A new app helps you get rewards just by signing up with your bank account.
I'm Rich Dimiro.
This is Rich on Tech with me today is Derek Fung. He is the co founder and CEO of Drop. This is an app that's kind of like a rewards program, but for everything that you buy. So, Derek, thanks for joining me.
Oh thanks for having me Rich.
So I just explained Drop, but you can do it much better. So explain to me what Drop the app is all about.
Yeah.
Drop is an intelligent mobile app in which you link your debit and credit cards you download from the app store. You link your cards and right after you link, you're able to earn points with companies like Uber, Starbucks, Swarby, Parker, Jet dot com. And you earn Drop points and you can redeem the points directly in the app with a simple press of a button. You can redeem the points for Starbucks coffee, you can buy something on Amazon, you
can buy some you know, Duncan Donuts. There's a ton out of great reward partners and it's all possible through our app.
Okay, so let me get this straight.
So I sign up with my bank account, link those and then so what I is it are the rewards based on what I spend. So let's say you see that I bought something at Starbucks, Yeah, five dollars yep.
Do I get points based on that?
Yeah? Exactly.
So both the offers you have on the platform and also the rewards are targeted to the consumer based on what they want, you know, where they spend, and what brands that they like. But I'd say that the rewards are very you know, mainstream companies like Starbucks in which consumers are you know, spending at every single day. So something as simple as a coffee to something as extravagant as a flight with you know, American Airlines, which is another one of our rewards partners.
Wow, I probably need to spend a lot to do that.
So if I'm so, am I getting a reward for Starbucks for spending at Starbucks?
Or am I getting rewards?
Like let's say I go to like Abercrombie and Fitch and buy fifty dollars worth? Do I get then to redeem that towards a Starbucks gift card?
Yeah? It's a crossword platforms, So think of drop points as a currency.
It's a very open ecosystem.
It's not closed off like some of the other programs out there that sort of you know, try to lead you.
To spend with specific stores.
Like we really are trying to build a very open network in which you can earn it, you know, by taking ubers.
You can earn.
Points from you know, traveling and you can use them on coffee, or you can earn points on coffee and use.
It for a nice T shirt.
And so it's a really you know, flexible model that we've built.
And I earn points based on the places I spend that if you have a deal with those places, like basically that's where I'm going to earn.
Those points exactly exactly.
So it's everything from spending to even you could walk your dog and earn points. With some of our partners, you can you know try out orby Parker Sunglasses and so whether you've spent there before or not. Like we're essentially driving consumers to really engage with a lot of these really neat and and you know new age brands that we've partnered with like to just really quick, easy
to consume content and that's how we've built Drop. It's like a very light touch, seamless works in the background. It's literally you could even you know, you could forget about it. You come back and you have points.
So I was gonna say, that's almost a problem for you guys, that it is so set and forget, because you want people to come back to your app for two reasons a too ce Like I'm assuming there's like bonus offers where you can get like more points if you do something that's sort of targeted from one of your advertisers, or you want to see how many points you have.
So those are the two reasons.
You might come back to the app, right, Yeah, exactly.
So we understand that you know, the simplicity could even work, you know, has worked against us, and we want consumers to keep coming back. So what do everything from the standard notifications and email, But we're actually rolling at a really neat feature which which will involve video and influences within drop to pull consumers back into the app and really you know, they'll be talking about the products and the brands that we showcase and it'll be done through video.
And I think a big movement we saw in twenty seventeen was you know, HQ Trivia obviously was a big hit, and it really showed that these consumer. Consumers are hungry for new ways to consume content to spend, and you know, they want quick and there's there's a major what we call fomo where it can you know, oh, all my friends are on this app and they're all opening at
the same time. I think there's a lot of opportunities for new tech companies to really explore these new ways to engage consumers, and I think it'll be you know, exciting for us as we roll out some of these new features this year.
Who is your competition? Is it punch cards? Is it Starbucks' own loyalty program?
What's Yeah.
I think it's a combination of.
Retailers and the Starbucks of the world, as you mentioned, having their own programs, and as a consumer, I think we're just competing for mindshare. I think as a consumer there's like only so many apps you can have on your phone. There's only so many points programs you can spend time trying to figure.
Out and maximize.
I think so it's a combination of both the retailer's proprietary programs and also credit card programs. But the beauty of Drop is we're built on top of that and you can double dip you can triple dip. I think ultimately it's just getting that time from the consumer that's becoming so important.
Is Starbucks one of your can I get points for Starbucks?
You can get points for Starbucks and you can so I can get points from Starbucks at their program Yeah, gold Stars, what if they call it? I get points on your program on drop and then on my credit card spending the money at Starbucks, I get triple dip. So that's triple triple? Is that as far as I can go? Is there any more than the triple There may.
Be some secret Easter egg out you know, secrets out there, but that's the that's the big triple dip.
Yeah.
And tell me about redemption of these rewards. I know we kind of went into that a little bit. But so I build up what certain amount of points, A thousand points.
Yeah, a thousand points is a dollar and the first the lowest reward you can get is a five dollars at Starbucks. And so where we've built the program very differently is a lot of the bigger main strea in programs actually they want consumers to save up because a lot of times consumers they don't want consumers to redeem. It's a concept called breakage in the loyalty industry, and we send to ourselves, Hey, if we're gonna create a an app and a product that's consumer centric, then we
don't want breakage. We want consumers very quickly to redeem and get that first for board. So once you get to five thousand points, then you can redeem your first Starbucks. You can get to that first five thousand points by spending you know, every dollar you can earn points with with retailers, retailers like Loomingdale's or Forever twenty one or even Warby Parker, or you can try out some of these new services.
