Consumers are engaging retailers on Facebook and Twitter now more than ever. Whether it is Liking a deal, Tweeting the link to a product, or even participating in a contest, shoppers are mentioning and interacting with these e-commerce sites on a daily basis. The problem with traditional online loyalty programs mirror offline programs, they only focus on rewarding users for simply their purchases. The challenge for retailers is not only how to track online mentions, but also how to meaningfully reward consumers for these mentions. Enter Y Combinator-backed 500Friends, which offers a platform called Loyalty Plus, which allows retailers to reward their customers for social actions.
The SaaS allows retailers to track users Tweeting their purchases, Liking the Facebook page and referring friends. It also allows merchants to reward other actions such as writing product reviews, entering sweepstakes or signing up to newsletters. Each action gives the user points, which can be used towards discounts, or even put towards charity donations.
In terms of cost, Loyalty Plus ranges from $2,000 to $30,000 per month. It sounds like a lot of money, but 500Friends is focusing on major retailers and e-commerce sites. For example, Hotels.com is a customer.
Loyalty Plus a compelling idea, in my opinion. Not only does it help retailers engage purchasers and their best customers, but it also helps the company reward consumers. And when consumers feels happy about a brand, especially one that saves them money; it helps business both online and offline.
And 500Friends, which graduated in 2010 from Y Combinator, is led by a strong team with experience in the e-commerce and marketing industries. Co-founder Justin Yoshimura has founded and sold two e-commerce companies. CTO Bob Tekiela was formerly CTO of StrongMail and VP of Technology at Sapient Corporation.
The company has raised and undisclosed amount of funding from a number of notable investors including Jeff Fluhr, Steve Newcomb, Naval Ravikant, Ben Ling, Eric Chen, Chris Yeh, and 24 others—they have a total of 30 investors.
500friends is the trusted provider of next generation loyalty marketing solutions to over 40 of the Internet Retailer 1,000 brands. The company is backed by leading institutional investors including Crosslink Capital, Intel Capital, and YCombinator.