New CEO of Buzz Points Predicts a Tech Boost to 'Buy Local' Programs

As he assumes the role of CEO of 'buy local' offers company Buzz Points, Dwayne Spradlin predicts that certain trends in technology and consumer habits will breathe life into a loyalty model that has stagnated in the past.

Spradlin was announced as CEO of the Austin, Texas-based Buzz Points last week. He replaces Jay Valanju, who has assumed the title of founder and senior vice president of business development and strategic partnerships.

Spradlin previously held executive roles at InnoCentive, a company that offered crowdsourced research and development; and Hoover's, the financial data consultancy. He says Buzz Points, which currently reaches 32 markets in 24 states, will benefit from an improving economy, the increased use of mobile and social networking in shopping, and a market of consumers who wish to buy products at local merchants.

"There is an explosion of activity with consumers and merchants in the 'shop local' space," Spradlin said. "We have a convergence of increasingly affluent buyers because of the economic recovery that are also a little more tech-savvy than in the past."

Consumers use Buzz Points to make debit card payments at local merchants, and earn points toward local gift cards or donations to local non-profits. Consumers also earn points for sharing information about Buzz Rewards on social networks. Buzz also uses technology embedded in mobile phones, such as GPS, and social data to offer merchant-funded rewards.

Other companies have used mobile technology in the past in an attempt to entice local shopping with poor results. Bling Nation, which was designed to be a discount alternative to the credit card networks, shut down four years ago local merchants refused to replace their existing loyalty campaigns with the one Bling Nation managed. Bling Nation also launched at a time when fewer phones were capable of making contactless payments; its system relied on contactless payment stickers that adhered to the backs of phones.

What's changed since 2011 is the proliferation of mobile-enabled marketing that has made consumers more comfortable with the technology, Spradlin said. 

A number of retailers are using emerging mobile technology to deliver location-based marketing in real time, which should provide a another reason for small businesses to adopt similar marketing, Spradlin said.

Other companies such as Groupon and Foursquare provide marketing for local merchants, and the general concept of mobile payment has gotten a boost from wallets like Apple Pay and mobile point of sale devices like Square.

Consumers are also using mobile and social in different ways, such as tracking their health — a concept that is merging with payments in the form of wearables (the Microsoft Band, for example, comes with both fitness-tracking tools and a Starbucks card app). Buzz Points can tap into the fitness-tracking mentality by providing the same sort of feedback.

"You can find out something like 'I spent twice as much at local merchants last month,'" he said. "That can feel good for someone who is trying to spend locally."

Buzz Points should also benefit from its focus on community banks and credit unions that, in turn, are targeting local businesses, said Ron Mazursky, director of the debit advisory service at Mercator Advisory Group.

"Strategically it's much easier to do that than focusing on a broader market," Mazursky said, adding other companies that operate national loyalty programs have had difficulty building local programs because they overreach. "Buzz Points is not trying to be everything to everybody."