Marqeta blurs the lines between online and offline commerce with its “pay in advance” approach. Consumers make their purchases online through the platform, and Marqeta sends them a free card to swipe when picking up their purchase. Retailers use the platform to offer perks like gifting, loyalty, promotions, cash back offers, charitable donations, and so on. Customers earn rewards as they use their card and Marqeta keeps tracks of all that information in one place. This system saves consumers money and offers retailers a channel for loyalty and marketing campaigns.

“Consumers are challenged with managing multitudes of offers, gift cards, and reward programs along with a lack of meaningful incentive to provide repeat business,” said Jason Gardner, the founder and CEO of Marqeta in an interview. “Retailers struggle to crack the code to easily capture customer loyalty and often need POS installation to run a rewards program, and enterprises are often unable to readily participate in relevant transactions within the payments stream, limiting their opportunities to optimize revenue. Marqeta makes the successful ‘pay-in-advance for your coffee’ Starbucks card model possible for everyone.”

The system works without any new software of hardware at the point-of-sale and requires no cashier training. Through the API and platform, merchants can customize their campaigns with different product uses and features. It is available at nine million locations on the Discover network.

Marqeta also announced today that its +M platform will drive Facebook’s gifting product Cards. Cards are like regular gift cards but work at a range of retailers like Jamba Juice, Olive Garden, Sephora, and Target. The cards can be reloaded and the balance checked from Facebook.

“Gifting is a very unique form of e-commerce, and we thought there was a lot more innovation that could be going on there,” said Gifts creator Lee Linden in a recent interview with VentureBeat.

Marqeta claimed in a statement issued this morning that the gift card space is worth $115 billion, but that merchants face significant challenges maintaining consumer relationships once the gift cards are issued. By requiring users to register on Marqeta, retailers can convert their loyalty campaigns into a “true marketing and engagement engine.”

This funding will go towards forming new national partnerships, “aggressively” expand its footprint, and contribute to product development. Existing investors Greylock IL and Granite Ventures participated in this round, along with new investor Commerce Ventures. Marqeta was founded in 2010 and has raised $22 million to date. The company has 37 employees and is based in Emeryville, Calif.

Today, this hot ticket-selling startup released Fanbase, a suite of customer analytics products that founder Andrew Dreskin said is a first of its kind. Venues and event promoters can use Fanbase to identify their top fans and offer them rewards for loyalty.

Dreskin’s claim to fame is “being the first guy to sell tickets on the Internet.” He cofounded a company called TicketWeb, which Ticketmaster bought in 2000. Around 2007, he saw that the main problems in event ticketing were still not being addressed and started building Ticketfly.

Ticketfly does not only sell tickets. Dreskin describes it as a “holistic technical solution” for events and venues. The platform provides events and venues with tools for ticketing, cross-channel marketing, and analytics that serve to streamline operations and drive sales.

“Historically, this industry had a lack of innovation,” Dreskin said during an interview at Ticketfly’s offices. “There were no integrated technical systems, nothing was connected, and there was no understanding of how tickets were bought and sold and who the customers are. We were the first to bring social ticketing and an integrated platform to this industry, and with Fanbase, we are continuing the theme of doing things first.”

The inspiration for Fanbase came from a discovery: that 7 percent of customers drove 30 percent of revenue. Ticketfly saw an opportunity to harness the power of these users by incentivizing their loyalty. The technology behind Fanbase is based on 12 different criteria that generate a ranking for each customer. Factors include how often a customer visits a venue, how much money they spend, their social media following, etc. Venues can adjust the criteria based on their preferences and reward their top users with perks like VIP access, presale tickets, merchandise, and drink tickets.

“Going to live events used to be an anonymous process, even if you went to the same venue 40 times a year,” Dreskin said. “Fanbase is about encouraging top fans to market on behalf of the venues and promoters, this has never been done before in the industry because no  other provider has access to this data. We are uniquely positioned to do this because we power all the technology for our clients. The industry is yearning for next-generation tools, and Fanbase is a great example of that.”

