At Sprout Insights, we comb the web to bring you the most up-to-date and actionable resources on how to use social media to grow your business.

To that end, we’re pleased to present the Sprout Insights series Spotlight on Startups. We’ll find the most innovative, useful startup companies out there, get the inside track on what they’re doing, and tell you how you can leverage their products and services for your own business.

This week we’re pleased to cast the spotlight on Front Flip — a smartphone app and marketing system that’s revolutionizing the concept of mobile loyalty programs. Front Flip is based in Leawood, Kansas, and serves clients and businesses throughout the United States.

What Is Front Flip?

Front Flip is an innovative mobile loyalty app. Consumers scan QR codes at participating businesses and their mobile devices are instantly transformed into interactive scratch tickets. Customers “scratch” the virtual tickets for a chance to win instant prizes and discounts at the establishments where they scanned the codes.

Sean Beckner, co-founder and CEO of Front Flip, says that the raw idea for Front Flip was born from his brother Matt’s visit to a favorite neighborhood coffee shop. As Matt got to the front of line, he discovered he’d forgotten his loyalty card at home — again. More importantly, he was struck by the thought that even though he was one of the coffee shop’s most frequent and loyal customers, the shop owner and staff had no way of knowing or leveraging this information.

Matt rushed home, collaborated with his business partner (and brother) Sean, and the two co-founded the startup known as Front Flip. This fun, interactive, and rewarding app-based loyalty program offers customers better incentives to frequent their favorite establishments. In addition, businesses can use the program to encourage even more visits (and upsell more merchandise) from its best customers.

The startup was officially launched in November 2011, and is available in both Android and iPhone editions.

What Needs Does it Address?

After the coffee shop visit, Beckner saw first-hand how the standard loyalty card system was failing both retail establishments and their customers. The “Buy 10 Get One Free” loyalty card model was providing too little a reward and too inconvenient a method for customers to participate in any meaningful way. Even worse, says Beckner, “businesses using these loyalty programs are capturing almost no valuable data, or offering any type of upsell opportunities to their best, most frequent customers.”

Although there are a number of mobile loyalty apps available on the market currently, Beckner says these aren’t much more than electronic versions of the old punch card system. “They’re still inconvenient for the customer and they still provide too little incentive to develop any real brand loyalty at all,” says Beckner.

By introducing a fun, interactive, and familiar interface to the loyalty card model, namely a scratch-and-win ticket on the face of your mobile phone, “customers can’t wait to visit stores where Front Flip is available.” Beckner adds that “people are literally lining up at establishments so that they can scan the QR codes, scratch their phones and maybe win prizes or discounts in the process!”

Beckner offers another example of how the Front Flip model is so successful at driving repeat business for his clients. “Let’s say, like many households in the U.S., that you order pizza three or four times a month. Which of those pizza places do think you’re likely to order from more often — those with nothing in particular to attract your business, or the one where you can win an instant prize, a free pizza, or other discount every time you order?”

How You Can Leverage Front Flip

Beckner says that according to a recent National Restaurant Association survey, customer loyalty is the biggest challenge to the restaurant sector in 2013. Additionally, 4 out of 10 consumers said they were not visiting restaurants as frequently as they wanted to. Front Flip’s unique loyalty program (and its fun, interactive design) helps address both of these major concerns.

Mr. Beckner is quick to point out that Front Flip’s solution is not just for restaurants, coffee shops or retail establishments. “We’re working with some large consumer packaged goods brands to include Front Flip QR codes on their packaging to offer discounts, prizes and incentives to consumers of all kinds.” Because the Front Flip app also captures visit frequency, and other consumer demographic data, “the possibilities are virtually endless as to what types of incentive programs can be developed with Front Flip technology,” Beckner says.

Beckner adds that Front Flip is constantly adding new locations and looking for strategic partnerships with interested parties. He also mentions (which is always a good sign) that the company is currently hiring all across the country and will soon be expanding internationally as well. Feel free to reach out to Front Flip on its website, or through its Twitter and Facebook accounts.

Know of any other startups that would make a good feature on Spotlight on Startups? Contact us, or let us know in the comments below.

[Image credits: Front Flip, fsse8info, KTDrasky]