Are Social Loyalty Platforms the Next Big Thing
Are Social Loyalty Platforms the Next Big Thing
Wednesday the 1st of June 2011
Is it just me or is there a new idea bubbling to the surface of the internet...
I'm talking about social networking based loyalty programmes. With the recent news of $850,000 USD being poured into internet start up punchtab its certainly piqued my interest in the topic.
While neither social networks or loyalty programmes are new concepts, the marriage of the two is something relatively new and it seems to be attracting a lot of attention, especially from "angel investors". Something is brewing and I don't think we've even scratched the surface of what is about to become a very main stream thing.
So how do these schemes work?
- You sign up with one of these sites - e.g. punchtab, musichype, what ever the latest and greatest is.
- Hand over access to your social network account, e.g. twitter, facebook, soundcloud, blogger, lastfm - anyone who has used a facebook app will be familiar with the process.
- They track your activities and reward you with points for performing certain actions e.g. like this band on facebook, comment on this blog etc.
- You cash in you points for stuff! - What sort of stuff? - usually product like free t-shirts and music etc
What is the most interesting thing for me about all this the amount of investment going into these projects. Music hype has recently secured a $600 000 NZD investment for expansion into the US market from the Rutherford Innovation Fund and Punchtab recently recieved $850,000 in seed funding from Mohr Davidow Ventures, Embarcadero
Ventures, and angels Venky Harinarayan, Anand Rajaraman, and Nick
Sturiale.
I certainly believe that investors see these ideas as potentially very popular because of a few reasons:
- People spend more time on facebook than any other site on the web, they aren't afraid to give away all their personal information or be tracked and if you can get rewarded for something you do anyway, why not.
- These are viable marketing avenues in a market which is increasingly strapped for cash. People have time and businesses have product, but right now sales are still in a slump and whatever leverage businesses can get with out monetary expenditure is one that they are likely to use. Another success story of the global financial crisis that illustrates is groupon - a special deals website that has reached unparalleled success in the "deal of the day" website market. While it wasn't a new concept, the timing was right, everyone is looking to save a dollar and perhaps right now is the time for social loyalty platforms, it would seem that investors think so.
Regardless of the reasons why it is certainly interesting to see what ideas investment is flowing into and where that is likely to drive innovation. I certainly feel that it's entirely likely that we will see a lot of these sorts of platforms popping up over the next 12 months aimed at all sorts of niches.
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Comments
But you know what they say, by the time you see the bandwagon its already too late.
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