Will Active Ride Shop customers be stoked over lifetime commissions?

Discussion
Photo: Active Ride Shop/Instagram
Dec 07, 2018

Under Active Ride Shop’s new “The Crew” program, referring friends can earn customers a “lifetime commission.”

On its website, the California-based skateboard-themed chain describes the lifetime commission this way: “Nick joins The Crew. Nick shares his link with Sallie. Sallie shops at Active using Nick’s link and receives 20 percent off her purchase. Nick earns one point for every dollar Sallie spends on this purchase and all of her future purchases, for life. That’s how lifetime commission works.”

The Crew members can redeem their points for store credit or cash. Points are only earned from online purchases, although Active Ride Shop is working on the ability to extend the program to in-store purchases.

The reward program also stands out because members gain access to events, exclusive releases and Active Ride Shop’s private skate park in Southern California.

“At Active, we know that our customers are our greatest advocates. With The Crew, we’ve finally found a way to reward their passion,” said Jenner Heller, company president, in a statement. “Our focus has always been to contribute to the communities that we are a part of first, so this new program is a natural progression of that philosophy.”

At retail, “Refer a friend” or “invite a friend” programs mostly offer a one-time discount for both the advocate and their friend. An Amazon Prime referral program ended last October.

A few examples of current programs include:

  • Rebecca Minkoff enables advocates to send a $20 discount via e-mail to a friend and then receive a $20 credit when their friend makes a purchase. As expected, the friend has to be a new online customer.
  • Zulily advocates earn a $15 shopping credit when their friends join Zulily and complete a purchase.
  • Fabletics’ members earn a $10 credit for every friend they refer to the subscription service.
  • Bombas enables advocates to send a 25 percent off coupon to their friends. If a purchase is made, the advocate gets two pairs of Bombas socks for free.

 

DISCUSSION QUESTIONS: What do you think of Active Ride Shop’s referral program tied to lifetime commissions and experiences? Should “refer a friend” programs be more commonplace at retail and what are the keys to making them work smoothly inside physical stores?

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"It not only promotes the brand but provides rewards for everyone making a purchase and still offers a competitive advantage."

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5 Comments on "Will Active Ride Shop customers be stoked over lifetime commissions?"


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Chris Petersen, PhD.
Guest

The cost could be very affordable depending on what “one point” is worth. Yet points also have to be meaningful for the referring customer. My biggest question is about Active’s ability to track lifetime purchases. Many retailers struggle with name changes, address changes and tracking households. However, it is a great way to engage customers in your business if the lifetime incentives can be cleanly tracked and managed. I can’t wait to see the disclaimers and legalese that defines “lifetime” rewards. Bottom line — creative disruption comes in many forms and this is one that can be tested and measured on the bottom line.

Frank Riso
Guest

I think it is a good idea and one that is very new to the industry. It not only promotes the brand but provides rewards for everyone making a purchase and still offers a competitive advantage. I do think they should be more commonplace in retail however management of the entire system could be a burden given so many different brand names under one company such as Gap and Limited. Online retail should be a no-brainer but physical stores could have issues. I cannot imagine this program working at supermarkets or gas stations but it could be nice to have it at these types of retailers. Restaurants would be an excellent place too!

Ken Morris
BrainTrust
Ken Morris
Managing Partner Cambridge Retail Advisors
3 years 5 months ago

I love it — a legal pyramid scheme aimed at Generation Z. I think this is a VERY creative way to develop passionate brand enthusiasts that will definitely reap rewards for the brand and the participants. Anything a retailer can do to capture loyalty that differentiates themselves from the pack is a good move. I think other retail segments should follow the lead here and embrace the concept. Who says there is no such thing as a free lunch!

Cate Trotter
Guest

It’s an interesting approach. For the person encouraging friends to sign-up it could be enough of a driver to actually make sure they get their friends over the line.

I think right now we’re all very happy to talk (without incentive) about products and services we love — we want to share that with our friends — but we’re not necessarily completely invested in making sure they actually buy it or use it. Sure it’s great if they do, but it doesn’t usually make any material difference to us and our experience. This approach means it will, so it may well drive up the number of people who follow through on a reference. It also means the customer is as invested as the brand in making sure their friends keep going back and buying more — although hopefully it won’t turn friends into nagging ads for the brand!

Mark Price
BrainTrust
Mark Price
Chief Data Officer, CaringBridge
3 years 5 months ago

I love this plan because it is not fundamentally transactional. Customers do not just receive a one-time reward, but get to feel like they are part of the company, with the same values — shared through personalized events and releases. The Join the Crew program creates affinity and provides access, a feeling of being on the inside. That may prove to be more important than the points program in retention, expanded revenue and business expansion.

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"It not only promotes the brand but provides rewards for everyone making a purchase and still offers a competitive advantage."

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