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Wavefront Helps Canadian Wireless Companies Gain Speed to Innovate and Win: RewardLoop Develops the First Transaction-based Wireless Loyalty Program

A diagram showing how RewardLoop works

Canadians love loyalty programs but they don’t necessarily enjoy hunting for their loyalty cards at the cash register. So why not develop a loyalty program that doesn’t involve cards at all? Many Canadians carry mobile phones—what if you could find a way to use wireless technology to automatically credit loyalty points or stamps to your account?

It was an idea that Nigel Malkin and fellow entrepreneur Jeff LaPorte developed while they were working day jobs in Vancouver. They came up with innovative technology to make the idea work and applied for a patent.  While they pondered whether or not they should quit their day jobs, they applied to be part of Wavefront’s entrepreneurship program. Wavefront is a not-for-profit Centre of Excellence for Commercialization and Research that helps emerging wireless companies get to market faster. Wavefront’s entrepreneurship program offers a year of free office space and $10,000 worth of services.

When they got the word that they had been accepted into the program, Malkin and LaPorte said to each other: “we actually have an office just waiting for us.” They decided, then to make a leap; they left their jobs in order to work full time on their company, RewardLoop.

Nine months later the device Malkin and LaPorte innovated is being sent to manufacture and RewardLoop has captured the attention of major chains in the United States and Canada. A pilot roll-out of the technology will take place in chain stores early next year. The company now has three employees working full-time.

“Getting into the program catapulted us forward,” says Malkin. “We caught a wave at the perfect time.”

A great idea at the right time

Part of the RewardLoop’s success so far is because they have a great idea at the right time, according to Wavefront’s President, James Maynard.

It is “dead simple” for companies to use RewardLoop’s technology. “There is no expensive capital and or complicated process; it is really simple for businesses to integrate RewardLoop’s device into their process.” Basically, RewardLoop involves merchants inserting a device between their point of sale system (e.g., “cash register”), and the receipt printer. The device intercepts the print data stream in order to add a secure, one-time use QR code (a type of matrix bar-code) to a customer’s receipt. The QR code can be scanned with a mobile phone and used to earn and redeem merchant-defined loyalty rewards.

In addition, RewardLoop was able to approach companies with their wireless loyalty program at the very time businesses were grappling with how to create mobile strategies. “The big chains are really thinking about how to innovate in the mobile space,” says Malkin. “They know they have to; they just don’t know how.”

“What’s weird about wireless is that it started as a communications device first adopted by consumers,” says Maynard. “Other than mobile mail and mobile voice, there’s been no big impact on industry. However, wireless is going to start to invade the way we do business. How can we get innovation going? Jump into the innovation cycle early.”

Accelerated capacity building

“We knew we had to act quickly,” says Malkin of their idea for a wireless loyalty program. “Wavefront was an extraordinary catalyst; we developed much faster than we otherwise would have.”

When Malkin and LaPorte were accepted into Wavefront’s entrepreneurship program they gained access to office space in Wavefront’s collaborative, downtown wireless accelerator centre, as well as to mentoring and coaching, technical services and connections to key industry contacts. “When you are a new start-up, some of the big chains ask questions like: how long have you been around? Are you going to be here tomorrow?” Just walking into a meeting in Wavefront’s professional boardroom with full connectivity helped to allay doubts before a presentation even began, according to Malkin.

RewardLoop also made use of Wavefront’s testing services. “Everything looks great on an iPhone, but we have to test with all kinds of phones,” says Malkin.

“We have a library of 350 to 400 different mobile devices,” explains Maynard. “For an early stage company, money is hard to come by and it’s expensive to test and deploy on a broad range of devices. Through Wavefront, individual devices can be rented for $10 a day, or entrepreneurs can pay $150 a day and do all the testing they want.”

When RewardLoop ran a pilot project in a local restaurant, one of Wavefront’s marketing staff also gave feedback that helped triple the uptake of the QR codes. Essentially, the advice was to let customers know about the program before they got to the cash—by means of table cards advertising the program, for example.

“Sometimes in the forest, all you can see are trees,” says Maynard. “It’s the third party objective view that snaps attention to what you’ve never seen before.”

In terms of securing financing, RewardLoop profited from Wavefront’s advisory services, and its broad network of connections. “They helped us craft our pitch. They helped us make connections that led to financing—they gave us referrals that led to other referrals.”

Wavefront’s growing presence

RewardLoop is just one of several small and medium-sized wireless companies that Wavefront is working with to help grow and compete. Seven other companies were also selected to participate in the entrepreneurship program the same year as RewardLoop. This year, Wavefront is selecting a further 12 companies for the entrepreneurship program. More than 250 companies have been served with other programs and services. In addition, Wavefront is currently developing an organization in Ontario to help businesses there connect to Wavefront’s national and international programs.

In addition, Wavefront is helping open international markets to small-and medium-sized Canadian businesses by fostering connections in Canada and abroad. “Wireless is an export business; the big play is off-shore,” says Maynard. “How does a 20-person company navigate those waters?”  Wavefront is helping to lead the way by fostering the connections and knowledge that Canadian companies can use to penetrate markets in Europe, Latin America and other regions of the world. Wavefront has made it their business to understand programs and wireless players around the world and how they work.

Moreover, because Canada is so large and many of its start-ups relatively small, it is not easy for international companies or investors to connect with innovative, new Canadian companies. Wavefront helps international players find out what’s going on in Canada.  “When it comes to wireless, everyone’s looking for the next new thing,” he says. “And Canadians have been a persistent source of innovation in telecommunications.”

“Canadian companies have led every major advance from the time of Alexander Graham Bell, through to Nortel, RIM and smart phones. A lot of the big wireless companies are interested in what Canadians are doing.”

Wavefront is a not-for profit centre focusing on the commercialization of wireless companies in Canada. Funded by the Networks of Centres of Excellence (NCE) Centres of Excellence for Commercialization and Research (CECR) program, it provides small and medium-sized enterprises with access to resources normally beyond their reach and helps connect university researchers with commercially viable innovations to suitable industry partners.

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