Fifty venues and promoters used Fanbase during beta testing and the feedback was “overwhelmingly positive.” Ninety-two percent of the clients said they would use Fanbase multiple times a week, and email sent with Fanbase offers to fans were twice as likely to be opened.

Dreskin told me to imagine that my favorite local venue offered me a VIP table for an upcoming show or gave me early access to shows that I might like. What’s not to like?

“It would be disingenuous to say that people solely buy tickets because they like a venue,” he said. “Of course the driver is the artist, but we are seeing more and more that people are developing great affinities for venues and promoters. If it’s a band they kind of like at a venue they love, they will go, and when they walk through the for, they are no longer a nameless, faceless person.”

Since launching in 2008, TicketFly has grown to 105 employees and 1,100 clients. Last year, the site sold tickets to 26,000 events and revenue growth continues to accelerate. Every 90 days, Ticketfly signs agreements to sell a million new tickets, and Dreskin projects it will do 250 million of gross transaction volume in 2013.

Ticketmaster is the startup’s main competitor, but Dreskin said it has major issues with technology and customer relations, not to mention alienating promoters by merging with event promoter Live Nation. Today’s releae is the first iteration of Fanbase and the platform will evolve over time as more people use it.

Ticketfly has raised $37 million in venture capital and is based in San Francisco.

Check out this video about Fanbase.

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July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

When the mobile app industry talks about success, it tends to tell a story of downloads. The more downloads you have, the better your app is doing, right?

Not exactly. Downloads are crucial, of course, but they’re only half the story. The full equation looks like this:

Success = downloads + loyalty

To say it another way, downloads are a top-line number that should always go hand-in-hand with two others: active users and retention rate.

If you’re going to spend time and money to acquire users, you can’t have them come in the front door and go right out the back, especially as the cost to acquire new users gets higher and higher. You have to make sure your best users stay happy and engaged as long as possible.

So the real question becomes: what are you doing to find your power users and keep them loyal? This is still a pretty new concept to mobile, but it’s a tried and true formula for the rest of the world. For example:

• American Express has its Membership Rewards program to give loyal users points for every dollar they spend — points they can redeem for concert tickets or home electronics.
• Virgin America rewards its loyal customers through its Elevate program — not only for flying but for using the Virgin credit card, staying with partner hotels, and so on.

I’m sure you can think of other examples because there are so many out there. In most major industries, the focus on power users is a given. That’s why the average household belongs to more than 14 loyalty programs.

And that’s why the best way to turn your app into a thriving business is to invest in your most active users. Focus on keeping them happy and you’ll not only grow their usage and loyalty to your brand, but you’ll make them more likely to go out and recommend you to other potential power users.

You see this idea at work in apps like Shopkick and Square Wallet that attract and reward loyal power users. And you see it as companies take the next logical step — helping power users attract other power users.

One big example: open the Weather Channel iOS app today and you get the chance to tweet your visit immediately. Power users tend to be significantly more social than other people, and that’s fueling a surge toward loyalty in 2013.

In light of all this, here are three top takeaways for mobile publishers:

1. When you talk downloads, be ready to talk retention rate, too.
2. Focus on the people who are already heavy users of your app. Not only will you keep them coming back, but you’ll attract new users who are increasingly looking for that two-way value exchange from the apps they spend time with.
3. Your power users are your best evangelists. Find ways to help them share their enthusiasm with others, and reward them for doing so.

Success = downloads + loyalty. If you want success to last, make your most loyal users your top priority.

Lars Albright is the co-founder and CEO of mobile loyalty and advertising platform SessionM. Lars is a mobile industry veteran — before SessionM, Lars co-founded mobile ad company Quattro Wireless, which was purchased by Apple and became iAd’s backbone. He also worked at Apple to help launch iAd, before leaving to build SessionM.

The Godfather photo via Paramount Pictures

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

AT&T has just announced the launch of AT&T Plus, a new loyalty program for AT&T customers.

So far, the program is just in a trial phase, and participants are limited to a select few in a diverse range of geographies around the United States, including Minneapolis and Houston. The company says it plans to test the Plus program with these consumers and gauge their interest in benefits and rewards.

