PlacePop: A Solution for Brands Seeking a Mobile Virtual Loyalty Card Program

Written by Bonnie Boglioli...March 14, 2011

Thanks to some 50 million Americans carrying around smartphones, location based services are among the most prominent applications in today’s social technology sector with players big and small getting in on the action. San Francisco-based PlacePop is one such location based service that focuses on social CRM services through its unique virtual loyalty card iPhone app.

Businesses utilize PlacePop to set up a free virtual card program that rewards customers checking into locations on their iPhone. While other applications feature similar benefits for B2C marketing, PlacePop’s app serves as a platform for businesses large and small to tap into. Businesses decide what offers to run, who to partner with and any other attribute that works for their B2C strategy.

PlacePop Founder and CEO Kent Lindstrom, who moonlights as an executive at an incubator and an investor, took time out of his hectic schedule to speak with Social Technology Review about PlacePop, the advantages and growing pains of mobile marketing and how to leverage the social graph for your customers. The interview has been edited for length and clarity.

STR:  With so many competitors in the LBS market including big fish like Foursquare and Facebook, explain PlacePop’s unique value proposition to businesses and customers alike.

KL:  The idea behind PlacePop is to allow businesses anywhere in world to have a mobile loyalty card without needing new technology or (IT) employees. Any business can set up a rewards program in three minutes and tailor it with photos, messages and offers. Consumers have virtual rewards cards with any business wherever they go, without needing to carry actual cards in their wallets.

STR:  Rewards cards can be a great marketing tool for businesses and geo-location has the added benefit of supplying valuable data. How do businesses leverage PlacePop to gain better insight into their target audience?

KL:  For starters, businesses see a feed of activity at their venue that includes any pictures that users upload while there, times that people visit and other broad data about who’s coming in. There are two big chunks of data that are appended to that. Most PlacePop users sign up using their Facebook profile. The Facebook API contains demographic data that businesses have access to, to the extent that it is of interest to them. The other thing that’s interesting is that you can run an algorithm to see where else your customers visit. With that info, you can cross promote.

STR:  Speaking of Facebook, how important is tapping into a larger social graph in today’s market?

KL:  It’s huge. For retailers, the biggest benefit is that customers have the opportunity to broadcast what they’re doing to a very large audience.

STR: For apps like PlacePop, you need businesses involved to attract new users who won’t go unless there are rewards. And businesses may be reluctant to get involved until they see a large customer base. As a startup, how tough has this delicate dance been to manage?

KL:  It’s a chicken and egg problem. Retailers have a seen a huge shift in recent years just getting online. A few years ago they might have posted an online Yellow-page ad and nothing more. With the help of sites like Yelp and Facebook, retailers are driven to the Internet. At PlacePop, we’ve gone after business first. Our approach has been setting up partnerships with larger distributors and letting our product channel our strategy.

STR:  Location based services and mobile marketing are still relatively young. How do you define the right parameters of mobile marketing to ensure that you gain new users and keep existing ones rather than put them off?

KL:  It’s a real challenge for everyone in the space. We’re very much in the early days of what’s going on here. We know that check-ins are something people want for self-expression, but we might also find they want to tie their credit card to a particular program or something else that will decide the future direction.

STR:  Prior to PlacePop, you were the CEO of Friendster, the social networking site that dominates the Asian market. What did you learn from your experience there?

KL:  I had been the CFO of Friendster for a couple of years and eventually I was asked to be CEO. Because of the very different jobs I did there, I learned about everything from engineering to gaining market share. More than that, I learned just how rare and hard it is to find something that resonates with people.

STR:  You serve as an executive at Ooga Labs, a Bay Area incubator where you started PlacePop (which has since spun out). Aside from funding, what are the most important things that incubators and investors bring to the table for a startup?

KL:  I think it’s very important to have investors who think the same way that you do. There are a few categories of investors and some will only invest in a very particular type of business. At Ooga, we aren’t that way.  Ooga provided PlacePop with engineering, people and capital which is a very unusual model. We iterated and changed direction for PlacePop a number of times.

STR:  Kent, thank you so much for your time today. We look forward to following PlacePop.

KL:  Thanks.

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