Speaker 1: A new app helps you get rewards just by signing
Speaker 1: up with your bank account.
Speaker 2: I'm Rich Dimiro.
Speaker 1: This is Rich on Tech with me today is Derek Fung.
Speaker 1: He is the co founder and CEO of Drop. This
Speaker 1: is an app that's kind of like a rewards program,
Speaker 1: but for everything that you buy. So, Derek, thanks for
Speaker 1: joining me.
Speaker 3: Oh thanks for having me Rich.
Speaker 1: So I just explained Drop, but you can do it
Speaker 1: much better. So explain to me what Drop the app
Speaker 1: is all about.
Speaker 3: Yeah.
Speaker 4: Drop is an intelligent mobile app in which you link
Speaker 4: your debit and credit cards you download from the app store.
Speaker 4: You link your cards and right after you link, you're
Speaker 4: able to earn points with companies like Uber, Starbucks, Swarby, Parker,
Speaker 4: Jet dot com. And you earn Drop points and you
Speaker 4: can redeem the points directly in the app with a
Speaker 4: simple press of a button. You can redeem the points
Speaker 4: for Starbucks coffee, you can buy something on Amazon, you
Speaker 4: can buy some you know, Duncan Donuts. There's a ton
Speaker 4: out of great reward partners and it's all possible through
Speaker 4: our app.
Speaker 2: Okay, so let me get this straight.
Speaker 1: So I sign up with my bank account, link those
Speaker 1: and then so what I is it are the rewards
Speaker 1: based on what I spend. So let's say you see
Speaker 1: that I bought something at Starbucks, Yeah, five dollars yep.
Speaker 2: Do I get points based on that?
Speaker 3: Yeah? Exactly.
Speaker 4: So both the offers you have on the platform and
Speaker 4: also the rewards are targeted to the consumer based on
Speaker 4: what they want, you know, where they spend, and what
Speaker 4: brands that they like. But I'd say that the rewards
Speaker 4: are very you know, mainstream companies like Starbucks in which
Speaker 4: consumers are you know, spending at every single day. So
Speaker 4: something as simple as a coffee to something as extravagant
Speaker 4: as a flight with you know, American Airlines, which is
Speaker 4: another one of our rewards partners.
Speaker 2: Wow, I probably need to spend a lot to do that.
Speaker 1: So if I'm so, am I getting a reward for
Speaker 1: Starbucks for spending at Starbucks?
Speaker 2: Or am I getting rewards?
Speaker 1: Like let's say I go to like Abercrombie and Fitch
Speaker 1: and buy fifty dollars worth? Do I get then to
Speaker 1: redeem that towards a Starbucks gift card?
Speaker 4: Yeah? It's a crossword platforms, So think of drop points
Speaker 4: as a currency.
Speaker 3: It's a very open ecosystem.
Speaker 4: It's not closed off like some of the other programs
Speaker 4: out there that sort of you know, try to lead you.
Speaker 3: To spend with specific stores.
Speaker 4: Like we really are trying to build a very open
Speaker 4: network in which you can earn it, you know, by
Speaker 4: taking ubers.
Speaker 3: You can earn.
Speaker 4: Points from you know, traveling and you can use them
Speaker 4: on coffee, or you can earn points on coffee and use.
Speaker 3: It for a nice T shirt.
Speaker 4: And so it's a really you know, flexible model that
Speaker 4: we've built.
Speaker 1: And I earn points based on the places I spend
Speaker 1: that if you have a deal with those places, like
Speaker 1: basically that's where I'm going to earn.
Speaker 3: Those points exactly exactly.
Speaker 4: So it's everything from spending to even you could walk
Speaker 4: your dog and earn points. With some of our partners,
Speaker 4: you can you know try out orby Parker Sunglasses and
Speaker 4: so whether you've spent there before or not. Like we're
Speaker 4: essentially driving consumers to really engage with a lot of
Speaker 4: these really neat and and you know new age brands
Speaker 4: that we've partnered with like to just really quick, easy
Speaker 4: to consume content and that's how we've built Drop. It's
Speaker 4: like a very light touch, seamless works in the background.
Speaker 4: It's literally you could even you know, you could forget
Speaker 4: about it. You come back and you have points.
