Loyalty cards have become a key weapon in the battle to retain customers during the current downturn. But the cost of setting up a scheme can be prohibitive for smaller businesses.

Irish-born John Staunton is the co-founder of Buzzoek, a loyalty network system that enables shop owners of all sizes to have a loyalty programme that doesn't cost a lot to run.

“Our system enables people to use cards they already have in their wallets (such as library cards or transport cards) as loyalty cards without pre-registration,” Staunton says. “At the heart of the system is low-cost, plug-and-play near-field communication-based hardware and a user-friendly dashboard that allows shops to reward loyalty and get easily understandable data about their customers. In turn customers collect points for their visits using their NFC-enabled cards and smartphones.”

Buzzoek was launched in early November and by January 2014 the aim is to have 50 merchants on board. Both the hardware and software sides of the company's cloud-based system were fully developed in-house and the partners self-financed the development of the prototype and back end system before raising €112,000 in crowd and angel funding. A pilot is currently running with six retailers in the Netherlands.

“Participating merchants pay monthly (€30) for the hardware console and personalised loyalty programme and premium services such as enhanced analytics targeted advertising will be available for additional fees,” Staunton says.

“Future extensions include mobile payments, pre-paid card top-ups and other product purchases such as vouchers and gift cards. Consumers are not charged to join or use the programme. We have started with individual smaller outlets to test the product but ultimately it can be scaled to suit any size of operation,” he adds.

Staunton is an engineering graduate who spent eight years working as a consultant with Accenture in different markets before setting up Buzzoek in March of this year. The company now employs six people. Staunton says completing an MBA gave him the push he needed to strike out on his own. "I come from a family of entrepreneurs, so the seed was probably there all along. I just needed to take the leap," he says.

Staunton and co-founder, Renji John, are currently honing their product while participating in an accelerated start-up bootcamp in Amsterdam. “The programme has a great reputation and there were 300 applicants from all over the world competing for 10 places. It gives us some financial support and incubation space but, most importantly, intensive mentoring, workshops and feedback,” he says.

Further revenue streams for the company include the provision of corporate services across large chains of stores, providing aggregated data to market research agencies and large brands, and providing “loyalty-as-a-service” to other loyalty providers via the Buzzoek platform.