Denver-based Plink announced a new $3 million injection of funds today, led by investor Grotech Ventures. The money will help Plink scale, as it moves to compete with a growing number of players trying to angle for retailer reward and loyalty dollars, with its own offline reward program tied to a user’s existing payment cards. Already, Plink has significant traction among national restaurant chains, including Arby’s, Burger King, Taco Bell and Quiznos, but the company hopes to begin expanding its presence to other verticals.
“We’re at about six employees right now, and we’d originally done an angel/friends and family round back in April, and raised a little over $600,000, so that’s been funding us right now,” Plink CEO and founder Peter Vogel told BetaKit in an interview. “But that meant we could only spend about $5-7,000 per month on marketing. You’re going pretty slowly when you’re doing that, so about 65 percent of these funds are allocated according to our plan for member acquisition.”
For Plink, growing its user base via consumer sign-ups is an important step, since it’s managed to leverage the founding team’s previous connections and experiences selling online ads into promising relationships with both partner stores, and big brands to provide its rewards. Originally, Plink was banking exclusively on tying its platform to Facebook Credits (the social network’s virtual currency), since it was also doing most of its consumer-focused marketing in consumer games; Vogel said that the company’s since done a bit of a “mini pivot,” since Facebook didn’t push Credits as strongly as Plink initially hoped they would.
“We kind of picked that niche to start with kind of under the belief that Facebook was going to blow up Credits a little more, and it was going to be appealing universally all over the site,” he said. “But they’ve essentially given up on it. We were trying to push Facebook Credits, but we didn’t really get any support from them.”
The change in rewards could be a blessing in disguise, though, since now Plink can appeal to a much broader cross-section of the population. By offering gift cards to retailers like Amazon, Walmart, Kohl’s and Macy’s, the startup now basically has its bases covered in terms of what it can offer consumers who sign up. Facebook Credit is still also one of the options available, as Vogel says Plink felt it was important to still keep their inaugural audience of social gamers satisfied. The company is also looking to partner with travel miles providers to give consumers a way to add to their existing points programs.
Loyalty startups are cropping up at an incredible rate, including a number of companies focused squarely on tying rewards and other functions to existing payment methods, including Swipely, CardSpring, Mirth and Cardify. Vogel believes that Plink has a unique approach, however, since it’s going after primarily larger brands and chains, instead of the smaller, independent merchants many of their competitors are pursuing. Vogel also believes that providing gift cards is something consumers respond better to and value more than cash back rewards, which don’t end up being memorable and thus don’t promote the kind of loyalty sellers are looking for. Finally, he noted that Plink’s rewards don’t lock consumers in with usage restrictions, by being tied to a specific location, for instance, making them more generally appealing.
Plink’s entire model is basically built around taking affiliate marketing offline, and it appears to have won over a lot of business customers, including some outside of its restaurant comfort zone like Regal Cinemas. The company also notes that it’s been able to demonstrate a 68 percent rise in transaction value at its participating merchant partners, determined using purchase data drawn from customers before and after signing up for the program. The challenge now is getting the word out and signing up consumers, which will help immensely as Plink looks to reel in big fish in new industries.