Local Loyalty: Perkville Wants To Turn Your Email Address Into A Virtual Rewards Card

Earlier today, I wrote about a new startup called Perka that’s attempting to bring an end to loyalty cards with a kick ass merchant-facing service. Well, it seems that today is the day for launching loyalty program-disrupting startups, as a company named Perkville is coming out stealth mode and launching into the public sphere.

Many of us have overflowing wallets due the amount of loyalty cards, buy-five-get-one-free tickets, and Groupons we carry around in our wallet. Or we get to our favorite coffee shop only to remember that we forgot our punch card at home. Perkville, as opposed to Perka, is taking a different approach to providing local merchants with a loyalty solution by turning customers’ email addresses into virtual reward cards. That means no more cards to carry and forget at home, no apps to download — just an email address, and users can participate in any merchant program on Perkville. And for merchants, Perkville is free to use and can be set up in minutes.

So how does it work? Merchants decide on what kind of reward program they want to establish for their customers, whether it be per visit or purchase, etc. When customers make a purchase, merchants reward customers with points via an in-store tablet (i.e. iPad) or their point of sale (POS) system. Customers can then track their points online and refer friends to the merchant, who then receive a special deal in return. The referring customer then receives points for a successful referral.

Founded in early January of last year by former Senior Product Manager at LinkedIn and Yahoo! Sunil Saha and Eric Bollman, the former Director of UX at Yahoo!, Perkville has been working diligently in stealth to partner with POS software providers to scale the business and get it to a place where it can become a valuable service for merchants. At launch, the startup has already attracted 200+ active merchants across the U.S. and has 100K+ consumers on board, 25 percent of which are registered users.

Whether merchants are onboarding with Perkville through POS visual touch solutions like Mindbody, which provides business management software for a wide range of businesses, including salons, spas, fitness studios, yoga, martial arts and retail, or by encouraging iPad adoption at the POS (which the team says work well for places like coffee shops, for cashiers who don’t feel comfortable with complicated approaches), or whether the merchants are entering the customer’s email address manually, once they have the email, the rest of the Perkville process remains the same. The user then gets an invite to join, they register, and the rest is history.

The Perkville Co-founders told me that they’ve been seeing low adoption among merchants using mobile solutions, QR code solutions, Shopkick, etc., because they all require downloading an app, scanning, holding a card next to some wonky device — and that this type of friction leads to concern, skepticism, and hesitation from small, local merchants. For companies like Groupon that have large sales forces, or for companies that don’t have such an automated process, there’s a lot of marketing spend and going door-to-door for these types of deals and loyalty solutions, and it can be tough to scale. Perkville doesn’t have to worry about that.

Another cool thing about Perkville is in how it’s monetizing. Because its core platform is free for merchants, Perkville is offering merchants the ability to set perpetual deals, or “winback” deals, for example, that lets merchants identify customers who haven’t been back to the store in awhile and send them a deal to get them back and buying. For Perkville’s highly targeted deals, the startup takes a 30 percent cut of profits earned by merchants.

But, on the whole, merchants retain full flexibility control and its loyalty program runs in the background — merchants can do as much or as little as they want to once Perkville is set up.

To test its new email-based loyalty hypothesis, Perkville established a case study with a yoga studio, and the results they’re seeing are impressive. Of the 9,000 people using Charm City Yoga, 21 percent of those students have joined the loyalty rewards program. These students are taking an average of 70 percent more classes. And since Perkville gives consumers the option of connecting their programs to Facebook and Twitter, the yoga studio has seen 500 postings and 100 tweets, as well as 77 referrals taking an additional 340 more classes. Their “Winback” program has reactivated 150 customers.

Perkville is currently actively seeking outside investment, after a $500K raise from friends and family and a year-plus of bootstrapping. It’s an interesting idea to be sure, and their email-based loyalty program seems to proving itself in case studies.

Check Perkville out at home here and let us know what you think.