A number of websites make use of incentive programs to entice members to join and participate. Gather.com shells out points redeemable for giftcards, as do MyPoints, Scour.com, KiwiBox and FreeRide.com. Websites like BigCrumbs, FatWallet, bing.com/cashback, and Dubli Shopping all offer percentage rebates and cash back for shopping, and still other websites bring in members by allowing them to earn entries into daily and monthly jackpot drawings (i.e. iWon.com). It is no secret that people love to get something for nothing as this is the primary motivating factor in bringing in new membership, but one has to wonder why websites offer incentives in the first place. Surely they wouldn’t do it just as a kind service. These websites primary goal is to make money, so why give it away?
Differentiation. Each business strives to have a point of differentiation from another business in the same niche – unless they are content to unabashedly copy and paste. Incentivizing membership, while perhaps reducing the bottom line in revenue, is a viable way to show uniqueness. KiwiBox realized that if they were to just start up a new social network geared towards teens, they would have a large amount of competition to overcome. By incentivizing membership with points that can be redeemed for prizes, and placing an emphasis on the safety of their networking platform, KiwiBox differentiated themselves and have found a relatively decent amount of success within the teen social networking market.
To Cover up Inadequacy. In as much as we as citizens of the earth think that all things were created equal, they were not. With any given product there is always a good, a better, and a best. Often times the good will create an incentivized membership program in an effort to conceal the fact that it is not the best. We see this most prominently with the gather.com, a content website disguising itself as the prominent social network for the 35+ age group. The statistics suggest otherwise in favor of facebook – the current “best” social networking platform industry-wide. It could be perceived that gather.com is using the reward system as a way to cover over their shortcomings in comparison to facebook . (Luckily, this is not the case as gather has re-vamped the points system to reward quality content, futher solidifying a transition phase for the website – IMHO.)
Because it Makes Money. One of the best ways to build repeat customers and lifelong loyalty is to give things away for free. They only way this works in terms of the websites discussed at the beginning is within the percentage rebate and cash back programs and with MyPoints.com. These websites were basically created to create leads and sales through affiliate programs. In order to capture the leads and affiliate sales the people at BigCrumbs, FatWallet, and MyPoints decided to pass a little bit of the commission on to their users as a “thank-you” for using the service. In a time where many are finding themselves financially strapped, rebate websites like BigCrumbs and FatWallet have seen a spike in traffic and membership as people are looking squeeze a bit of shopping savings in any way possible.
{ 2 comments… read them below or add one }
This is Mike, the founder and COO of Kiwibox.com. I enjoyed reading your article Ethan, and I think you made a lot of great points. Just one to clarify, I feel a lot of sites offer rewards/points/incentives to users, because there is a large and powerful subset of the online community that gravitates towards this type of site, and sites like ours (Kiwibox.com), MyPoints, FatWallet, etc attempt to fill that nitch. And one other thing to clarify, we do not incentivize users to join, they join because they want to be a part of a site where they earn things for doing what they do on other sites without any reward. Sort of semantics/language, but just wanted to clarify.
That being said, we spend countless weeks/months/years developing new features, and attempting to make our sites the most user friendly, enjoyable site we possibly can, and we do not rest on our laurels assuming that points and incentives will be the saving grace, it is simply another feature of our sites.
Any other thoughts or questions I would be happy to entertain,
Thanks to all,
Mike
Mike@Kiwibox.net
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Thanks for the feedback Mike. I appreciate what you have to say and the “corrections” you made to my statements.
While I certainly did imply the fact that some use incentives to “cover up” their “inferior” feature set, that of course is based solely on my own opinion – as there are some feature sets from some websites that I prefer whereas other people have different preferences. While the brand managers and engineers work build the best product in their eyes, it may not turn out to be my favorite – hence the opinionated views.
I think one of the problems you run into (perhaps not fatwallet or BigCrumbs) but the more social-networking oriented ones is that niche people you serve (those interested in getting “paid” for something they would do anyway – or something for “nothing”) are perhaps much less likely to make it worth the advertisers while. (This comment is more aimed at the gather network, as KiwiBox does have some interesting forms of advertising rather than standard banners etc.)
Once again, thanks for the thoughts Mike.
Speak soon,
-Ethan
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