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Belly App Converts 'Damn Paper Punchcards' to Digital Customer loyalty is important to small business -- but what consumer wants yet another rewards card? Logan LaHive's venture-backed startup offers a digital solution.

By Brian Patrick Eha

Opinions expressed by Entrepreneur contributors are their own.

While customers now routinely "check in" to favorite shops and restaurants using various social media, many small businesses still rely on old-fashioned punchcards as their primary loyalty program. One rewards startup, Belly, is trying to change that.

Belly works one-on-one with small and medium businesses to create digital loyalty programs and to design customer rewards that are more unique than the typical "buy 10, get one free" deal. Customers can use Belly either on a physical card -- intended to replace every other reward card in their wallet -- or on a mobile app. We talked to 30-year-old founder Logan LaHive by email to learn what makes Belly stand out. What follows is an edited version of our exchange.

Entrepreneur: How did Belly come about?
LaHive:
Belly arose as most disruptive businesses do: out of the desire to solve a problem. We saw large companies building marketing programs and technology to reward and incentivize their customers, but there were no tools effectively solving this problem for small [and] medium businesses. We set out to level the playing field.

Our goal is to take the traditionally offline experience of shopping in a small business, and bring it into the digital era. To help businesses foster better relationships with their customers via a custom and unique digital loyalty program -- a program that enables data, analytics, communication tools and social advocacy. We set out [to] help customers of these businesses consolidate all those damn paper punchcards into one place, and get rewarded at all their favorite businesses.

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Entrepreneur: What makes Belly valuable to customers and businesses?
LaHive:
Belly is a digital loyalty program built with a deep understanding and respect for small businesses and their customers. Loyalty to a small business is not about a coupon. It's not $2 off on your bank statement. It has nothing to do with how you pay. Loyalty to a small business is wanting to go where someone knows your name….where you love the culture, personality and product that they sell.

That's the key for Belly -- we enable businesses to have a custom and unique loyalty program, while being part of our universal network. We provide everything they need, including the iPad, physical loyalty cards, marketing materials, data and communication tools. By having a physical loyalty card, every customer that comes through the door can sign up, and with the mobile, users can discover locations, view rewards and get offers straight to their phones. [It's the] best of both worlds.

Entrepreneur: How challenging has it been to build Belly?
LaHive:
A wise mentor once told me that a fast-growing startup is like trying to assemble an airplane mid-flight. Truer words have never been spoken. It was a process of iteration to build Belly -- one filled with months spent entirely in stores talking to small-business owners and their customers, understanding their needs, then building that product for them.

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Entrepreneur: What are your finances like?
LaHive:
We raised just shy of $16 million in our first year of operation, from phenomenal investors like Andreessen Horowitz, Lightbank and Silicon Valley Bank. While this level of investment from top-tier investors is a nice endorsement of our position as the leader in the digital loyalty space, we are acutely aware this money is intended to support scaling our business quickly, adding new markets and investing in the continual innovation of our product.

Entrepreneur: What are your plans for growth?
LaHive:
We are expanding our universal loyalty platform to new markets, growing our merchant, user and engagement numbers at astonishing rates, and rolling out new products to improve the Belly experience. But beyond just achieving ubiquity as a loyalty solution, we view Belly as the means for businesses to create relevant, lasting and data-driven digital relationships with their customers. And our position -- a customer-facing tablet at point of sale -- very much enables us to execute on those plans.

Brian Patrick Eha is a freelance journalist and former assistant editor at Entrepreneur.com. He is writing a book about the global phenomenon of Bitcoin for Portfolio, an imprint of Penguin Random House. It will be published in 2015.

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