Grouponzi antidote empowers small biz

Grouponzi antidote empowers small biz

Summary: Australian small business owners now have the opportunity to leverage their best customers via a new application that combines the power of referrals with loyalty rewards schemes.

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TOPICS: Start-Ups
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Australian small business owners now have the opportunity to leverage their best customers via a new application that combines the power of referrals with loyalty rewards schemes.

The retail version of Posse was launched in November, and allows small businesses to reward their most loyal customers whenever they refer friends and family, according to founder Rebekah Campbell.

It sends a QR code to a referred customer via email, SMS or Facebook message. This must be scanned at the shop in order to redeem a special offer, and the referral generates a certain number of points for the referrer, which can be cashed in for discounted or free goods and services.

To date, 50 businesses in Surry Hills have signed up to the service for a $30 monthly subscription fee, which gives them access to the application and to manage their "posse".

Everyone wins, because good service is rewarded, according to Campbell, and the service is an antidote to the brand damage caused by the daily-deals sites, which have flooded small businesses with loss-leading, one-off customers.

"The store wins, because they have these customers that have been very highly targeted, because they've come through from the referrals of their best customers," Campbell said.

"You're more likely to get referrals if their service is really good, a daily-deals site, for example, you can get 1000 new customers, because they've offered something really cheap.

"I think it's the next evolution. The next Groupon, in a good way, one where the merchants actually win."

The idea has evolved from the initial version of Posse, which rewards music fans when they promote their favourite bands. It became increasingly popular with festivals, and then night-club promotions.

The night-club promotions demonstrated to Campbell the value for retailers, and she plans to push out a major update in February.

This comes on the back of a bumper year for Posse, with the company recruiting Google Maps founder, and now Facebook executive, Lars Rasmussen as a board member, and Google Wave developer Alex North. It has also has raised almost $3m in funding, including from Twitter investor Bill Tye.

SWOT

Strengths

It leverages the very powerful purchasing concepts of loyalty rewards and referrals, and has a rock-star developer team with lots of investment cash. It's a scalable, profitable business model.

Weaknesses

Ability to scale could be the only limiting factor, because the firm is locally based and could require significant sales force to add customers (similar to Groupon).

Opportunities

It's proven to be a powerful customer-engagement model, and has first-mover advantage. It could received a huge funding injection from Silicon Valley investors.

Threats

The model could be replicated by other companies in geographies around the world, similar to the daily-deals sites. Also, Campbell is accountable to investors.

Conclusion

Everything about this is a winner: the customer engagement, the technology team, the investors and board members and the vision; 2012 will be the year of Posse.

Verdict: BOOM

Topic: Start-Ups

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