Striking the balance with customer loyalty programs so they achieve more sales without annoying the user is not easy. Refreshingly, AppCard seems to deliver
The customer loyalty gurus at AppCard announced on Thursday that they have closed their Series B funding round with $20 million in new financing. The round was led by Alexander Rittweger who formerly led PAYBACK, and PLDT Capital, the investment branch of the Philippines Long Distance Telephone company.
AppCard was launched in 2011 by co-founders CEO Yair Goldfinger of ICQ fame and CTO Amichay Oren. In 2012, the company initially raised a $6.2 million Series A from prolific tech figures Peter Thiel through his Founders Fund, Jerry Yang of Yahoo, and Eric Schmidt’s Innovation Endeavors. All of them also participated in this most recent round.
The company is headquartered in NYC, with an additional R&D site in Israel. Their 65-member team is expected to double by the end of 2016. They say that they have had rapid growth in their client base over the past seven months and have reached three million users.
Bringing strong marketing tools to all
The service gives small and medium sized businesses the ability to achieve high level targeted marketing and connect more effectively with their customers with tools that would otherwise be out of reach. This includes targeted SMS messages that can play a big role in bringing customers back into the store.
The AppCard team has built a product whose technology leverages smart data captures of what customers buy and their habits with an artificial intelligence engine that can help their clients automate their targeted marketing.
In practice, this means that a retailer like a cafe can learn who their customers are, what they like to buy, when they buy, and what they can do to increase sales. In most cases this can be accomplished by offering their customers great deals, such as giving away a free corn muffin with a second coffee, to get them in the door.
According to AppCard, on average 53.47% of offers that were redeemed resulted in customers buying an additional item. Moreover, they also claim that AppCard users rack up a 28.1% higher spend than those who are not part of the program.
Retailers pay a monthly subscription to use the service. Along with the use of the automated marketing, they receive added support from a dedicated account manager and consultations with the company’s data scientists, both of whom can help the retailers build a smarter marketing plan and increase ROI.
Consumers benefit from using the app for iOS and Android to manage numerous loyalty programs, replacing the many cards that they would normally have to lug around in their wallets. For those looking to avoid downloading another app, there is also an option to use a physical card that can be swiped at the point of sale.
Users can build up rewards points for discounts at their favorite stores, and rise up the ranks with silver, gold, and platinum levels. They also receive coupons and digital receipts for their purchases, the latter being a special plus for anyone who likes to keep track of their spending but hates carrying the paper.
Striking the balance with customer loyalty programs so that they achieve more sales without annoying the user is far from easy. They often feel bulky from the user side, receiving irrelevant messages, building up a stack of cards that you never want to carry with you anyways, and racking up other inconveniences. Add on top of that the frustration of having your phone number and data passed around like a village bicycle to other marketers and it is enough to make you want to forswear ever signing up for another “loyalty/membership” program again.
Perhaps refreshingly, AppCard seems to have gotten a lot of things right here, making for a potential win-win situation for both retailers and consumers. I for one am actually happy to receive an update or offer from the retailers that I buy from. If I have bought things from them in the past, then there is a pretty good probability that I would want to hear more from them in the future. Please do not bug me too often, but do send me offers to remind me that you still exist and have something worth walking in the door for. If I do not want to get the updates, I can simply tell them to stop by unsubscribing through the SMS. It is still a little unclear about whether this will wipe me from their system and be “forgotten,” but this is a good step. AppCard told Geektime that they keep user details private and will not pass them on to third parties.
Their app-based system makes it far more convenient than having to carry yet another card, especially since it spans a number of stores. For the time being, their client list of participating retailers appears slim, but has the potential to scale rapidly.
Smarter use of customer data in exchange for rewards is becoming more prevalent throughout the industry. With their stellar team of founders and backers, AppCard is well positioned to establish themselves as a real leader in this field, hopefully leading the charge towards better ROIs and marketing for all.