START-UP NATION: PHLOKA new social media platform and app promises to help firms harness the power of Facebook

The popularity of Facebook is well documented. The social networking site has more than two million Irish users, with 1.5 million accessing the site every day. But Facebook doesn’t work for most local businesses, according to Irish entrepreneur Paul Graham.

As the managing director of Clarity Telecom, a Belfast-based telephone services company, Graham discovered it was difficult to engage with customers on the site.

“I started looking at social media as a way of marketing. Over 3,000 businesses paid us every month and yet they wouldn’t follow us on Facebook,” he says.

“And the people following us often weren’t our target market as they were in other countries.”

Graham noticed that it was difficult for small businesses to attract followers, “likes” and people to have conversations with. At the same time, businesses were being told of the importance of engaging with social media. He also noticed a huge rise in daily deals sites in recent years, but found the business providing the deal was often the loser in the arrangement, while the deal company and the consumer were the winners.

New platform

He believed it would be better to replace the daily deals model for small businesses with something more consistent and profitable. So he set about creating Phlok, an incentive platform to make social media easier and more profitable for small businesses.

Phlok works out cheaper for retailers than daily deal sites, he says. It also helps retailers to generate revenue from engagement with local consumers on social platforms, as customers receive points by shopping with participating retailers.

“We make social media easier and profitable for smaller and local businesses. We provide incentives for people to engage with businesses,” he says.

“Users can earn points by checking in at a business premises, following the business and buying its products. It incentivises people to use social media with local businesses when they weren’t before.”

The site was originally aimed at people with a smartphone, but Graham has since decided to make it available to everyone by building a website.

“I wanted to build a business I could scale out of the borders in Ireland and the UK. We have advisers in America and plan to launch in Austin, Texas early next year.”

Phlok points

The company created a universal digital currency (Phlok points) that customers can collect and spend later, via gift certificate, at any participating Phlok retailer.

“You have to get 25,000 Phlok points before your can redeem anything but you can accrue them quite quickly. You can get 100 points just for checking in somewhere on Facebook, 150 points for following a business, points for buying products etc. For example, a bridal shop offered 1,500 points to users for trying on a dress – 25,000 points is worth €25.”

There are already 150 businesses using Phlok, mainly in Northern Ireland, and close to 11,000 people have signed up.

“Before I invested any money into the business, I wanted to see if it was a viable idea. So I went about seeing if any businesses in Belfast would be interested – I signed 50 businesses up.”

The company launched in Malahide two months ago, and has more than 50 per cent of retailers there signed up thus far.

“I need to make a big difference in a small area rather than a tiny difference in a large area, Thus I’m concentrating on towns such as Malahide. Dublin is so big you have to focus on sections of it,” he says.

So how does the business make money?

“We charge a subscription fee for the retailers of €35 per month. There is also a 25 cent one-off price per follower for the business to get access to analytics.”

It’s a win-win situation for everyone Graham says, as members of the public can earn points to buy things and the businesses get more customers and more online advertising through the increased engagement with users of the site.

“Users are encouraged to check into a premises on Facebook and all their friends will then see they have checked in to that place. Businesses also get micro adverts. If someone checks in, the person’s Facebook friends see that and an ad. It’s not an ad in the regular sense but more a detailed description of the place the person checked in at.”