As soon as The Wolf of Wall Street was advertised in the cinema I wanted to go and see it. I highly rate Leonardo DiCaprio as an actor, IMDb gave it 8.6 / 10 stars within a few days of launching and Robert Ebert described it as “abashed and shameless, exciting and exhausting, disgusting and illuminating… one of the most entertaining films ever made about loathsome men.” Sign me up! However, the deciding moment came when I received a text message from one of my closest friends. “You have to go and see The Wolf of Wall Street, its one of the best films I’ve seen in a long time. Hilarious!” – My ticket was booked before I could reply to her. The point I’m making here is that personal recommendations from friends and family hold so much more weight than any advertisement, online scoring system or independent review because it’s a direct endorsement from someone you can trust.
Furthermore, recent survey results show that 92 percent of people trust recommendations from family and friends more than any other form of advertising and on top of that 70 percent of Facebook users would rather hear about a brand or a product from friends rather than from the brand itself. When you put those things together, there is a real need in the market place for a word-of-mouth engine.
It’s this understanding of consumer behaviour, which inspired Tom Larkin and Ben Stewart, co-founders of Social Rebate to develop their application. Aware that online reviews, social scoring and the number of ‘Likes’ a company receives doesn’t necessarily equate to much in the real world – a Facebook ‘Like’ doesn’t mean someone has ever bought a product from that company and a positive review on Yelp could well be fake – they began developing an ecommerce marketing solution that harnesses the engagement of real customers, who have voluntarily opted to spend their hard-earned cash with the company in question.
Read related articles in Business Review Australia
Let me explain in more detail - Social Rebate allows businesses to boost their online sales and decrease their net advertising costs by leveraging the engagement of their customers. Online businesses participating in the Social Rebate scheme can ‘hire’ their customers to share information about their brand across popular social networking channels such as Facebook, Twitter, Google+, Pinterest and LinkedIn – and in return customers earn cash-back based on the traffic their recommendation generates.
Business Review Australia had the opportunity to sit down with Tom (CEO) and Ben (CTO) to discuss what the application can offer ecommerce companies, how it can boost customer loyalty and why it is so much more effective than upfront discounts and coupon codes in regards to generating long term customers.
What makes Social Rebate different to other marketing solutions?
Unlike other discounted purchase incentives, Social Rebate leverages the engagement of its existing customers and offers discount based on what they ‘give back’ to the company in terms of traffic. As Tom explains, “From the company’s point of view, it’s no different to offering a 10 percent discount, only the amount they give away is performance based. This allows them to turn the entire customer base of their business into a marketing force.” According to Tom, Social Rebate allows businesses to maximize their customer relationships by offering discount to those who spread the word. In turn, those customers experience increased loyalty to the brand they already chose to shop with because they get a lump sum of cash-back for their purchase.
“One of the things we really embraced going into this is the fact that there are small and medium retailers who are having to give away margin up front in order to compete with much larger companies online. In the last five years, there has been a boom in the number of websites offering discounts and coupon codes and essentially that’s margin these businesses are giving away to inspire purchase,” says Ben. “Our credo is more, why would you coupon that margin away when you can offer it to the customer post purchase in return for marketing and publicity?”
However, Social Rebate is not just beneficial for the ecommerce companies utilizing the service. For one, they offer customers the chance to earn real cash rewards, rather than vouchers and what’s more, users don’t have to create a purchase to get something back. “We allow people to earn cash-back based off the visits that they generate versus the conversions they create. We make it a goal that is achievable. It’s as much about brand awareness as anything else,” explains Ben. “We wanted to make sure that all the incentives were incrementally aligned, for the consumer, for the business and for us. We want to preserve our reputation as something that is very positive for the business.”
With this in mind, Social Rebate is not just about the quantity of purchases from individual shares. The marketing campaign remains live for as long as the company wants, so even if they stop using the service the backlinks will continue to boost SEO credibility and generate conversions. “Its not just about quantity, its also about the quality of traffic we are ultimately creating,” says Tom.
Who can take advantage of Social Rebate?
From research conducted by the company, ecommerce businesses with inherently social products (tech, fashion, entertainment) are set to gain the most, however Tom and Ben have seen some incredible results from the most unlikely businesses. For instance, a pet food home delivery company has experienced a five percent month on month sales increases since signing up.
“You have probably seen tonnes of articles about the conversion rate of social being incredibly low, 0.17 percent would be a pretty good click through rate for a Facebook ad campaign (0.5 percent would be excellent). But what we are seeing is 30 percent of Social Rebates turn into a sale. The reason being is its not just an advert, it’s a real recommendation from someone that has spent their discretionary money on an item and liked it enough to tell their friends about it,” says Ben.
What next for the word-of-mouth engine?
Three hundred companies currently employ Social Rebate and the plan is to increase that membership by several thousand over the course of the year. According to Tom and Ben, the company is also exploring some exciting ventures in mobile and sees huge opportunity for growth in regards to collecting and leveraging retail data.
Social Rebate is on the cusp of taking off, and with an unwavering commitment to customer service and product development it’s set to become synonymous with turning customers into the most powerful and cost effective advertising platform you can get your hands on.