Source: Sweatco.in homepage
Consumers sweat their way to rewards
Rick Ferguson, Editor-in-Chief of the Wise Marketer Group
Through a special arrangement, presented here for discussion is a summary of a current article from The Wise Marketer, a website and newsletter serving the global loyalty industry.
Studies of consumer psychology tell us consumers are motivated by rewards and recognition. Entice them with economic rewards and soft benefits that induce positive feelings about your brand, and they will buy more, buy more often, tell their friends, and develop a lasting relationship with your brand that instills customer loyalty. Do the same techniques work to motivate personal behavior changes that lead to life improvements?
In September, Sweatcoin, an app that rewards individuals for staying active, became the most downloaded health and fitness application in the U.S. and it has retained that top ranking nearly every week since, according to The New York Times. Launched in December 2016 for iOS and April 2017 for Android and available in the U.S. and U.K., the app just raised $5.7 million in its second round of funding.
That success is due entirely to the app’s business model, which is based on classic loyalty marketing techniques.
Designed to motivate more active lifestyles, the app tracks a user’s outdoor steps using their phone’s accelerometers and GPS location and rewards them with “sweatcoins,” a virtual currency, that can be redeemed for anything from small-denomination gift cards up to a new iPhone X. Like money, coins can be also sent to friends or donated to charity.
The app is free at the basic “Mover” level, with options to move up to three higher fee-based tiers that accelerate earning. Indoor activities such as running on a treadmill don’t yet count towards rewards, although an update is being worked on to counts indoor activities.
The parent, London-based Sweatco, receives a fee from manufacturers and brands who market their products to sweatcoin users and also accept the virtual currency as payment. Sweatcoin also hopes to partner with insurers and corporate wellness programs to help motivate their members or employees to exercise. It’s also working with local governments to have Sweatcoin more widely accepted as a payment method and even traded for other cryptocurrencies.
Competitors including the similar U.K.-based Bitwalking app as well as Charity Miles, which turns steps into charitable donations.
Discussion Questions
DISCUSSION QUESTIONS: Do you see gamified apps rewarding consumer behavior such as Sweatcoin as a potential loyalty tool for retailers and brands? Would you encourage retailers and brands to explore experimenting with these types of apps?
Poll
BrainTrust
Lyle Bunn (Ph.D. Hon)
Strategy Architect – Digital Place-based Media
Dave Bruno
Director, Retail Market Insights, Aptos
Sweatcoin seems to take multitasking to new levels. Consumers want loyalty rewards to apply for actions they would normally take, as opposed to those prescribed in a marketer’s mind. Sweatcoin aligns brand goals and the consumer view of rewards. We will see many more loyalty programs reflect this model.
Absolutely. Retailers should look into third-party reward apps such as Sweatcoin or Dosh (a popular cash-back rewards app). Designing and implementing a reward or gamified app that is specific to your brand is very labor-intensive and will likely only reach your already loyal customers. Using third-party apps can help retailers of all sizes reach new customers.
On the surface, apps that reward consumers for behavior seem like no-brainers, but dig a little deeper and you will see that it will take years of effort to reach significant rewards. Like bad loyalty programs before them, these apps will start strong, but go out with a whimper.
There are so many interesting angles to this product and story. Start with the interesting name Sweatcoin. Will that be as intriguing and as attractive if Bitcoin crashes? Will brands and consumers accept a form of cryptocurrency that is the medium for rewards?
The healthy concept has great potential appeal for those that already work out and see the “rewards” as consistent with their lifestyle. On the flip side, there is a question of ease of use. Brands must associate or market their products via Sweatcoin and accept virtual payment. Consumers must download and faithfully use yet another app.
Bottom line, this is an interesting reward concept with niche appeal for some brands and retailers. However the hardest thing to change is consumer behavior, unless they want to change it themselves. Sweatcoin will be a tough slog for mass appeal.
Sweatcoin is an outstanding idea that enables folks to not only get in shape but also provide motivation in the form of virtual currency. Its a win-win situation for the consumer. Sweatcoin will create an engaging customer experience, make exercise fun, provide rewards for the consumer and enables the company to establish partnerships with manufacturers and brands.
As we increasingly transition to a mobile and digital life, Sweatcoin is on top of the innovation curve with this app, and will certainly capitalize on this opportunity as they scale in size and scope.
I would envision that innovation-first brands such as Under Armour, Nike and Adidas may ultimately enter the fray. This would also enable consumers to exclusively use virtual coins towards their products.
All of us love loyalty rewards as long as they are not too difficult to achieve, and they offer something we can use when redeeming points. Loyalty programs have been around forever and now, through today’s technology, there are more opportunities for businesses to be creative with them. I like what Sweatcoin is doing, and there’s a natural tie-in with today’s mindset of staying healthy. I use a food tracking app and as long as I stay on track, I receive rewards with coupon offers on products, some that I find very appealing. As a result, I make sure I track my food every day. If I miss one day, I lose my status and have to start all over, so these concepts make sense and, in a fun way, they become addicting. I would expect to see retailers and other businesses exploring more options of how to benefit with these new types of loyalty reward concepts and technology.
The Sweatcoin concept can work with brands and retailers only when virtual currency becomes a standard system used. Consumers like to be rewarded for their loyalty, but it will need to be done with convenience and for items they care about.
The positive about this concept is that the user doesn’t have to think about doing anything extra to gain their reward. But like so many “games” it will have a life cycle, no matter what the reward. It is like the gym membership; gung-ho in January and ho-hum in March.
The more of these apps that become available (for any reason or category) the less effective they will be.
As someone who treks 20,000 steps a day, this may not be a completely unbiased opinion, but I love this concept. Motivating shoppers by integrating within their lifestyle is 100% aligned with the direction I believe the future is headed.
This app takes advantage of and brings together two significant consumer trends (Measured Living and Gamified Experiences) to drive greater engagement. People are motivated by seeing improvement — what gets measured gets done — especially from a health standpoint. And, the gamification aspect keeps people engaged. Inserting retailers and brands into this makes sense if it can be done in a natural and organic way beyond just rewards.
Though I’m too young for “old codgerdom” I hope, I’m going to follow the Warren Buffet model on this: stay away from things you don’t understand. I don’t see how this works; who provides the money for the rewards and why? (On re-reading I got to the part about “governments and insurance companies,” but I have my doubts … after all, good health is its own reward).
Gamification makes just about anything more interesting. Great application here to give marketers another advertising medium and the consumer carrot to workout — and consumer advertising. Trick will be integration with other programs that keeps interest from consumers and media buyers/sponsors. Perhaps blockchain could be the tool to move between other forms of rewards programs.
I’m reminded of the Alibaba presentation at the NRF show earlier this month. The presenter stated, “You can sell anything to someone if you make it fun!” Gamification is becoming quite a trend and appearing in every aspect of rewards, loyalty, and motivation both in retail and other industries. The potential of gamifying almost anything remains largely untapped in my opinion and will continue to grow. I’m a strong believer in the concept which can be used very effectively as the Sweatcoin app proves! Retailers would do well to study gamification and experiment with ways of applying it to loyalty programs.