So oh, you know, try a Casper, or sign.
Up for Harry's Razors, or try out this new wag walk your dog and you'll get doing you know, twenty dollars worth a points, fifty dollars worth the points. A lot of the financial services companies, instead of spending money on Facebook ads, they'll give us, you know, they'll they'll work with us and you'll see an offer. Oh, try out this new Capital one credit card and earn you know, over one hundred dollars worth a point. So it ranges, but you can get there, you know, really really quickly.
You can also invite your friends, and there's other ways certain points as well in the platform.
And you said you were number two in the app store at some point. Yeah, I looked at the app store. You have thousands of ratings. Yeah, I mean lots and lots, so clearly people are using this. I mean that's that's pretty impressive. Are you impressed at the success?
Again?
I think to myself, like, there's it's a no brainer. Why would a consumer not want to use the product? And I think, as I said before, the biggest challenge is there's just so much noise out there.
There's so many apps.
Consumers are deleting apps at a more rapid rate than ever before. So I think it's just that that much more important to stay relevant. And we believe that to really stay relevant as a you know, direct to consumer brand these days is just to be transparent. Tell them up front, hey, you're exchanging your data and we're gonna
provide you value. And it's really you know, building a lifestyle, lifestyle company, a lifestyle brand that resonates with them, that they can experience every single day, and and you know, it's it's a very well well used saying, but it's this concept of oh, millennials want experiences. So hey, you know, I don't want to just redeem for you know, a gift card. Let's let's have more aspirational rewards. And we're working on a ton of both aspirational rewards and also
status and VIP. So imagine you show your Drop app and you get you know, whether it's line bypass or access to special lounges. And so that's the direction that we're really trying to head in twenty eighteen and onwards.
You can do a lot.
I mean, there's so much because people love they love the frequent flyer programs. They love people love loyalty programs because you're a customer of a business and you want to be rewarded for that.
Exactly. The average years household is a member of over twenty nine. So they love it.
But I think they love it too much in that you know, your wallet is only so big, and so I think we'll start to see a lot of concernsolidation. And really we're at the epicenter of a lot of that consolidation because Drop, you know, we pride ourselves in cross merchant. You can spend at one place and redeem it another and I think ultimately that's what the consumers want.
They want freedom.
It just made me think of two things real quick.
First off, I remember when all these loyalty programs started taking off. I had like all of them on my keychain, and so did everyone else.
Yeah, and it just.
Became ridiculous, you know, because you'd be like, okay, I And there came a point when I actually took them all off and I said, you know what, I'm not doing this. I'm not putting all these on my key chains. Is they were just taking up a ton of space. And you know, you can use your phone number for some of them. But I think you just made me think of plenty, which they tried to consolidate a lot of these things.
But I feel like they failed in a miserable way. They literally failed. They're shutting down in July. Oh, they just announced that they're shutting down the program.
Okay, because I just I mean, it was so complicated, like something I do, like get gas at Exon. There's no way I could ever and I get gas there all the time. There's no way I could figure out how to redeem or put my points or get my points, couldn't scan anything. I didn't know what the number. The number was like twenty five digits long. Yeah, so you learn from their mistakes.
Yeah, I'd say, you know, we're very very familiar with plenty. We were we were building our programs and looking to roll out, you know, in the very similar time horizon. But I think where they were very different is they took the traditional approach. And the traditional approach is, hey, let's find three to five what they call anchor retailers.
So they had Macy's, they had excellent mobile at and t let's convince their cmos to you know, give up half their marketing budget to replace their programs with art with you know whatever we're pitching them, and let's convince them to allow.
Us to put signage in stores.
And for the consumer, it's confusing and you're you're limited by and they have exclusivity, so you can only have one gas station, one this retailer, one pharmacy that right aid and they went the traditional card approach, and I
think it was just confusing. I think the challenge with them too is such big retailers and as I said before, like a lot of these financial institutions oftentimes have these relationships already built with these retailers, whereby it's hard for them to build a truly consumer centric model because you have all these merchants saying, oh, but what about what what about us?
What about ask? We like, we want to get our email out to the base.
So it's just a very tough model that has worked in other countries around the world. But I think why it didn't really take off in the US is it's so fragmented as well. You won't find as many you know, write aids on the West Coast as the East, or vice versa, or you know, there's just so many different types of these grossers and retailers that it's very hard to scale.
If you're a Verizon customer and AT and T is one of their main you know, uh, you know programs, you're just like not interested at the beginning, so like, we're not going to earn all those points for exactly from Verizon.
All right, So what's the website? How do I find the app?
Uh? Earn withdrop dot com.
But the easiest way really is just to pull up in the pull up in the app store, type and D will be the first one download link your cards, start earning points in minutes and redeem your points in days and even the same.
Day if you want.
And the easiest way to do that is just invite your friends on the on the platform and you can earn points for referring friends as well.
Nice Android and iOS.
Again, the app is named drop and so I can get the points I've got that.
Can I link more than one bank account.
As many courages as you want? Okay, so you can link credit and credit Okay, all right. Derek Funk, co founder and CEO of Drop, thanks so much for joining me again. The website is earn with drop dot com. Thanks so much for listening. I'll put a link to that on my website. Rich on tech dot tv, I'm Rich Murro.
I'll talk to you real soon.