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Reaping the benefits of customer loyalty with sights on global market


MARKETING MOTIONS: Sean Gallagher with James Lenehan, who set up Reep Rewards in 2013. Photo: Gerry Mooney

MARKETING MOTIONS: Sean Gallagher with James Lenehan, who set up Reep Rewards in 2013. Photo: Gerry Mooney

MARKETING MOTIONS: Sean Gallagher with James Lenehan, who set up Reep Rewards in 2013. Photo: Gerry Mooney

Nowadays, whenever we go shopping, whether to our favourite clothing outlet, supermarket or to simply top up with fuel for the car, we are probably going to be asked by the shop assistant if we have a loyalty card.

By simply presenting this card or tag, we are entitled to either a discount of our current purchase or points which we can use against some future purchase. With so much competition in the retail market space right now, such loyalty programmes are fast becoming an established way for shop owners to reward regular visitors to their stores and to promote better customer retention.

So successful have these reward programmes become, that one Dublin entrepreneur, James Lenehan, spotted an opportunity to develop his own solution for the sector.

When I visit him in his Donnybrook office, James is both upbeat and optimistic about the future. And why wouldn't he be? Reep Rewards, the company he set up in 2013 has really taken off. A mobile app that offers discounts and cash back to loyal customers, it has already had over 80,000 downloads.

Today, he employs a team of 10 full-time staff and is on target to turn over €1m this year. So how does it all work, I enquire?

"Shoppers simply go to the Apple or Android app store and download the free Reep Reward app. This then allows them view a host of special offers which retailers - mostly supermarkets - from all over the country have uploaded. The app then entitles them to avail of savings on these promotional items which, in some cases, can be as much as 25pc-50pc off the original product price," explains James.

"In addition, users can choose to earn cash back by taking a photo of their till receipt using the app which in turn uploads it into their personal Reep Reward account.

"Once uploaded, the system verifies and validates the receipt and issues a notification to the user that cash has been added to their account.

"Currently, we are processing as many as 7,000 individual receipts from shoppers every day," he adds proudly.

On the face of it, it's a straightforward business model. However, in order to be successful, James's challenge has been to continually focus on developing two distinct markets at the same time: retailers and shoppers.

"It's the classic sales and marketing dilemma that many new businesses face," admits James.

"The more, and the better the brands we have, the easier it is to get more shoppers to sign up. And similarly, the more customers we have using the app, the easier it is to attract the big brand names in the first place," he adds.

However, with between 400 and 500 products on special offer at any one time, retail stores and brands are quickly realising the potential that Reep Rewards offers them in connecting directly with shoppers.

For many, this has come along at a time when they have begun to move away from traditional paper-based special-offer flyers to the more dynamic and instant world of online and mobile.

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An additional feature of the technology developed by James and his team is the opportunity for retailers and brands to invite consumers to complete a short questionnaire about their shopping experience.

"They get a notice to their phone or mobile device after shopping to see if they are willing to take part. It's a real win-win scenario. Gaining feedback provides retailers and brands with a deeper understanding of the purchaser's journey when this is still fresh in their minds, with further recommendations as to how this journey could have been improved from the shopper's perspective. On the flip side, the shopper gets the opportunity to earn extra discounts or cash in return for taking a few minutes to fill out a quick survey," explains James.

The concept is also becoming attractive to brands because they are realising that they now have the opportunity to interrupt shoppers on what is called their "pathway to purchase".

Through a combination of rewards and incentives, whether discounts or cash back for purchasing specific items, retailers and brands can now influence the buyer's decision-making process and direct them towards certain product items.

James also understands the power of the data that can come from tracking the patterns and preferences of so many shoppers, feeding this back to retailers in a way that allows them better understand buyer behaviours. It is something that will certainly be of value to retailers and brand managers in the future.

For the consumer there are other new initiatives which James is planning to implement in the near future. These include offering proximity promotions or geo-fencing functions that allow shoppers identify the closest participating stores where their favourite products are on special offer.

"It's part of the trend towards what is known as personalisation and localisation of services," explains James. "This is where the app actually does a lot of the work for you.

