Loyalty startups, beware: Belly lands in Bay Area with its quirky perks

Boring loyalty programs are getting some new competition. Quirky digital loyalty system Belly is expanding to California’s Bay Area.

Belly makes a rewards platform for small businesses and a universal loyalty card for consumers. Belly merchants deploy a special consumer-facing iPad kiosk to manage rewards, and Belly shoppers tote around a digital Belly card on their iPhone or Android device that scans for points at all participating locations. Belly prides itself on getting to know its clients, which means customers should find unique, occasionally bizarre, rewards at each merchant’s store.

Launched in August 2011, Belly now manages the loyalty programs of more than 4,000 local merchants and maintains a strong presence in 10 major U.S. markets. It counts 600,000 people as active users, and CEO Logan LaHive insists that the company maintains the fastest growing loyalty program on the planet (I can’t confirm).

Thursday, the company added San Francisco and the broader Bay Area to its list, launching with 150 partner merchants ready to deploy their own unorthodox digital loyalty programs.

Cupcake lovers who frequent Mission Minis in San Francisco, for instance, can eat their way to a satisfying reward: one dozen cupcakes of a personally concocted flavor. Palo Alto coffee house Ground Up is doling out free t-shirts to loyal patrons. The most loyal of the bunch who sport the tee in the store on future visits will get free coffee.

Behind the scenes, Belly spent about four weeks setting up shop in the Bay Area. The startup is using an operationally heavy approach, just as it does in other markets, to establish a presence in the city. The company hired a six-person Bay Area sales staff, and each signed-on merchant gets its own account manager to help structure programs.

The Bay Area launch, however, seems a bit belated. The market is an important one, especially considering Belly’s interest in loyalty domination.

“San Francisco is a very different beast,” LaHive told me. “There is a large number of competitive companies that, on a day-to-day basis, go around and pitch San Francisco merchants on some new technology. For us, we wanted to focus on really building our business and refining our product before we entered that competitive market. Now … we’ve decided to come to San Francisco and really make our presence felt.”

LaHive added that Belly is aggressively adding to its merchant list in the area. His pitch to Bay Area merchants is this: We can boost your business, and we’ve got the data to show it.

“We let them know that Belly is proven to not only create a deeper connection between merchants and customers but is also a proven system, across the country, that increases the frequency of visits month over month,” said LaHive.

Belly’s system increases the frequency of customer visits by more than 20 percent on average, he said.

Belly has raised roughly $13 million in funding to date. Buzzy venture firm Andreessen Horowitz poured $10 million into the startup earlier this year.

In the promotional video below, Courtney Lauder of Ground Up coffee talks about how Belly is helping the Palo Alto coffeehouse engage tech-savvy customers.

http://vimeo.com/53535044