How did Matthew grow LOKE to 7 figures with strategic partnerships and relationships

If you have a high-ticket product, this case study is for you. See how Matt grew LOKE to high 7-figures with partnerships, relationships, and sales.

How did Matthew grow LOKE to 7 figures with strategic partnerships and relationships

How did LOKE gain 1000s of customers in the hospitality sector globally?

In this post of the "My First 1000 Users" show, we will cover the story of LOKE and how it gained 1000s of customers around the globe.

The content of this case study is taken from the podcast episode I recorded with Matthew Khoury, who is the founder of LOKE.

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LOKE builds branded ordering, loyalty, and marketing technology for retail and hospitality brands.

So without further ado, let's dive deep.

How did Matthew get the idea of starting LOKE?

Matthew was born in the hospitality industry and completed his education doing project management and economics and then went on to work as a project manager in the construction industry.

While backpacking in Bolivia, he got a call from his friend inviting him to Australia to start a digital media agency.

He left the construction industry and started a media agency with his friends delivering everything from social media setups to website builds.

Over time, they realized that the hospitality and the retail industry had a lot of challenges, like not being able to close the loop on their marketing activities and the inability to show ROI from their investment.

So Matthew got an idea of creating a product that enabled these businesses to rectify these issues.

One of the main issues of the hospitality and retail business is that they don't know who their customers are because they couldn't get the data in the transaction.

So Matthew built a platform that digitized these transactions to get the data that funnels through to a marketing and rewards engine. That is how he founded LOKE with his cofounder in Adelaide, Australia.

First 100 customers

Matthew came up with the idea of LOKE in the car park of a famous pub in the city he was living in, so he decided to go to the pub and pitch the idea to the manager.

The manager was excited about the idea, so Matthew returned to the organization a few days later with a PowerPoint presentation to convince the board and booked the pub as their first paying client.

Then Matthew and his partner went to all the other pubs, bars, restaurants, and cafes in the city to secure them as clients.

In doing this, they signed up 6 hospitality owners and used that money to find a software engineer to build their minimal viable product (MVP). Their clients loved the product, and Matthew used their case studies to pitch to everyone else in the industry.

After securing all major players around Adelaide, Matthew decided to take the product nationally and shift his Adelaide headquarters to Melbourne.

Matthew and his partner used a similar approach in Melbourne to get to their first 100 clients.

How does LOKE work?

Matthew has built a white-label platform that he can brand to businesses giving them the technology to better engage with their customers across various tools. That includes everything from the ability to pay with their mobile phones at the counter of pubs, pay hotel bills, order room services, etc.

Whenever the customer makes a digital transaction, the data is then collected to learn more about the customer's preferences and behaviors.

The collected data enables the hotel to curate content, push rewards and promotions to enhance the user's experience and ultimately make more money.

What would Matthew do differently if he were to start LOKE today?

Matthew thinks bootstrapping is a fantastic way to grow any business, but it limits the number of people one can hire because companies are at the mercy of their revenue.

If given a choice, given today's times, Matthew would first try and generate some interest from his target market and then raise capital to scale his team and grow faster.

However, according to him, it's essential to ensure that one has the right market fit and knows how to spend the sudden inflow of cash poured from the investors.

He gives an example of another tech company he had. He signed 100 different venues on a one-page form showing demand in the consumer audience before going to the investors and raising money on the back of that demand.

Then he used that money to build an MVP before raising another funding round.

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Note #1 - In this article, I explained the differences, shortcomings, and benefits of both fundraising and bootstrapping.

Matthew's takeaways on how to successfully raise capital

Matthew believes raising capital is very similar to selling a product or a service. It all comes down to trust. People buy the product because they trust the person selling it.

In regards to raising capital, it's precisely the same process. People need to trust that if they're going to give you millions of dollars, they will see a positive return on their investment.

Building relationships with successful people could always add value to one's business in some shape or format. Investors are always looking for a person who can be persistent through ups and downs in business.

So get people involved in your company in some way or the other. Also, while raising funds, make sure you have the correct documents in place, have built your pipeline, and have all the necessary information.

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Learning #1 - Whenever we're talking about an amount bigger than $1000 - the first thing people think about before pulling out their wallets is: "Do I trust this person/company?"

That's why it's always essential to build trust with your market through relationships, influence, and content. 

How does Matthew build relationships with investors?

The first step would be to go to your immediate network and ask them if they know any successful business people and start building a database.

Then ask them to introduce you to those people if possible. Successful people probably already raised some sort of capital for their businesses in the past. Not only would they be able to deploy money into your business, but they would also have a network that could potentially invest in you.

Cold email is another way to go about it. Have a monthly or quarterly email going to the database of investors you may have reached out to via email, phone calls, zoom, etc.

This way, you keep them in the loop of your progress and benchmarks, and when the time comes and they start trusting you, they'll get back to you and invest in your project.

Not to mention that, by reaching out to your investor database quarterly or monthly, you're already more likely to get an investment from them than hundreds of other entrepreneurs who reach out to them only once.

Brokers are another way of securing investment, but it isn't easy to find the right broker. Look for a broker with a database that can efficiently distribute your pitch deck to 100s of investors or someone willing to sell on your behalf.

Anyway, let's get back to the actionable growth case study.

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Learning #2 - Be persistent, but not boring. Just because someone didn't reply to your first email, it doesn't mean they're not interested to invest in your product.

So create a list of, let's say, 100 dream investors, and send them roundup emails every 1-3 months notifying them about your progress.

