When it comes to encouraging consumer loyalty, Starbucks’ program involving its mobile app and accompanying rewards card set a high bar for the rest of the industry to follow. Today, a new company called Dealyze is launching a service that aims to offer a similar app experience to any business, but at a lower price point than its competitors in the mobile loyalty space.
While there are today a number of startups running mobile loyalty programs for small businesses, including Belly and FiveStars, for example, what makes Dealyze different from others is that it allows a company to brand its consumer-facing app and tablet with their own logo and color scheme in order to really make it seem like their own. This is done by way of Dealyze’s own theming engine, which allows the company to make custom systems in minutes.
Explains co-founder and CEO William Baron, the idea for the startup really just landed in his lap. After graduating from UCF, he spent a lot of time hanging around a local pita restaurant, working on various programming projects. He became friendly with the staff there over time, and one day the owner just asked him if he could build a loyalty program for the store.
“He didn’t want to have [his loyalty program] seem like a third-party,” says Baron. The programs that were out there at the time were these “one rewards for all” type of systems. “They were feature complete, but [the owner] didn’t really want to compete with other stores on another marketplace. He was afraid he was joining another Groupon…all his deals were shared with everyone in the city. He wanted something that seemed more official – that was just his program,” Baron adds.
Having his first customer already in place, Baron called up longtime friend, also from UCF, Mark Salpeter, to work on the project with him. Over the next six months, they developed a system that met the needs of the pita store owner, and, after it was up-and-running and bugs were squashed, they ended up selling it to the Cold Stone Creamery franchise owner next door, too.
Now the program is being piloted in 10 Cold Stone Creamery locations in Florida and Puerto Rico, and, in total, there are 30 businesses using the mobile loyalty system Dealyze created, including other bars, restaurants, hotels, coffee shops, airlines, nutrition stores, smoke shops, hair salons, and car repair stores. Currently, there are 14,000 customers across these businesses signed up on the Dealyze platform, and, during its pilot testing period, the company reported seeing a 10-15% revenue lift for those businesses it worked with.
The system itself is designed to be simple to use. It includes a locked-down Android tablet that’s mounted in the store where customers can initially sign up for their rewards account by providing their name, email and phone number. Customers are then texted a link that allows them to install the store’s app on their phone. However, unlike programs like the one at Starbucks, this app is not a native application distributed through the major app stores, but a web-based app that appears like an icon on the phone’s homescreen.
Baron says they decided to use a web app because it made installations easier and quicker for customers – and the stores liked that they could just text the app to their customers.
Program members can also optionally carry around plastic loyalty cards that include a QR code that launch the app, if they like having the reminder of a physical card.
Deals are then sent out to customers over SMS or email, and when those deals are clicked and redeemed, Dealyze charges $0.10. Customers can also check-in via the digital card app in order to earn points with the store, or, if the business chooses, customers can collect points based on their in-store spending amounts instead. However, most today are using the check-in system, Baron notes, with rewards generally kicking in after 10 points are received.
In addition to earning points and receiving deals, the company offers a referral program where customers can text deals with friends, too, which also earns them points when redeemed. The pricing on these varies, but can be as high as 25 cents.
Pricing for the service is $50 per month (or $500 per year) for a limited time, and includes access to an online dashboard that allows the business to track their deals, redemptions and the profit they’ve made from using the system. In the future, Baron says the plan is to offer reloadable cards like those at Starbucks, but for now the focus is on getting more businesses and consumers signed up.
The company is currently participating in the Y Combinator accelerator, but has no other outside funding.
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