Loyalty programs + Fun quotient = Front Flip, a unique approach

I met Jim, a restaurant owner in Ohio when I was in school, and I must tell you he was on top of things. He wanted to know how to turn his last customer (who ordered a big meal) into a loyal one? And it made me wonder, how do you even know who he was and if he would even show up again? Few years later, I observed that Matt Beckner, founder of Front Flip saw this as a business opportunity and found Front Flip with his brother Sean.

Front Flip, a Kansas (really!) based Fintech company found in 2011 by Sean and Matt Beckner aims to add the fun quotient in to the loyalty programs and invites the customers to keep coming back. In an interview with Forbes, Sean Beckner said Punch cards do not motivate customers to keep coming back. When we came up with Front Flip, we wanted to help businesses build visit frequency through a fun in-store customer experience and mobile bounce back rewards.

Front Flip charges businesses a monthly subscription fee of $125 and has tie ups with KFC, McDonald’s, Wendy’s and Pizza Hut. Front Flip has been successful in raising funding of $7.7 Million and is backed by VC’s like Peter Brown from Grassmere Founders, Gary Fish (founder of FishNet Security) and Archer Foundation Executive Chairman John Derbyshire.

So how does Front Flip actually work? Front Flip’s QR codes are found on a restaurant’s table and on the back of the receipts. Front Flip’s clients offer their customers a unique QR code. Customers enter their personal details through the Front Flip app to access the code. Customers scan the code through a Front Flip app on a smartphone to receive a digital scratch card. Prize or promotion details are revealed and the users can share their prize details with their friends on Facebook and Twitter.

Customer details captured are shared with the restaurants which help them determine the visit frequency and meal preference. From thereon, Front Flip’s clients reach out to their customers by enticing them with offers of freebies if the customers haven’t returned for 30, 60 or 90 days.

Front Flip had tied up with one of the McDonald’s franchisee group in Colorado which has a presence in 8 locations. Over 9,000 customers of McDonald’s took part in this program and scanned over 66,000 Front Flip QR codes. The restaurants saw an increase of 1.5% in sales in the first 90 days of the program.

54th Street Grill & Bar which was Front Flip’s first client reported that there were over 125,000 Front Flip users across 18 locations. The 125,000 customers are valued at $6.5 Million annually.

Front Flip faces competition from loyalty app provider Belly. Belly also has tie ups with over 3,000 restaurants in the US and charges them $50 - $100 a month. Customers of the restaurants who have tie ups with Belly use their mobile phones to scan the bar code on the app installed on an iPad placed near the cash register, to collect points and redeem them. Belly loyalty program is also made available to users who do not have a smartphone through a plastic rewards card.

LTP View: According to us the combination of tracking user preferences, loyalty programs & mobile based payments would work well in a restaurant setup. Having said this, it would be interesting to see if FrontFlip's user base and revenue would go up if FrontFlip plan to integrate mobile based payments through their app.