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Speaker 1: A new app helps you get rewards just by signing

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Speaker 1: up with your bank account.

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Speaker 2: I'm Rich Dimiro.

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Speaker 1: This is Rich on Tech with me today is Derek Fung.

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Speaker 1: He is the co founder and CEO of Drop. This

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Speaker 1: is an app that's kind of like a rewards program,

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Speaker 1: but for everything that you buy. So, Derek, thanks for

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Speaker 1: joining me.

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Speaker 3: Oh thanks for having me Rich.

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Speaker 1: So I just explained Drop, but you can do it

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Speaker 1: much better. So explain to me what Drop the app

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Speaker 1: is all about.

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Speaker 3: Yeah.

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Speaker 4: Drop is an intelligent mobile app in which you link

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Speaker 4: your debit and credit cards you download from the app store.

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Speaker 4: You link your cards and right after you link, you're

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Speaker 4: able to earn points with companies like Uber, Starbucks, Swarby, Parker,

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Speaker 4: Jet dot com. And you earn Drop points and you

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Speaker 4: can redeem the points directly in the app with a

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Speaker 4: simple press of a button. You can redeem the points

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Speaker 4: for Starbucks coffee, you can buy something on Amazon, you

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Speaker 4: can buy some you know, Duncan Donuts. There's a ton

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Speaker 4: out of great reward partners and it's all possible through

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Speaker 4: our app.

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Speaker 2: Okay, so let me get this straight.

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Speaker 1: So I sign up with my bank account, link those

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Speaker 1: and then so what I is it are the rewards

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Speaker 1: based on what I spend. So let's say you see

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Speaker 1: that I bought something at Starbucks, Yeah, five dollars yep.

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Speaker 2: Do I get points based on that?

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Speaker 3: Yeah? Exactly.

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Speaker 4: So both the offers you have on the platform and

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Speaker 4: also the rewards are targeted to the consumer based on

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Speaker 4: what they want, you know, where they spend, and what

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Speaker 4: brands that they like. But I'd say that the rewards

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Speaker 4: are very you know, mainstream companies like Starbucks in which

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Speaker 4: consumers are you know, spending at every single day. So

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Speaker 4: something as simple as a coffee to something as extravagant

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Speaker 4: as a flight with you know, American Airlines, which is

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Speaker 4: another one of our rewards partners.

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Speaker 2: Wow, I probably need to spend a lot to do that.

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Speaker 1: So if I'm so, am I getting a reward for

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Speaker 1: Starbucks for spending at Starbucks?

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Speaker 2: Or am I getting rewards?

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Speaker 1: Like let's say I go to like Abercrombie and Fitch

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Speaker 1: and buy fifty dollars worth? Do I get then to

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Speaker 1: redeem that towards a Starbucks gift card?

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Speaker 4: Yeah? It's a crossword platforms, So think of drop points

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Speaker 4: as a currency.

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Speaker 3: It's a very open ecosystem.

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Speaker 4: It's not closed off like some of the other programs

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Speaker 4: out there that sort of you know, try to lead you.

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Speaker 3: To spend with specific stores.

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Speaker 4: Like we really are trying to build a very open

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Speaker 4: network in which you can earn it, you know, by

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Speaker 4: taking ubers.

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Speaker 3: You can earn.

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Speaker 4: Points from you know, traveling and you can use them

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Speaker 4: on coffee, or you can earn points on coffee and use.

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Speaker 3: It for a nice T shirt.

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Speaker 4: And so it's a really you know, flexible model that

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Speaker 4: we've built.

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Speaker 1: And I earn points based on the places I spend

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Speaker 1: that if you have a deal with those places, like

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Speaker 1: basically that's where I'm going to earn.

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Speaker 3: Those points exactly exactly.

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Speaker 4: So it's everything from spending to even you could walk

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Speaker 4: your dog and earn points. With some of our partners,

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Speaker 4: you can you know try out orby Parker Sunglasses and

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Speaker 4: so whether you've spent there before or not. Like we're

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Speaker 4: essentially driving consumers to really engage with a lot of

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Speaker 4: these really neat and and you know new age brands

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Speaker 4: that we've partnered with like to just really quick, easy

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Speaker 4: to consume content and that's how we've built Drop. It's

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Speaker 4: like a very light touch, seamless works in the background.

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Speaker 4: It's literally you could even you know, you could forget

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Speaker 4: about it. You come back and you have points.

