FreebeeCards buzzing towards mid-May launch in Des Moines

In Des Moines, there’s a new startup quickly building buzz around town. It has 17 employees on the ground, and it’s on the verge of closing a $1 million round. The source of that buzz is FreebeeCards, a customer engagement platform that aims to drive consumers to vendors through the use of virtual gift cards.…

FreebeeCards is currently signing merchants and registering customers. It’s scheduled to go live in central Iowa on May 15.

In Des Moines, there’s a new startup quickly building buzz around town. It has 17 employees on the ground, and it’s on the verge of closing a $1 million round.

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The business behind that buzz is FreebeeCards, a customer engagement platform that aims to drive consumers to vendors through the use of virtual gift cards.

Freebee founder and CEO Ken Lazzaro (left) conceived of the idea just over a year ago, and since then the startup has quickly put one milestone after another in its rearview mirror. Freebee hired employee No. 1 in February of 2011, set up shop in downtown Des Moines in October, expects to wrap up a $1 million “family and friends” round of funding within the next few weeks and is scheduled to launch to customers in central Iowa and Denver on May 15.

“I’ve been on board since Dec. 20,” said Todd Razor, Freebee’s director of communications, “and, you know, sometimes it feels like it’s been a year since then … (with) how tremendously we’re meshing and coming together and all the pieces are falling into place.”

Freebee’s “box of customers”

Freebee’s current focus is on registering merchants, primarily in the retail, restaurant, service and entertainment sectors, to use its platform. About 50 Des Moines businesses are on board already, and Razor said additional agreements are pending.

With those merchants, Freebee starts by sending what Lazzaro calls a “box of customers” to help with the promotion of virtual card campaigns. The box includes a digital tablet with proprietary software that tracks what customers come in to a business, how much they spend and when they return. The software also features a messaging center that aims to enable merchants to communicate with customers after sales in hopes of generating repeat business.

Once Freebee launches, it will use email blasts and its website to highlight participating businesses, each of which offer a set number of cards worth varying, undisclosed amounts. After registering for Freebee accounts, users interested in a particular business can reserve one of that company’s virtual cards for free. They must then visit the business and use an on-site QR code scanner to find out how much their virtual card is worth, at which point they can apply the card to a purchase that day, save it for later or give it to someone else.

Merchants pay an initial setup fee — costs vary, Freebee says, depending on the scope and length of campaigns — to launch a Freebee campaign. They pay additional fees for each card brought into their establishment and each card that’s used for a purchase.

Razor (above) emphasizes that Freebee’s revenue is based primarily on a pay-for-performance model. “We only win,” he said, “if the merchant wins.”

Generating repeat business

Lazzaro said Freebee’s primary competition comes from daily deals sites, but he points out nuances in Freebee’s system that distinguish it from the Groupons and Living Socials of the world. Freebee’s future plans include loyalty card programs and avenues for customers to provide direct feedback to businesses. “It is important that we quickly differentiate ourselves, however, by explaining our goal of providing a positive customer experience, and reinforcing that experience through technology and services that generate repeat business,” Lazzaro said.

Lazzaro believes Freebee can offer greater flexibility for vendors than daily deal sites can. “With Freebee Cards,” Lazzaro said, “merchants can tailor their campaigns to meet the specific business challenges that they are facing.”

Lazzaro saw the need for a platform like Freebee while doing work with his consulting business, which educates and helps business owners implement gift card, loyalty and credit card processing programs.

“I soon realized,” Lazzaro said, “that developing an electronic version of this gift card marketing concept would allow merchants to track customer shopping habits, as well as open a direct line of communication to make special offers, reward customer loyalty and collect candid feedback outside of the public’s view.”

It wasn’t long before that idea had become the basis for a full-fledged startup and that startup had set substantial roots in central Iowa.

“There are numerous business development initiatives that made it financially favorable to base our headquarters here,” said Lazzaro, who is effusive in his praise of Freebee’s home base. “We have been lucky enough to hire some amazing people here, and that has been a big driver to continue growth in Des Moines.”

For more on FreebeeCards, see the short promotional video below.

 

Credits: Photos of Lazzaro and Razor courtesy of FreebeeCards. Video from FreebeeCards on YouTube.

This story is part of the AIM Archive

This story is part of the AIM Institute Archive on Silicon Prairie News. AIM gifted SPN to the Nebraska Journalism Trust in January 2023. Learn more about SPN’s origin »

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