“Based on what our customers tell us, it may be something we look to roll out more widely in the future,” an AT&T spokesperson said in a statement to The Verge. “It’s an example of our ongoing efforts to deliver a great experience for our customers.”

The Plus program, which is free for its trial participants, so far offers a rather snoozy set of benefits, which may include but are not necessarily limited to the following: a members-only phone number for customer service, no upgrade fees, no activation fees for second phone lines, a 25-percent discount for non-Apple phone accessories, and a $10 Starbucks gift card.

We’ll see what benefits (and/or fees) AT&T decides to tack on if and when the company deems AT&T Plus ready for public consumption. In the meantime, VentureBeat writers will probably be snarking privately about the irony of offering a loyalty benefits program while still seemingly shafting the majority of your customers with fun tricks like limited “unlimited” data plans and the flaunting of net non-neutrality for big-name corporate customers.

Image courtesy of olly, Shutterstock

CrowdTwist CEO Irving Fain

Consumer loyalty platform CrowdTwist, one of the graduates from TechStars NY’s first class, has announced a huge revenue growth of 3,200 percent year over year.

CEO Irving Fain once complained to me that his company didn’t get much screen time on the Bloomberg reality show, since there was little drama in a startup with a steady business. But his investors must be happy to see that things are going well, with revenue up; new blue chip clients like Sony, Pepsi, and the Miami Dolphins; and new executives poached from from big agencies like Digitas and Momentum Worldwide.

CrowdTwist is a white-label software company that aims to help companies extend their loyalty platforms beyond retail store to web sites, social networks, and mobile apps.

“A lot of traditional approaches don’t reach far beyond the brick and mortar,” Fain told me in a phone interview yesterday. “But when you can identify that customer on Facebook, Foursquare and your mobile app, you can tailor the rewards and increase engagement.”

Since launch last October, CrowdTwist work with Sony’s Kelly Clarkson has seen a 40 percent increase in purchase size and a 900 percent lift in engagement among her fans. Across the board, CrowdTwist customers are seeing an average purchase size increase of more than 30 percent and an average engagement lift of 1,000 percent.

The new hires are Adam Trisk, a former vice president of business development at Digitas, and Frederick Brown, who was an executive VP at Momentum Worldwide.

CrowdTwist raised a $6 million round of funding led by Softbank back in September 2011. With young startups, it’s hard to say what 3200 percent growth really means, but it’s worth noting that CrowdTwist entered the TechStars program when it was already a year old and generating revenue, so this isn’t a big jump from nothing to something.

In a way, New Belly can be considered the opposite of Groupon. Groupon is known for helping businesses with customer “acquisition,” and has been criticized for being a pump and dump sort of business — maximizing customers for businesses, but not caring about customer loyalty.

By contrast, Belly tries to offer loyalty. It says it replaces the traditional ‘buy 10 get one free punch cards’ with rewards that “fit the personality of the business and connect consumers on a much more personalized level.”

The company says it will be the first digital universal loyalty program that goes wherever you go: with a single physical card, iPhone App or Android App, that lets you earn points and redeem rewards at your favorite local businesses by simply scanning the card or app on the provided iPad. “Other reward programs don’t effectively cater to both consumers and businesses, and most are horribly ineffective,” said Belly co-founder and CEO Logan LaHive in a statement. “Consumers don’t want to carry several different cards.”

Granted, there are plethora of other companies that are offering digital reward programs, and who are also boasting single physical cards and apps. But the company says its biggest difference is that it also provides training and an in-store iPad with every subscription.

Belly says it is already installed in over 200 businesses in the Chicago area (see the map above; that’s a pretty impressive density).

The company is apparently trying to take some of the whimsy known in Groupon’s marketing, and applying it to loyalty. It’s boasting funny rewards, including one from a comic book store that offers customers a chance to punch the owner in the stomach, to a bakery that rewards customer 10 minutes for all you can eat cupcakes. It also lets you arm wrestle a sandwich restaurant owner or ride along in a food truck that will let its best customers “egg” the truck as it drives by.

