Top Hat encourages customers to shop local
Published in the March 4 – 17, 2015 issue of Morgan Hill Life
By Staff Report
Sunil Joshi, CEO of NetIncent
NetIncent is a Palo Alto-based start-up with a goal to help mom-and-pop stores compete with the big-box and chain retailers in attracting customers by providing an incentive-based marketing system that’s easy for merchants to implement and for customers to use. Since December, Morgan Hill has served as NetIncent’s testing ground for its innovative marketing system that uses Silicon Valley technology to reward customers for buying from local small and medium-sized businesses such as restaurants and shops.
Morgan Hill Life asked NetIncent CEO Sunil Joshi about his company and why Morgan Hill was chosen as one of its first sites.
What does NetIncent do and what is its vision?
We started NetIncent to bring state-of-the-art technology for customer loyalty to independently-owned small and medium businesses. Today, small businesses are at a disadvantage because big-box and chain-stores have perfected the art of attracting customers to their stores with sophisticated, targeted analytics that tailors deals and discounts based on customer buying preferences. The time has come to make comparable technology available to small merchants in a way that is both trivially easy to use and incredibly affordable. This will play a key role in revitalizing local economies all around us.
How did you come up with the ideas for consumer loyalty reward systems and build your company based on this idea?
Over several years, I watched the plight of small business merchants as they fell behind as web technologies accelerated the advantage that large businesses already had due to scale. Last year, I serendipitously told my rewards system idea to my college buddy, Kal. It resonated with him so much that he immediately jumped on board to start this company with me. Our combined technology and business expertise and our passion to do something profoundly good for the small business and communities across America drive us to make our endeavor a success.
Explain what Top Hat Rewards are and how can Morgan Hill customers benefit.
The Top Hat Rewards programs creates energy in shop local campaigns by making shopping at small retails stores and restaurants rewarding and fun. We make it simple for merchants to reward their customers with a cash-back reward — just like credit-card companies do. Customers love cash-backs, and they love them far more than reward points, which they find hard to value. Top Hat Rewards have tiers, so the more a customer shops, the higher the reward can be. Customers like the flexibility of being able to shop at a wide assortment of businesses and continually getting rewarded and having the ability to purchase more using these rewards. The result is that customers shop locally and buy more often.
Your Shop Local Gift Card is now implemented by Morgan Hill merchants. How do these cards benefit those who use them?
The big-box/chain stores, as well as e-tailers such as Amazon, have their branded cards for sale everywhere. Small businesses sometimes have their own gift cards, but they hardly get purchased because people want to give the recipient flexibility in shopping rather than constraining them to one store. NetIncent’s cards are flexible and can be used at scores of participating merchants. This community-based approach has two main advantages — it makes it easy for the gift-giver to give a gift card that is widely accepted, and for the shopping money to be spent with the local small businesses. NetIncent simplifies the process so that merchants can accept without any special equipment and customers can simply store the value in their mobile wallets.
How might a merchant work with you to implement the Top Hat Rewards system as well as the Shop Local Gift Card to increase the number of customers?
It’s simple. First, we can get a merchant setup in 10 minutes or less in our system. Second, we train a merchant to use and deploy it in an equally short amount of time. Third, we do not have a fixed upfront cost which makes it easy for the merchant to make a decision to join. They have to pay a reasonable fee tied to transactions only when customers shop with them. There is no binding commitment. And the merchant gets access to detailed analytics about customer and revenue growth, so they can measure the program’s effectiveness. There is also a referral program that encourages merchants to add and grow the ecosystem.
Why did you choose the South Valley region as a testing ground for your company?
We made the decision to start out in Morgan Hill and Gilroy because these communities are close to Silicon Valley. We realized the community spirit was incredibly high in Morgan Hill and we got a warm reception from many folks in town who truly shared our vision. They invited us to meet with the Downtown Association and Chamber of Commerce and become members. Our goal is to provide a simple, useful, affordable solution for mainstream America. That’s why we are connecting with Morgan Hill and Gilroy businesses directly and continually refining our product to address their needs. We are very happy with how well this process has gone to date.
