Today I had the chance to talk to the management team at Fanminder, a start-up working on simple tools for local merchants to communicate with and reward customers. Similar to philosophies we’ve heard lately (such as PlacePop), this involves fostering relationships with existing customers in addition to attracting new ones.

“Tens of billions of dollars are spent with a focus on new customers,” said Paul Rosenfeld, cofounder and CEO. ”But when they get those customers, they do almost nothing to manage and nurture them. The irony is that this is the most cost-effective way to grow a business.”

Rosenfeld previously spent time in various positions at Intuit, where he gained important perspective about SMBs and what makes them tick. I say important because it’s perspective that’s often lacking from the many companies that are flooding into the hot mobile local space.

K.I.S.S.

Using Fanminder, businesses can build customer lists, then are led through a process of sending out targeted marketing across platforms like SMS and (coming soon) mobile apps. The main distribution point is currently SMS, given the medium’s ubiquity and comfort levels among users and merchants.

Using the dashboard (see screenshots below), merchants can send and track dynamically generated offers to this customer list. Interested users then send a uniquely coded reply. The resulting text message is shown to the business to redeem the offer. Unique codes are used to limit offers per user (such as “first time” offers).

The nature of the offers are also highly customizable (i.e., “offer good until 5 p.m.”). This is good for merchants with fluctuating business, and a need to drive foot traffic during dark periods or inventory surpluses. For those less certain, the dashboard also comes with suggested deals that are category specific.

This appears to have the right mix of simplicity and instant gratification — key levers for appealing to the sometimes fickle SMB segment. The simplicity also comes through in the pricing, with a monthly fee that starts at $25 and graduates upwards based on the number of customers a business is messaging.

Intuit-ive Approach

One challenge facing anyone in this space – no matter how bright and shiny your product is — is reaching businesses to begin with. Fanminder is tackling this challenge with a quickly growing reseller network.

Rosenfeld also went into depth about a previously unannounced partnership with Intuit. It powers the “Text2Vote” feature of Intuit’s “Love a Local Business” Grant Competition. This helps merchants solicit SMS-based feedback and testimonials, incentivized by a raffle prize.

This could be a big boost in reaching Intuit’s massive installed base of SMBs. According to Rosenfeld, planting “Text2Vote” in front of these merchants will also involve cross promotion and discovery of its other products, thus opening a major door into an otherwise elusive market segment.

“It’s a great partnership when you consider that our goal and [Intuit’s] are the same and that’s to help the SMB to be more successful,” he said.

Next up is continuing to grow partnerships, relationships with merchants and meeting with VCs to raise the next round of funding.

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Screenshots

What the user sees

What the merchant sees