Lightbank is the investment firm of Groupon co-founders Eric Lefkofsky and Brad Keywell.

Here’s a list of some of the projects:

• Galleria Market: Free Pint of Haagen Daaz / Ben & Jerry Ice Cream
• Dairy Queen: Free Blizzard or Smoothie
• Devil Dawgs: All You Can Eat Chicago Dawgs (10 Minutes In-Store)
• Dirk’s Fish & Gourmet: Kiss A Lobster – Then Take It Home With Dirk’s Famous Recipe and Dressings
• Cheetah Gym: Refer a Friend, Get a Free Month
• Heat Kitchen: Free Wild Game Sausage & Truffle Fries
• Papa John’s: 1 Pizza (one topping), Order of Wings, 20oz Pop, and Order of Breadsticks
• UPS Store: Free Ground Shipping
• AlleyCat Comics: Punch Staff Member of Choice in the Stomach
• Dog-A-Holics: Portrait of You and Your Dog On Our Wall
• Chicago Bagel Authority: Owner Will Write a Song For You!
• Molly’s Cupcakes: Name Your Own Cupcake for a Day!
• Molly’s Cupcakes: 10-Minute-All You Can Eat
• Gaztro Wagon: EGG the Truck – 60 Eggs & Egg the Truck as it Cruises By
• Southport Grocery: VIP – Cut the Line

[Update: This story originally called the company by its earlier name, Bellyflop. That has been corrected].

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Mobile payments startup Square has updated its popular iOS and Android apps to include loyalty tracking and discounts for regular customers and further hardware support for brick-and-mortar stores, the company revealed today.

“We’re enabling merchants to recognize regulars that use the Card Case application,” Megan Quinn, Square’s director of products, told VentureBeat. “With this update, there’s no need for coupons, punch cards or third-party apps.”

Square’s mobile payments service has seen incredible growth since its debut in late 2009. Quinn said the company has signed up more than 800,000 customers in the past year, and we heard recently that it is aiming to go more mainstream by selling its credit card readers at Walmart. Additionally, Square raised $100 million back in June on a $1 billion valuation.

With the update to version 2.2 for iOS and Android, Square’s biggest new feature concerns loyalty functions. We’ve already seen the updated Card Case application, which came out two weeks ago and makes it possible to pay Square retailers without touching your mobile device. Now, when Square retailers actively serve loyal Card-Case-using customers, they can automate the process of giving those customers a discount based on number of visits or the total amount spent.

“We want to help businesses of all sizes to grow using Square,” Quinn said. “By providing a seamless discount to loyal customers, both retailers and customers win.”

The update looks almost identical to the previous version, but it adds a “regular ribbon” (as seen in the above photo) that identifies loyal customers, and there are a few extra buttons too. There are also advanced features retailers can take advantage of such as better sales tracking, new tipping support, resending of receipts and providing refunds from the point-of-sale system.

Square also told us it has added support for some commonly used brick-and-mortar hardware devices like printers and cash drawers. When a Square merchant taps the “tender” icon, the cash drawer pops open and they can print out receipts that have personalized info. For printers, the app works with Star Micronics receipt printers and Square recommends the Star TSP143LAN or Star TSP650. For cash drawers, it works with the APG cash drawer Vasario Series equipped with a MultiPRO interface, and Square recommends the Vasario 1416 or Vasario 1616.

Zappos founder Nick Swinmurn wants to see a picture of everything in your closet.

In return, he’ll give you badges and even discounts on clothing brands that you love.

He’s not a creep (as far as I know). Rather, his startup, RNKD (pronounced “ranked”), is gathering information about what brands people are loyal to, and using that data to provide better information to those brands while offering good deals to customers. RNKD enters beta testing today.

“What you have is a better predictor than what you say you want,” said Swinmurn in an interview with VentureBeat (see video above). In other words, you might say you want a nice Brioni suit, but if your closet is full of Mark Ecko T-shirts, the odds are pretty high that your next purchase will be at the mall, not Fifth Avenue.