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Speaker 1: So I was gonna say, that's almost a problem for

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Speaker 1: you guys, that it is so set and forget, because

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Speaker 1: you want people to come back to your app for

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Speaker 1: two reasons a too ce Like I'm assuming there's like

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Speaker 1: bonus offers where you can get like more points if

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Speaker 1: you do something that's sort of targeted from one of

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Speaker 1: your advertisers, or you want to see how many points

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Speaker 1: you have.

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Speaker 2: So those are the two reasons.

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Speaker 3: You might come back to the app, right, Yeah, exactly.

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Speaker 4: So we understand that you know, the simplicity could even work,

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Speaker 4: you know, has worked against us, and we want consumers

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Speaker 4: to keep coming back. So what do everything from the

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Speaker 4: standard notifications and email, But we're actually rolling at a

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Speaker 4: really neat feature which which will involve video and influences

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Speaker 4: within drop to pull consumers back into the app and

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Speaker 4: really you know, they'll be talking about the products and

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Speaker 4: the brands that we showcase and it'll be done through video.

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Speaker 4: And I think a big movement we saw in twenty

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Speaker 4: seventeen was you know, HQ Trivia obviously was a big hit,

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Speaker 4: and it really showed that these consumer. Consumers are hungry

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Speaker 4: for new ways to consume content to spend, and you know,

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Speaker 4: they want quick and there's there's a major what we

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Speaker 4: call fomo where it can you know, oh, all my

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Speaker 4: friends are on this app and they're all opening at

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Speaker 4: the same time. I think there's a lot of opportunities

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Speaker 4: for new tech companies to really explore these new ways

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Speaker 4: to engage consumers, and I think it'll be you know,

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Speaker 4: exciting for us as we roll out some of these

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Speaker 4: new features this year.

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Speaker 1: Who is your competition? Is it punch cards? Is it Starbucks'

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Speaker 1: own loyalty program?

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Speaker 2: What's Yeah.

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Speaker 3: I think it's a combination of.

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Speaker 4: Retailers and the Starbucks of the world, as you mentioned,

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Speaker 4: having their own programs, and as a consumer, I think

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Speaker 4: we're just competing for mindshare. I think as a consumer

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Speaker 4: there's like only so many apps you can have on

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Speaker 4: your phone. There's only so many points programs you can

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Speaker 4: spend time trying to figure.

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Speaker 3: Out and maximize.

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Speaker 4: I think so it's a combination of both the retailer's

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Speaker 4: proprietary programs and also credit card programs. But the beauty

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Speaker 4: of Drop is we're built on top of that and

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Speaker 4: you can double dip you can triple dip. I think

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Speaker 4: ultimately it's just getting that time from the consumer that's

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Speaker 4: becoming so important.

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Speaker 2: Is Starbucks one of your can I get points for Starbucks?

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Speaker 1: You can get points for Starbucks and you can so

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Speaker 1: I can get points from Starbucks at their program Yeah,

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Speaker 1: gold Stars, what if they call it? I get points

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Speaker 1: on your program on drop and then on my credit

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Speaker 1: card spending the money at Starbucks, I get triple dip.

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Speaker 1: So that's triple triple? Is that as far as I

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Speaker 1: can go? Is there any more than the triple There may.

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Speaker 4: Be some secret Easter egg out you know, secrets out there,

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Speaker 4: but that's the that's the big triple dip.

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Speaker 3: Yeah.

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Speaker 1: And tell me about redemption of these rewards. I know

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Speaker 1: we kind of went into that a little bit. But

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Speaker 1: so I build up what certain amount of points, A

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Speaker 1: thousand points.

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Speaker 4: Yeah, a thousand points is a dollar and the first

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Speaker 4: the lowest reward you can get is a five dollars

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Speaker 4: at Starbucks. And so where we've built the program very

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Speaker 4: differently is a lot of the bigger main strea in

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Speaker 4: programs actually they want consumers to save up because a

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Speaker 4: lot of times consumers they don't want consumers to redeem.

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Speaker 4: It's a concept called breakage in the loyalty industry, and

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Speaker 4: we send to ourselves, Hey, if we're gonna create a

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Speaker 4: an app and a product that's consumer centric, then we

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Speaker 4: don't want breakage. We want consumers very quickly to redeem

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Speaker 4: and get that first for board. So once you get

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Speaker 4: to five thousand points, then you can redeem your first Starbucks.

