Net users used to say that “information wants to be free”, but the new trend is for websites that will pay you to read them. Frequent surfers can collect cash in the form of “ipoints” or beenz the way frequent flyers collect air miles, as website owners sign up for rewards schemes that encourage customers to keep coming back.
There’s nothing new about loyalty or rewards schemes, but recently vendors have turned to new technologies, and card-based schemes from retailers have become popular.
It’s no surprise to see the same ideas appearing online as more and more people start to shop the Web.
Indeed, rewards schemes may prove even more important online, where search-bots make it easier to find the lowest price. Last weekend, a survey of 1 905 online shoppers conducted for the Associated Press by American-based Internet research firm NFO Worldwide revealed that 53% of those surveyed said they would buy more if incentives were offered, and 47% said they would be more loyal to a site that gave rewards. Only 15% said that rewards would not influence them to make more purchases.
“Ecentives” are certainly more convenient than offline schemes. Aaron O’Sullivan, director of , says “the really fun thing” about ipoints is that everything happens on the Internet. “You join the scheme online, collect and check your points online, and spend them online. There’s much more `instant gratification’ than when you have to write away for your points. We have people joining up and redeeming points at 3am!”
The lower overheads of electronic trading can also allow for larger rewards. O’Sullivan says: “We allocate about 7% to 10% of the sales value for rewards, so it’s a major, major jump on traditional schemes where it’s 1% to 2%. It means you get rewards three or four times faster. And it’s not just about shopping. You can get points for visiting sites or for completing surveys, and if you get your friends to sign up.”
The ipoints scheme, which has signed up about 5 000 members in its first two months, will soon face competition from Zoom points, which will be launched “in about six weeks”, according to Zoom chair Robin Klein. The difference is that where ipoints are offered on disparate sites, Zoom points will be limited to the online shopping mall.
“It’s a classical loyalty scheme, and a point is a penny: it’s interchangeable with cash. It’s a way to encourage and reward online shoppers,” says Klein.
Points won’t be available on other websites, but they will be offered by brands owned by the Arcadia Group. Other partners who trade through the mall will also all be able to offer Zoom points.
Similar schemes have been running in the United States for years, through companies like MyPoints. com, CyberGold and Netcentives.
MyPoints.com’s CEOSteve Markowitz says the company’s MyPoints and BonusMail loyalty programmes have attracted two-million consumers in 18 months, and MyPoints are used by more than 250 clients.
CyberGold says that more than a million members are collecting its points, which can be exchanged for cash, and it has just launched its own credit card. Netcentives has more than 350 000 members, and the merchants using its ClickRewards scheme include Gap and Yahoo!.
But not all the US rewards schemes are open to users outside North America, and participating retailers may not be willing to grant points to non-US users, or redeem them.
What people don’t like is having to cope with multiple schemes. They are already suffering from “plastic fatigue” caused by carrying too many cards. Who wants online points that don’t exist offline? Why can’t people collect, say, air miles online instead?
Judith Thorne, group marketing director at Air Miles Travel Promotions, says they can. “All of our clients will offer [air miles] online, and if you use your NatWest credit card to make online purchases, you get air miles on that,” says Thorne. “So effectively air miles is not just an online currency, it’s a retail currency as well. They’re all going to have to do that, otherwise they won’t survive. People don’t want to have to collect one type of points online and another type when they shop at retail so we see [the Internet] as a great opportunity to build on what we’ve already got.”
But, like other rewards schemes, air miles have limitations. You can collect air miles in dozens of countries but they’re neither interchangeable nor universal.
Does this mean there’s a gap in the market for a universal currency for the Web? Phil Letts hopes so. Letts is chair and CEO of Beenz.com, which launched beenz in March. “You can now earn beenz for doing the sort of things you do online in any case, you can save those beenz at the bank at Beenz.com, and you can spend them on a whole range of things,” says Letts. “It’s like money, but better. It’s going to revolutionise the Web.”
Traders can buy beenz from the bank and give them away to surfers. They can also ask visitors to pay in beenz for access to information that they don’t want to give away free.
Since beenz is, in Letts’ words, “a rewards system, not a loyalty play”, there’s nothing to stop competing companies from offering them. In fact, Letts sees beenz working in parallel with loyalty systems.
Letts says the take-up of beenz is running ahead of expectations with about 150 sites offering beenz, 22 sites redeeming them, and more than 20 000 active account holders at the beenz bank. “Everyone thought we were a bit mad with our forecasting, but we’ve really over-achieved. We’ve got nearly 50 employees and a humming business and a great infrastructure so we can roll this thing out really fast now. You’re going to start seeing some big names pretty soon, and we’re going to start the consumer marketing this month.”
Nor do Letts’s ambitions stop with the Web. “This thing is going to go offline,” he says, “and yes, we’re doing some trials already with one of the leading smartcard players, and we’ll be on WebTV and mobile phones by the end of the year.”
The ultimate fantasy is, of course, to have beenz quoted as a currency alongside US dollars, pounds sterling and yen. For Letts it would be like having the facility to print money, except that with an electronic currency, he won’t even have to print it.