Calling all customers: prepare to lighten your wallets. St. John's has recently become the birthing ground for an innovation in customer loyalty.
Local entrepreneur and business graduate Matthew Stenback, 24, has teamed up with marketing graduate Adam Puddicombe, 23, to launch Brownie Points, a free online application that acts like a virtual punch card, building engagement between local businesses and their customers.
Like most apps, the main objective is to make the complicated simple. It eliminates the endless stream of plastic reward cards by creating one centralized online platform that works efficiently with today's ubiquitous mobile devices.
Each business that signs up with Brownie Points becomes part of the network. They receive a tablet computer, which sits beside the cash register and acts like a scanner. When a customer buys a product, they simply open the app on their smartphone, scan the code and collect points to receive rewards.
Alternatively, those who don't have smartphones receive a Brownie Points card, which also connects them to the online hub.
"The idea is that you're giving people a sense of progress," says Stenback. "The fact that you feel like you're earning something gives you this additional goal or reason to do it."
The primary motive, he says, is to create communities for local businesses across Canada - a series of networks linking independent business owners to their dedicated clientele.
"I've always really loved the local shop scene and wanted to open my own store," he says. "With my experience in design and development, I realized this was the perfect way to leverage my passion with my skill."
Helping hand
Stenback began developing Brownie Points in the summer of 2011 during an entrepreneurial work term with Memorial University's business program, known as SIFE.
When he pitched the program to the SIFE Memorial Innovation Challenge, he was awarded $2,500 start-up capital from sponsor Cox and Palmer and free office space at Launch Pad, the university's entrepreneurial incubation centre.
With a boost of start-up capital and space for creative invention, Stenback set out to make his entrepreneurial dream a reality. Since his reward, he's been working around the clock to prepare Brownie Points for the big reveal.
From developing the backend and designing the interface to perfecting user experience and scheduling client meetings, Stenback says that, like every new entrepreneur, he's had to wear many hats.
"I was a one-man wrecking crew," he says.
Recognizing the need for a Brownie Points liaison, Stenback partnered up with Puddicombe in April 2013, who became responsible for the marketing and sales side of Brownie Points.
Puddicombe boasts about the new venture, describing how his excitement comes from being an integral part of the progress.
"There's something so rewarding about building your own start-up from the ground up," he says.
"It gives us a sense of progress and purpose that we likely wouldn't find working for a big company."
Trial run
In February 2013, Stenback took Brownie Points to the public sphere with an initial "beta phase," which saw just a few businesses in St. John's featuring the app in store.
The beta phase was like a Brownie Points trial run, introducing the idea and giving the team time to seek sufficient funding for tablets and additional hires.
One of the beta stores was Post Espresso on Water Street. When Stenback approached him about the idea, owner David Bowden says he was immediately drawn to the legitimacy, impressive esthetics and local network incentive that Brownie Points had to offer.
"I liked that it was a local company," says Bowden. "They are ambitious young minds who want to take their local business to the next level, and that's why I trust them. I think we're like-minded people."
Since Brownie Points has been set up, Bowden says customers have responded very positively to the new technology.
"I find there's a newfound excitement when people come to the cash," he says. "People like having the opportunity to track their progress, and I think that very incentive is what makes this a powerful tool."
Stenback says creating this incentive empowers the consumer, which inevitably leads to stronger relationships with businesses.
"If you want a tool like this to be successful, customers need to own it," he says. "We eventually want customers to have profile pages, so they are recognized at stores and praised for their progress as they earn rewards."
The next step, Stenback says, is to launch a pilot program, from which he aims to enlist up to 50 businesses across St. John's and Mount Pearl. This will create a tightly-knit base from which Brownie Points will effectively grow.
"The whole purpose of the pilot is to prove that the concept can work here," says Stenback.
"If we can create a strong network of local businesses within one city, we can take Brownie Points to the next level."
Investment stage
This next level, he says, is pitching the concept to an angel investor, who will help launch Brownie Points off the ground to the national scope. After first building bases in Halifax and the rest of Atlantic Canada, Brownie Points will eventually land in bigger city centres, gradually building networks across the country and beyond.
This method of expansion, which Stenback refers to as a "conquest strategy," is crucial to the tool's philosophy. Rather than sporadically introducing Brownie Points to random cities across the country, the idea is to build one base at a time - pick one area and conquer it, before moving to the next.
"It's like putting up a wall against competitors," he says. "To get the benefits of that network effect, you need a concentrated number of spots in a targeted area."
Amongst this list of competitors is Perka, a Portland-based online loyalty program that has already partnered with businesses across Canada - including seven in Toronto and two in Vancouver. While their numbers are growing quickly in the U.S. and Canada, Stenback says Perka is not a long-term threat.
"They partner with businesses all over at any time, which is ideal for quick expansion," says Stenback. "But our strategy is about creating a community in one specific area, and building long-term relationships."
Stenback says he hopes the tightly knit culture of St. John's will help build this initial base.
"It's like two degrees of separation here," he says. "There are pockets of connected people everywhere, but the city of St. John's is that one unified pocket. We are all very connected."
The pilot phase is set to kick off this summer. In the meantime, Stenback says he is continuously improving the product and discovering new ways to engage consumers and businesses, such as implementing push notifications and statistics functions.
Eventually businesses will have the option of sending push notifications to their regulars about new deals or rewards offers," he says. "It all falls under that idea of engagement with the consumer, and maintaining that two-way flow of communication."
Every detail, Stenback says, ultimately leads to one fundamental goal.
"We want to build networks," he says. "Eliminate the faceless consumer, give people meaningful choices and bridge the gap between the people and the product."
Brownie Points is currently being offered in Post Espresso at 168 Water St. in St. John's, Happy Hummus Hut at 208 Duckworth St. in St. John's, and Clay Cafe at 39 Commonwealth Ave. in Mount Pearl.