Speaker 1: So I was gonna say, that's almost a problem for
Speaker 1: you guys, that it is so set and forget, because
Speaker 1: you want people to come back to your app for
Speaker 1: two reasons a too ce Like I'm assuming there's like
Speaker 1: bonus offers where you can get like more points if
Speaker 1: you do something that's sort of targeted from one of
Speaker 1: your advertisers, or you want to see how many points
Speaker 1: you have.
Speaker 2: So those are the two reasons.
Speaker 3: You might come back to the app, right, Yeah, exactly.
Speaker 4: So we understand that you know, the simplicity could even work,
Speaker 4: you know, has worked against us, and we want consumers
Speaker 4: to keep coming back. So what do everything from the
Speaker 4: standard notifications and email, But we're actually rolling at a
Speaker 4: really neat feature which which will involve video and influences
Speaker 4: within drop to pull consumers back into the app and
Speaker 4: really you know, they'll be talking about the products and
Speaker 4: the brands that we showcase and it'll be done through video.
Speaker 4: And I think a big movement we saw in twenty
Speaker 4: seventeen was you know, HQ Trivia obviously was a big hit,
Speaker 4: and it really showed that these consumer. Consumers are hungry
Speaker 4: for new ways to consume content to spend, and you know,
Speaker 4: they want quick and there's there's a major what we
Speaker 4: call fomo where it can you know, oh, all my
Speaker 4: friends are on this app and they're all opening at
Speaker 4: the same time. I think there's a lot of opportunities
Speaker 4: for new tech companies to really explore these new ways
Speaker 4: to engage consumers, and I think it'll be you know,
Speaker 4: exciting for us as we roll out some of these
Speaker 4: new features this year.
Speaker 1: Who is your competition? Is it punch cards? Is it Starbucks'
Speaker 1: own loyalty program?
Speaker 2: What's Yeah.
Speaker 3: I think it's a combination of.
Speaker 4: Retailers and the Starbucks of the world, as you mentioned,
Speaker 4: having their own programs, and as a consumer, I think
Speaker 4: we're just competing for mindshare. I think as a consumer
Speaker 4: there's like only so many apps you can have on
Speaker 4: your phone. There's only so many points programs you can
Speaker 4: spend time trying to figure.
Speaker 3: Out and maximize.
Speaker 4: I think so it's a combination of both the retailer's
Speaker 4: proprietary programs and also credit card programs. But the beauty
Speaker 4: of Drop is we're built on top of that and
Speaker 4: you can double dip you can triple dip. I think
Speaker 4: ultimately it's just getting that time from the consumer that's
Speaker 4: becoming so important.
Speaker 2: Is Starbucks one of your can I get points for Starbucks?
Speaker 1: You can get points for Starbucks and you can so
Speaker 1: I can get points from Starbucks at their program Yeah,
Speaker 1: gold Stars, what if they call it? I get points
Speaker 1: on your program on drop and then on my credit
Speaker 1: card spending the money at Starbucks, I get triple dip.
Speaker 1: So that's triple triple? Is that as far as I
Speaker 1: can go? Is there any more than the triple There may.
Speaker 4: Be some secret Easter egg out you know, secrets out there,
Speaker 4: but that's the that's the big triple dip.
Speaker 3: Yeah.
Speaker 1: And tell me about redemption of these rewards. I know
Speaker 1: we kind of went into that a little bit. But
Speaker 1: so I build up what certain amount of points, A
Speaker 1: thousand points.
Speaker 4: Yeah, a thousand points is a dollar and the first
Speaker 4: the lowest reward you can get is a five dollars
Speaker 4: at Starbucks. And so where we've built the program very
Speaker 4: differently is a lot of the bigger main strea in
Speaker 4: programs actually they want consumers to save up because a
Speaker 4: lot of times consumers they don't want consumers to redeem.
Speaker 4: It's a concept called breakage in the loyalty industry, and
Speaker 4: we send to ourselves, Hey, if we're gonna create a
Speaker 4: an app and a product that's consumer centric, then we
Speaker 4: don't want breakage. We want consumers very quickly to redeem
Speaker 4: and get that first for board. So once you get
Speaker 4: to five thousand points, then you can redeem your first Starbucks.
