Traditional loyalty programs based on discounts earned as a result of transactions are being re-examined. The value proposition is generally very costly for the brand and doesn't necessarily lead to a deeper relationship with the customer. At least that is the belief of Whrrl, the latest location-based social network and what is behind their goal to rework a dated business model.
John KimJohn Kim, head of product development and marketing for Pelago (Whrrl's parent company), while currently only at 300,000 users - is stepping up its game in a crowded space with the likes of Foursquare and Gowalla. The first-time offering is to present 'Society Rewards' for brands to market to loyal customers that are motivated by game-like interaction, that includes an element of chance.
In interviewing Kim today, Kim believes "there is a significant innovation occurring in the game space right now, and brands want to leverage the lessons." Differing from traditional loyalty programs that have to invest in a long-term and costly strategy, a location-based loyalty campaign like the one that Whrrl is launching is quicker to get to market and to motivate users because bigger prizes can be awarded.
Kim uses the example of "would you rather earn $.50 off your next fill at the pump, or would you rather have a chance of winning a $50 tank of gas?" The former is based on reaching VIP status in a traditional loyalty program, whereas, the latter relates to Whrrl's Society Rewards program, based on check-ins and brand recommendations. The more engagement, the greater the level - the more levels - the greater chance of winning the greater reward.
To kick off Society Rewards, Whrrl has teamed up with its first partner, Murphy USA, a gas-station operator with over 1,100 locations nationwide. As the prototype for other brands to follow, the 'Murphy USA Society' will "reinvent what it means to be a gas station," with the assistance of social media, according to Kim. "Why does fueling up need to be a mundane activity when it can be an opportunity for surprise, delight and fun? We are excited to be working with a brand that wants to add spice to your everyday activities," notes Kim.
As the first Society Rewards brand, Murphy will "learn what works and what doesn't (and) the program will get better because they will gain knowledge as to what motivates their customers," say Kim. As a monitoring device, Kim asserts that "every time users recommend an idea, Whrrl creates a social record of the friends and followers who act on that idea," again, allowing users to level up and gain more chances of winning a free tank of gas.
When querying Kim as to how Whrrl differentiates themselves from the bigger players in the location-based social networking space like Foursquare, he focuses on what he calls "passion groups."
For example, if users joined the Mountain Biking Society, their smartphones will become a compass to find the best trails and recommendations based on contributions from its members. While Foursquare focuses on check-ins to restaurants and bars, Whrrl's members might be passionate about 'vegetarian dishes' (not just venues - but a passion for the cuisine). In essence, Kim describes the Whrrl loyalty campaigns as those that 'build community,' 'activate people in the real world,' while encouraging the program's 'virility.'
While taking loyalty into the 21st Century, Whrrl is testing what works best for today's customer that chooses to be more engaged with the brands that want to learn from them. As a first step, I think it's worth giving this service a whirl!
For other Whrrl related promotions, see "Red Bull Takes A Whrrl On Location-Based Social Network For Air Race."