In early 2002, we launched BzzAgent with the concept that we were going to turn the traditional loyalty model on its head, while organizing and measuring the most powerful medium on the planet: word of mouth. For years, marketers have “rewarded” consumers for a variety of spending habits. You could receive Starwood Points for staying in a Sheraton, Westin or W hotel, redeemable for upgrades to club floors or free additional stays. For using your American Express Card, you are rewarded with access to airport lounges – get enough points and you can even get a ride on a subsonic flight or cruise the Nile. Baseball fan? Get a Sports Loyalty Program membership and receive access to your favorite Dodger player – or throw out the first pitch. New Kid on the way? Get a Upromise account and start spending to save for education. We get rewarded for buying groceries [in exchange for providing the supermarket chain data, which is inherently more valuable when they sell it to product manufacturers!], for buying a car on memorial day weekend, sticking with one airline, getting your office supplies at Staples, filling your prescriptions at CVS, shopping at Banana Republic [extra socks with your shirts] or pumping gas [discounted car wash, anyone?]. We are rewarded so frequently that companies failing to reward customers are often at a serious disadvantage.
So, why not word of mouth? Why should rewards only be applied to your spending habits? Why can’t the reporting of the natural opinions you share with others – arguably more valuable than any individual spend – be rewarded as well?
The concept made quite a bit of sense [To me, at least. Not to many others in the early days.], and so we rolled out our model with the intent to make rewards a cornerstone of our process. In true affinity model fashion, the goal was to build an approach that could also drive significant revenue – not only would we design and implement word-of-mouth campaigns, but we’d sell product slots for exposure in our rewards system. For full campaigns, customers would be able to place their own brand-associated products to add value – publishers could add other Titles or beverage manufacturers could provide samples of next year’s flavors. Then, alongside client-supplied rewards, other brands could pay small incremental fees to have their products included in our rewards database, shown and then experienced by our BzzAgents. There’s the affinity: driving revenue from both sides of the model, and the consumer receives value, as well. We actually sold a few of these programs in the early days – my favorite being DVDs of Lesbian Victorian Romances [PG rated] for our program for the Lesbian Victorian romance novel, Fingersmith.
But, as with many new ideas, things don’t always turn out as planned. We succeeded wholly at developing an organized and measurable approach to word of mouth, but the rewards part of our process [at least as currently structured] has – in essence – failed. For starters, the majority of BzzAgents don’t want the rewards we offer. Almost 87% with enough points to redeem a reward never redeem a single point [an inverted model, for those who are in loyalty marketing], up from 70% just one year ago. No matter how much prodding or pushing we do, fewer BzzAgents are seeking rewards for their points. A very small subset – those in our program for freebies – continue to pursue the rewards, but the significant majority do not. We began offering rewards as donations to non-profits, and many seemed to like that, but the redemption rates didn’t change dramatically. In essence, somehow the “stuff” of our reward system doesn’t work like the “stuff” from a typical reward program.
So, what “stuff” is working? The value of our system to BzzAgents appears to be two-fold. Access to products and services and brands is a clear driver – who wouldn’t want to join the Philips campaign and receive a Sonicare Toothbrush to experience. But additionally, getting invited into a campaign – being acknowledged as having a valuable opinion – and then being able to communicate with others about involvement, being able to share knowledge, being about to submit reports to have a dialogue with the brand – that becomes the glue that holds this fascinating marketing technique together. In short, the social currency of involvement with brands that allow the consumer to be center stage is the true driver of a word-of-mouth ecosystem.
On top of this, we’re facing the next wave of wrath from those who are – for whatever reason – seeking flaws in our model. This is something of a “pedestal” problem: since we are the most recognized, most outspoken [sometimes to a fault] company in the space, we engender the bulk of the criticism. The latest critique is about rewards. Some people see claim foul because rewards may be synonymous with compensation! “Oh no,” cry hypocritical card-carrying, reward-obtaining consumers. Somehow sharing an honest opinion – with disclosure about involvement as a volunteer – is worse than spending our time figuring out how to get the Charbroil 3-burner 40,000 BTU outdoor barbecue grill from LinensnThings for $160, and telling everyone else about it.
For example, PR celeb Larry Weber took some shots at the “snorklers,” BuzzMetrics [couldn’t have anything to do with Larry joining BM competitor Communispace’s Board? No way!] and us, claiming our rewarding people for reporting word-of-mouth activities isn’t appropriate. Jackie Huba and Ben McConnell claim that, “Points programs are inauthentic and focus action on rewards,” but love Bike Friday which, among other things, gives people cold-hard cash for selling a bike to their friends. Whether Larry, Jackie or Ben really know what they’re talking about or not is irrelevant. What’s clear is there are those that believe our rewards infrastructure actually deteriorates the value of the approach we set out to harness. Somehow, the concept of rewards has evolved from something all consumers expect for their purchases, to something that is abhorrent when it comes to sharing your opinion. A fine line that is just becoming defined.
BzzAgent prides itself on continuous innovation of its model. No one has ever before built a fully-scalable word-of-mouth media platform, so there’s no roadmap. In order for us to get there, we’re going to have to be willing to continue to evolve in real-time. We evolved our disclosure policy from the early days of anonymity into the full enforcement of disclosure – effectively setting the highest bar for everyone else in the industry. Now it’s time to evolve the reward system. It isn’t working anyway, it attracts more pests to the system, and drives resentment from hypocritical Starwood-carrying, Amex-spending, free-rental-car-upgrade-loving, extra i-Tunes downloading, bonus-shot-of-coffee marketers.
So, changes are afoot. Keep an eye out.ReTweet