Charles Ehredt, co-founder of Currency Alliance.
Charles Ehredt has started 21 companies in his career, which makes him highly qualified to start his new venture, Currency Alliance, a tool that makes it easier for customers of loyalty programs to redeem and earn their points, while also allowing brands to get more data on what their customers are buying. It’s a win all around.
The Beginning
Charles Ehredt grew up in a farming community outside of Chicago, Illinois. He learned to be resourceful at a young age because he had to solve his problems on his own.
“There is nobody around to help you.” Ehredt explains, “And it turns out that as an adult, problem solving is what I love most, but specifically solving business problems by applying new business models or innovative technology.” He has already used that passion in the various companies he has invested in, started, and coached. His experience spans management consulting, to toys, title insurance, biotech, TV broadcasting, traveltech and more in both B2B and B2C models.
In 2015 he was in a meeting with various other companies who run loyalty programs, when one of the chief marketing officers said he was not going to spend “one European cent” on the travel club points given to his customers. He said his reasoning was because every customer knows the redemption values of the loyalty currency are worth less than 0.4 European cents.
That’s when the cogs in Ehredt’s entrepreneurial brain started to turn. “My entrepreneurial antennas went off—I was like ‘holy cow!’” Ehredt says. “How is it possible in the age of the internet, where the marginal cost of virtually everything is approaching zero, that there is still an industry in the world where the intermediary running the loyalty program has so much negotiating power that they are able to take 60% out of the ecosystem to cover their operating costs and profit? There has got to be a disruption opportunity here.”
Following this revelation, Ehredt launched into a six month period of studying the loyalty industry, and in October of 2015 he and his partner, Jordi Arias, came up with the idea behind Currency Alliance. However, the two did not want to act on the idea until they were certain it was a great opportunity, so they performed six months of due diligence. When Ehredt and Arias were convinced of the opportunity in March of 2016, Currency Alliance was born.
The Timeline
- March 2016: Ehredt and Arias create and name Currency Alliance.
- End of 2016: The first version of their user-friendly program comes out.
- 2017: Ehredt starts to market and sell their program to brands, gaining four large companies as clients by the end of the year.
- Early 2018: Ehredt and Arias added brands like Orange Telecom and Miles & More from the Lufthansa Group.
Ehredt says, “Now things are accelerating even faster.”
Business is Taking Off
Right from the start big brands were interested and willing to talk to Currency Alliance, but they were not ready to start using the program. Years invested in relationship building with global brands is paying off: the sales cycle is rapidly shrinking and companies are signing up.
“We have started to see a lot more engagement and interest,” Ehredt explains. “This requires a lot more face-to-face meetings because the directors of these brands literally want to look me in the eyes and determine whether they can trust us.”
This year alone Ehredt estimated that he has traveled over 68 thousand kilometers to meet with prospective clients. “Once we build a relationship with the brand, the ongoing support we need to provide is quite minimal, because we designed the Currency Alliance business model and its software as a Software as a Service (SaaS) technology platform to be largely self-service,” Ehredt says.
The program also cuts the negotiation time of the commercial agreements between partners from up to six months to just a few days, not to mention the time it would have taken the IT department to schedule and complete the integration. System implementation would normally take six to 12 months, but now Currency Alliance does it for you. For example, thanks to Currency Alliance, if EasyJet wanted to partner with Starbucks, their customers could start earning those rewards in a few short days instead of three to six months.
The Future
Within the next year, Ehredt says that he believes Currency Alliance will have enough brands using its platform that others will feel compelled to join in order to compete and connect with partners, like those mentioned above. That would make Currency Alliance the logical option for brands in order to connect with partners. Though Ehredt has enough business experience to know that there are always competitors out there, he believes that none of Currency Alliance’s competitors have the same focus. In that way, the company does not truly have any relevant competitors offering a self-service platform.
“We do have competition, but I think nobody really is focused on the same opportunity as we are, which is a global loyalty ecosystem for collaboration on brands.” Ehredt points out. “I think that we are uniquely focused on that and delivering a product that can be deployed rapidly.”
In the next three to five years, Ehredt says he thinks the company will cement its position as the primary marketplace for loyalty currencies and collaboration. After this has been achieved, he believes strategic industry players like Visa or American Express will make offers to buy the company.
The real value of Currency Alliance is in the data the program collects when it is processing transactions: “The more we know about products purchased, frequency, and where share-of-wallet is allocated, the better partners on our platform can target customers to improve conversion,” Ehredt notes. “Such personalization is also helpful because the customer views the offers more as a service than noisy, non-personalized advertising.”
In fact, the company has already had a few offers to acquire the technology, but Ehredt believes their valuation can be higher in a year or two, so he’s not selling just yet. Plus, Ehredt says he is having so much fun being a part of the company he wouldn’t mind running it for the next 10 years.
“I am not in any hurry to sell because I am really having a great time,” Ehredt tells me. “I am convinced we are on the right path and it is really just a matter of time until we achieve our purpose, and I am happy to stick with it.”
You can read more about Currency Alliance at currencyalliance.com or follow on Twitter: @CurrncyAlliance or LinkedIn: @currencyalliance.
Madelyn Swenson is a contributing writer and summer intern at Barcelona Metropolitan. From St. Paul, Minnesota, she studies mass communication, journalism and conflict studies at Winona State University. In her free time, Madelyn likes to watch soccer, listen to music and read.