Not all customers are created equal — that’s the idea behind a new product from Y Combinator-backed loyalty startup 500Friends.
The company already allowed businesses to reward customers for activity like referring friends, writing reviews, checking in on Foursquare, and so on. Recently, however, it released an enterprise product that does a lot more.
CEO Justin Yoshimura says the new product creates “archetypes” of different kinds of customers, then uses the businesses’ data to determine which archetypes are going to be the most valuable, either in terms of dollars spent or social influence. Then, when a new customer comes to a website, a business can match them against the different archetypes, effectively identifying which ones are likely to be the most valuable and allowing businesses to give them special service and offers. Yoshimura says:
“For example, if you purchased a necklace from Ice.com, we could compare your datapoints (what you bought, your facebook interests, and what other sites you’ve visited) against their BEST customers and influencers to PREDICT your lifetime value. If you are determined to be a potential high value customer, your order could be overnighted.”
Hopefully, that service will fill customers with warm, fuzzy feeling so they keeping buying from you or tweet good things. Of course, you may be a bit grumpy to hear about this if you’re not in one of the desirable archetypes. But that’s just the reality, Yoshimura says — for most retailers, “the margin just isn’t there” that you can overnight products to everyone. He adds that ideally, a business should give all of their customers good service, but then provide a “ridiculously amazing experience” when it really counts.
500Friends launched the enterprise product in April, Yoshimura says, and it has already signed up six of the top 100 retailers, but the company hasn’t been talking about until now. It’s also running a special promotion called the Win/Win Challenge, where the business that offers the best customer loyalty experience wins $25,000 or 1 million airlines miles.
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.