NXT: What is Abenity?
Abenity helps organizations offer transparent and easy-to-use perks on everything from pizza and the zoo, to movie tickets, oil changes, car rentals, and hotels.
We work with companies who want to take care of their employees, brands who want to reward, retain, or gain new customers, and even membership and alumni associations.
NXT: How did you get started in the perks industry?
I started selling cell phones for Sprint straight out of college, and door-to-door sales for business lines was the number one strategy presented to me for success. With a goal of 30 phones per month, I figured that I could just sell the same number of phones over the Internet by staying in the office and calling on very large employers.
One of my first success stories was with H&R Block out of their corporate office in Kansas City. I simply let them know about corporate discounts on Sprint services, and they distributed my flyers via email to their employees. One day I asked my brother to build a website (he had the technical skills) and I began to take more orders online than anyone imagined.
Sprint took notice of my success, and soon Sprint’s Corporate Account Team started requesting our websites as a vehicle to advertise Sprint within the companies they serve. In the meantime, I was calling Boeing, Oracle, the US Army, and the Walt Disney Company to get my foot in the door.
NXT: How was Abenity born after your success at Sprint?
There was a day in 2005 when The Walt Disney Company had the wrong Sprint information published on their Intranet and their IT department didn’t have the capacity to deploy a fix for weeks. I suggested building a separate platform to communicate employee discounts, where IT wouldn’t have to touch that platform, and they agreed. That’s how Abenity was born.
Other services in our space were making money by selling insurance products, ads, and/or charging a fee per employee per month. These business models were not serving the industry well, so we decided to work for a flat monthly fee, which secured a niche for us that has now lasted for over a decade.
NXT: How did you get your 1st client after Abenity?
I still worked for Sprint at the time, so I’d be talking to clients about Sprint services, and, when appropriate, I would introduce to them my platform as a solution to manage their discounts .
The first 3 customers received the platform for free, but our 4th customer paid us. We added their logo for a monthly fee for brand exposure, and thus began our subscription model.
Right now, our lowest plan is $99/month, and our top client is worth a little over $65,000 per month. We always customize our platform based on our client’s specific needs. The average Abenity customer pays around $450/month.
NXT: Who are your ideal clients?
Our sweet spot is companies with 500 to 5,000 employees. We don’t do a lot of advertising and we focus on growing organically by working the existing networks that we have. Industries we serve include retail, healthcare, unions, universities, and trucking companies, to name a few.
NXT: So now that you have companies on one side, how do you get vendor discounts?
Acquiring new vendors who are willing to offer a discount is maybe one of the most difficult areas of our business. National brands have a very specific way that they market their offerings and that doesn’t alwasys include our corporate perks channel. We think this is a huge mistake as our members blow tradiational marketing response rates away, with more than 20% open rates and click through rates in our monthly perks emails.
We do work very hard to recruit new discounts every day, in fact, we have a team who strategically calls on local and national vendors in regions where we have the largest membership populations. We generally ask for them to support a mobile coupon inside our apps in return for free advertising in our platform. This is a story that many local vendors connect to.
NXT: How do you find and “win” your clients now?
We negotiate everything privately, from benefits packages to perks so our offers are unique to what our clients need.
We also try to attend a few trade shows every year like the CAAMP conference.
Many of our best customers require a long sales cycle, so we have a team that’s focused on building relationships with Fortune 1000 and Inc. 5000 companies who have shorter sales cycles. Companies this size are always looking for ways to better engage their group.
One of our best online resources for groups interested in Abenity is our Perks Report, an eBook we created to show how our discounts compare against others in our industry.
NXT: What is the perks industry like? Do you have a lot of competition?
Competitors, yes. Competition, no. Corporate perks is a very niche industry, and as of this publication, no other provider offers a busines model where a flat-fee perks subscription includes over 40 branding and customization options in addition to wholesale perks prices to deliver members the most savings.
We love showing people what perks can do for their employee well-being, instead of focusing on the traditional benefits model.
I’d say the one difficulty in our space is that many companies haven’t evaluated their perks provider in many years, and they don’t realize how much progress providers like Abenity have made in the last ten years. In fact, many competing programs are funded by advertisers and insurance commissions. So naturally, their perks are not great which gives the industry a bad name.
NXT: What does the longer sales cycle look like?
