Iowa City startup BlendCard is a customer loyalty program for a community’s local businesses.

Imagine getting the tenth punch on a “Buy 9, Get 1 Free” rewards card at your favorite coffee shop, only to lose the tiny paper card before you can redeem your free drink.

With Iowa City startup BlendCard, you’ll never miss out on a customer loyalty benefit again. The company’s tag line is “free stuff all over town—one card in your pocket.”

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Founder Paul Kongshaug had a vision: loading all of a community’s punch cards, coupons, rewards and gift cards onto a single card that wouldn’t get lost in a customer’s overly packed wallet. After four years of behind-the-scenes work, he raised $100,000 from private investors in September 2013 to launch BlendCard, a new loyalty program for customers and businesses.

Though BlendCard started out as a responsive, mobile-friendly app, Kongshaug quickly realized he wanted to capitalize on a key fact: consumers and businesses are already familiar with using physical cards for loyalty or rewards programs. Kongshaug says it’s a win-win for BlendCard because customers intuitively understand how to use the product, employees don’t have to learn a new system and the cards integrate easily with existing point-of-sale systems.

“In my opinion, what the local market needs is a sustainable platform for loyalty programs, one that doesn’t just bring people in the doors, but maps customer data for businesses so that they can track consumer patterns and relationships,” Kongshaug said. “It also has to be easy for customers to use, something specific and simple. With traditional rewards programs, it’s more, ‘Here’s your customer, good luck.’ We wanted to provide more than that.”

For customers, participating is incredibly easy. They can pick up a card at stores offering BlendCard and register online using a phone number and email address. Users also can request a card online at BlendCard’s website, which will be mailed directly to their home, free of charge.

Once a card is registered, customers log on to see all of the deals, coupons, gift cards or rewards associated with BlendCard businesses. Each listing is pre-loaded and detailed in real-time, and any earned but unused rewards are kept in a separate column so that customers don’t forget about them. New users receive rewards from simply signing up, and the perks continue alongside customer use.

Similar to other rewards programs, customers out shopping can access BlendCard promotions at a store by providing their phone number, instead of carrying the physical card with them.

Kongshaug (right) structured BlendCard to works with all types of businesses within a single community: coffee shops, restaurants, retail stores, auto repair, health and wellness, graphic design and more. Businesses can customize the rewards they’d like to provide, as well as change the rewards at any time, which leads to more success than traditional loyalty card programs.

Businesses have unlimited options when it comes to the types of rewards they want to provide through BlendCard, allowing them to test different deals in a pre-set market to incentivize people to come in and spend money. For example, if a business notes that a customer hasn’t used a particular reward, it can change the reward to something a little more enticing, to see if that works better for the customer.

Originally, Kongshaug intended to start BlendCard in a place like California or Texas—but after attending an Iowa City TechBrew event, he realized Iowa could be the perfect market for testing a new startup company.

At its launch, a joint event with Yotopia Frozen Yogurt in Iowa City, more than 750 users signed up for BlendCard. After a few months of beta testing, BlendCard had 3,500 card holders and 75 registered businesses by January 2014. 

BlendCard is free to customers, but down the road, Kongshaug says businesses will be able to pay for additional integrated marketing packages and advertising opportunities.

“Some small local businesses can’t afford a lot of marketing on their own, so this is a way we can be useful to them and provide a marketing service on the side,” he said.

Customers also will soon be able to purchase gift cards for businesses directly through BlendCard, which can then be shared with other BlendCard users or conveniently saved in one’s account. Even further into the future, Kongshaug hopes to incorporate some sort of fundraising element into BlendCard where a percentage of gift cards purchased using the program could benefit a particular charity or nonprofit organization supported by businesses.

While Kongshaug works on BlendCard full-time, his team includes strategic partners—who focus on implementation and execution as well as software development and marketing—in the Iowa City, Cedar Falls and Washington, Iowa, regions. He hopes to raise another round of significant funding in the next six to nine months in order to expand BlendCard throughout Iowa.

“It’s in my blood to create things,” Kongshaug grins. “Loyalty is good for businesses and I look for ways to get ingrained into a local community as much as possible.”

Credits: Photos courtesy of BlendCard.