Belly CEO: Loyalty Is a Relationship — And Relationships Take Work

Logan LaHive always wanted to be an entrepreneur. The first company he worked at, Pay By Touch, turned into a disaster, while the second was the hugely successful Redbox. After those two experiences, LaHive decided to strike out on his own and founded Belly, which creates unique customer loyalty and rewards programs for small- and medium-sized businesses. The company currently operates in 10 cities as well as many one-off locations around the country, and it got a massive vote of confidence in May when Andreessen Horowitz invested $10 million in series B financing.

LaHive connected with Street Fight over email recently about the process of scaling up, settling down, and the struggle between great ideas and execution.

I was watching an interview you did recently in which you said “Ideas, in general, are overrated.” You spent a lot of time iterating and trying different things out before settling on Belly. How long did that process take? How did Belly come about?
In scope of time, our iteration process to get the “idea” you see as Belly today was the over the course of a couple months, but it was one test/idea among many. The core here is that, to founders, all of their ideas look great on paper. When an idea hits you, its the solution. It’s the holy grail, it’s perfect… but your customers may think otherwise, and that’s all that matters. Years back when I knew I wanted to be an entrepreneur I waited to start my own company because I didn’t have an idea — and today I realize that the idea is the easy part. It’s the execution that’s hard.

I have people tell me every week that they had the idea for Belly years ago, but Belly was one-of-a-kind when we launched, and we managed to grow it. The actual process of development, to selling, to execution is what I value as our early accomplishment, not the whiteboarding.

Belly came about out of an idea to disrupt the “loyalty” space. We knew that was our problem — we thought we had solutions. But over time, iterations were tested, attempted to be sold (to merchants), and abandoned. Eventually, we came up with our current model — iPad in-store combined with physical card & app, and customers earn points for every visit toward custom and unique rewards. We built it, sold it, listened, and once merchants and users told us “yes” we scaled up our efforts and put resources into growth.

What did you learn at Redbox that translated to Belly?
If you don’t learn something each and every day you are falling behind. My first startup job was with a company called Pay By Touch — there I learned a lot about what not to do. The company was a massive bust. Horribly managed, little focus on unit economics, customer acquisition costs, LTV, user demand/feedback. I learned and documented all the things I contributed to failure.

I also believe my experiences there led me to Redbox. The product, market, culture, and leadership — all things that fit my new criteria. At Redbox I learned an immense amount about disruption. How to find a problem, focus on the consumer, build for scale, how to lead & communicate, and how to launch products. I spent over 4years with Redbox and was able to learn directly from many supremely talents leaders, and I tried to take what I felt was the best from each and incorporate those learnings into my own style. The key for me was knowing what I wanted to accomplish in my career — I knew what I wanted to be — thus, I was able to craft each day/project/role toward that strategic end. I was able to take each experience in context and evaluate how I’d handle situations or decisions. That was critical for me, because I was able to position myself for directly meaningful experiences.

Each business that uses Belly has a different set of rewards and interactions for their customers. That’s a very cool thing to offer that flexibility, but I imagine that having to create bespoke campaigns for each new client is time-consuming. Do you streamline the process? Are you trying to streamline it more as you achieve scale?
Sometimes “difficult” isn’t reason enough to not do it. Sometimes the hard way is the right way — and it takes someone willing to role up their sleeves and do the job right. It is easier to allow a minimum set of generic tools for businesses to build their own boring loyalty program, however, loyalty to SMBs isn’t generic. You simply can NOT build a meaningful loyalty solution without creating a better relationship with your customers. Loyalty isn’t a coupon, it isn’t a discount. Loyalty is personal, it’s a relationship — and relationships take work.

We partner with each business, on a one-on-one basis to customize the program according to their personality, culture, products, and business objectives. Of course we utilize data to make this process efficient, and will continue to improve the process to ensure we are offering the best possible rewards — but rewards will always be king. That, we will never sacrifice.

One of the big advantages Belly offers businesses is that it allows them to collect information about their customers. Does Belly collect that info as well? If so, how do you use it? If not, is there a time when you would? It seems like it would be valuable information to have on a larger scale.
Belly helps businesses understand their business better by providing analytics, additional tools, and communication methods for SMBs to develop better relationships with their customers. Each business has access to a back-end reporting site where they can view reports, analytics, and data to optimize their rewards program and better understand their customer behavior and demographics. Along with that, Belly gives businesses the opportunity to connect with customers via email and social media integrations to further enhance the relationship and enable their most loyal customers to be social advocates of the brand.

All of this data is utilized only to optimize the customer experience. Belly ensures that customers get only relevant communications, and we analyze the data to optimize the rewards and offerings for the individual customer.

Yes, the data is valuable. But Belly does not, and will not, share or sell customer data to third parties.

Belly focuses on small and medium-sized businesses, but would you consider working with a national chain if they came to you? Are there plans to move in that direction? What would some considerations be?
Belly was built for small and medium-sized businesses, with the intention of leveling the playing field. We set out to offer world class technology and marketing that small businesses would not otherwise have access to. Our intent is to create a universal loyalty platform that people can user at all their favorite places. To that end, we engage in discussions with businesses of all sizes in order to provide the best experience for our customers.

Is Belly profitable? If not, any timetable on reaching profitability?
Belly is a private company that doesn’t discuss revenue or profitability. At this time we are focused on improving our product and customer experience, and growing to new markets and locations. Belly has a clear revenue generating business model, and we’re quite pleased with progress to date.

Noah Davis is senior editor at Street Fight.