LAVCA spoke with Bruno Giuffra, Founder and Executive Director of Promotick, a Peru-based marketing company that manages B2C, B2B and B2E loyalty and incentive programs through offices in Colombia, Peru, Chile, Ecuador and Bolivia.
LAVCA: Please give us a bit more background on Promotick and its products/services.
Giuffra: We’re a high-tech oriented company with revenues over US$7 million. Promotick runs more than 50 programs for large corporations in the region, including banks, insurance companies, airlines, hotels and mass-consumption companies. Its revenue model combines service fees and the sale of merchandise in the form of rewards, which are offered through tailored on-line and printed catalogues to thousands of participants. The company integrates Marketing, Technology and Logistics in its operations.
LAVCA: How did you come up with your business idea? Did you have prior entrepreneurial experience?
Giuffra: My first business was a multi-brand coupon-based discount system called “Tarjeta Ventaja” that worked in partnership with selected Peruvian retailers. The dynamics of the business implied renewals of thousands of memberships every year, in times with very low e-commerce activity and credit card penetration. Since it was so difficult to collect US$25 from thousands of members, we decided to offer the concept to a local bank targeting its customers. Our company started servicing this bank as a marketing company and new products were developed. One of them, after some years, was a loyalty program for its Visa credit card customers. After learning and validating the business model, we replicated the concept in other industries and to other countries.
LAVCA: What sort of financing have you received thus far? From whom?
Giuffra: It’s mainly been from providers and clients. Our capital needs have not been to a level where we’ve needed to seek angel or venture capital investment. In addition, my friends and family have not been involved with the company either, except for my identical twin brother who has been my business partner the majority of the time.
LAVCA: You’ve already expanded Promotick outside of Peru and into Chile, Bolivia, Ecuador and Colombia. What are some of the most valuable lessons you’ve learned while expanding your company to different markets?
Giuffra: Nothing is more true than “think globally, act locally.” In Latin America every market has its unique qualities and particularities so you can’t simply look at all of the countries as a whole region. Chile is totally different from Ecuador; people from Bolivia think radically different from Colombia, and so on. You have to act locally if you want to be a good regional player. The second lesson is that it’s very important to align interests within the organization since our teams come from different countries and cultures. Leadership is crucial for growth.
LAVCA: Do you have further expansion plans and if so, what is your financing strategy?
Giuffra: We are convinced that our business has the potential to scale globally. We have started operations in smaller markets that were easier to enter. Now it is time to enter into bigger markets, such as Mexico, followed by the US. We are aware that this will significantly increase our future capital needs. We are looking to sell equity in order to obtain growth capital to meet our goals. We’ll look to venture capital firms and investment funds. Beyond capital, we also hope to find firms that will provide strategic counseling, networking and knowledge transfer. We strongly believe that smart, strategic involvement by investors will benefit both parties in the long run.
LAVCA: Who is your competition? What do you see as your competitive advantage?
Giuffra: We don’t have a regional competitor with local presence. Nonetheless, there are local firms in every market that can run loyalty and/or incentives programs, but none of them have the coverage we have or serve the variety of clients and industries that we do. When global companies want to launch an incentive program, they prefer to work with few providers that have access to large regions. We can offer immediate operations in five markets with a single account manager in charge. Our management team and our technology platforms are also very important differentiating factors for us.
LAVCA: Can you tell us about some of your clients? Why did they choose to work with Promotick?
Giuffra: Promotick’s clients come from several industries. We are able to work with large banks as well as small local hotels. Normally, we work with the largest or second largest player in each incentive-sensible industry. The list includes Banco de Credito, Banco de Bogota, Telefonica, Casa Andina, Frito Lay, Nestle, Cementos Lima, Banco de Guayaquil, P&G, Kimberly Clark, Shell, etc. I think they chose Promotick because we make their goals ours as well. We work fully aware of their needs and deliver consistent results, which means more loyalty and a more profitable business for them.
LAVCA: Where do you see your company five years from now?
Giuffra: Our expansion plan is very aggressive. We will be working in every important country of the continent, serving the most important clients, including banks and mass consumption companies. We see marketing budgets focusing on point of sales and less on traditional methods such as TV, so we plan to stay on top of trends and adapt.
LAVCA: Not only are you an entrepreneur, but also a professor of entrepreneurship. What do you think are the most important skills for entrepreneurs in Latin America to possess and/or develop?
Giuffra: Actually I wear three hats; I manage the company with my twin brother, I host a daily business TV show and teach Entrepreneurship at CENTRUM, the MBA school of Universidad Católica del Perú. What I see in this business environment is that we in Latin America are losing the fear to compete. We are now more capable of facing the challenges of internationalization. I see more and more international Latin American companies in the neighborhood. Clearly something has changed for the better.