InfiNET Marketing

Cash Back Rewards for Word of Mouth Marketing

A recent article by Bloomberg News notes how many retailers are looking to online sales to rescue them from the downturn in the economy and to prop up holiday season sales. One retail consultant believes that it is online sales that will propel the retail  industry out of the recession.

Retailers are taking note of the fact that online sales margins can be as much 20% or more over brick & mortar margins. Merchants are putting more and more attention and money into increasing online sales.

Blastoff is a new twist on marketing that many retailers are flocking to (over 400 merchants so far). From giant retailers like Kmart, Target, Macy’s and Best Buy to Starbucks and travel sites like Expedia and Travelocity - merchants are jumping on the “cash back rewards” to social networks bandwagon to encourage more sales online.

InfiNET Marketing has been working on a similar concept for over a year. We weren’t totally shocked that someone beat us to the punch. Rewarding social networks for word of mouth marketing is such an obvious evolution that it’s amazing it hasn’t happened sooner. Our interest in this concept really started heating up when we read all the stories of how Facebook was looking for a revenue model.

Like many other online enterprises, Facebook was looking at ad revenue - everyone is trying to copy Google’s success. Our immediate thought was - Why doesn’t Facebook forget the small pond (ad revenue) and get in the ocean (online sales)? We found it interesting that part of Facebook’s revenue model is to make money off of the word of mouth marketing by its members with no cash back reward to them for their efforts. After all, it’s the Facebook members that are recommending books, music and products to their peers - why shouldn’t they share in the rewards?

The business model we have developed actually targets Amazon.com as a strategic partner as they have everything but the social network rewards piece already in place. Our conservative estimate was the cash back rewards program running through Amazon.com would add $800 million to $1.2 billion in revenue in the first year.

Facebook and Google were other contenders for strategic partners.

While Blastoff has the cash back rewards by merchants in place, they really don’t have the social networking piece in place. A significant missing link in our opinion.

Dynamic Matrix Revenue Model

Our model for Amazon not only addressed the social network piece, but also included how to drive more online sales and how to increase word of mouth marketing by network members. While Blastoff relies on the familiar networking model for member growth and revenue share, we have developed a new revenue-sharing model more suitable for social networks that we call the “dynamic revenue matrix.”

We, of course, would still love to get in front of Amazon, Facebook or Google with our concept - if you can open the door for us, we can certainly take you along for the ride.

john@InfiNET-Marketing.com