Source: Backcountry.com
By Adam Blair
Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints website.
Several years ago, I heard a futurist predict that consumers by 2020 would begin monetizing themselves — "selling" their private information, their attention to a given marketing message, and the right to address personalized communications to them.
Now, four years ahead of schedule, some consumers are being rewarded for actions they take, but a difference is that they aren't earning money but an incentive they can't take to the bank: good karma.
Let me explain. A few weeks ago, I attended a web seminar about the highly successful referral program run by the outdoor gear e-tailer, Backcountry.com. Current customers are encouraged to become "advocates" with the altruistic call-to-action of "Give Your Friends $10." If the friend accepts the discount, the advocate receives an e-mail adorned with "a cheerful image of people hugging on a rock in the middle of a lake," said Marc Peterson, Organic Marketing Manager, Backcountry. The friend who was turned on to Backcountry.com receives one saying "[Adam] just gave you $10."
Lest all this sound like hippie-dippy hogwash, the results speak for themselves. Backcountry.com boasts a referral index (the number of conversions per 100 advocates) of 42, well above the industry benchmark of 25. Since the program's launch less than one year ago, nearly 34,000 customers have made at least one referral. "Influencers" and "Super Advocates" making multiple referrals also tend to be bigger spenders.
When you think about it, it makes sense. Facebook and other social networks have built multi-billion dollar businesses based on the non-monetary currencies of "likes" and "followers." That's feel-good social capital if not exactly karma, but it's certainly not money in the traditional sense. And according to recent reporting, Facebook's market value of $357 billion now outstrips that of Warren Buffett's more traditional business conglomerate Berkshire Hathaway. (Now that's real money.)
If there's a lesson for other retailers, it would seem to be that not everyone can (or even wants to be) incentivized by money or a lower price. If you're already lucky enough to have a customer base that feels positively about your brand, other rewards may be more meaningful than a few dollars.