One of the fastest growing startups in the Kansas City area is making a big bet that its cards can trump the competition.
Front Flip, a customer engagement platform based in Overland Park, Kan., launched in the Kansas City market on Nov. 4 and already has about 300 businesses and nearly 40,000 individual users on board. That’s all for a mobile application based on virtual scratch cards that help businesses attract, reward and retain customers.
Sean Beckner, 33, and his brother Matt, 29, grew up in the Kansas City area and graduated from the University of Kansas. They started Front Flip with co-founder Bart Janssen based in part on Matt Beckner’s experiences with his favorite neighborhood coffee spot. After Matt visited the same shop almost daily before abruptly switching to a new one, the brothers came to a couple of realizations. First, the initial shop had no way of gauging Matt’s loyalty as a customer. Second, as Sean puts it: “What’s even worse is (even) if they did know that he’s gone, there’s not a way for them to reach out to him.”
Enter Front Flip, which Sean Beckner describes as a little like Groupon, with elements of foursquare and a dash of traditional customer loyalty cards. But he says Front Flip intentionally strayed from the Groupon model because it’s unfriendly to merchants’ margins and the market was already so crowded. The elder Beckner says his startup avoided mirroring traditional customer loyalty cards because, well, those are “very, very ’90s.”
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“What sometimes businesses forget is that it doesn’t matter if hundreds or even thousands of people come through your doors a day if you don’t have anything to really engage them in a fun way that they’re going to want to do every time they come in,” Beckner said. “So this is really a way to engage the people that you’re already getting and … it drives people into your store, then you have the system already in place to start capturing that information.”
To use Front Flip, customers download the app on their smartphone and register an account by submitting their gender, date of birth and zip code. From there, users can scan customized, branded QR codes that Front Flip supplies to participating businesses. Those QR codes unlock digital scratch cards — think lottery scratch tickets for mobile devices — that, when “scratched,” reveal whether the user has won a prize. A user then has 30 minutes at that location to redeem the ticket and collect the prize.
So, for example, a Front Flip user walks into the local pizza joint to pick up his order, scans a QR code near the register, “scratches” off his virtual card to reveal a 15-percent discount and walks out with a deal on his pepperoni pie.
With the platform, users get perks for their patronage of businesses. Businesses, in turn, collect data on customers every time Front Flip is used. That enables further engagement by the businesses, which can send push notifications — ideally used to reward loyal customers or invite back customers who strayed — to Front Flip users once a month.
Front Flip is free for users, and Beckner says “it’ll always be that way.” Businesses pay a monthly subscription fee to use the platform, with entry-level clients paying $50 per location per month and larger businesses paying $129 per location per month. (From left: Sean and Matt Beckner, photos from linkedin.com)
The startup has grown from a team of eight late this summer to 25 full-time employees today, and it followed the Nov. 4 Kansas City launch with a Dec. 12 debut in Dallas. Plans are in place to roll out in a third city sometime in February, debut in multiple cities each month after that and reach 40-50 markets by early fall of 2012. Beckner said user adoption numbers thus far for Front Flip compare favorably to statistics he’s seen from some other noteworthy startups with similar aims.
“We looked at the first month that Foursquare was released nationwide, and they got 5,000 users their first month,” Beckner said. “And then you actually look at Groupon in Chicago, and their first month they had 7,000 users. … Our first month, we were in that 25-30,000 range, so it’s been exciting to kind of see just how fast the adoption rate is.”
In late 2010, backed by $700,000 in angel funding, the company launched as Me360, an app for liking, sharing and discovering new places. Then this summer, around the time of a $2 million capital infusion from Archer Capital of Overland Park, Kan., the company changed direction.
“We kind of started challenging ourself to say, ‘Let’s do something better,’ ” Beckner said. “Once someone has been in your store once that’s great but how do you really engage them in a fun way and be able to continue to continue that relationship after they leave?”
Front Flip hopes the answer to that question — and success for the startup — is in the cards.
Here’s a Front Flip promotional video showing a demo of its app:
