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Dairy Queen Serves Up Personal Discounts With RFID

A Tetherball system allows the restaurant's customers to receive text-message coupons and use a passive high-frequency tag to redeem them.
By Claire Swedberg
Tags: Retail
Jun 03, 2009A Dairy Queen restaurant in the Indianapolis region is providing its customers with RFID-enabled loyalty stickers that attach to their phones, thus enabling them to redeem coupons sent to those handsets via text messages. If the system is successful, Dairy Queen intends to expand it to additional restaurants in the region, as well as nationwide.

The system, provided by marketing applications service provider Tetherball, is an expansion of a system Dairy Queen has already been using for 20 months, to send discount coupons for several Indianapolis-area restaurants to customers' cell phones. International Dairy Queen Inc., headquartered in Minneapolis, services more than 5,600 independently owned and operated Dairy Queen stores in the United States, Canada and other countries. With the RFID enhancement, says Jamie Guse, International Dairy Queen's Web site manager in charge of all digital applications, the restaurants can track the success rates of specific promotions, as well as which regions and times of day are the best targets for those promotions. In addition, the system will enable restaurants to offer discounts to specific customers based on their purchasing habits.

Jamie Guse
For the past 20 months, the Dairy Queen locations have been offering Tetherball's Mobiquitous text-messaging coupon service to customers who sign up for the restaurants' loyalty program by dialing into the system from their mobile handset. A patron provides his or phone number, then receives a text message from Dairy Queen when there is a special promotion, such as for $1 off a Blizzard milk shake between certain hours of a particular day. The customer can take his or her cell phone to a participating restaurant and show the clerk the text message that was received, and the employee will provide that person with the appropriate discount.

Approximately 900 customers have signed up for each restaurant, says Jay Highley, Tetherball's president and COO, and only about 6 percent of those who signed up for the service later canceled. However each transaction requires the clerk to look at the phone's text message, which can be time-consuming. What's more, the restaurants had limited access to real-time data indicating how successful a promotion was.

With RFID, Highley says, the system is simpler and the data is available in real time. To sign up, a customer first obtains a high-frequency (HF) 13.56 MHz RFID tag complying with the ISO 14443 standard, at the Dairy Queen restaurant. That person then accesses the system by dialing a specific number from his or her mobile phone, following instructions on a poster at the participating restaurant. The patron provides his or her mobile phone number and the zip code where he or she lives, as well as the ID number of the Tetherball tag; the zip code enables the system to link that customer with the restaurant closest to his or her home. The system then informs the patron how many text messages he or she can expect to receive. The sticker can be applied to a cell phone, wallet or purse.

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