Fivestars Loyalty Inc. had pretty humble beginnings. Picture two guys in grungy t-shirts eating ramen and getting creative. No, it’s not Wayne and Garth; it’s Victor Ho and Matt Doka. The Founders of Fivestars were both consultants at McKinsey before they decided to venture out on their own. The Fivestars Loyalty program was debuted during the Y-Combinator Winter 2011 session. Most recently, Fivestars has raised 26 million in series B funding from investors, including Menlo Ventures, Lightspeed Venture Partners, DCM and Rogers Communications. Employment numbers have expanded as well, with roughly 150 sales reps and 50 support staff available to service over 5000 active merchants, a number they estimate will grow considerably in the next year. Fivestars users range in the millions, over 9 million, actually, which makes for a great data pool.
The biggest draws for Fivestars are its POS integration, marketing tools, and the sign up process. Fivestars has ramped up their marketing tools with the Autopilot feature and a new promotion feature to bring back customers. They’ve also added some new features to their mobile app. Read more for more information on how the Fivestars program works.
Fivestars has simplified its pricing model, offering tiered pricing plans to merchants with inclusive features. Their basic plan includes two customer facing tablets, POS integration, the Autopilot program, onboarding and three training sessions for $279 per month. The next tier includes unlimited promotions for $299.00 per month. They offer a third tier for enterprise level clients.
Contract lengths vary but six months is standard. You are obligated to pay the full value of your contract if you decide to cancel early. Your service will continue on a month to month basis at the end of your contract. You can cancel without penalty once your initial contract is fulfilled.
Gracie Binder, who works in Product Marketing at Fivestars, had this to say regarding contracts and cancellation:
“At Fivestars, we ask our clients to agree to a 6 month term. We do this simply because customer loyalty programs take a little while to ramp up and drive revenue. The agreement is by no means used to corner a business into using our software; it’s meant to give the program a chance to truly prove its value. Additionally, we think an investment in your customers should be viewed as a long-term commitment, but we will never penalize you for choosing to cancel with us after this 6 month period. In fact, we’ll even give you all of the customer data you collected through our program if you do choose to part ways with us.”
Web based or Locally – Installed:
The software is locally installed on your POS or Computer using a USB. Your dashboard can be accessed via the Fivestars website.
Hardware and Software Requirements:
Fivestars software works with POS systems or computers. Fivestars software works on most Windows operating systems and requires 256MB of RAM and 250MB of hard drive space.
In order to access your merchant dashboard, you’ll need to use a supported browser (Google Chrome, Internet Explorer 10 or Firefox).
Specific Size of Business and Type (Or Company Size):
Fivestars is pretty honed on small businesses and only serves brick and mortar stores (no ecommerce solutions here). Their local clients range from coffee shops to bars and pubs. Their nonlocal clients tend to be small chain restaurants (such as Hwy 55 Burgers) or Tobacco and Vapor stores.
Ease of Use:
How it Works – You can view a demo of how the program works here. Fivestars uses a few simple steps to interact with customers using the loyalty program. Signup only requires a phone number, and if it’s too busy to gather additional information from your customer, the program provides options to acquire that information later via text or email campaigns, or through the customer’s interaction with the Fivestars web or mobile app. Recently Fivestars made tablets a standard hardware feature in their pricing model, so the customer facing tablet can be used to gather data without tying up the cashier line.
Installation – Fivestars will send you an installation kit with a USB key to be plugged into your main POS terminal or computer. Once your device recognizes the software, you’ll follow the prompts to install it. The Installation article on Fivestars gives you step by step instructions, and Fivestars offers installation support if you need any assistance.
Sign Up – When signing up new customers, you’ll scan their Fivestars card first. New customers are registered by entering a phone number. Optional information such as name, email, birthday, and notes, can be collected at that time, or via the options listed above.
User Interface – The Fivestars program is pretty square, which isn’t a bad thing. Large buttons and letters make selecting options on the screen fairly easy. The design makes sense and the colors are unobtrusive.
POS Integration – So far, Fivestars has been pretty successful with POS integration. They operate in all fifty states, as well as Canada.
- Read Only –Information can be viewed, but not edited.
- CRM – Send campaigns or edit customer and business profiles
- All Access – Edit billing, reward structure, business name and thresholds
Dashboard headings help you navigate through various program options.