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Speaker 4: You can get to that first five thousand points by

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Speaker 4: spending you know, every dollar you can earn points with

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Speaker 4: with retailers, retailers like Loomingdale's or Forever twenty one or

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Speaker 4: even Warby Parker, or you can try out some of

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Speaker 4: these new services.

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Speaker 3: So oh, you know, try a Casper, or sign.

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Speaker 4: Up for Harry's Razors, or try out this new wag

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Speaker 4: walk your dog and you'll get doing you know, twenty

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Speaker 4: dollars worth a points, fifty dollars worth the points. A

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Speaker 4: lot of the financial services companies, instead of spending money

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Speaker 4: on Facebook ads, they'll give us, you know, they'll they'll

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Speaker 4: work with us and you'll see an offer. Oh, try

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Speaker 4: out this new Capital one credit card and earn you know,

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Speaker 4: over one hundred dollars worth a point. So it ranges,

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Speaker 4: but you can get there, you know, really really quickly.

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Speaker 4: You can also invite your friends, and there's other ways

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Speaker 4: certain points as well in the platform.

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Speaker 1: And you said you were number two in the app

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Speaker 1: store at some point. Yeah, I looked at the app store.

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Speaker 1: You have thousands of ratings. Yeah, I mean lots and lots,

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Speaker 1: so clearly people are using this. I mean that's that's

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Speaker 1: pretty impressive. Are you impressed at the success?

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Speaker 3: Again?

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Speaker 4: I think to myself, like, there's it's a no brainer.

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Speaker 4: Why would a consumer not want to use the product?

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Speaker 4: And I think, as I said before, the biggest challenge

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Speaker 4: is there's just so much noise out there.

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Speaker 3: There's so many apps.

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Speaker 4: Consumers are deleting apps at a more rapid rate than

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Speaker 4: ever before. So I think it's just that that much

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Speaker 4: more important to stay relevant. And we believe that to

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Speaker 4: really stay relevant as a you know, direct to consumer

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Speaker 4: brand these days is just to be transparent. Tell them

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Speaker 4: up front, hey, you're exchanging your data and we're gonna

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Speaker 4: provide you value. And it's really you know, building a lifestyle,

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Speaker 4: lifestyle company, a lifestyle brand that resonates with them, that

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Speaker 4: they can experience every single day, and and you know,

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Speaker 4: it's it's a very well well used saying, but it's

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Speaker 4: this concept of oh, millennials want experiences. So hey, you know,

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Speaker 4: I don't want to just redeem for you know, a

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Speaker 4: gift card. Let's let's have more aspirational rewards. And we're

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Speaker 4: working on a ton of both aspirational rewards and also

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Speaker 4: status and VIP. So imagine you show your Drop app

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Speaker 4: and you get you know, whether it's line bypass or

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Speaker 4: access to special lounges. And so that's the direction that

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Speaker 4: we're really trying to head in twenty eighteen and onwards.

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Speaker 2: You can do a lot.

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Speaker 1: I mean, there's so much because people love they love

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Speaker 1: the frequent flyer programs. They love people love loyalty programs

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Speaker 1: because you're a customer of a business and you want

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Speaker 1: to be rewarded for that.

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Speaker 3: Exactly. The average years household is a member of over

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Speaker 3: twenty nine. So they love it.

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Speaker 4: But I think they love it too much in that

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Speaker 4: you know, your wallet is only so big, and so

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Speaker 4: I think we'll start to see a lot of concernsolidation.

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Speaker 4: And really we're at the epicenter of a lot of

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Speaker 4: that consolidation because Drop, you know, we pride ourselves in

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Speaker 4: cross merchant. You can spend at one place and redeem

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Speaker 4: it another and I think ultimately that's what the consumers want.

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Speaker 3: They want freedom.

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Speaker 2: It just made me think of two things real quick.

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Speaker 1: First off, I remember when all these loyalty programs started

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Speaker 1: taking off. I had like all of them on my keychain,

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Speaker 1: and so did everyone else.

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Speaker 3: Yeah, and it just.

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Speaker 1: Became ridiculous, you know, because you'd be like, okay, I

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Speaker 1: And there came a point when I actually took them

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Speaker 1: all off and I said, you know what, I'm not

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Speaker 1: doing this. I'm not putting all these on my key chains.

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Speaker 1: Is they were just taking up a ton of space.

