Most of the time, when customers become loyal to a business,
it’s not because they’ve been offered benefits via a loyalty card
or shown up for a one-time deal. And, some have argued, it can be
difficult to convert customers who focus
on bargains into those who simply love a product or
For that reason, many of the newest loyalty programs in the Middle East are jettisoning the coalition model, in which customers would register to receive benefits at a variety of companies, in favor of a merchant-driven model, which focuses on long term relationships to help stores grow their customer base organically.
In the UAE, it’s a busy sector; some of the rising loyalty programs include Snapp.ae, an app that uses QR codes to offer loyalty cards, Advantag, which uses NFC cards (more on their model soon), and UrbanBuz, which, uniquely, doesn’t use cards or QR codes, or even necessitate a smartphone or internet connection; all users need to collect points is an email address or phone number.
What sets UrbanBuz apart, says Dana Baki, the company’s Marketing Director, is that it exclusively takes a B2B approach, not serving customers directly, but building programs that are very tailored to merchant needs. Just don’t call it a loyalty network. “What we’re providing is not a loyalty network but a platform enabling any company to easily set up and customize levels of reward and engagement,” she says. “We provide businesses with the right tools and features to attract and retain their consumers.”
While educating the market about loyalty programs in general is
the burden that any loyalty program or deal service must adopt,
UrbanBuz goes further to refocus its clients- many of which are
small and medium-sized enterprises (SMEs)- from primarily focusing
on customer acquisition to understanding the power of customer
retention. As UrbanBuz’s CEO Mustafa Sadek pointed out, a 5%
increase in customer retention can lead to an increase
profitability by more than 25%, according to management leadership
Leading on the Edge of Chaos.
By focusing on offering new marketing and reward channels, UrbanBuz helps a given coffeeshop set customized perks and giveaways, such as cashback or points loyalty systems, or incentives for referrals, sign ups, sharing offers, or reading emails. Once a customer offers their phone number or email address, employees at the company log in to a specialized system to log the transaction amount, and communicate a consumer’s progress and rewards to them in person.
Although UrbanBuz is not designed like coalition programs, which, again, offer perks at a variety of outlets, it does allow its companies to launch joint benefit programs, where spending at one company earns customers discounts at both.
Over the past year, more than 30 business partners with over 25,000 active users have subscribed to UrbanBuz, increasing their average transaction size by 20%. One fitness center has seen a 52% growth in sales since joining, while a beauty salon has seen a 22% increase in retention rates, and a 40% boost in sales, says Baki.
Yesterday, Urbanbuz announced that it has closed a series A round of over $700,000 USD in Series A funding, from individual investors in the United States, Jordan and United Arab Emirates, to help the company grow and expand in the UAE and throughout the Middle East.
With the new funding, the company plans to grow from its current team of eight, launch an Arabic site and expand into Saudi Arabia, securing business partners before establishing an on-the-ground presence. It will also be expanding into Turkey and Egypt, growing organically as it expands with its partners; with a focus on small and medium-sized businesses, UrbanBuz is sometimes growing along with its clients, as they scale into new markets.
Although the loyalty segment is crowded, it seems that the company plans to continue focusing on SMEs, and building very tailored programs in order to carve out its niche.
Focusing on SMEs will also help develop the region’s economy, says Salam Saadeh, the company’s cofounder, COO, and investor via her VC firm Y+ Ventures, summarized the company’s broader goals in a statement:
“We are driven by our belief in the importance of SME growth to any economy and in particular to ours, as they represent more than 90 percent of the economy in the UAE. Making customer loyalty easy and affordable for SMEs means helping them grow their business and ultimately creating the much needed jobs for our youth.”