Sales cycles can sometimes take up to 24 months, but when we get through the legal approval process, these clients stay on with us for a very long time. In fact, we have over 30 accounts that have been active with us for more than 10 years now!
NXT: What are you focusing on now?
Abenity is out of that early phase where if you don’t fill up the funnel, your business goes dry. We are currently in a phase where we are really focusing on managing the momentum we’ve generated in a way that leaves everyone feeling cared for – our clients, vendors, members, suppliers, strategic partners, and internal team members.
I think a secret to our success is that we’ve always focused primarily on serving our existing clients really well by understanding and addressing their needs. Many of these clients are huge corporations, and when we build a solution that meets their needs, it naturally offers other large companies access to the same solutions, which allows us to serve them well too. I don’t want to say that we are not a sales focused organization, but we’re focused on serving our industry and our clients well. We take on clients as they come, but outbound sales isn’t our thing.
With the above strategy, we’ve consistently see 30% year-over-year net client growth. This year, we’ve had a big bump because we did in 5 months what usually takes us 12 months to accomplish!
On top of that, our 2017 revenue growth for our Inc. 5,000 ranking was just over 150%, but it’s been as high as 300% within the last 5 years.
NXT: How did you manage to grow so fast without doing any outbound sales?
None of the measurable channels contributed to the growth, so it doesn’t go back to a sales person or a conference we attended.
It’s all been referrals from existing customers, and increased use of our product from our existing members. I believe that when you take care of your customers, and you’re proactive about telling your story, then opportunities will come your way without the need for an advertising budget.
NXT: What do you wish you knew when you started?
I’m glad I didn’t know much, because I built a healthy, debt- and investor-free business based on following basic principles and values that my brother and I share. We are both personally accountable for this business. There have been 3 times in the last 12 years where I made tough decisions because something didn’t align with our core values.
In 2012, I made the tough decision to fire 65 customers because I could see that they were not our core business. We lost $200,000 in licensing (recurring) revenue but they were too high maintenance. If I had investors, they would not have let me cut those relationships. Within 15 months of these cuts, the freedom to make my own decisions allowed us to grow this same channel by over $1 million.
Sometimes, you have to make decisions where you take a short-term dip financially, but it’s worth it if it will benefit your users and bring your numbers back up in the long-term.
We have a goal to unlock new opportunities for our members, and we have to be forward-looking. Being naïve has helped me from getting stuck!
NXT: Where do you see opportunities now?
There are only so many discounts you can deliver, so we are trying to focus on providing a level of experience for our members that goes beyond discounts.
My vision over the next 3 years is to begin building a support structure that serves our millions of members in more of a personal concierge format. Let’s say you want to plan a vacation to Orlando, our concierge team will take care of your needs, so you don’t have to waste 2 hours of work/leisure time to plan your trip and hope that you found the best value.
The Abenity Store is another area of our business that continues to produce amazing results. In fact, this summer our lowest sales day in 2017 was higher than our highest sales day in 2016. There’s a lot we can do here to improve our member’s experiences by increasing our inventory, offering one-click order options, digital mobile redemption certifciates, and more!
NXT: Have you thought about going on TV shows like Shark Tank?
We bootstrapped our way to where we are, and being personally liable for everything within the company gave us the flexibility and control to get where we are today. We’ve thought about Shark Tank, but at the end of the day we are scaling well, and we don’t want to be flagged as a group that’s pursuing it for the publicity only.
NXT: Abenity also has a social mission; did you always start out this way?
I call myself a social entrepreneur, it’s important to me that the success of our business directly correlates to our ability to help globally reduce extreme poverty, injustice, and economic inequality.
For Abenity, we sponsor a child living in extreme poverty with every perks program we deliver through World Vision. Right now, we sponsor 194 children in Senegal Africa! This not only provides us with the motivation to keep going, but helps us get work with clients with similar values as well.
Another unique program that I’m working on with my wife is a non-profit organization at SeaStarAZ.com where we will be offering Dolphin Assisted Therapy to kids with Special Needs from Scottsdale Arizona.
A huge thanks to Brian Roland for participating in this interview. Brian and his brother Mark created Abenity with a focus on technology and transparency, bringing perks back into focus by delivering deeper discounts with no hidden fees. He oversees the strategic direction of Abenity, and is a member of the C12 Group. You can watch their Shark Tank audition video here.