It’s easy to see why customer loyalty programs have long been popular—think frequent flyer miles, cash back on credit card purchases, or working toward a free Frappuccino. Many of the best-known rewards programs are aimed at incentivizing consumers to spend more money, because that way they’ll earn more back.
Madison, WI-based startup Kilter Rewards is taking a different approach: encouraging users to exercise by awarding them redeemable credits every time they go to the gym. The credits can in turn be used to purchase items like coffee, food, and athletic apparel. The idea of workout-based rewards isn’t new—see apps like Pact (formerly called GymPact)—but Kilter is trying a new spin.
Kilter launched its mobile app for iOS and Android devices on Wednesday. The startup has partnerships with numerous local fitness centers, boxing gyms, and yoga studios. Anyone who uses the Kilter app to check in to one of these locations and stays for at least 30 minutes earns points that can be redeemed at local retailers like Java Den or Ian’s Pizza.
Users can download the app and begin earning rewards for free, says co-founder and CEO Seth Braddock. The company isn’t putting any caps on the number of credits users can earn and redeem for now, he says. However, Braddock says Kilter may eventually shift to a freemium model where the number of credits non-paying users can redeem is limited. Another possibility is configuring the app so paid subscribers are eligible for weekly and monthly bonuses, depending on how often they work out, he says.
Kilter was incorporated in early 2016. However, the startup’s origin story dates back to the previous year. Braddock says he took frequent business trips to Harrisburg, PA, and other cities as part of his job at Epic Systems, a healthcare software company based in the Madison area. Braddock says that when he was on the road, he often did not feel like exercising after long days of meetings and presentations.
“That motivation wasn’t there to get to the gym,” he says. “A lot of travel can definitely get to you.”
Braddock says the idea for Kilter is based on the idea that an incentive—even one as minor as $1 off a cup of coffee—can make the difference when someone is debating whether he or she is really up for hitting the weights or elliptical.
Braddock left Epic in the summer of 2016, having spent about a year and a half at the company. He says he had the idea for what would become Kilter several months before his departure, but the model of how the exercise-based rewards program would work went through a couple iterations. After initial ideas to structure Kilter as a modified corporate wellness program, and then a loyalty and marketing tool for businesses, the startup’s team decided it made the most sense to take a consumer-focused approach.
“We wanted to center it around the user,” Braddock says. “People lead busy lives and have competing priorities. We ultimately changed it into this model where every time you go to the gym, we’re going to reward you with a dollar worth of rewards.”
Kilter’s other co-founders are Thomas Malcolm and Xiao He, who is currently an undergraduate studying computer science at the University of Wisconsin-Madison. Kilter’s team includes four other full- and part-time employees, Braddock says.
Late last year, the startup raised a $250,000 seed round of equity funding from angel investors. Braddock says the lead investor was Mark Bakken, who founded the Madison-based healthtech consulting company Nordic and is now managing partner at
