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Dairy Queen launches RFID-based mobile loyalty program

Dairy Queen is running a mobile rewards loyalty program using radio-frequency identification -- RFID tags -- to send coupons and offers to consumers' handsets.

The quick-serve restaurant giant tapped NFC specialist Vivotech Inc. and Tetherball's new RFID-based mobile marketing platform to deliver targeted offers to mobile consumers. The RFID service is opt in at the point of sale and Dairy Queen markets the program with in-store signage encouraging consumers to join the DQ mobile rewards program.

"We have a national agreement with Dairy Queen International, which sees this mobile loyalty program as a competitive advantage," said Jay Highley, president and chief operating officer of Tetherball, Indianapolis.

"We have been working with Dairy Queen for 20 months and we found that you lose 90 percent of the U.S. market when you tell them to download an app, and MMS is not consistently applied and it is expensive," he said.

Vivotech specializes in Near Field Communications, mobile payments and promotions. Its platform lets consumers make contactless payments with RF-enabled and NFC-enabled mobile phones.

Mobile marketing applications service provider Tetherball specializes in mobile loyalty and rewards services

Tetherball's programs are designed to drive customer loyalty through mobile coupons, mobile rewards programs, mobile sweepstakes and mobile notifications.

Mr. Highley expects to see this service expand across the Dairy Queen system and to other national retailers very soon.

Dairy Queen is a quick service restaurant chain with 5,600 stores in the United States, Canada and foreign countries. It offers dairy desserts, hamburgers, hot dogs and beverages.

Dairy Queen will start promoting the mobile rewards program on its Web site, and there will also be some direct email and Web advertising support to make customers aware of the mobile initiative.

Dairy Queen's call-to-action at the point of sale offers consumers a coupon for a free Blizzard if they join the mobile rewards program.

The consumer is asked to go to the counter and get a Tetherball RFID tag to place on their handset.

Information on the card instructs consumers to text in a unique code on the tag to activate their membership.

Once they join, Dairy Queen typically sends out a new offer on a weekly basis.

"Once you've done that, you're tethered, and that same user can go to other retail clients as this continues to expand," Mr. Highley said. "That one Tetherball tag can be their loyalty card for a number of different retailers, as we can tether the RFID tags to a different short code for each client."

Mass adoption of mobile marketing using bar code coupons hasn't happened because it is too complicated, with a plethora of technical and user issues at the point of redemption, according to Tetherball.

Tetherball doesn't use mobile coupons with bar codes or require any type of mobile screen visuals to redeem offers.

The RFID-based platform, which works on any mobile phone, eliminates fraud and lets retail clients measure the performance of their campaigns via real time validation and reporting, according to Tetherball.

Tetherball's approach helps clients -- including Dairy Queen -- "tether" their brand to target audiences by identifying what their customers want and delivering mobile campaigns that interact with the call-to-action through permission-based mobile coupons, mobile rewards, mobile sweepstakes and mobile notifications.

Integrating traditional marketing methods such as in-store advertising, customers are encouraged to sign up for mobile loyalty rewards programs offering promotional discounts.

Dairy Queen's in-store signage at the point of sale urges consumers to opt in to its mobile loyalty club to receive a free Blizzard then receive more-or-less weekly coupons thereafter.

Upon joining, customers are given a Tetherball Tag, a tiny RFID chip that is affixed to their mobile phones, which uniquely identifies them through Tetherball's technology platform.

Dairy Queen is then able to send offers to their customers via standard text messaging.

Offers are redeemed electronically using existing in-store RFID point-of-sale terminals or stand-alone RFID kiosks provided by Tetherball.

"Our RFID mobile loyalty platform is easy to use on any phone and there are no downloadable apps required," Mr. Highley said. "Everybody's got their phone with them all the time, so it's convenient solution for the member, and it resonates well with a younger demographic -- there's a high cool factor.

"It also helps retailers eliminate fraud, because you can't create fake codes, and it eliminates employee theft, plus we offer real-time validation and reporting," he said.

Dave Reasoner, an International Dairy Queen franchisee, has been working with Tetherball for nearly two years to refine the mobile loyalty program for his stores.

His stores now average more than 900 members per store and continue to see growth in membership and redemption rates, which is making a measurable difference in his year-over-year traffic and revenue, according to Mr. Reasoner.

"This is a significant opportunity for retailers to start mobile loyalty and mobile couponing initiatives, as well as mobile advertising," Mr. Highley said. "We see an appetite from the consumer side to engage in mobile couponing and loyalty programs, especially in the current economy."