CEO Eric Lopez of two-year-old WorkOutLoud believes he has developed a better way for companies to retain customers.
WorkOutLoud, a six-person company in northeast Minneapolis that has 20 clients, says it is the “first and only social platform” designed specifically for customer collaboration to help retain and build business.
“The cost of retaining customers is anywhere from five-to-25 times less than acquiring new customers and there’s a 5-to-20 percent probability of selling to a new prospect vs. a 60-to-70 percent probability of selling to an existing customer, [so] it makes sense for companies to focus on keeping what they’ve caught,” Lopez said. “We reduce customer churn, develop new customers and advocates, and reduce the cost of sales.”
Lopez, 56, has worked as a technologist and marketer for 30 years including at the former Lawson Software. He is joined by Loring Kaveney, who is president of the company, a veteran of several technology concerns and the Minneapolis director of Startup Grind, which is the largest independent start-up community that actively educates, inspires and connects entrepreneurs.
Lopez has been at work for several years on the WorkOutLoud concept and software. The company’s advisers include Dan Kinsella, CFO of SportsEngine; Jason Tober, CEO of Delaget and Susan Dub, former CFO of Code 42 and Lawson Software.
WorkOutLoud says it provides “a private, secure, branded customer community that enhances the customer experience.
It is delivered as a software-as-a-service offering and is primarily run by the customers in a simple-to-use, self-service manner, guided by a ‘community success manager’ who provides initial training and ongoing engagement support; ensuring the success of the community.’’
Customers then run their operation independently on the WorkOutLoud platform.
The secret sauce is in the software that enables customers to run their community engagement, and the site provides analysis to clients about customer segmentation, interests, challenges and preferences.
Each client can brand its community with logos, colors, and imagery, as well as custom business rules.
All data generated by the community belongs to the client.
Rick Brimacomb, a Twin Cities small technology-business adviser, is a WorkOutLoud adviser and customer. He uses the platform for his Club Entrepreneur and Network Connect interest groups.
He called WorkOutLoud “a market disrupter, unlike other collaboration platforms that provide a simplistic, partial customer experience, limited functionality and minimal data access.
“It’s all about a better way for customers to connect in meaningful ways that drive revenue, loyalty and a better bottom line,” Brimacomb said. “WorkOutLoud does it in a single platform.”
The competition includes Jive Software, Igloo and LinkedIn. Lopez, who has tinkered with the concept for a few years, incorporated WorkOutLoud in 2015 and launched to customers in January 2016.
“The customers we work with want deeper relationships, “said Lopez, who expects 250 clients and revenue to exceed $1 million within a few years. “They are challenged to get their message out and get customers to know each other to help solve common issues.’’
Lopez and two other founders have ‘bootstrapped’ the company with their own funds so far. “Last year, we had $280,000 in revenue,” Lopez said. “Our goal is to hit $1 million within 12 months. If we can hit $1 million we shouldn’t have trouble hitting $10 million.
Revenue comes from companies who pay WorkOutLoud on a user-based subscription model. The second source is independent companies who pay $5,000 to $50,000 a year to advertise to WorkOutLoud clients and their customers.
“Our three big features are collaboration, event management which allows [clients] to create their own meetings, e-mail and social marketing,” Lopez said. “Our product is put in the hands of [our clients’] customers.”