Qbot App, Built in Little Rock, Takes On Loyalty Programs

A year ago, the Qbot app for iPhones and Androids had around 30 users. Now, according to Qbot President Chaney Phillips, it has 92,000, and it’s growing by about 10,000 each month.

So what sort of market has Qbot tapped into that’s granted such explosive growth? Loyalty programs. The Qbot app replaces the typical paper and plastic loyalty cards issued by thousands of companies and subsequently lost in wallets or couch cushions.

Phillips said Qbot came about when he and co-founder Gabriel Mays were working at a coupon business in Houston. The two men were discussing with the company the idea of starting a mobile couponing app, but the company was not interested in leaving the paper medium.

“So we fleshed out the app, we conceptualized it, engineered it and laid it out, and we stepped back and said, ‘Wow, we have a great idea here,’” Phillips said.

He and Mays relocated to Little Rock three years ago to start their company, which initially was called Qpon Revolution and was changed to Qbot when Phillips wanted to ditch the association with coupons.

For the past couple of years, Phillips’ team has been performing grassroots marketing efforts to grow the app’s user base. This meant everything from sponsorships to simply showing up at tailgate parties with a table and a demo.

Growth was slow, but exposure paid off when James Barnes, CEO of BBA Solutions of Little Rock, caught wind of the project. Barnes’ company is an off-campus college textbook provider and is also partnered with Sodexo, a French company that provides food service for a multitude of college campuses worldwide. Barnes had noticed that AT&T sales representatives were actually marketing Qbot to customers as a good way to make up for the cost of a higher-tier data plan. The AT&T reps had no vested interest in Qbot, Barnes said; they just loved the app.

“It’s just this awesome communication tool,” Barnes said. “In addition to giving people an irresistible offer to try a business, it also rewards frequent business.”

Barnes became an investor in Qbot. In October, Sodexo piloted the Qbot rewards program on 12 campuses all over the U.S.

How Qbot Works

The app uses QR codes instead of the typical punch or stamp cards. In making the app, Phillips and Mays examined existing loyalty programs, using a 10-year Harvard Business Review study as a basis.

The study looked at several industry sectors to find what customers valued in a rewards program.

“What it told us was that customers, No. 1, want ease of use,” Phillips said. “Customers lose motivation if it’s not easy to use.”

Next, customers wanted a streamlined reward process. Customers lost motivation if the loyalty goal took too long to achieve. Third was the reward’s value. Phillips wanted the app to reflect these three tenets, with an easy interface, rewards offered at shorter intervals and with greater value.

The app is free for users, but businesses pay a nominal fee for setup and a monthly fee for the service thereafter.

Excluding Sodexo, between 350 and 400 merchants, about 60 percent of which are in Arkansas, use Qbot. With Sodexo, the number is closer to 600 or 700.

Besides Sodexo, the clients are mainly local businesses and individual franchises, Phillips said, but he noted that the company was a few months away from a corporate partnership with Burger King.

“They will have 17 locations in Arkansas doing this as kind of a pilot test; then they’ll go out and offer it to all the franchise owners across the nation,” Phillips said.

The next hurdle for Qbot will be growing to meet the need of its client base. The company employs 12, but with more and more app downloads and Sodexo’s goal of 100 campuses using Qbot by fall of this year, growth will have to happen eventually.

“We’re running a very lean machine,” Phillips said. “We’re a startup company still and we’re trying not to add too much overhead at this stage of growth.”