Move those pesky loyalty cards to your smartphone

adunn@newsobserver.comJuly 9, 2012 

If Chris Smashe has his way, you’ll soon be tossing all those store loyalty cards that somehow go missing the moment you want to redeem one for a free coffee or sandwich.

Smashe, a former Marine and self-taught computer programmer who lives in Holly Springs, has developed a smartphone app that he hopes will some day replace all those forgotten punch cards that sink to the bottoms of purses and desk drawers.

“We’ve taken the punch card and moved it to your phone,” Smashe said. “I see it as being easier. Everything’s here,” he said, tapping his smartphone.

Called FREEquents, the app went live in the Triangle in late May with a handful of participating businesses clustered mostly in the Apex and Holly Springs area near his home.

That’s mostly because Smashe, who built the app during the last several months, is juggling multiple roles in the fledgling company while also running his small software development firm to pay the bills.

Most recently, he has found himself in the roll of sales rep, trying to persuade shopkeepers to offer customized deals through FREEquents. “I’m the head cheerleader,” he said.

Smashe, 36, along with two partners, hopes to take FREEquents nationwide.

Nikoleta Panteva, a senior analyst at research firm IBISWorld, said FREEquents is a viable concept.

“In general, it’s a great idea,” particularly from the shopkeeper perspective, Panteva said.

She said apps such as FREEquents do what daily deal sites such as Groupon have not consistently delivered – the return customer.

With a loyalty card app, she said, “businesses are enjoying return customers, which is key.”

FREEquents isn’t the first punch card gone mobile on the market, or even the first in the Triangle.

Two other apps, Perka and Belly, have a considerable head start, with thousands of app users and hundreds of shopkeepers signed up.

But neither has a large presence in the Triangle. Ole Time Barbecue in Raleigh and a handful of other local businesses use Perka, which is based in Oregon and is used primarily in the Pacific Northwest.

About a dozen Triangle businesses use the Belly app, including the Flying Biscuit and Bada Bing Pizza in Raleigh. Belly, based in Chicago, has its biggest saturation in Chicago, Austin, Texas, and the Northeast.

So far, about a dozen Triangle shopkeepers have signed on to use FREEquents. The Sweet Frog yogurt shop in Cary is a recent addition to the line-up. Papa Murphy’s Pizza, the Beer Dispensary and Common Grounds coffee shop, all in Apex, are also among FREEquents’ clients.

Allan Jones, manager and owner of the Bruegger’s franchise in Apex, said he was willing to give FREEquents a try because it rewards his most loyal customers.

“It benefits our current clientele,” Jones said “We want to look after them like they’ve helped us through this terrible economy,” he said.

Plans for expansion

Beyond the Triangle, Smashe is working on expanding into Ohio, Minnesota and Florida, where friends and associates are currently making sales calls.

Smashe estimated he has invested 1,000 hours in sweat equity since FREEquents grew out of a casual conversation with friend and business partner Jim Penn, 47, of Akron, Ohio, late last year.

Startup costs, Smashe said, have been shared between himself and Ryan Monteleone, 36, the third partner in FREEquents. Monteleone works as a financial adviser and also lives in Holly Springs.

Smashe declined to give specific financial information on the fledgling business, but said FREEquents is currently looking for outside financing.

FREEquents charges shopkeepers a monthly or yearly fee to offer the smartphone punch card. And right now, as the company tries to make a name for itself, Smashe is heavily discounting the fees.

Before the launch, Smashe was offering a yearlong contract – with six months free – for less than $1,000.

For shopkeepers who don’t want to make a long-term commitment, Smashe is also offering a per-click fee, which amounts to a few cents.

FREEquents does not take a percentage of sales.

How it works

The punch card offers are customized by the shopkeepers. For instance, at Papa Murphy’s in Apex, you’ll receive $5 off a pizza after earning 15 “FREEquents” or points.

Using their phones to scan a barcode at the register, customers earn a point for each purchase and they have the option to earn additional points for checking in and posting to Facebook or Twitter.

It’s an extra perk for smartphone users addicted to social media, Smashe said, and it gives shopkeepers what amounts to free advertising.

The app, which is available for iPhones and Android devices, has a “couple hundred” users right now, Smashe said. “It’s not thousands, but I didn’t expect it to be 500,000 in the first week. It’s going to take awhile for people to learn about it and use it,” he said.

But he’s optimistic about FREEquents’ chances for success. “People love free stuff,” he said.

Jones, the bagel shop owner, is also cautiously optimistic. “I’m hoping it’s going to take off,” he said.

“It’s something new and everybody seems to have a smartphone.”

But for now at least, Jones is not quite ready to completely do away with the old-fashioned paper punch cards. “We’re keeping those for the analog people,” he said.

Dunn: 919-829-4522; Twitter: @amygdunn

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service