Speaker 4: You can get to that first five thousand points by
Speaker 4: spending you know, every dollar you can earn points with
Speaker 4: with retailers, retailers like Loomingdale's or Forever twenty one or
Speaker 4: even Warby Parker, or you can try out some of
Speaker 4: these new services.
Speaker 3: So oh, you know, try a Casper, or sign.
Speaker 4: Up for Harry's Razors, or try out this new wag
Speaker 4: walk your dog and you'll get doing you know, twenty
Speaker 4: dollars worth a points, fifty dollars worth the points. A
Speaker 4: lot of the financial services companies, instead of spending money
Speaker 4: on Facebook ads, they'll give us, you know, they'll they'll
Speaker 4: work with us and you'll see an offer. Oh, try
Speaker 4: out this new Capital one credit card and earn you know,
Speaker 4: over one hundred dollars worth a point. So it ranges,
Speaker 4: but you can get there, you know, really really quickly.
Speaker 4: You can also invite your friends, and there's other ways
Speaker 4: certain points as well in the platform.
Speaker 1: And you said you were number two in the app
Speaker 1: store at some point. Yeah, I looked at the app store.
Speaker 1: You have thousands of ratings. Yeah, I mean lots and lots,
Speaker 1: so clearly people are using this. I mean that's that's
Speaker 1: pretty impressive. Are you impressed at the success?
Speaker 3: Again?
Speaker 4: I think to myself, like, there's it's a no brainer.
Speaker 4: Why would a consumer not want to use the product?
Speaker 4: And I think, as I said before, the biggest challenge
Speaker 4: is there's just so much noise out there.
Speaker 3: There's so many apps.
Speaker 4: Consumers are deleting apps at a more rapid rate than
Speaker 4: ever before. So I think it's just that that much
Speaker 4: more important to stay relevant. And we believe that to
Speaker 4: really stay relevant as a you know, direct to consumer
Speaker 4: brand these days is just to be transparent. Tell them
Speaker 4: up front, hey, you're exchanging your data and we're gonna
Speaker 4: provide you value. And it's really you know, building a lifestyle,
Speaker 4: lifestyle company, a lifestyle brand that resonates with them, that
Speaker 4: they can experience every single day, and and you know,
Speaker 4: it's it's a very well well used saying, but it's
Speaker 4: this concept of oh, millennials want experiences. So hey, you know,
Speaker 4: I don't want to just redeem for you know, a
Speaker 4: gift card. Let's let's have more aspirational rewards. And we're
Speaker 4: working on a ton of both aspirational rewards and also
Speaker 4: status and VIP. So imagine you show your Drop app
Speaker 4: and you get you know, whether it's line bypass or
Speaker 4: access to special lounges. And so that's the direction that
Speaker 4: we're really trying to head in twenty eighteen and onwards.
Speaker 2: You can do a lot.
Speaker 1: I mean, there's so much because people love they love
Speaker 1: the frequent flyer programs. They love people love loyalty programs
Speaker 1: because you're a customer of a business and you want
Speaker 1: to be rewarded for that.
Speaker 3: Exactly. The average years household is a member of over
Speaker 3: twenty nine. So they love it.
Speaker 4: But I think they love it too much in that
Speaker 4: you know, your wallet is only so big, and so
Speaker 4: I think we'll start to see a lot of concernsolidation.
Speaker 4: And really we're at the epicenter of a lot of
Speaker 4: that consolidation because Drop, you know, we pride ourselves in
Speaker 4: cross merchant. You can spend at one place and redeem
Speaker 4: it another and I think ultimately that's what the consumers want.
Speaker 3: They want freedom.
Speaker 2: It just made me think of two things real quick.
Speaker 1: First off, I remember when all these loyalty programs started
Speaker 1: taking off. I had like all of them on my keychain,
Speaker 1: and so did everyone else.
Speaker 3: Yeah, and it just.
Speaker 1: Became ridiculous, you know, because you'd be like, okay, I
Speaker 1: And there came a point when I actually took them
Speaker 1: all off and I said, you know what, I'm not
Speaker 1: doing this. I'm not putting all these on my key chains.
Speaker 1: Is they were just taking up a ton of space.