- Overview – this page shows a summary of stats on your loyalty program including total visits, referrals and members. It also shows your progress on your monthly sign up goal.
- Campaigns – this page allows you to manage your email, text message, or AutoPilot campaigns.
- Members – You can view, sort and tag members here, as well as edit member information.
- Reports – You can generate member and usage reports here, and additional reports depending on your program features.
- Settings – This is where you’ll be able to edit your thresholds, business profile, etc.
Customer Service and Technical Support:
My first experience with Fivestars, though not terrible, was not that great. This time around, response times were much better, I had the rep’s full attention, and sales and support lines were picked up within less than a minute.
Phone – For all inquiries you can call their general number at 860.578.2770.
- You can shoot technical support an email at support@Fivestars.com.
- Their Support Webpage is loaded with useful articles and FAQs. You can also check out their Blog, which features articles on loyalty programs, tips and success stories.
Onboarding and Training – Fivestars offers three training sessions for their merchants, which can be done in person. Onboarding includes vertical data for promotions and additional setup support
Video Tutorials – Fivestars offers tons of video tutorials. These guys love making YouTube videos of themselves, and some of them are pretty helpful. They offer more extensive tutorials on their website, as well as training videos on the Fivestars University webpage. Here are some additional videos:
- Dashboard Demo
- Text Messaging Campaigns
- Micros 3700 Demo
- Micros e7 Demo
- Adoption and Employee Engagement Tutorial
Negative Reviews and Complaints:
Fivestars Loyalty has a C- rating with the BBB and four complaints in the last three years. Most of the complaints are billing or sales related, and the most recent complaint hasn’t been answered. The Fivestars app gets 4 out of 5 stars in the Google play store with 2500 ratings. The app gets 4 out of 5 stars with 345 ratings overall in the Apple store, though the latest version has a higher rating. In the previous review, there were two issues with Fivestars that they’ve improved on. The first was their mobile app and its lackluster features. The second was their training and support outside of their local area. These things have improved, but they still have work to do.
Decreased support outside of local area – Though you’ll find Fivestars locations nationwide, and even areas outside the US, operations are concentrated in San Francisco, Northern California, Chicago and Denver. If you’re operating outside of these areas, Fivestars has increased its outside sales force, but they still can’t reach everyone. Additionally, local merchants get access to the innovation of Fivestars at a much faster rate than nonlocal merchants.
App Functionality – On the customer side of things, Fivestars ratings have improved, but there are still some bugs to fix. The most frequent issue is loss of points, or not getting credit for check-ins. This could be an error on the merchant side or an inherent flaw in the way the app works.
Positive Reviews and Testimonials:
Fivestars has a self-proclaimed retention rate of 90% among their clients. Some of their success stories, like Fibbar & Molly MaGees, can be found on their blog.
Increased Customer Activity – Fivestars clients have reported significant improvement in participation in the rewards program as well as an increase in profits.
“My business profits have increased from $50 – $150 a day to $400 – $800 a day! Fivestars pays for itself!”
– Sarah, Chama’s Dog Wash & Wellness San Diego, CA
Easy Signup – All you need to sign up new customers, or convert existing ones, is their phone number. Every time after that, customers just need to swipe their card. If they don’t have their card, you can enter their phone number.
“The best thing about Fivestars is how easy it is to swipe and punch in info. There is very little we need to do on an administrative basis.”
– James, Cafe Dulce Los Angeles, CA
Innovative marketing tools – Fivestars offers a few automated programs to help you continue to engage with frequent, at risk, and lost customers. These tools analyze customer data in a way many programs don’t (unless you have a really big marketing budget).
Service with Fivestars includes training and support, an account manager, monthly marketing meetings, online resources, and unlimited cards for your program.
Loyalty Programs – Your Fivestars rep will help you build a custom loyalty program that suits your business and your goals. You can go with their suggestions or choose something different altogether. Some of the options for these programs include:
- Per visit point system (with or without minimum dollar values)
- Per dollar point system
- VIP member status
- Multiple tiers
Dashboard – Your dashboard is set up to make accessing your program data easy, and can be accessed via the Fivestars website. You can also edit certain features, such as your business profile, monthly sign up goals, and additional campaigns. Check out the dashboard demo on YouTube.
