Pizza Hut is one of Punchh's more than 100 customers worldwide. / <a href=''>Pizza Hut </a> Pizza Hut is one of Punchh's more than 100 customers worldwide. / <a href=''>Pizza Hut </a>

Punchh Gets $20 Million Investment to Boost Its Loyalty Efforts

Restaurant loyalty has quickly become far more than a worn out punch-card encouraging repeat visits. Today, Punchh announced a $20 million series B investment led by Sapphire Ventures, earmarked to drive artificial intelligence and machine learning-based tools for restaurants.

Punchh provides loyalty-based technology, marketing, and analytics to restaurant companies like Pizza Hut and Dairy Queen. It allows restaurants to send tailored marketing messages and offers to customers based on criteria like demographics and visit history. With its new funding, the company plans to invest further in machine learning that can aggregate data points like weather reports and customer profiles, offering, for example, a lunchtime soup special offer on rainy days to hyper local customers.

“Companies like Amazon have digital, data-driven, and tailored one-to-one marketing down to a science, while brick and mortar retailers are left data-blind and forced to spray and pray – they don’t learn from your past purchases, can’t recommend products they know you’ll buy, and they aren’t able to send the right offers to you at just the right time.” said Shyam Rao, CEO and co-founder of Punchh.

In tandem with its financing announcement, Punchh introduced a new product, dubbed Punchh Acquire, aimed to help restaurants with customer acquisition, and converting so-called anonymous customers — those that come in and pay with cash — to known customers or even “loyalists.” (Loyalists are defined as a diner with a restaurant’s app installed on their phone, who visits regularly and wants to earn and use points and rewards.)

More Than Loyalty

The benefit of converting unknown customers to known is clear. Targeted marketing and targeted experiences make for happier customers and happier loyal customers drive revenue. Punchh was founded eight years ago as a kind of digital punch-card for restaurant loyalty, replacing paper cards. Its evolution illustrates the evolution of loyalty generally; by tying customer information and spending patterns to real-world data, restaurants can hone on in guests in order to drive repeat visits, rather than try to deploy a one-size-fits-all loyalty strategy.

Plus, customers enjoy interacting with brands they like. According to OpenTable’s 2017 Technology in Dining Out report, 22 percent of diners say they always or frequently interact with a restaurant’s loyalty program. In fact, loyalty programs were ranked highest by diners in post-meal interaction in the survey.

Punchh works with over 100 restaurant chain worldwide, representing more than $12 billion in annual spend by 35 million consumers.

More from Skift Table