Three University of Pennsylvania graduates, Balu Chandrasekaran, Philip Tribe and Bipen Sasi created a startup last October that puts an entire new spin on recommendation, reward and loyalty at the retail level. We’ve often suggested that the recommendation/reward space is going to become hotter than daily deals as merchants focus on retaining and growing their customer base through loyalty. While Lokalty is only available in Philadelphia at the moment, these three entrepreneurs get that.
According to their website Lokalty was born in February 2011 out of an idea that the three had at a Rittenhouse gym. They started working on the project seven months ago and went live just five months ago. As we suggested above, they were growing tired of daily deals and wanted to find something more effective for both the merchant and the customer.
The idea behind Lokalty has been tricky as Chandrasekaran told FlyingKitemedia:
“Growing the company has been tricky”, says Chandrasekaran, who says he and his partners have taken on a difficult task, marketing to businesses and consumers at the same time. “It’s the classic chicken and egg problem.” While Lokalty means marketing for retailers, “most small business owners would rather hear sales pitches that address the cost side instead of the revenue side.”
After the trio gets over this hurdle, the benefits to a platform like Lokalty are easy to see. A customer in the Lokalty program, like may of us, has a key ring full of rewards cards. With Lokalty you get one card for all the network merchants. Lokalty makes it so if you buy enough coffee from Elixr you can get free bagels from Spread Bagelry . You can use points from one merchant in the network with any other merchant in the network. So not only is the Lokalty program encouraging repeat business at one merchant, but they’re encouraging discovery and repeat business at all the other merchants in the network as well.
More after the break
In a quick interview with Nibletz Chandrasekaran said that they currently have nearly 50 merchants in the Lokalty network ranging traditional coffee shops and breakfast spots, to bike shops, comic book stores, shoe stores and even pet shops which Chandrasekaran hopes to bring online soon.
Through grassroots marketing, word of mouth and counter real estate they’ve already grown the Lokalty customer base to over 3500 users. People are drawn to the local aspect of the business as well as the fact that they can eliminate a keychain full of keytags with just one tag.
Chandrasekaran talked briefly about his past life as a consultant for Bain Capital. His earlier career experiences have helped him a great deal with Lokalty and doing a startup. On the flip side though, as a consultant he was often able to work with companies for a long period of time, a luxury he doesn’t have with Lokalty where things are fast paced and constantly changing.
Lokalty plans to continue building themselves up in Philadelphia and then expanding to smaller cities like Baltimore and possibly DC. Cities that still have a wealth of locally owned businesses and smaller towns are the target market for Lokalty. They plan on sticking with local businesses only, of course it’s in their name. Chandrasekaran said they would never do big boxes and national chains, however a locally owned chain of bagel shops, shoe stores, restaurants are right up their alley.
They also have plans to offer unique deals to their customer base. By using the Lokalty platform to offer deals to their network of users from their network of merchants, the merchant doesn’t run into the problem they do with a Living Social or Groupon. We’ve found that many local merchants are actually losing money in their margin on daily deals to attract customers who aren’t sticking around. With Lokalty the retention piece is already built-in.
If you’re in Philadelphia be sure to download the Lokalty app in the Apple iTunes app store or in the Google Play Store for your mobile device and start earning points. Points can be redeemed for anything from a cup of coffee to a massage at the end of the year.
If you’re in the Philly area Lokalty would love for you to try their app out. Use promo code KEEPITLOKAL and get 100 bonus points in addition to the 100 points you get for registering.