Social Media Integrations – Fivestars integrates your social media information with your business profile on their mobile app and website. What’s missing in this feature is the ability to tie social media interaction directly to your customers’ rewards.
Promotions – Fivestars offers the ability to send promotions to your customers via the channel of their choice: email, SMS text, or mobile app. While there is a numeric limit to how many messages your customers can receive, there is no limit to the number of messages you can send. Promotions can be sent to specific customers, or customer groups generated by Fivestars.
AutoPilot Campaign – These campaigns are automated and preprogrammed to target specific customers. You can modify the template for each message, but the program decides which customers will receive the message. You can view the AutoPilot FAQs for more details. The campaigns can be activated from your dashboard and include expiry options The campaigns are:
- Network – generated when a Fivestars member joins your program before visiting your store
- Smart Data Collection – generated after the 2nd visit to collect birthday and email address information
- New – generated an hour after the first visit to ask for return business
- At Risk – generated after 30 days of inactivity
- Lapsed – generated after the 60th, 90th, and 120th day of inactivity
- Lost – generated
- Growth – generated after every X number of rewards to offer an additional reward
- Birthday – generated 7 days before a customer’s birthday
Mobile App – Fivestars has recently added Bluetooth beacon technology for some of their local merchants. This technology enables automatic check-ins when your customers enter your business. In lieu of a mobile scanner, Fivestars has also added a “one-tap” check-in feature for Bay area merchants. Members who use the Fivestars app and have joined your loyalty program can receive “Push” notifications from your business when you send out promotions.
Integrations and Add-Ons:
Fivestars has opted to include tablets and marketing features in their monthly subscription packages, a much simpler option than paying additional amounts for SMS text messaging, additional campaigns, and tablets.
The Fivestars software and dashboard are password protected with access controls.
The Loyalty Test:
Reviewing Fivestars overall, do they:
- Increase repeat business – Yes. Positive feedback from clients has shown increases in profits and exposure. I think what makes this loyalty program appealing is the seamless process. Working with the system you have (be it POS or a computer), offering training and support for employees, and providing tutorials for text and email campaigns makes the whole process a little less daunting. As a consumer, I find it very disconcerting when the cashier I’m working with can’t answer my questions about the loyalty program. I’m more likely to participate if the cashier can explain the program to me and answer basic questions. Aside from that, the Autopilot campaign and promotions give your customers more reasons to come back.
- Generate new business – Not actively. Marketing tools are focused on retaining and increasing spend with current customers, but there aren’t any specific tools designed to reach customers who’ve never entered your business, unless you count the Network campaign. Fivestars members can locate businesses nearby that use the card, giving you added exposure to Fivestars’ 9 million member base. If a Fivestars member joins your loyalty program but doesn’t check-in to your location, the Autopilot program will send out a message reminding that customer to come in. Social media links are accessible through your business profile, so you can try to entice potential customers if they happen to visit your social media pages. Other than that, there’s not much there.
- Give you a competitive edge – Yes. Studies show that continued customer engagement is an effective way to increase revenue substantially. Fivestars tools give you the ability to stay engaged with your customers beyond the point of purchase. Knowing what promotions work and are best effective for your business type is also one of the ways Fivestars helps your business remain relevant to your customers. They’ve evolved on the customer-facing tablet issue, making tablets a standard part of their subscription package, and the training they provide via onboarding and tutorials can really make a difference in the execution of your loyalty program. Well trained employees can quickly and effectively communicate the highlights of your program and provide a positive experience to your customers.
Fivestars is a great option for merchants, particularly those operating in their local area. If you’re in the Bay area, or near a Fivestars HQ, you can maximize on their customer service and pick their brains for ideas to improve your loyalty program (You’ll also get to try out the new features first!). The price for the program is higher than others, but not unreasonable, especially for what they offer. The no-way-out contracts are a little intimidating, and they don’t seem to wiggle, so make sure you’re ok with that, and check out your other options before signing a contract. Fivestars continues to improve both on the structure of their service and the features they offer. They should be expanding some of their mobile features to include nonlocal merchants soon. Their BBB rating did go down since my last review, though, so customer relations have ample room to grow.