You may have spotted the colorful logo on the side of a Lextran bus rolling around town and wondered, ‘what is Xooker?’ Conrad Carney is founder of the Lexington-based mobile marketing company. He talked with Tom Martin about how his company has evolved, what it does, and why he made the decision to keep it local, confining to Lexington his search for high tech talent.
Q: Am I right that your first endeavor was something called CMS Text?
A: That’s correct. CMS Text is still a strong vibrant company. We’re in all 50 states and in every Province of Canada.
Q: What does it look like on the consumer end, something that people would be familiar with?
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A: If you go into some of the clients like Sonny’s BBQ, Marco’s Pizza, Johnny Carino’s, to name a few, they may offer you a free appetizer if you join their mobile VIP club by texting, say, JC1 for Johnny Carino’s to 49798, which is one of our short codes. And when you do that, you’re going to get a reply message asking to confirm that you want to receive those offers. Once you reply yes, then you’ll start getting one to two messages a month from them with either a special or a deal that they’re going to offer just to the people that are in their mobile VIP club. And it comes right to your phone via text.
Q: This evolved out of your interest in marrying text marketing to the smartphone?
A: Right. As soon as I graduated from UK, I started working for a local company, Cellular One. So, I’ve been in mobile since 1987. I remember when we celebrated the 40th cellphone customer here in Lexington. So, I’ve been in mobile a long time.
Q: CMS Text began in about 2007?
A: That’s when we developed the intellectual property. What I was looking at was how we could engage customers more with small and medium-sized businesses and how it could give them an even footing with the major franchises and brands. The problem at that point was smartphones only accounted for roughly about 2.5 percent of the total number of cellphones out there. So it was not a very scalable product at that point, because even if you had 100 percent penetration, you only had 2.5 percent of the market. So we needed to wait until smartphones became over 50 percent of the market, which was roughly in 2012-2013, before we started developing the intellectual property and programming it to do a pilot.
Q: In 2011, you announced that you would be expanding, adding about 135 jobs.
A: Correct. And a lot of that had to do with what we’re doing with Xooker. The economy took a major downturn, and some of those things got postponed, but we’re now in a position where that’s going to become a reality.
Q: How does Xooker differ from other forms of social media like Facebook and Twitter?
A: We really don’t consider Xooker a social media per se in that it’s really a consumer application on the phone to where they can engage to find great deals of their favorite restaurants and retailers, where social media is more about connecting with friends and more about what you’re doing in your life. Xooker is a tool for the consumer to find great deals so they can save money. And for the small and medium-sized merchants, it’s a way that they can economically market to consumers. We found through our experience, now going on 11 years with CMS Text, that small and medium-sized business owners don’t have time to manage all these different social media, mobile marketing and digital media tools because they’re too busy running their businesses. And a lot of them are not millennials. So they’re either not text savvy or they’re even intimidated by technology. It’s human nature: We tend to avoid the things we don’t know or understand. And so, what we’re bringing is a tool set, a suite of services to those merchants that they can market to those consumers, but in a way that puts them on even footing with these much larger brands that have deep, deep pockets.
Q: What about automatic check-in? How does that work?
A: The Xooker app runs in the background on your phone. It doesn’t take up a lot of battery space because it will pause when you’re moving, and where you’re at (the location), it automatically checks in. So you don’t have to remember to open up the app and check in. It automatically does that for you. With other services such as Foursquare, you have to remember to open up that app and then check in.
Q: So, you walk through the doors of a restaurant and boom, there it is?
A: It automatically checks you in and then it lets you know the type of specials that they have in that restaurant or that store.
Q: What was the thinking in adding games to the equation?
A: The average person has 27 apps on their phone. And the amount of time that they engage in those apps is roughly 5 to 7 minutes a month. But you know, shopping apps have even less time that people engage. So, we wanted to do something that would keep consumers coming in to the app and therefore being able to see the deals and specials that the merchants offer. Of the 315 million cellphone users, 285 million have smartphones; of the 285 million smartphone users, 128 million Americans play games on a monthly basis. And they get points for playing. You know with Candy Crush, you get points, but you get nothing for your points. So we wanted to do something that you could play these games, earn points, and then be able to go into the rewards catalog and actually redeem those points for deals and rewards from your favorite restaurants and shops.
Q: If I understand correctly, initially, you had support of Silicon Valley talent, but now you’re focused locally.
A: Absolutely. We rolled out our pilot last year. There were three things we wanted to demonstrate. One was we wanted to demonstrate that we could onboard merchants very quickly and we did over 231 merchant locations here in Lexington in 60 days. The second thing we wanted to demonstrate was that we could get consumers here in Lexington to download it — and we did that pretty much organically with minimal advertising. We had over 12,000 downloads. And the third thing was to show that people would utilize the platform to actually get deals and redeem them. We averaged 18.8 percent redemption rate. That is almost 10 times what traditional marketing results are for a small, medium-sized business. So, we demonstrated that our hypothesis actually would work.
Q: You found not only the talent for your own company here, but you have partnered and have some collaborations going on.
A: We do. Through the experience of partnering with Silicon Valley programmers and development companies out there, as well as on the East Coast, we started really looking here in Central Kentucky and in a lot of ways we found better talent here, locally. We said, ‘if we’re a Kentucky company, then we want to be a Kentucky company.’ We partnered with a couple companies here. One is Fusioncorp. What you see on the app, while we designed the architecture of it, they implemented the program that developed it. The gaming was done through a company called Super Soul. The games and the graphics are just phenomenal. And we’ve gotten a lot of compliments across the nation with different firms looking at it and saying, ‘Wow. Where did you get that done?’ And we say, ‘Central Kentucky.’ They’re like, ‘Really?’ ‘Yeah. Really. There is that kind of talent here.’ Another company we partnered with was Able Engine that did the development of our sales tracking platform. We needed a platform that could be used by our field reps when they go in to sign up a merchant and train those merchants, as well as sell the different advertising packages so that it could be seamless, but also give us the ability to expand exponentially very quickly and efficiently.
Q: So, all that talent is right here in Central Kentucky.
A: Lexington has a lot of benefits in that we’re centrally located. We’re within 8 hours of almost 50 percent of the population in the U.S. We just had some of our board members — one is from San Francisco, Silicon Valley, another one is from Manhattan, another is from New Jersey and another from San Juan. And when they came here for our board meeting, they just fell in love with the city. They say, ‘What a great place. The people are so nice.’ And as they see the ability of human capital we have, resources through the universities and the colleges here, it’s just a great place for us to build and expand this company.
Tom Martin’s Q&A appears every two weeks in the Herald-Leader’s Business Monday section. This is an edited version of the interview. To listen to the interview, find the podcast on Kentucky.com. The interview also will air on WEKU-88.9 FM on Mondays at 7:35 a.m. during Morning Edition and at 5:45 p.m. during All Things Considered.