10 October 2009

Marketing through social networking rewards

Many businesses are trying to exploit the explosion in social networking to promote, and market, their products, but the effort to successfully get the word out about their products is time-consuming, and it is getting harder to be heard through the mounting cacophony of Tweets, Facebook messages, and myriad other messaging venues.

Why not incent individual users to do the social networking for your business, getting all those social networking addicts to do the hard work for you? Just register your business, and promotional deals, with a social networking marketing aggregation service, and any social networking mavens can sign up to get rewards for promoting your business and products.

Users can browse this social networking marketing site to find products or services they like, and inform all their friends by just clicking a button. This marketing tool will automatically send tweets, facebook messages, e-mails, and numerous other social networking messages, by tying directly into the APIs of these various services. Users will provide the login information to this marketing service for all their various accounts.

This service will automatically track how many of each user’s friends respond to the promotions and credit their accounts with various forms of rewards. If 10 of their friends clicking on the custom link they sent to redeem a local restaurant’s web coupon, the user could get a free meal. In other cases they could get discounts in buying products, or any other number of incentives.

This marketing service offers easy tracking of responses for every promotion, and every user who broadcast the deals to their friends. Companies using this service to market their products can be charged a fee for every response.

Widgets can even be provided to the companies promoting their products, allowing them to offer a one-click rewards program on their own web sites (e.g. click here to inform your friends about this product and earn rewards).

Instead of trying to navigate your own business’ way through social networking, trying to find ways to gain a broader audience for your products, just start incenting users to do the marketing for you.

Money on the table

One of the most exciting aspects of this business idea is the fact that numerous affiliate and reward programs already exist. There is no need to spend lots of effort to convince businesses to register with this rewards service (although the option will exist). We can hit the ground running by simply signing up to any number of affiliate programs, and passing on a portion of the referral earnings to members. Most affiliate programs are geared towards other web sites. We can re-package those same programs to make them accessible to end-users.

A CRM service, for example, may be willing to offer affiliates $100 for every customer registration they get. Our rewards service can in turn split that fee with the individual members who have promoted this hypothetical CRM web site to their contacts.

It is even possible we could offer discounts to our members who buy products directly through our site by splitting the affiliate fees with them. One financial news web site, for example, offers a 50% commission for all new subscribers. We could easily offer the members of our own rewards web site a 25% discount on the normal subscription fee, just for placing their orders through our site.
Utilizing these pre-existing affiliate programs will allow us to build an attractive inventory of products to promote, and start making revenue from the very first day.

Getting to know you

This rewards web site will gain a lot of knowledge about the likes, and habits, of its members. We can use this to target suggestions for new products to promote (e.g. from the same store, or product category, of things this user has already promoted). Since we know precisely which products got the most follow-through from each member’s promotional efforts, we can suggest similar items for promotion that will have a good chance of success.

Our excellent end-to-end tracking capabilities will also allow us to tell what incentives work best, and fine tune our rewards programs for maximum benefit. We will even know which social networks yield the best results.

NOTE: If you like this business idea, you can also check out my other concept for a code licensing marketplace.

2 comments:

  1. What is not clear is whether you have paying clients actually committed to this. Getting a $100 for each CRM site signup sounds sweet -- but do you have letter of commitment from such sites?

    Today, Web 2.0 software is rarely "if I build it, they will come". For every 1000 folks that try that approach, 1 ends up make any profit.

    Do you have a firm business plan that deals with financial?

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  2. What is not clear is whether you have paying clients actually committed to this.

    The beauty of this plan is that we don't need any "paying" clients signed up. We can begin this service by simply plugging into existing affiliate programs. Zillions of web sites already offer affiliate programs where they give significant referral fees, or commissions, to web sites that send them business.

    All we need to do to get this rewards site off the ground is sign up to join a variety of affiliate progams, and share the commissions with our members. If a given CRM firm is offering a $100 referral fee (and some are offering even more generous terms than this), it is a simple matter for our rewards site to give some of that back to any members whos'e promotional efforts resulted in commissions.

    Some affiliate programs won't allow such a re-selling/re-packaging of affiliate commissions, but many do. To start off with we can just target those sites with affiliate programs that permit our business model. Once this concept is proven (i.e. and lots of business is generated by our members) it will be easy to convince even the sites that prohibit this kind of commission splitting in their affiliate programs to play along.

    At least this is the idea. :)

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