UKNM: Internet Loyalty Schemes

[Russell Buckley]

Ken Cowley wrote about Beenz.


If I understand correctly, the way that Beenz work is that they sell to

promotors for 1c each and they buy them back at 0.5c if you allow punters to

redeem at your site.


Alternatively, your site users can use the Beenz you give them (and others

they've collected) to buy a CD, say. If they do, the punter gets a CD with a

retail cost of GBP 13 (ish) for 3,000 Beenz valuing each Beenz at 0.43c.


Now, please someone point out where I'm going wrong here - I'm happy to

accept public humiliation as it's been bugging me for a while. Isn't this

like them selling $1 bills for $2? If I'm running a promotion, surely I want

to give my consumers something which they think is worth more (or at least

the same, as is the case with many vouchers) than what I paid. Why would I

pay a third party double what they are then giving to my customer? Would you

pay M&S (still a powerful brand, despite their current problems) GBP 10 for

every GBP 5 voucher you purchased?


Now I know online brands play by different rules and work to different

business models. There is arguably a case to say that Beenz will (at some

point) have millions of collectors all looking to collect and spend Beenz

and thus the traffic they can generate may be worth something on top of

the intrinsic value of the reward they represent. But can it be worth paying

double the face value of what you're giving away?


Beenz.com are at pains to distance themselves from a promotional scheme,

preferring to describe themselves as "the web's currency". OK, but what bank

would be able to get away with selling their bank notes at twice what they

buy them back at?


Have I missed the point?


Russell Buckley

The Handling Partnership


----------

 >

From: owner-uk-netmarketing-digestchinwag [dot] com (UKNM Digest)

 >

To: uk-netmarketing-digestchinwag [dot] com

 >Subject: UKNM Digest V1 #373

 >Date: Wed, Jan 26, 2000, 11:58

 >


 > Date: Mon, 24 Jan 2000 22:44:06 -0000

 >

From: "Ken Cowley" <kenvitamin [dot] co [dot] uk>

 > Subject: Re: UKNM: Internet Loyalty Schemes

 >

 > I think the use of the term 'loyalty' is interesting.

 >

 > Beenz certainly go out of their way to suggest that they're supposed to be

 > used to incentivise particular behaviour while on a site (click this link,

 > fill in this form). You can see how this might work - you open a site you've

 > not been to and one of the links promises you something (anything will do)

 > if you click on it. It's only human nature, goes the argument. The beenz

 > presentation talks about visitors 'doing work' at a website (clicking,

 > filling in forms) for which they 'get paid' (in beenz). But this is not

 > loyalty. (I'm sure brand managers will point out that you don't 'buy'

 > loyalty anyway - granted, but out of scope of the thread).


[Sam says: email chopped for brevity] 



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