Speaker 1: And you know, you can use your phone number for
Speaker 1: some of them. But I think you just made me
Speaker 1: think of plenty, which they tried to consolidate a lot
Speaker 1: of these things.
Speaker 4: But I feel like they failed in a miserable way.
Speaker 4: They literally failed. They're shutting down in July. Oh, they
Speaker 4: just announced that they're shutting down the program.
Speaker 1: Okay, because I just I mean, it was so complicated,
Speaker 1: like something I do, like get gas at Exon. There's
Speaker 1: no way I could ever and I get gas there
Speaker 1: all the time. There's no way I could figure out
Speaker 1: how to redeem or put my points or get my points,
Speaker 1: couldn't scan anything. I didn't know what the number. The
Speaker 1: number was like twenty five digits long. Yeah, so you
Speaker 1: learn from their mistakes.
Speaker 4: Yeah, I'd say, you know, we're very very familiar with plenty.
Speaker 4: We were we were building our programs and looking to
Speaker 4: roll out, you know, in the very similar time horizon.
Speaker 4: But I think where they were very different is they
Speaker 4: took the traditional approach. And the traditional approach is, hey,
Speaker 4: let's find three to five what they call anchor retailers.
Speaker 4: So they had Macy's, they had excellent mobile at and
Speaker 4: t let's convince their cmos to you know, give up
Speaker 4: half their marketing budget to replace their programs with art
Speaker 4: with you know whatever we're pitching them, and let's convince
Speaker 4: them to allow.
Speaker 3: Us to put signage in stores.
Speaker 4: And for the consumer, it's confusing and you're you're limited
Speaker 4: by and they have exclusivity, so you can only have
Speaker 4: one gas station, one this retailer, one pharmacy that right
Speaker 4: aid and they went the traditional card approach, and I
Speaker 4: think it was just confusing. I think the challenge with
Speaker 4: them too is such big retailers and as I said before,
Speaker 4: like a lot of these financial institutions oftentimes have these
Speaker 4: relationships already built with these retailers, whereby it's hard for
Speaker 4: them to build a truly consumer centric model because you
Speaker 4: have all these merchants saying, oh, but what about what
Speaker 4: what about us?
Speaker 3: What about ask? We like, we want to get our
Speaker 3: email out to the base.
Speaker 4: So it's just a very tough model that has worked
Speaker 4: in other countries around the world. But I think why
Speaker 4: it didn't really take off in the US is it's
Speaker 4: so fragmented as well. You won't find as many you know,
Speaker 4: write aids on the West Coast as the East, or
Speaker 4: vice versa, or you know, there's just so many different
Speaker 4: types of these grossers and retailers that it's very hard
Speaker 4: to scale.
Speaker 1: If you're a Verizon customer and AT and T is
Speaker 1: one of their main you know, uh, you know programs,
Speaker 1: you're just like not interested at the beginning, so like,
Speaker 1: we're not going to earn all those points for exactly
Speaker 1: from Verizon.
Speaker 2: All right, So what's the website? How do I find
Speaker 2: the app?
Speaker 3: Uh? Earn withdrop dot com.
Speaker 4: But the easiest way really is just to pull up
Speaker 4: in the pull up in the app store, type and
Speaker 4: D will be the first one download link your cards,
Speaker 4: start earning points in minutes and redeem your points in
Speaker 4: days and even the same.
Speaker 3: Day if you want.
Speaker 4: And the easiest way to do that is just invite
Speaker 4: your friends on the on the platform and you can
Speaker 4: earn points for referring friends as well.
Speaker 2: Nice Android and iOS.
Speaker 1: Again, the app is named drop and so I can
Speaker 1: get the points I've got that.
Speaker 2: Can I link more than one bank account.
Speaker 1: As many courages as you want? Okay, so you can
Speaker 1: link credit and credit Okay, all right. Derek Funk, co
Speaker 1: founder and CEO of Drop, thanks so much for joining
Speaker 1: me again. The website is earn with drop dot com.
Speaker 1: Thanks so much for listening. I'll put a link to
Speaker 1: that on my website. Rich on tech dot tv, I'm
Speaker 1: Rich Murro.
Speaker 3: I'll talk to you real soon.