Punchd Acquisition Builds Out Google SMB-Products Suite

Last week Google bought a company called Punchd (first reported by TechCrunch). It was a small acquisition but may turn out, in several respects, to be more significant than it looks.

Loyalty Card on a Smartphone

Essentially Punchd enables small businesses (SMBs) to run loyalty programs on smartphones, very much like paper punch cards (e.g., every 10th latte is free) — hence the company’s name. The customer gets the loyalty card on her phone and each visit is recorded and tracked toward some freebie.

The company uses GPS to verify users are in the store and protect against cheating. Punchd uses QR codes, which is interesting given that Google is essentially walking away from QR codes.

There’s almost nothing unique here and plenty of other companies are doing a version of SMB/mobile loyalty. For example, Groupon aspires to be a CRM platform (eventually). Startup Closely offers an interesting spin on loyalty that can involve physical cards or be purely digital. An early mobile app called CardStar puts all your big-box and grocery loyalty cards into a single app and has SMB aspirations too. A social-mobile CRM tool called Fanminder offers a broad range of marketing and loyalty capabilities for business owners. SCVNGR’s LevelUp is a new deals entrant that emphasizes loyalty.

I could go on with this list for about a half hour. Stepping back, however, there are a couple of things that are interesting for Google from a local product and strategy perspective.

Part of a Growing Product Suite for SMBs

Google is building out the product suite it offers to SMBs beyond AdWords and Places. In April Google bought TalkBin, a tool for consumers or customers to provide feedback to local businesses. (Google could use easily position TalkBin as a review solicitation tool if it wanted.) Punchd is another tool that SMBs can use to manage customer relationships. It could sit beside Google Places, Boost, TalkBin and Offers — although Punchd might get folded into the Offers product. (There’s also Google Wallet, which ties into Offers.)

Google Offers, as you know, is the company’s comparatively recent entry into the daily deal segment. One of the challenges for merchants with daily deals is that they often attract customers who don’t repeat and sometimes attract existing customers, who simply get a huge deal on a service they might otherwise buy at full price.

Acquisition, Loyalty, Analytics

Punchd indicates that Google is developing some more nuanced thinking about where it wants to go with deals/offers over time. There will likely be more tools or programs coming that distinguish between new customer acquisition (and related offers) and loyalty in the deals market. Punchd gives Google a potential way to create and support different products for acquisition and loyalty.

With Punchd Google could also get more data on customer behavior and online-offline activity. Google Wallet (if widely adopted) gives Google the ability to track behavior from digital (or print) ad to the offline point of sale. It can also do that with Offers today, but in a relatively manual way. So, beyond its utility as a loyalty tool for SMBs, Punchd could become part of Google’s overall effort to gain more visibility and trackable insight into real-world consumer behavior.