The pleasant sound of a Lokalty chime will soon be audible all over University City. Philly start up
Lokalty, which rewards frequent local shoppers and cross promotes merchants, is now expanding westward from Center City. Over a dozen UC merchants have signed on since the company crossed the banks of the Schuylkill about a week ago.
Launched in October 2011 by
Penn grads Balu Chandrasekaran, Philip Tribe and Bipen Sasi, the name Lokalty is derived from Local plus Loyalty. "These days, business names are influenced by a domain name search," says Chandrasekaran, who changed the C to a K. But the uniqueness of the name is actually a good thing, adds Tribe, who comes from a product design background. "Lokal business means it's in our network," he says. The company tagline, "Keep it Lokal," has become a bit of a marketing boost.
Lokalty membership is not tied to a credit card, unlike
LevelUp, which isn't a direct competitor except in the area of retail counter real estate. Both companies use a dedicated smartphone built into a plastic box to read customer QR or bar codes.
Lokalty is a cloud supported consolidated version of all the separate customer loyalty tags people carry in wallets and on keychains. The idea is that when you earn points for shopping at one Lokalty business, you can reap rewards at any business in the Lokalty network. Buy enough coffee at
Elixr and get free food at
Manakeesh.
Growing the company has been tricky, says Chandrasekaran, who says he and his partners have taken on a difficult task, marketing to businesses and consumers at the same time. "It's the classic chicken and egg problem." While Lokalty means marketing for retailers, "most small business owners would rather hear sales pitches that address the cost side instead of the revenue side."
The business benefits of Lokalty participation may take time, but Chandrasekaran cites the example of newcomer
Spread Bagelry, which saw several dozen new customers directly related to Lokalty participation. The participating merchant is privy to valuable metrics, and can get to know customers on a first name basis. Lokalty, says Chandrasekaran, is a year round marketing program, as opposed to less frequent offers like discount coupons and seasonal sales.
The fully bootstrapped Lokalty is set to release a new version of its smartphone app within the next few weeks, according to Tribe, and the company, which launched with 7 merchants and is now up to 29, hopes to achieve critical mass via placement in dozens more businesses around Philadelphia and the Main Line.
Source: Balu Chandrasekaran, Philip Tribe, Lokalty
Writer: Sue Spolan