Picture this: You’re a beer geek walking into ABG in Seaport, and instantly, a notification pops up on your iPhone alerting you about Smuttynose’s newest seasonal brew—along with a promotional offer. That kind of personalized, real-time experiential marketing is being made entirely possible for brands by Adored, a Manchester, N.H.-based mobile startup that utilizes iBeacon technology.
The startup just launched in early October, but already, it’s raised a $2.3 million round of funding from prominent local investors, including Kepha Partners, Boston Seed Capital, Matrix Partners and Borealis Ventures, along with numerous Dyn executives and other big-name angels, such as Kayak/Blade founder Paul English and Wayne Chang, head of product marketing for Twitter’s mobile platform.
Co-founder and CEO Cory von Wallenstein says the concept for Adored was sparked last summer. While weighing his options for what to explore post Dyn (where he filled the role of CTO), an investor friend made an off-hand casual remark that hit him hard:
“Some of the best companies are created because there’s a technology out in the wild that people haven’t figured out what to do with yet.”
A day later, von Wallenstein stumbled onto iBeacon—something he deemed “a marketer's dream, but a consumer's nightmare.”
“I don’t think people understand that when they select ‘allow access to location’ on an app, that includes iBeacon capability, which gives that app visibility into where you’re standing indoors down to about a foot,” he told BostInno in a phone interview. “I knew there was huge potential for this, though, because the consumer adoption is already there. It’s already in everyone’s pocket. The problem is that the beacons aren’t deployed. And the only way you’re going to get those deployed and consumers to actually want to participate is to give them a first class experience where they’re the beneficiary, while also respecting their privacy.”
Von Wallenstein instantly began working on a prototype and by the end of August, had pulled together the founding team—which includes CTO Dan Vine, formerly at Acquia, and Director of Merchants Tim Thyne, formerly at HubSpot.
“The interesting thing about this venture is that we wrote the bare minimum amount of code to understand what the risks would be for the business,” he added.
How it works
The core concern with iBeacon technology, according to Von Wallenstein, is the privacy factor. That’s why this entire venture was founded on the basis of anonymity. Consumers don’t offer their name, gender, email address, nor do they create account username or password—and yet they can still reap a personalized experience. A download assigns a random identifier to a user’s phone, which enables the app to understand that person’s existing loyalty behavior and preferences without having to know who they are.
Still, that anonymous data on foot traffic and the peaks in visits-per-week enables vendors to segment their customers and profile their behavior. And since merchants are directly sent those analytics, they can use that information to make better decisions that delight customers and drive revenue.
But the real beauty of Adored lies in its hyper-personalization capabilities. Studies have shown that loyalty points alone don’t influence consumer behavior—in fact, according to Forrester, more than half of all loyalty programs aren’t actively used. With Adored, though, it isn’t about letting someone rack up loyalty points for rewards, it’s about creating a rich and rewarding experience.
With Adored, it isn’t about letting someone rack up loyalty points for rewards—it’s about creating a rich and rewarding experience.
For example, a restaurant could highlight different daily specials to a regular than to a suburban customer who only visits on Friday nights. And at a ski resort, Adored can segment people based on the chair lifts they ride, pushing a notification to newbies with an offer for beginner lessons, or one to experts with an offer to demo a new type of skis. At theaters, music halls and arenas, Adored can identify the type of event someone is attending, whether a jazz concert or comedy show, and tweak the experience accordingly, making suggestions for related things to do after the show is over.
“These days, making great beer just gets you a seat at the table,” said Peter Egelston, founder of Smuttynose Brewing Company, in a news release. “To compete, we need to create great experiences for consumers and at every level of the distribution chain. That is why we use Adored to help build stronger relationships and more remarkable experiences.”
In making these experiences possible, Adored allows restaurants, bars, hotels and other businesses to increase the lifetime value of their customers and brands to have more relevant direct conversations with customers. And that level of engagement increases the customer’s spend per visit, lifetime value and also the likelihood that they’ll come back repeatedly.
"There are dozens if not hundreds of companies trying to do something similar—because it is such a great idea—but the reason we're backing Adored is that Cory is assembling the team that is actually going to make this work,” said Paul English in a press statement.
Initial impact—and immense potential
Already, Adored has racked up more than 10,500 downloads in four metropolitan areas across the northeast, with 5 percent growth week over week.
Chang told BostInno in an email interview: “I greatly admire Cory’s mission with Adored. I’ve known him for a couple years now and he is a solid, genuine entrepreneur. Investing in Adored meant pushing the technology forward to how we all might engage in physical locations.”
After starting to use Adored, Cafe la Reine experienced a 20 percent increase in visits per week.
And thus far, the company’s approach has been validated. Vendors who use the app, like Smuttynose Brewing and Cafe la Reine, are already seeing results. After starting to use Adored, Cafe la Reine experienced a 20 percent increase in visits per week. Erica Murphy of The Common Man Family told BostInno that her organization began leveraging Adored at two locations in February and saw “strong consumer adoption and engagement.” As such, they’re introducing the Adored loyalty experience to more than 20 locations.
Von Wallenstein noted that this recent funding round will be used in part to expand the Adored product and sales teams. Right now, the startup has seven full-time employees, but will be bringing on four new engineers, and then adding four more sales positions in three months. Another key target is to expand elsewhere in New England — as far north as Maine and as far south as Connecticut.
“We’re laser focused on keeping these metrics where we have them,” added von Wallenstein. “With restaurants, we turned 20 percent of casual customers into regulars. When we measured traction, we had 5 percent conversion on all the real-time upsell we did. These are the phenomenal numbers, which is why the investors have invested so enthusiastically. So now—it’s all about building that for scale.”
All images courtesy of Adored.
