How a headphone site operator built loyalty startup Lantern to solve his own problems

Andrew Lissimore, the mind behind the audio gear website Headphones.com, has dedicated nearly a decade to catering to audiophiles. However, he found himself frustrated by the ongoing expenses of acquiring new customers through platforms like Meta and Google. Determined to enhance customer loyalty instead, Lissimore embarked on a quest for solutions within the Shopify ecosystem. His search yielded few results—most loyalty programs focused solely on spending and tier-based rewards. This limitation prompted him to create his own system, leading to the formation of Lantern, a startup designed to offer seamless loyalty solutions to various businesses. What began as a personal project to improve retention at Headphones.com has now evolved into a versatile tool for other companies. Lissimore initially experimented with integrating different applications to establish a diverse loyalty program based on stamps, spending, points, and referrals. However, managing these apps proved cumbersome and created challenges in user experience and brand identity. "We thought it would be fantastic to have a Shopify-native loyalty system that is both customizable and easy to integrate," he stated, convincing Shopify designers Kyle Peatt and Dominic McPhee to join him in this endeavor. Both have since become co-founders of Lantern, with Peatt serving as the Chief Design and Product Officer and McPhee as the Chief Technology Officer. Today, Lantern boasts a team of eight full-time employees and offers comprehensive solutions for customer account management, loyalty, and referrals specifically for vendors on Shopify. The platform enables websites to reward new and returning customers, even granting points for engaging in community forums. The integration process is straightforward, requiring no additional coding from the sellers. Operating Headphones.com provided invaluable insights into the challenges of improving customer retention. Lissimore expressed, "We were in the ideal position to develop Lantern because we were so eager to boost our repurchase rate. Unlike clothing or makeup brands that have inherent repurchase cycles, our situation was critical." Since adopting Lantern, Headphones.com has seen its repeat visitor purchase rate surge from 30% to an impressive 50%. The time frame for buying a second pair of headphones has also decreased significantly from 198 days to just 98 days. Lantern's client list now includes notable brands such as the skincare site Counter, which generates over $200 million annually, and the footwear company Vessi. The startup has also created tools to effectively measure retention, demonstrating its value to clients. To further its growth, Lantern secured $3.1 million in seed funding, led by Salesforce Ventures, with contributions from Sidekick Partners, Day One Ventures, and individual investors, including Tony Yi from Vessi. Lantern competes with established companies like LoyaltyLion and Yotpo. Rob Keith, a partner at Salesforce Ventures, highlighted Lantern's unique approach to customer retention, stating that it transcends traditional point-based loyalty systems. "Lantern combines Andrew's firsthand experience in managing Headphones.com with Kyle and Dominic's expertise from Shopify, where they developed the widely used Polaris design system. This blend ensures they understand merchants' needs and can create solutions that feel integrated, not just added on," Keith emphasized. Additionally, Lantern's features, such as wallet functionality integrated directly into the checkout process, enhance the experience for both consumers and brands. Looking ahead, the company plans to incorporate AI to provide valuable insights and recommendations for improving customer retention.