So if the Mark Ecko company only knew what a loyal fashion victim you were, it could probably get you to buy even more stuff by giving you discounts or early access to new clothing lines.

Enter RNKD. Swinmurn’s goal is to collect as much information about what clothing people actually own, while rewarding them for uploading and tagging photos. Step two is to approach brands with that data and figure out how to make a business out of it, perhaps through advanced data analytics services or through e-commerce offers.

In the meantime, the site can build momentum by getting clothing brands to offer real rewards in exchange for demonstrations of loyalty from RNKD’s customers. You say you’ve got 20 different pairs of Adidas, and the photos to prove it? Adidas may very well want to offer you a coupon for your 21st pair at some point. As the company’s press materials describe it, RNKD is “the first universal loyalty program that creates a direct relationship between you and your favorite brands online.”

RNKD has a bit of a chicken-and-egg problem in that no brands are likely to be interested in the community until it has a critical mass of consumers, yet consumers have no real incentives to open their closets to the world without real benefits. Swinmurn seems unfazed by this. Like FourSquare, RNKD is offering virtual badges as rewards for participation, making uploading into a competitive game. And, he points out, there are many sites where people already share information about what clothing they own, such as WIWT, Nice Kicks, Chictopia and Fashism, to name a few.

As someone who generally wears the same jeans three days in a row and can’t be bothered to shop for shoes more than once or twice a decade, I’m way outside of RNKD’s target market. And I’ll be honest, it seems like a pretty thinly disguised brand marketing scheme. Who is really so loyal to some abstract corporate brand that they’d be willing to share dozens of photos in hopes of getting some evanescent reward that just means you can spend more money on the same stupid corporate invention?

But Swinmurn might onto something, having made one of the most successful online retail operations of the last decade. He then followed it up with Dethrone, a small clothing brand focused on mixed martial arts fashion. Meanwhile, I spent the past twenty years working as a journalist. Clearly, he’s both a better businessman and far cooler than I am, and he’s probably a lot tougher besides, so who am I to say it’s a crazy idea?

Swinmurn, who is less well known than former Zappos CEO Tony Hsieh, started Zappos in 1999. He credits sheer, dogged persistence for making the company a success.

“Constant rejection was the only reason it worked,” he said, mentioning as an example the fact that it took seven years before Nike was willing to let Zappos sell its shoes. Only by going to industry trade shows year after year, learning the ropes and facing repeated rejections, was Swinmurn able to get traction for his online shoe business.

Based on that experience, he believes it’s better to build something real, then try to see if people want to buy it. Rather than raise a bunch of money on a speculative business plan, Swinmurn believes in just getting started and building something.

“People want to see something,” he said.

So perhaps, with seven years of dogged persistence, he may be able to build RNKD into something as successful as Zappos.

Looping, which provides businesses with a phone-based loyal customer tracking program, launched today at the DEMO Fall 2011 conference.

Most of a business’ revenue comes from repeat customers. So it is typically in a business’s best interest to create a loyalty program that generates repeat customers. But instead of issuing a punch card or some other physical loyalty program, customers just have to dial a number and then record a sound generated by a business to register as a “loyal customer.”

A customer just has to dial a number given by Looping and then hold a phone up to a businesses’ microphone. That business then has a unique “sound token” that fires off through the phone back to Looping’s servers. The servers validate that sound and register the customer — like punching a loyalty card, but customers don’t have to carry around those physical cards.

“With this simple dial and tap action we can identify the customerʼs presence, authenticate the transaction and instantly close the loop between both channels,” Looping spokesperson Dani Alyamour told VentureBeat. “Operating through audio coupling, with just a phone call, a secure channel is established between the customer and our processing platform.”

Looping has four employees and was founded earlier this year. It is based in San Francisco, Calif., and is self-funded by the founders.

Looping is one of 80 companies chosen by VentureBeat to launch at the DEMO Fall 2011 event taking place this week in Silicon Valley. After our selection, the companies pay a fee to present. Our coverage of them remains objective.