Massimo Sirolla is the founder and CEO of Loyalzoo, based at The Light Box in Chiswick, a fast-growing digital loyalty card service for retailers and the restaurant business. It replaces traditional loyalty cards and provides to small businesses the tools currently only available to big brands and chains, such as customer analytics, push promotions and social marketing.
He tells the business network Knowledge Peers about his business, how he founded and financed it and his plans for growth.
The story of Loyalzoo
Sirolla explains that smaller retailers - which make up 70% of the retail sector - are underserved by technology. While larger retailers are switching loyalty programmes to digital apps, smaller retailers have fewer options.
His co-founder, Mark Ryan soon came on board as he bought into the idea immediately. Sirolla explains that they have "different skill sets" and complement each other but, critically, they share "the same vision". Vitally, they share a common view on how the business will grow.
One of their key aims is to "hide the complexities" from the view of small businesses as much as possible. They integrate Loyalzoo into their point of sale. They are one of the only services around that require no training by the retailer.
Originally the business was based in serviced offices, but at The Light Box they have "much more flexibility... we really like it here, it's really cosy and there are lots of other companies just like us."
Three sources of funding
Loyalzoo has raised money in three ways: through friends and family, the crowd and angel investors. 'Most of my friends are shareholders in my company... They are very supportive and I try and give them an update every quarter.' Angel investors are, according to Sirolla, more 'demanding because they invest a lot more money'. Some of them 'get properly involved in the business.'
In April 2014, Loyalzoo launched a crowdfunding campaign, which raised £204,000 in less than two weeks, on the platform Seedrs. The following year, they managed to raise the same amount of money - £170,000 was invested in just three days.
Looking back, Sirolla admits he would have raised money faster in order to grow the business quicker.
Why only some loyalty schemes work
Loyalty programs are far from dying, Sirolla explains in his interview. But he doesn't mean discount vouchers and deals which he doesn't see as competition; they 'are in fact dying'. In the office, they like to call these schemes 'dis-loyalty programmes' because they incentivise you to go to shops you don't shop at often in order to make a one-off purchase.
Sirolla hopes the Loyalzoo approach will have an altogether different effect. It's meant to encourage consumers to 'come more often and spend a bit more'. There's a strong trend for large retailers to use customer data to tailor marketing messages. This is rubbish, says Sirolla. 'I don't think this is what people want.' Whether the message is customised or not, doesn't matter. The customer usually just presses delete.
The Light Box is a fantastic building home to a raft of New and Growing Companies in studios featuring high ceilings, exposed brickwork and wooden flooring – ideal for creative agencies, fashion brands and tech start-ups like Loyalzoo, to name but a few. If you’re thinking of setting up a business near Chiswick, click here to arrange a viewing of our available spaces.