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| Frequent Clickers: Rewards Lure E-Shoppers |
| Online shops partner to provide loyalty programs that invite you to surf for dollars.
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| By Glenn McDonald, special to PCWorld.com
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| January 17, 2001
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Rebates, credits for frequent customers, and even cash rewards may not be new concepts in retail, but they're increasingly available online as dot-coms clamor to keep you surfing their way.
Loyalty programs come in many shapes and sizes, but they share the principle of rewarding you with actual cash value for repeated visits. Often, you can accumulate points and then get discounts at affiliated online retailers and service providers.
Even though this is clearly a competitive system, it often involves partnerships. ClickRewards and MyPoints.com are two of the leading points-based loyalty systems. Each has a vast network of partner sites, including big-time retailers. Among the MyPoints.com partners are Blockbuster, Barnes & Noble Booksellers, Eddie Bauer, and Bloomingdale's. Signed on with ClickRewards are the Gap, CDNow, Office Max, and J.Crew.
You can earn points by visiting the partner retail sites, making purchases, and agreeing to receive targeted e-mail solicitations from affiliates. ClickRewards has carved a particularly popular niche by granting ClickMiles--frequent flyer miles that you can redeem at ten major airlines.
Offering a wide range of affiliated products and services is the key to drawing e-shoppers, says Brooke White, ClickRewards spokesperson.
"We have more than 70 partner companies, plus the ten airlines," White says. "With programs where there's not a huge network of earning opportunities, it's going to be harder to get any value out of that."
Charlene Li, research director with the analyst firm Forrester Research, concurs.
"ClickRewards is a good share and reward program," Li says. "I mean, how many of these cards do you keep in your wallet from local retailers, but you just don't go into those stores often enough to make it worthwhile?" Having lots of affiliated online stores in one program gives you more opportunities to cash in, she notes.
Visit the Site, Win Money
Perhaps the most successful loyalty-based model currently in operation is the sweepstakes program employed by Web portal and supersite iWon.com. Unlike ClickRewards and MyPoints.com, IWon is a true Web portal, offering Web directory and search functions, licensed content from news organizations, and services like free e-mail, chat rooms, and message boards.
Backed by network behemoth CBS, iWon.com offers daily, weekly, and monthly sweepstakes with cash prizes up to $10 million. After you register, you earn sweepstakes entries by doing the things you normally do at a portal site, such as performing a Web search (which tallies seven entries), checking the weather (five entries), even reading news stories (five entries apiece). You can rack up a maximum of 100 entries daily.
Believe it or not, iWon.com gives away millions of dollars a year just for making the site your portal of choice. It hands out $10,000 every day, 30 prizes of $1000 every week, $1 million every month, and $10 million on tax day.
Is such a generous reward system feasible? Apparently so.
"Oh sure, that's nothing in the scheme of things," says Forrester's Li. "Do the math and it comes out to a few million dollars a year. Consider how much more money they'd have to pay to build this kind of success just through marketing. It's ingenious."
What Keeps You Coming Back?
iWon.com has given away more than $30 million since its launch in October 1999, says Bill Daugherty, iWon.com founder and co-chief executive officer. You'll find it's become a much more functional portal site since then, too, thanks to a number of marquee-name partners.
For instance, search and directory functions are powered by Inktomi, LookSmart, and Direct Hit. Hollywood.com and Reuters provide local movie listings and reviews.
"We've been able to cherry-pick the best search functions and work with the best providers to offer the best of what each of them do," Daugherty says.
iWon.com is undeniably popular--the site routinely ranks in the top ten sites visited on a daily or weekly basis, according to Internet monitoring service Media Metrix. It currently ranks 25th in overall unique monthly page views.
Li says iWon's model is so successful because the site genuinely offers value aside from the eye-popping sweepstakes giveaways.
"IWon is interesting," she says. "They're really more of a media site, and they're using sweepstakes as a way of generating traffic. People come to the site to hopefully get a million dollars, but then they say, 'Hey, this is a pretty good site.' It's a decent portal--a nice, pleasant, personalized experience."
Partnerships Are a Staple
iWon is about to become even more formidable by adding its own points-based reward system to the mix. Launched just before the new year, the iWon Cash Points program works much like ClickRewards and MyPoints.com. It grants cash points redeemable at affiliated retailers and service providers.
You can already start racking up points, although the actual Rewards Store won't open until the spring, Daugherty says. While he declines to name specific partners (negotiations are still underway) he promises a broad network of partners in "music, travel, gifts, and entertainment."
"We've built a loyalty program with the sweepstakes, and now with cash points, we think we have the ultimate loyalty program," Daugherty says.
Online loyalty programs have a particular advantage over their offline counterparts. By grouping dozens of affiliated retailers or service partners in the same place, you can accumulate points in a one-stop shopping and Web-browsing venue. Everyone loves a bargain, and in a gloomy dot-com year, these online loyalty programs are something of a silver lining, promising a brighter future of consumer benefits (and for some e-retailers, a future).
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