As customers expect evermore personalized services, leveraging customer data is consequently becoming evermore important. Eager to save time and be efficient, many companies are turning to solutions that analyse customer movements and suggest tailor-made customer solutions automatically.
That’s where Loyal Guru comes in. Focused on the supermarket industry, its customer data platform with marketing automation capabilities uses data and AI to make every customer interaction smarter, overall increasing brand loyalty.
We spoke with co-founders Borja Sanfeliu and Javi Fernández about the future of AI in the retail sector, hiring a team of 40+ in 4 years, the perfect timing of bootstrapping and venture capital funding, and strategising international expansion in Europe and Latin America.
Thank you for joining us! Can you tell us the story of Loyal Guru, where did the idea come from?
When we were carrying out consulting projects for large and medium-sized companies, we realized that although customer data was completely wasted, if it was exploited intelligently, very good results could be obtained directly impacting sales. From there we decided to build a solid and scalable platform that would allow retailers to understand and develop their customers intelligently.
Until now, large retail chains have received and stored information about their customers, interacting with them in a very generalised way. Loyal Guru has created a platform and an algorithm that allows retailers to analyze purchasing information, consumer behaviour and affinity for certain products, and develop it through discounts and loyalty programmes in a completely personalised way. We collect data from all touch points, that is, points of sale, e-commerce, customer support, emails, phone calls… to centralise them in a unique customer profile. This allows to accelerate the decision making and to activate the previously collected data, with personalised campaigns that impact the final consumer and translate into an increase in sales.
What makes Loyal Guru unique?
Most large consultants were developing custom platforms to offer their services, and little by little they have realised that it is better for them to rely on specific products like ours. We have competitors in some of our modules, but none offer a complete end-to-end suite like ours. Our strength is to develop the final consumer through coupons and personalised loyalty programmes, while other platforms specialize in other areas of technology, closer to data analysis.
Your platform uses artificial intelligence to improve customer interactions. How do you see AI transforming your sector in the future?
We don’t think of AI as a magic wand, nor as the only available solution to the retail problems we are trying to solve. This is why we make use of artificial intelligence, but Loyal Guru goes way beyond that. We constantly ask ourselves if our platform would still be valuable without AI, and the answer remains, and should always be, yes.
Having said that, we strongly believe artificial intelligence makes a lot of sense in the retail industry, especially in food retail, where there’s a lot of well-structured data and can be easily used and managed to improve models, deliver fast results, and iterate. In our sector, we think artificial intelligence has great potential to improve recommendation engines and the way we collect data from consumer behavior.
From your founding in 2016, you focused on a bootstrapping strategy in your early years. What was behind this decision?
It was very important for us to have a sustainable business model from the start. Very often, the main goal for many startups at the beginning is to raise money quickly, but many times those funds burn out very easily since they’re not directed to making the business grow, so they end up closing 2 or 3 years in. For us, it’s very important to take it step by step, consolidating our team and getting solid and loyal clients that are happy with the results.
Recently you raised venture capital funds. What made you decide it was now the right time?
We have been active since 2016 and reached break-even two years in without any external investments. So, while we have been able to build a great company until now, this funding round is key for us in terms of developing our business in LATAM and Europe, as well as consolidating our position in Spain and searching for talent in all areas to continue improving our team and our product.
What advice would you give founders weighing up the pros and cons of bootstrapping, venture capital funding or crowdfunding?
We believe bootstrapping is the key to any startup’s foundation. When you lack resources, you focus on what’s important, on the things that drive value to your company, the rest becomes irrelevant.
We like to tell people who are looking for VC funding to always look for Smart Money. We are so glad and grateful for the constant help we’re getting from the team at Greycroft. Getting advice from professionals that have worked with companies in situations similar to ours is sometimes even more valuable than the money you could get. Run away from investors who offer ‘just money’.
You’ve expanded to Andorra and more recently LATAM. What practical internationalisation tips do you have?
When it comes to international expansion, you need to look for business accelerators in each country that work well for your company. For example, one key accelerator could have senior team members who are well-connected within the industry or seek out partnerships with other companies with an established customer base in that country. We are lucky to have team members with a strong network within the industry. Apart from introducing us to the right people, these members have been able to hold a conversation and create interest in our platform.
We’re still in a very early phase of our international expansion, and our best bet is to keep the organisational structure and team in Barcelona without opening new offices or building teams in each country. However, we consider that building small but focused sales teams in each country could be beneficial for our business later on.
You are based in Barcelona. What is your opinion on starting up a company there?
Barcelona is one of the most important tech hubs in Europe. You can make lots of contacts and foreigners like coming to live here, which is a big pro for us in a moment when we are making hiring a priority. It’s always been very important to us to create our business here so we could have stability business-wise.
Finally, your team is now 40+ people! Could you talk to us about your strategy on team expansion?
Hire a person with strong talent management capabilities. The key to our growth success is our own Head of Talent.
When we started out, we, the founders, were holding interviews and looking for people on LinkedIn. Then we moved on to specialised recruiters who connected us to certain profiles we needed, but ended up being an expensive solution for the company. Once we knew we wanted to grow fast, we looked for that person that would help us out to build our most important asset: our team.
This person needed to be multipurpose: they needed to be able to recruit, establish internal processes, look after the company culture and make sure team leaders were holding constant feedback meetings with their teams. However, if you want to make this type of profile work out for your company, you need to make sure your team culture is strong and able to adapt quickly first.
via https://www.AiUpNow.com/ by contact@bcurdy.com, Khareem Sudlow