Six, 12, or more months down the road, if you keep them in the loop, they'll gladly do that. Especially because they followed your entire journey, and already know all the numbers.

The journey from 100 to 1000 customers

There are different paths to market, direct sales being a critical foundational step for any business. LOKE started with cold callers and direct salespeople. They would book meetings and sign deals.

Building partner distribution channels are also essential, and partnerships can play a vital role in building credibility for your business. At the same time, the right partners also help in generating inbound leads for the company.

When LOKE expanded to the UK, Matthew set up a sales team while simultaneously building partnerships to help them expedite traction into the market.

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Learning #3 - Think about strategic partnerships you can make. For some companies to be classified as a "strategic partner", they must sell "supplementary" solutions to the same or similar audience.

Create close partnerships with those companies.

What has been the most successful acquisition channel for LOKE?

Matthew believes no single channel works independently to generate great results.

Partnerships and direct sales always go hand in hand, and referral from a partner builds credibility and increases the percentage chance of closing that deal.

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Learning #4 - Buyer journeyhas changed rapidly during the past decade. Now it's almost impossible to exactly map down the journey your customers go through before buying from you.

There are multiple things you can't track, such as dark social, word of mouth, sharing your content across different communities and private Slack channels, and so on.

All of those "small touches" someone has with your company add up over time and help them make a decision to buy from you. 

Matthew's insights on setting up a killing sales team

In the early days of LOKE, Matthew looked for hungry people fresh out of university looking for an opportunity to work in a technology company.

Since Matthew was one of the first to market such a product in the international market, it was easy to train the sales team and get results.

The people on the cold calling team were paid on high commissions. At the same time, the salespeople and the business development managers were kept on a base plus commissions structure.

Since the market has matured now, technology in the hospitality industry has innovated a lot. So there is a need for a much higher quality salesperson versus many individuals.

When dealing with a large deal size and multiple touchpoints with finance, operations, HR, and marketing, you need a brilliant individual to handle a conversation.

What has been Matthew's sales approach?

LOKE's target market requires more of a soft-touch approach. Their ideal clients want to do business with credible companies that have been in the hospitality industry for a significant period. So Matthew's team has slowly moved from cold calling to building strategic relationships.

Having the right client is more valuable than having a lot of clients for LOKE, so the team goes through a qualifying process to build a list of clients who fit the company.

Online channels have been non-existent for LOKE because the market has been very competitive.

What does the first touch look like when Matthew's team reaches out to prospects?

Matthew's team pushes content out digitally in blogs and social posts and tries to get involved in running events or attending events. The team also tries to use its partner distribution mechanisms to reach new or existing prospects.

Private events position Matthew and LOKE as thought industry leaders:

Matthew always makes sure his team is bringing something to the table for every prospect they reach out to and is respectful of their time.

The best mechanism for the first touch is through an introduction, which is why partners become so crucial in the value chain.

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Learning #5 - When selling a high-ticket product, a strategic, ABM (account-based) approach makes the most sense. 
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Learning #6 - To engage with top leaders in your field (who happen to be your dream customers), you should host private events, both entertaining and educational.

How does Matthew approach building partnerships with partners?

Building partner relationships are tricky because they come with their problems and challenges.

According to Matthew, you should try to choose a partner where your product can integrate and add value to what they are doing so much so that their clients are demanding it.

Try to be selective about your top partners and where you invest your energy. Always try to work out a beneficial commercial relationship for your partners, yourself, and the clients.

What are some of the things Matthew did while building LOKE that didn't work so well?

Matthew had his set of failures while building and scaling LOKE.

From a sales and marketing perspective, Matthew hired the head of Google's paid division to come and build out paid advertising channels for his organization, but it didn't work.

But this failure made Matthew realize that not all channels are suitable for his organization, and timing also plays a significant role while building advertising channels.

Matthew believes if he had a product that is easy to deploy, like TikTok, it would have been easier to scale through paid advertising channels.

He also tried building joint ventures to expand into countries and new markets, but it didn't work so well because he sells sophisticated technology that needs a lot of sales training.

This entire experience made him realize that expanding worldwide comes with its challenges.

What are the main challenges in building, hiring and managing a global team?

Matthew's number one challenge while running a company in multiple regions is the different time zones that lead to the company's culture being split up.

Matthew believes culture is critical when attracting and retaining talent. So he has restructured the company in recent years to have departmental regions instead of having two teams running separately in different countries.

Unifying the departments across countries have solved the issue of having an "us vs them" culture build up between the teams in different countries.

What is the one thing Matthew would not do if starting LOKE tomorrow?

Matthew's advice for all entrepreneurs starting today is to make their platform globally scalable. He believes if one genuinely wants to create a unicorn, one needs as many clients as possible and should not be limited to a specific vertical, niche, or region.

So if starting today, Matthew would build LOKE as a global platform as he has found that changing the platform's structure later to fit the needs of new regions is a challenging task.

What is the one book that has Matthew read that he would like to recommend to all entrepreneurs?

Matthew recently read the autobiography of Marc Benioff, founder of salesforce.

He found that a lot of what Marc did to build the company was quite disruptive and unique. He suggests everyone read that book to learn about creative ways of scaling a company.

The Bottom Line

People buy from people they know, like, and trust, so make sure you build meaningful relationships within your niche.

When starting, always focus on the bigger picture, and don't be afraid of getting outside help if it helps you scale faster.

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