"From your buying history, it can narrow down the items you typically like to purchase and then match these to the nearest retail stores where these items are on special offer. Similarly, when shoppers approach a store, the app recognises that they are in the locality and, based on what they have purchased in the past, will deliver a push notification to their phone or smart device highlighting these or similar products that are on special offer inside," he adds.

Such advances are helping to reshape and revolutionise the world of promotions where brand owners or store owners can proactively and accurately target specific customers, such as those in defined age groups or geographical locations.

"In addition, they can then receive immediate feedback as to what promotional activity actually works. It is something that is likely to result in big changes in how marketing will be done in the future.

James Lenehan grew up in Dalkey in south county Dublin. He attended University College Dublin and completed a degree in law before going on to study at the highly regarded Michael Smurfit School of Business.

From there, his journey took him to the Law Society of Ireland where he qualified as a solicitor. For the next few years, he practiced corporate law in Dublin.

However, while he enjoyed the work, he had always been passionate about business and as time went by, his desire to start his own business grew stronger and stronger.

Business has always been in his blood. Growing up, his father ran the Lenehan's Hardware chain and he recalls how business was always talked about around the family's kitchen table.

Throughout his own college years, James ran his own successful business selling roses in pubs and nightclubs across the capital. He even managed to branch out to other locations by inviting a group of his fellow students from UCD to take a bucket of roses with them when they went home at weekends.

"At one stage we were selling roses in more than 20 towns around the country," explains James cheerfully. "It was great fun, but also hugely educational," he adds.

Working in the legal profession just didn't cut it for the young James. He didn't feel fulfilled. Eventually, he decided it was time to do something different and began to look around for a potentially viable business idea.

It was in 2000, that he came across the idea for his first start-up venture - an upmarket discount club which consisted of a book of quality discount vouchers which could be redeemed in a range of participating businesses.

While slow to take off in the beginning, the business did catch the eye of one potential customer - Bank of Ireland .

"I got a call from the bank who asked if I would come and see them for a chat," explains James.

"To my surprise, I discovered that they were about to roll out their student discount scheme to third-level colleges around the country. And we ended up being awarded the contract to roll out the scheme on their behalf," he adds proudly.

This was all the encouragement that James required to set up Win Win, a company that specialised in supplying rewards and incentives to large corporate clients in the banking, insurance and telcoms sectors.

"For example, a bank might offer a free flight or hotel stay for anyone who opened a new bank account with them," explains James. "It became recognised as a successful way to help drive customer acquisition," he adds.

Today, that company employs 23 staff and has expanded its customer base to include leading brand names such as Vodafone, Aviva, Mondelez, Heatons and Maxol.

"While James remains chairman and the majority shareholder of this business, the company has its own management team which now allows him to focus all his efforts on growing Reep Rewards, the new venture, he set up in 2013.

To help fund his new venture, James raised €1m in investment from two venture capital firms - Frontline Ventures in Dublin and EC1 in London - as well as from a German high-net-worth investor who is involved in the incentives sector in Europe.

With money now in the bank and a team of 10 staff in place, what are his plans for the future?

"To date we have focused on developing the app and building the IT backend infrastructure to support the collection of data as well as on marketing and brand awareness," explains James.

"We now want to focus on growing our mobile users from 80,000 to 200,000 over the next 12 months," he adds.

By 2016, he also wants to be in the export market and plans to focus initially on the UK and Germany. Recently too, he has had enquiries to licence the Reep Rewards platform for use in other markets, such as Australia and the Czech Republic. It's something he's not ruling out.

James Lenehan is a progressive and dynamic businessman. He could have stayed in his job as a solicitor. Perhaps he might even have been happy and comfortable in the role. But, like most entrepreneurs, he was moved by that insatiable pull to do something more challenging and more fulfilling - to start a business of his own.

At the time this must well have felt like a scary thing to do - but James, like his many customers, is beginning to reap his rewards.

For further information: Reep Rewards, 3 Argyle Square, Donnybook, D4


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