Logan LaHive is the CEO of Belly, a digital customer reward program that offers insight to small to medium-sized business owners, reduces clutter in consumers' wallets, and even gives users unexpected perks, like the opportunity to punch a comic store owner in his gut. We caught up with Logan on the occasion of Belly's ranking as a finalist in the upcoming Moxie Awards in Chicago. We also asked him how Apple iOS 6's new Passbook feature--which aims to be a virtual wallet for digital coupons, among other things--might impact Belly.
FAST COMPANY: It’s been a while since we first profiled you in December. Remind our readers of the pitch behind Belly.
LOGAN LAHIVE: Belly is a digital universal loyalty program. It offers unique and customized rewards programs to small and medium-sized businesses. It helps the customer replace the buy-10-get-one-free punch cards, and gives the customer the ability to have one card, or an app, to use at all participating Belly locations.
Those punch cards are annoying. I usually throw them out, even at places I go to often.
Loyalty programs have traditionally been a problem both for businesses and customers. Punch cards fill your wallet with clutter and are easy to forget and lose. And for the business, punch cards don’t provide the business with data, and it doesn’t give the business any communications tools or analytics to run their business better.
Is loyalty really that nuanced? Don’t offers of free stuff simply bring customers back to the store?
Real loyalty to small to medium-sized businesses goes beyond coupons and discounts. It’s "Does my dry cleaner remember my name," or "Do they recall I don’t like starch?" What we try to do is create a platform for business to run loyalty programs, to promote their culture and personality, and to help foster more personal relationships with customers.
For at least one business you work with, that personal relationship with customers involves letting the most loyal ones punch the owner in the stomach.
[Laughs.] AlleyCat Comics has a reward program with eight different rewards, including a free back-issue comic book, a graphic novel, and the right to pick their movie at movie night. If you save up all the points, the owner lets you punch him in the gut. That doesn’t work for every business, but that’s why we offer the ability to customize.
Why do comic book store patrons crave punching store owners in the gut?
It might just be Nick, the owner. He’s got a nice round belly, and maybe his stomach in general just looks punchable. We worked with AlleyCat on that one. We proposed the idea to the business owner, and he liked it.
So you develop the loyalty programs in-house?
We put feet on the street and go in to each store to talk to the business owner and understand their personality. Then we have a creative team in-house that brainstorms all day thinking of content for stores that will drive customer behavior. The business owners have complete control of what they choose, but we provide consultation on the creative process.
How many stores are you in?
Right now, as of our last statement, over 1,600.
With such individual attention given to each client, how do you scale?
People ask us this all the time. How does this scale if it requires people? It’s really in the execution where someone has the opportunity to win this space. For us, scaling a team in order to support each business, you’re right, is hard. But we didn’t feel that hard was a reason not to do it. We try to automate as much as we can in terms of data, analytics, and tools. But each business has an account manager with a one-to-one relationship. We want to create a relationship with us over the long term. We plan on working with these businesses for many years to come.
What do you charge?
It’s a subscription service. The price point varies based on the services we provide, the level of data, analytics, and communications tools. It varies between $50-$100 a month. Businesses can try at no risk.
On Monday Apple announced "Passbook," which will be part of iOS 6. Passbook will have a place for digital coupons, among other things. Does this change the equation for you?
It's a brand-new announcement, so not all the information on Passbook is out just yet. But it's a platform, so Passbook allows third-party integration. It's not a loyalty card provider. An open platform that allows for partnerships sounds pretty neat to us. We see it not as competitive, but collaborative.
So businesses can't just digitize their punch cards through Apple?
Passbook doesn't display physical punch cards, only digital ones. So unless a small business has an internal set of developers to build their own digital loyalty solution, they could not display loyalty cards within Passbook.
So Passbook could basically be a new channel for Belly? Did you hear the announcement and rejoice?
Absolutely. It's an opportunity to leverage the tech they're building, and we think it's a great opportunity to become a digital loyalty platform for small businesses and enable them to have their digital loyalty card, through Belly, in Passbook.
Googling “belly” turns up you as the top hit. How’d you swing that?
We passed DMX and Hype Williams! That Belly IMDb link, that’s when I really got excited, about a month ago. Obviously, we’re a tech company, and we work on SEO and SEM, but it’s grown organically over the last few months.
Did you throw a party when you reached the top?
I raised a glass. We’re a startup that’s grown quickly in the last year. If we celebrated every milestone, we’d be celebrating five times a week.
Which were you more excited by, your top-Google-hit status or your $10 million investment from Andreessen Horowitz?
The 10 million dollars from Andreessen Horowitz.
This interview has been condensed and edited based on two phone conversations.
Follow Fast Company on Twitter.