Using cryptocurrency, Curt Hopkins, CEO of Koin Rewards, wants to make customer loyalty exciting again. And, his idea could just transform the way we all shop…
Your purchase will give you 25 points. TWENTY-FIVE POINTS! Excuse me while I dance a jig of delight. It’s hard not to spontaneously celebrate when you’ve added points to your customer loyalty account, isn’t it? After all, what do points mean? That’s right ladies and gentlemen, points mean prizes – as anyone who used to watch Play Your Cards Right will know.
Excuse the sarcasm. It’s just that retailer loyalty schemes do not exactly set the pulse racing these days. Like Play Your Cards Right, they’ve aged badly. They are the beige wallpaper of retail – generic, homogenous, dull, and in need of serious redecoration.
Someone who’s recognised the declining power of traditional customer loyalty schemes is Curt Hopkins, CEO of UK-based Koin Rewards. Curt, American by birth but resident in Britain for 18 years, wants to re-energise and overhaul the traditional system. Working with an experienced team that includes retail businessman Fergal O’Mullane and music entrepreneur Grant Calton and serial entrepreneur and Saracens Rugby Club chairman Nigel Wray, who is backing their idea, he has created an exceptionally robust management team. “We want to change the way people think about loyalty schemes,” says Curt. “We want to build the leading loyalty reward currency in the world.”
The key to their big idea involves exactly that – currency – because Koin Rewards will not offer points for customer loyalty. Instead, it will give members units of cryptocurrency – virtual cash that exists independently of a central bank. Shoppers will collect digital tokens – bitcoins – which they can trade. Crucially, the value of these Koins (as Koin Rewards calls them) is not determined by participating retailers but by the market, meaning that they have a specific, redeemable value that can’t be changed on a whim.
“We’re using new technology to solve an age-old retailer problem,” says Curt. “Retailers need loyalty schemes to keep their customers happy and to acquire new ones. But traditional programmes are just not working like they did. Why? Because customers feel disillusioned with them. They’re being bombarded with advertisements and don’t know how to ‘spend’ their points. Also, it’s never clear how much a ‘point’ is actually worth. And that’s hardly surprising because in many ways it is a false market: the retailer creates the points and then sets their value.”
Koin Rewards wants to get customers excited by loyalty schemes again. Its founders believe cryptocurrency is the perfect way to do this. “Instead of gathering meaningless points or air miles,” explains Curt, “our members and customers collect crypto currency. Rather than banking a point that you don’t know what to do with, you earn a tradeable reward. You can pocket it at one shop and redeem it at another at a price set by the market. You can turn it into real cash.”
But aren’t people sceptical of cryptocurrency? Won’t that be a hindrance? No, says Curt, because Koin Rewards allows people to dip their toes into the intriguing waters of crypto without risking anything. “Yes, there is crypto scepticism and fear of the unknown,” says Curt. “It’s a tricky technology to understand and there have been excesses in the market. However, we’re presenting crypto as a tradeable shopping reward – nothing more. We can help retailers figure out how to leverage this new phenomenon: we provide an opportunity to start using crypto in their stores, which gives them a way to differentiate from other merchants. And from the shopper’s perspective, we are offering a no-risk route into this new currency. People are intrigued by crypto – especially young people – they want to find out about it and how to use it – and this is an easy way to try it out.”
Curt and his team mean business. They are currently building what they call their ‘Alpha Coalition’ – a group of 10 to 15 retailers around which they will develop their product. The next stage – coming later in 2019 – is to launch their Initial Coin Offering (ICO) when they will introduce their cryptocurrency – Koins – into the marketplace. “Once funds are in place through our ICO, we will seriously scale the business,” says Curt. “We’ll add hundreds of retailers and millions of consumers – not only in the UK but across Europe and North America. We have big ambitions and that’s what gets us out of bed in the morning. But we also know we must take things one step at a time. That’s why we’re starting in the UK with a small set of leading retailers.”
Curt has lured some serious investors to back the project – not least Nigel Wray – and he has excellent advice for fellow entrepreneurs looking to raise capital. “You need to understand where your potential investor is coming from,” he says. “Is the investor a high-net-worth angel investor or a venture capitalist? Are they an institutional investor, from a family office or part of some other kind of fund? Each type of investor has different motivations, different reasons, and different parameters for investing. Understanding what drives them is key to making sure you’re speaking to the right person. Most people who are trying to raise money speak to the wrong kind of investor.”
By persuasively speaking to the right kind of investors and impressing them with their vision, Curt and his team have carved out a golden opportunity to transform customer loyalty schemes globally. If they succeed, retailers will reap the rewards and customers may finally win prizes…