FiveStars Helps SMBs Build CRM with Promotions

Leveraging Technology to Enhance Customer Experience

Five years ago, two business analysts taught themselves to write code and built their own customer loyalty program for small to midsize business (SMB). Matt Doka and Victor Ho, co-founders of FiveStars, offered SMBs help with delivering coupons and discounts via a cloud-based loyalty program. It was the first SMB loyalty offering that integrated with the merchants’ point of sale systems instead of using cards or mobile apps.

It then offered SMBs a behavior-based campaign called AutoPilot that sends regular customers coupons and incentives based on their recent purchases automatically. The program sends millions of targeted messages each month to customers from merchants who’ve adopted this service. This SaaS platform also integrates with most POS systems used by SMBs.

The company’s latest offering is called Promotions. It allows merchants to gather email and SMS information from customers to build what Ho explained to VentureBeat is a “super simple, super lightweight CRM” platform that collects data such as sales behavior, which allows the merchant to categorize visitors as repeat customers, regular daily or weekly customers or one-time visitors via POS info. For those who don’t visit frequently or one-time buyers, the merchant can send discount coupons or special offers to entice them to return for future visits.

Ho also reported that the beta test of Promotions revealed a 10 percent response rate, which is a fairly high rate of returning customers.

As a software as a service (SaaS) company, FiveStars’ business receives monthly revenues from its tiered services. Its initial loyalty program runs merchants $99 per month. Promotions costs $129 per month and AutoPilot is $199 per month. According to Ho, the company is now “the largest loyalty and marketing automation program for SMBs in the country” with more than 5 million customers and 6,000 SMB stores using its services. In late 2014, FiveStars raised $26 million to further build out its SMB services offerings.

According to the company’s website, FiveStars has “more members than any other rewards program” with 2.1 million check-ins each month, 325,000 new members signing up for the program each month and 70 plus loyalty promotions claimed for each business per month. It offers merchants a free trial and loyalty guide, which contains an ROI calculator, to try out its services before signing up.

Kim Mays has been editing and writing about IT since 1999. She currently tackles the topics of small to midsize business technology and introducing new tools for IT. Follow Kim on Google+ or Twitter.