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Speaker 1: And you know, you can use your phone number for

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Speaker 1: some of them. But I think you just made me

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Speaker 1: think of plenty, which they tried to consolidate a lot

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Speaker 1: of these things.

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Speaker 4: But I feel like they failed in a miserable way.

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Speaker 4: They literally failed. They're shutting down in July. Oh, they

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Speaker 4: just announced that they're shutting down the program.

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Speaker 1: Okay, because I just I mean, it was so complicated,

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Speaker 1: like something I do, like get gas at Exon. There's

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Speaker 1: no way I could ever and I get gas there

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Speaker 1: all the time. There's no way I could figure out

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Speaker 1: how to redeem or put my points or get my points,

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Speaker 1: couldn't scan anything. I didn't know what the number. The

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Speaker 1: number was like twenty five digits long. Yeah, so you

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Speaker 1: learn from their mistakes.

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Speaker 4: Yeah, I'd say, you know, we're very very familiar with plenty.

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Speaker 4: We were we were building our programs and looking to

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Speaker 4: roll out, you know, in the very similar time horizon.

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Speaker 4: But I think where they were very different is they

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Speaker 4: took the traditional approach. And the traditional approach is, hey,

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Speaker 4: let's find three to five what they call anchor retailers.

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Speaker 4: So they had Macy's, they had excellent mobile at and

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Speaker 4: t let's convince their cmos to you know, give up

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Speaker 4: half their marketing budget to replace their programs with art

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Speaker 4: with you know whatever we're pitching them, and let's convince

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Speaker 4: them to allow.

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Speaker 3: Us to put signage in stores.

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Speaker 4: And for the consumer, it's confusing and you're you're limited

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Speaker 4: by and they have exclusivity, so you can only have

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Speaker 4: one gas station, one this retailer, one pharmacy that right

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Speaker 4: aid and they went the traditional card approach, and I

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Speaker 4: think it was just confusing. I think the challenge with

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Speaker 4: them too is such big retailers and as I said before,

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Speaker 4: like a lot of these financial institutions oftentimes have these

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Speaker 4: relationships already built with these retailers, whereby it's hard for

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Speaker 4: them to build a truly consumer centric model because you

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Speaker 4: have all these merchants saying, oh, but what about what

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Speaker 4: what about us?

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Speaker 3: What about ask? We like, we want to get our

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Speaker 3: email out to the base.

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Speaker 4: So it's just a very tough model that has worked

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Speaker 4: in other countries around the world. But I think why

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Speaker 4: it didn't really take off in the US is it's

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Speaker 4: so fragmented as well. You won't find as many you know,

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Speaker 4: write aids on the West Coast as the East, or

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Speaker 4: vice versa, or you know, there's just so many different

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Speaker 4: types of these grossers and retailers that it's very hard

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Speaker 4: to scale.

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Speaker 1: If you're a Verizon customer and AT and T is

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Speaker 1: one of their main you know, uh, you know programs,

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Speaker 1: you're just like not interested at the beginning, so like,

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Speaker 1: we're not going to earn all those points for exactly

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Speaker 1: from Verizon.

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Speaker 2: All right, So what's the website? How do I find

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Speaker 2: the app?

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Speaker 3: Uh? Earn withdrop dot com.

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Speaker 4: But the easiest way really is just to pull up

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Speaker 4: in the pull up in the app store, type and

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Speaker 4: D will be the first one download link your cards,

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Speaker 4: start earning points in minutes and redeem your points in

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Speaker 4: days and even the same.

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Speaker 3: Day if you want.

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Speaker 4: And the easiest way to do that is just invite

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Speaker 4: your friends on the on the platform and you can

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Speaker 4: earn points for referring friends as well.

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Speaker 2: Nice Android and iOS.

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Speaker 1: Again, the app is named drop and so I can

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Speaker 1: get the points I've got that.

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Speaker 2: Can I link more than one bank account.

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Speaker 1: As many courages as you want? Okay, so you can

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Speaker 1: link credit and credit Okay, all right. Derek Funk, co

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Speaker 1: founder and CEO of Drop, thanks so much for joining

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Speaker 1: me again. The website is earn with drop dot com.

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Speaker 1: Thanks so much for listening. I'll put a link to

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Speaker 1: that on my website. Rich on tech dot tv, I'm

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Speaker 1: Rich Murro.

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Speaker 3: I'll talk to you real soon.