No way! In order to grow operations, local and global businesses need to acquire new customers. But they shouldn’t forget that the easiest way to make money is represented by existing customers, who already know their products, who already trust in them. In addition, acquiring new customers is more expensive than selling products to existing ones, who spend more than a new one on average. To exploit this “organic” opportunity and maximize revenue, companies need to reward customers for staying loyal, giving them a good reason to come back every single time.
At the same time, startups are trying to leverage the cloud, mobile devices and sensors in them, to help businesses digitalize their loyalty efforts in different ways, following various approaches. In the last few months, several US-based (mainly Silicon Valley) startups have been funded in this field while Europe is slower. Anyways, some cases are arising and let’s have a look at some of them and their offerings.
Starting from the USA, Foster City, CA and Manila, Philippines-based Stellar Loyalty, which completed a $5m Series A funding round in October 2014, aims to enables brands to recognize, engage and reward their loyal customers across the network of digital, physical and human interactions. Its technology applies analytics to obtain a view of the customer’s recent behaviors, including mobile and social media data and creates experiences in which all interactions are tailored to his/her journey. Perkville, which closed a $2.4m Series A financing in October 2014 from several investors including Moneta Ventures, MDO Holdings, Keiretsu Forum, Sand Hill Angels, Xandex Ventures, Fifth Era, and members of Berkeley Angel Network, provides a SaaS platform that enables businesses to create customer loyalty and retention programs. Through integrations with POS systems, the platform automatically rewards customer visits, tracks referrals and drives social media. San Francisco-based FiveStars, which raised $26m in Series B funding September 2014 from Menlo Ventures, Lightspeed Venture Partners, DCM and Rogers Communications, provides a customer loyalty and marketing automation platform for local businesses which leverages predictive analytics to reach customers at the right time. Launched out of Y-Combinator in 2011, the company currently drives two million customer visits per month across a network of over 5,000 merchants. San Francisco, CA-based Thanx, which raised $4.7m in Series A funding earlier in November 2014, provides merchants with a platform that tracks and rewards consumer purchase activity. Without installing additional hardware or point-of-sale integration, the company’s solution allows merchants to launch retention marketing campaigns customized for their business. Once in, consumers pay as usual and automatically receive personalized rewards via real-time notifications to their mobile devices, eliminating check-ins, loyalty cards, and added steps at checkout.
In Europe, existing examples come from Rome, Italy-based Spotonway, which recently raised €215k. It provides a universal loyalty program that allows local businesses to eliminate the need to carry multiple punch cards and create custom rewards to engage regular customers, who can collect points at every check-in simply scanning their personal QR-CODE in front of iPad’s camera near the businesses’ counter. In addition, the company allows merchants to reach new customers offering them custom discounts through “Spotonway Deals”. The company, was backed by LVenture, which had previously backed Pubster, a provider of a mobile loyalty app for pubs. In addition, in London, UK, LoyaltyLion provides an extension for ecommerce platforms that allows any retailer to add a comprehensive loyalty program to increase customer lifetime value and gain insights into loyal customer behaviour. The company closed a $370k seed funding round in April 2014.