Sweet Tooth

If Sweet Tooth’s space in Waterloo’s Accelerator Centre gets any more crowded, Mike Rossi will have to walk backwards to leave the room.

Okay, so the space crunch is not quite that dire, but the eight-member Sweet Tooth team is no doubt looking forward to its new 24-person suite.

“Everyone’s touching elbows,” Rossi, the company’s vice-president of business development, said a few weeks before the move.

Such is life for a company seeing 12 per cent monthly revenue growth – a testament to the exploding popularity of Sweet Tooth’s customer loyalty programs for online retailers.

The company’s latest innovation, a program in beta called Sweet Tooth Instore, is poised to fuel that growth. It allows e-retailers to extend loyalty programs into their physical stores, and reward points to customers for, say, trying on a piece of clothing. The points can then be redeemed on purchases made online or in the store.

“This hasn’t been done before by any company, really,” Rossi said, adding that customers can enlist in the programs with as little as an e-mail address. “There’s a benefit to you because you don’t end up with two segmented loyalty programs, and you don’t end up with cards in your wallet.”

Company: Sweet Tooth

Location: Waterloo

Founded: 2009

Employees: 17

Key investors:
MaRS Business Acceleration Program (Ministry of Research and Innovation, Government of Ontario)
Friends and family

Since it launched in July of 2009, Sweet Tooth has enjoyed a steady uptick in loyalty from its own customers, who include Rockstar Energy Drinks, Delta Airlines and headphone/earbud maker Skullcandy. They are the best-known among more than 1,000 retailers to line up for their programs, which have rewarded 15 million-plus customers through $250 million in annual transactions.

The company owes much of its rapid growth to the vision of founder and CEO Jay El-Kaake, who was a University of Waterloo student when he hatched what Rossi calls “the most flexible customer loyalty program in the world” due to its fully customizable features.

A key decision early on also proved canny: to build Sweet Tooth on the Magento e-commerce platform, which is now the largest and fastest-growing in the world but at the time was one of several candidates. Magento, acquired in June by eBay, now has 100,000 retailers in its portfolio, which means great exposure and extensive growth opportunities for Sweet Tooth.

Growth, of course, is a good problem to have, but is nonetheless challenging, Rossi said. Customer support demands are keeping Sweet Tooth’s eight-member Waterloo team, plus nine employees abroad, plenty busy. Support requests have gone from 10 to 12 per month a year ago to seven per day today, he said.

Having a Waterloo address has been crucial to managing that growth, given “the close community of people you have access to” as a startup, Rossi said. Meetings with advisers can often be arranged the same day, “and we don’t have to travel far to do it,” he said, adding that time-consuming trips to Toronto, once necessary, are now a thing of the past.

“We don’t have to do that now that Waterloo has advanced to this stage,” Rossi said. “We see that as a huge advantage.”

Despite rapid growth in e-commerce that could make the company an attractive acquisition target, Sweet Tooth intends to keep following the course of these past two years; namely, continuously updating its offerings based on customer feedback, and preparing for the opportunities that mobile payments will bring.

“Our strategy is to become the standard in customer loyalty,” Rossi said, “not to do a quick exit.”

For more information, visit:

Sweet Tooth Rewards

Magento Commerce

Accelerator Centre