With big chains like Starbucks, Subway and Dunkin Donuts testing mobile payment systems, it makes sense that other restaurant operators are looking into it as well.
Take sweetgreen, for example. The Washington D.C.-based chain with about 15 units has implemented a custom-branded mobile payment app designed by LevelUp, a mobile payment company turned loyalty and marketing platform. The Boston-based company recently launched a white-label version of its mobile payment platform, meaning merchants — like sweetgreen — can use the infrastructure to run loyalty and payment programs at the point of sale on their own custom-branded mobile apps. That's key for companies that want to keep the emphasis on their own brands.
"It's a way for us to give our customers a branded sweetgreen experience, and enjoy all the benefits of LevelUp's loyalty programs, rewards, analytics and security," said Nathaniel Ru, sweetgreen co-founder.
Many of LevelUp's partners have brands with cult followings, said LevelUp Chief Ninja Seth Priebatsch, so it made sense to provide a solution that would showcase their identities.
"They've told us they want LevelUp's unique combination of mobile payments and loyalty-driving campaigns, but they've got to make it their own," he said.
How it works
When users pay with their phones on the LevelUp platform, businesses pay no payment processing fees as they would with credit cards systems. Instead, they are able to reinvest those savings into growing their businesses by attracting new customers and bringing them back, Priebatsch said. There is a fee, however, if operators run their marketing campaign through LevelUp. The company charges merchants a percentage when those campaigns succeed. For every incremental dollar brought in the company collects 35 cents.
"Our customers tend to be tech savvy and 'in the know," Ru said. "The philosophy behind sweetgreen is to create experiences that exceed expectations, so it is important for us to also stay at the forefront of any type of technology that is great for both our business and our customers."
Ru may be onto something, said Mobile Payments Analyst James Wester, editor of MobilePaymentsToday.com.
"Mobile payments are still in the early stages in many ways, but it's not too soon for even small merchants to start looking at how to use the channel effectively," he said. "Smartphone users actively use their devices to find restaurants or read reviews, and mobile is only going to become more important. Smart merchants like sweetgreen are using this time to figure out how to integrate mobile into everything from marketing to ordering to payments in order to find new patrons and improve the customer experience."
The ROI sweetspot
The ROI for sweetgreen can be expressed in numbers but more importantly in increased consumer brand connection, Ru said.
"We're foodies, but we're also tech geeks, and we see this as a way to cultivate increased brand loyalty through reward and convenience," he said. "If our app can make your day just a bit easier, that's tangible ROI.
The actual numbers are there, too, according to LevelUp, which boasts the following: Merchants bring in $18 for every $1 spent on customer loyalty campaigns; the average LevelUp user saves $25/month; and 40 percent of all new customers complete a loyalty progression within 30 days.
"We believe the app is a win-win," Ru said. "Customers will not only be able to pay using their phones but will also receive rewards the more they dine with us."
Read more about technology.
Cherryh Butler has been a reporter for nearly 10 years, writing on a variety of topics ranging from the restaurant industry to business and health and fitness news. Before joining FastCasual.com as editor, she oversaw KioskMarketplace.com and PizzaMarketplace.com and contributed to RetailCustomerExperience.com. She's also written for several daily newspapers, magazines and websites, including The Kansas City Star and American Fitness magazine.