April 9, 2012
The best way to explain loyalty rewards platform Zavee comes courtesy of Cofounder and COO Ron Stack:
“Daily deal sites like LivingSocial and Groupon get the customers in the door. Zavee keeps them coming back.”
Sounds like a no-brainer – what merchant wouldn’t want to use a tool that can do that? And who would have thunk that Zavee was started by 2 attorneys.
Stack started out as a corporate lawyer in NYC but decided there was a marketing guy inside, switched careers, and opened a corporate brand strategy consulting firm that focused on professional services. His former law firm colleague, Alan Pleskow, who still practices law, constantly pitched Stack startup ideas: “He’d come to me and say, ‘Ron, you’re a marketing guy – what do you think of this idea?’ And the ideas made no sense, but at one point, he pitched me Zavee. We whiteboarded the thing forever and launched it last year.”
Zavee was started from the prospective of local merchants rather than consumers, which are still using paper coupons and ads in local newspapers and on TV and radio – none of which are priced on performance or give actionable data, not to mention that they tend to be expensive.
As Stack explained, loyalty marketing is more about the entire customer lifecycle and not just customer acquisition. “From the standpoint of a huge loyalty system like Macy’s, it’s not rocket science, but this is new for the local pizzeria. Because they pay only on transactions, merchants aren’t faced with the pay-up-front cost of traditional marketing in the hope that it works.”
Zavee has more than 20 different types of customizable offer types that go way beyond 10% off. They have offers based on customer attributes, like where they live, how old they are, etc., and offers based on behavior, like if you spend more than $X, you get extra savings. It is also socially integrated, so it’s a more effective word-of-mouth solution for merchants.
Response from both merchants and customers in South Florida, where they are based, has been great so far, but even better is the response from the loyalty industry, which has historically overlooked local merchants in favor of large multi-location merchants (think Macy’s, CVS, Nordstrom, etc.). “All of a sudden, all of the big loyalty players are saying we need to do something with local and social,” Stack said. “So they look at someone like us, and they say, let’s talk….We are not a daily deal, we are an every day deal, and that is what local merchants need.”
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