Flooze-Your-Friends: Acquire Customers and Loyalty

Typically, a viral marketing campaign is used to acquire new customers in the manner of that old shampoo commercial: “I told two friends, and they told two friends and so on and so on…” Yet often, the underlying goal is simply to learn more about how viral marketing works. Flooz.com’s recent viral marketing campaigns have fulfilled both goals.

While it’s almost always important for a business to acquire new customers, it’s especially important for a company such as Flooz.com that offers Flooz, The Online Gift Currency. In turn, the users use their Flooz as spending money at participating online merchants. The more customers Flooz.com acquires, the more merchants they are likely to attract, leading to more customers and more merchants in an ever-expanding circle.

So it was only natural that Flooz.com actively sought out new members through viral marketing campaigns. They’ve learned quite a bit about where to focus their resources from the two that they’ve conducted so far. And considering their own email marketing approach, what they’ve learned can benefit others.

The first campaign called Flooz-Your-Friends, was an attractive mailing. (It was also mentioned on the web site.) Flooz-Your-Friends offered Flooz customers the ability to earn Flooz simply by encouraging friends to sign up. For each referral that opened an account, Flooz.com gave $3 in Flooz to the person who made the referral, and each member could refer up to 30 people.

New members received $10 worth of Flooz just for opening accounts, and they also were given the incentive of getting others to join by receiving $3 for each person they, in turn, convinced to sign up. All told, new members could earn up to $100 in Flooz just for registering and passing the word along successfully.

That was back in March. About 400,000 Flooz users were notified in the initial mailing, and during that month, about 200,000 new referral addresses came in (including succeeding generations of recipients). Of those, about 20,000, or 10 percent, signed up for the service.

While CEO Robert Levitan says he’s happy with the initial campaign’s results, he also learned that it was time to turn his company’s energy into building loyalty among existing members. So Flooz.com began planning another viral campaign. Although this campaign would also be used to acquire new customers, it would be focused more on showing the existing customers they were appreciated. The goal shifted from brand awareness to more emphasis on the quality of the customers.

And that’s when the greeting card campaign kicked in. Just in time for the Fourth of July holiday, the then-500,000 Flooz.com account holders (Flooz.com now has about 770,000 accounts, or people who have either sent or received Flooz) received a mailing inviting them to send a greeting card to friends or family members and received entries into a sweepstakes. (As a side note, in my mind, the company was wise to test out this strategy mid-summer rather than waiting until the week of Christmas.) Because the reward wasn’t currency, Flooz.com was better able to judge where its more loyal customers were located.

And they did. The cards were sent to about 100,000 others, with an average of three referrals per person. And although the percentage of new members who signed up was lower during this campaign than during the previous one (about 4 percent of the referral addresses signed on), they did so without a financial incentive.

Another reason Flooz.com shifted the focus from acquisition to loyalty has to do with customer service. Levitan points out that with a lot of people earning Flooz at once, the floodgates of potential customer service calls were opened. He notes that, “We don’t necessarily want to be investing customer service time and dollars in customers unless they’re targeted individuals.”

So what did Flooz.com actually learn from its viral marketing campaigns? Now that they’ve grown their customer base, it’s time to focus on quality, one-to-one marketing, and to better learn how to best manage their acquired customers. That, too, is something important to all businesses.

A reader request: I received email last week asking me whether there are any case studies about how HTML-enhanced messages are received as compared to text messages. The reader hypothesized that text messages are friendlier to more people, and HTML mail can be seen as junk mail. My research has shown that for the most part HTML mail has higher click-through rates, but it would be great to document this. If anyone has any possible case study leads related to this, please pass them along!

Brainteaser Results Summary
# Users Average Total Completing Score
Date First Click Last Click Clicks Number who finished brainteaser Brainteaser score (out of 6)
20-Jul-00 Thursday 3:30 AM 10:52 PM 1,949 94 4.21
21-Jul-00 Friday 2:04 AM 6:18 PM 211 11 4.82
22-Jul-00 Saturday 2:15 AM 4:37 PM 41 2 4.00
23-Jul-00 Sunday 1:11 AM 10:48 PM 135 8 4.38

24-Jul-00 Monday

8:47 AM 11:21 PM 384 18 4.78
25-Jul-00 Tuesday 7:54 AM 7:57 PM 17 0 0.00
Totals 2,737 133 4.35

Readers are awake at all hours of the (EST) day. Friday puzzlers are smarter than Thursday puzzlers..? They must all have barbeques on Saturday evenings. Sunday is not a day of rest. Like the Boston Marathon, not everyone made it to the finish line.

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