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The Spoon

Daily news and analysis about the food tech revolution

Punchh

PAR Acquires Guest Loyalty Platform Punchh for $500M

Restaurant tech provider PAR Technology Corporation announced today it has acquired guest engagement platform Punchh for $500 million in cash and shares. The deal adds loyalty and guest engagement software to PAR’s existing arsenal of restaurant tech tools, which currently includes a wide range of hardware and software products for restaurants.

Punchh has for a long time promised to “take the guesswork out of marketing” for restaurants by helping them align their sales channels and marketing campaigns with what their customers actually want. It does this by collecting data on customers and using it to dictate the types of campaigns and promotions sent out. A high-level example of this would be sending deals on plant-based meals to vegans and never sending that group offers for burgers. Punchh, however, can get considerably more granular than this. 

To date, the company has raised $68.1 million. Its platform serves over 200 brands, including Pizza Hut, Denny’s, and El Pollo Loco.

PAR’s CEO and President Savneet Singh noted in today’s press release that integrating the Punchh platform into PAR’s existing offerings will allow restaurants to access more technology via a single system, rather than “juggling disjointed vendors,” as is fairly common nowadays. 

However, this idea of gluing together siloed technologies to run a restaurant will get increasingly harder as digital orders increase and customers demand more personalization. It follows, then, that we’ll see more deals like the PAR-Punchh one in the future as companies attempt to turn themselves into “one-stop-shop” systems for the restaurant industry. Other companies, including Square and Toast, are also building out unified restaurant management systems that are made up of hardware and software controlled from one centralized point. 

Will Punchh’s New ML-Based Customer Lifetime Value Predictor Create More Data Darwinism?

Punchh, a software startup that creates digital marketing tools for physical retailers like restaurants, announced the release of its new machine learning-based “Predictive Customer Lifetime Value” (PCLV) application this week. But will this new technology just be another avenue for data darwinism?

CLV is a metric companies use to predict how much money they will reasonably get from any one customer. The concept certainly makes you wonder whether restaurants are feeding you meat, or if you’re the meat feeding the restaurant. Regardless, it’s something restaurants are using more. Fellow restaurant app-maker, Toast, did an explainer post on CLV awhile back.

From the Punchh press release:

From the moment a customer makes their first purchase, Punchh instantly predicts their CLV, then constantly refines that prediction as the relationship between the brand and customer deepens. Based on that PCLV, retail marketers can create target segments with this data to, for example, encourage high CLV segments to enroll in rewards programs while offering low CLV segments incentives through coupons.

While this PCLV may be useful to a restaurant for marketing purposes, it also feels like more data darwinism, like my purchases will determine a company’s level of interest in me. If a restaurant predicts that I’m a low-ticket customer for them from my very first purchase, will they just ignore me? Or will I get worse service? I asked Punchh about this and Xin Heng, Punchh’s Senior Director of Data sent me the following response:

Xin: They won’t be ignored, they will just be put in a different bucket (or segmentation). In other words, low CLV customers will be continuously monitored and treated with winback campaigns. But those who are outside this segment can be subject to games, compression campaigns, a referral callout and more. It’s just about segmentation, but every customer is consistently monitored regardless of what segment they fall into.

Great(?), a restaurant will still be sending me emails no matter how much–or little–I spend! The company is billing the PCLV tool as a restaurant’s virtual data scientist, but it seems like moneyballing me could be just another way that data ruins dining out with too many predictions about my behavior.

We’ll soon see, as Punchh works with more than 160 brands including Pizza Hut, Del Taco, Denny’s and TGI Friday’s. The company has raised $31 million in funding and earlier this month opened up an engineering hub in Toronto.

Restaurant Marketing Platform Punchh Raises $20 M in Series B Funding

Marketing software and data analytics platform Punchh — who counts the likes of Pizza Hut, Dairy Queen, and Del Taco amongst its customers — just closed a $20 million Series B round of funding, bringing the company’s total funding to $31 million. This most recent round is led by Sapphire Ventures, with participation from previous investor Cervin Ventures.

The new funds will allow the company to further build out its AI and machine learning components that help a growing number of restaurants power their marketing channels and analyze their data.

The company also announced, alongside the funding news, the release of Punchh Acquire, an all-in-on platform that integrates with a restaurant’s existing channels for customer engagement. That includes anything from email campaigns to text messages to self-serve kiosks and POS systems. While Punchh doesn’t build the actual app for the restaurant, the Acquire product does streamline marketing to all those different channels, while also pulling and analyzing the data afterward.

So, for example, a consumer won’t see anything about Punchh when they open their Coffee Bean & Tea Leaf app. They’ll navigate the coffee chain’s own app experience, probably unaware it’s Punchh’s system offering them a two-for-one deal on lattes or 20 percent off their next purchase.

Punchh promises to make it a lot easier for restaurants to collect data on their customers and tailor their channels and campaigns to meet preferences (everything is opt-in for the consumer).

“We’re trying to bring to brick and mortar the same level of data-driven marketing and customer relationship management software that is really prevalent in the e-commerce realm,” says founder and CEO Shyam Rao.

Those in charge of customer relationships at restaurants use Punchh to track customer behavior — in real time — and adjust digital offers as that behavior changes. A low spender, for example, might receive an up-sell campaign. Meanwhile, a mom stuck at home in Pittsburgh on a rainy winter day might get an offer for soup and tea. It works the other way, too: vegetarians will not get an offer for a Meat Lover’s pizza.

“All we’re trying to do is go back to the time 50 years ago where shops had this personal relationship with every single customer,” says Rao. “We’re trying to go back to that at scale, and the first step is to get to know the customer.”

To do so on such a granular level, Punchh separates customers into three “buckets” and tailors campaigns towards each: Anonymous customers are the ones who simply walk into a restaurant; the Known ones have given an email address or phone number; and the Loyalists dine regularly, have downloaded the restaurant’s app, order through it, and redeem offers on a regular basis. The goal, of course, is to get Anonymous customers to become Known, and Known to become Loyalists.

For many brick-and-mortar brands, restaurants or otherwise, creating this kind of digital counterpart to the main business is such a challenge many don’t even try. Starbucks may have a robust digital strategy, but Starbucks also serves 90 million customers per week. The local pizzeria around the corner presumably does not have the kind of footprint that makes it possible to throw thousands of dollars and people at a mobile strategy. Even larger brands, like, say Pizza Hut, may not have the resources — monetary or otherwise — to invest in a homegrown mobile platform that builds powerful relationships with customers. “Relationships drive revenue,” says Rao. “We help [restaurants] establish these relationships.”

Punchh currently has over 115 customers and 34,000 locations worldwide. With this latest round of funding, as well as the release of Punchh Acquire, the company also plans to branch out into health and beauty brands, as well as convenience stores.