C'mon And Take A Free Ride

The web is crawling with loyalty programs.

At last week’s Internet World show Cybergold sent out buses emblazoned with the creative for its “I Got Paid for Doing It” campaign. eTour and Beenz both had booths on the main show floor, while ClickRewards and MyPoints have also drawn their share of publicity. (There are several other smaller outfits out there, and several marketing companies which specialize in designing such campaigns.

Loyalty rewards are an online adaptation of an old offline model. You give points to frequent shoppers which they redeem for free merchandise. My “favorite” may be the program at Stride Rite shoes — buy 12 pairs of shoes, have a card stamped, get one pair free. Both my kids outgrew Stride Rite before I got any free shoes.

The folks in the loyalty business call this “breakage.” The relationship is broken before the customer gets anything of value. Breakage hurts the whole loyalty industry (although it worked great for Stride Rite, at least in my case).

Frankly, I was on my way somewhere else when I saw the booth of FreeRide Media LLC of New York, down in the show’s basement and near the “LaunchPad Showcase” area. Justin Parks, FreeRide’s executive vice president of client services, quietly informed me he’s drawn 600,000 members simply through “word of mouse” by solving the breakage problem. I stayed to learn more.

The key, he said, is “accelerating the rewards cycle.” That means, in part, lowering the value of basic rewards. At FreeRide, you can win simple things which “have a value in everyday life” like a gallon of gas, or a movie ticket, within a few days, and that brings you back.

FreeRide users can get just 35 points per day solely by surfing. There are also “pop-up surveys” where you can get 25 points by filling in a marketer’s form. The big points come from spending. You can get three points for each dollar at Smarterkids.com. If you’re a glutton for points, you can get 800 points for each $10,000 in real estate value if you buy or sell a house through Avviva.com. This has made FreeRide into a viable “online mall,” since you get the points by going to the merchant through the FreeRide site.

FreeRide also integrates with real world point programs, making it a “clicks and mortar” play. If you send them the UPC code from a package of Oreos, for instance, you get 20 points. (That’s for a maximum of three packages, cookie lovers.)

“There are a lot of ways to get, and a lot of ways to spend,” said Marks simply. There’s also no special software — just an account sign-in and a password given by the site. Don’t think this is one of those consumer data slice-and-dice outfits, either. “We don’t sell information except demographic data,” he said, “and we don’t sell names.”

So how did he get so many offers under the radar of competitors? “We spend on our salesmen,” he said with a smile. (A group that looked like Marines was manning the booth as we spoke.)

Salesmen, in other words, get big rewards for pushing pay-for-performance contracts on consumer product companies. (When consumers win points from merchants, merchants pay FreeRide.) FreeRide has also been doing this a while, a full four years. In May Media Metrix measured FreeRide as first among shopping sites for visiting frequency and second for duration of visits, behind only eBay.

FreeRide hasn’t yet begun its marketing campaign. You can expect that soon. If it succeeds there as it has succeeded with users and marketers, expect big things.

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