Featured Startup Pitch: Loyalzoo wants to enable local merchants to create loyalty programs that rival those of their big brand competitors

By Massimo Sirolla, Loyalzoo co-founder and chief executive zoologist

ELEVATOR PITCH

Loyalzoo is a loyalty app designed to help independent merchants compete with the big brands. It lets businesses create their own loyalty programs, which can be run wherever: Either online, using our app, or integrated in existing POS-systems. It is the first truly affordable option which gives small businesses access to advanced tech.

PRODUCT/SERVICE DESCRIPTION

Loyalzoo’s app is aimed to help small businesses grow and compete through increasing customer retention. With the app, every retailer can create their own loyalty programs and choose rewards that fit their business. The business can choose between a stamp-based or points-based program, and they can give loyalty points any way they want; printed on business cards, on receipts, on packaging, in emails, tweets, text message, or using our mobile app or direct POS-integration. Phew! It is also the first loyalty app which works for online retailers or those without a set location. So it works just as well for the hairdresser on the corner as for the online supermarket or a photographer who moves between his studio and various locations. We have everything from upmarket restaurants, to hotels, pubs, spas, and delis using it—all in their own way.

FOUNDERS’ STORY

My business partner and I both live in Chiswick, West London. Mark Ryan, my co-founder, is originally from Ireland, but he’s lived most of his adult life in the UK. His experience includes marketing online reservation systems for restaurants, both in the U.S. and the UK. Myself, I’m from the north of Italy—which you may have guessed from my name—but have lived in London for almost eight years. My background is in the IT sector; I spent 19 years selling multi-million-dollar solutions to retail banks across the globe.

The idea behind Loyalzoo came to us one day when were looking at our wallets, full of (often unused) loyalty cards, and seeing how most big chains are promoting their own branded loyalty apps to replace traditional loyalty cards. The immediate question that came to us was: What about the independents? Our neighborhood, as any other, is full of them—and we both love the variety and buzz they bring. Local merchants are the lifeblood of an area, but they’ll never be able to compete against the large brands with all their technology and marketing investments. So the challenge for us was to create a loyalty app for independent retailers that is affordable, easy-to-use, and that will give them the technology they need to compete in this increasingly mobile society. Eight months after we started the business we quit our day jobs and put all our energy into Loyalzoo.

MARKETING/PROMOTION STRATEGY

Until this point we use digital marketing, relying mostly on our website to sell the product for us. The majority of our business comes not directly from ads, but from organic search, which means people are actively looking for the product. It is increasing weekly, more-and-more businesses are looking for a way to digitalize their loyalty cards. Going forward we also want to be doing more active outreach to potential clients, which is something we don’t have the resources to do right now.

MARKET OPPORTUNITY

The big market for loyalty apps is currently in the States, where companies like LoyalBlocks and Belly are amongst the leaders in the sector. In the UK, several companies are trying, but the market is less receptive than stateside for now. We are the largest, with more retailers and a wider reach than any of our competitors. As for our target market, an estimated 99 percent of all businesses in the UK fall into the SME category—a figure which roughly translates into 5.2 million businesses. Most of these don’t have the budget or the resources to make their own app like the big brands do—that’s where we come in. We get requests from people wanting an app all the time—it is definitely an upwards trend.

HOW WE’RE UNIQUE

We are really proud that Loyalzoo is the biggest loyalty app in the UK. In the U.S. we have several competitors, but none of them have the same opportunities for the merchants. Loyalzoo is the only app that doesn’t require any specific hardware to run, as it works on any Apple or Android device, as well as on Windows-based tills. This means merchants can use their existing hardware and existing systems whilst reaching their customers straight on their smartphones.

We are also the only loyalty app which lets the merchant choose exactly how they give loyalty points: Electronically, with the app, their POS, or physically—putting codes on packaging, printed on receipts, or on business cards.

BUSINESS MODEL

We make money mainly when customers (businesses) sign up to our services, either on a monthly or annual basis. We are also partnering with other companies which offer Loyalzoo to their clients as added value.

CURRENT NEEDS

We are currently going through a round of funding, which we hope to complete before the summer, which will let us step up our marketing efforts and hire more staff to help us with business development—but that is just the beginning!

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HEADQUARTERS: London