A pair of St. John’s entrepreneurs has developed a new loyalty program app for smartphones that is gaining traction with retailers in their hometown and as far afield as Calgary.

Matthew Stenback and Adam Puddicombe have formed Brownie Points to offer small and mid-sized retailers — who have to compete with multinationals with sophisticated programs — fun digital loyalty programs with some interesting features.

The two former business students at Memorial University began Brownie Points as a tool for coffee shops (as the name suggests) but other retailers can use the product.

 “Brownie Points is a digital customer loyalty program,” said Stenback in a phone interview from St. John’s.

 “It stems from the fact that small businesses don’t have the resources to build something like the Starbucks reward program.”

Having previously built apps for smartphones, Stenback set out in 2012 to build something that would help small businesses, and he hit on electronic loyalty programs for coffee shops.

He believed loyalty cards were cumbersome, tended to clutter customers’ wallets and offered the retailer no analytics.

After developing an early version of the app, Stenback teamed up in April with Puddicombe, who he’d gone through university with.

They beta-tested Brownie Points with a few businesses over the summer and held discussions with about 20 retailers on what features they would like.

Stenback and Puddicombe have launched the product within the past month with about 10 companies, including a coffee shop in Calgary that heard about the app through a friend in St. John’s.

Brownie Points now allows consumers to use a traditional loyalty program using a card or to use an app on an iPhone.

Stenback said about 60 per cent of customers use the cards, but that proportion should fall when Brownie Points releases its app for Android phones in a few weeks.

While the apps are convenient for the customer, they also allow the retailer to analyze customer behavior and provide the retailers with information on how to increase their sales.

 “Our analytics are all based not on what you buy but how you interact with the business,” said Puddicombe.

They look at the outlet’s busiest times, slowest times, how frequently returning customers come back, what people order and how engaged the customer is with things like the retailer’s promotions.

And Brownie Points will work with the retailer to use the analytics to interact with clients.

 “We allow them to deliver a message to their customer base to retain customers and increase traffic on a slow day” said Puddicombe.

The entrepreneurs said they are getting more enquiries from retailers through their website and are looking at scaling up the business, both inside and outside Newfoundland.

They have considered trying to raise equity financing to hire more staff and grow more quickly, pondering a target of about $250,000 to $300,000.