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Social Loyalty Takes a Big Step Forward

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Social Loyalty Takes a Big Step Forward
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Our study of Millennials began about 6 years ago and evolved to recognize a broader group of technology savvy and constantly connected consumers known as Consumer 2.0. As social media grew from a curiosity to become a mainstream communications medium for this group, we began thinking about how loyalty programs should evolve in order to remain relevant over the next decade.

We began using the term Social Loyalty during 2010 and have developed a significant body of research and data to help define the term over the past 18 months. I give thanks to Joseph Morin, founder of Social Rewards and BJ Emerson, creator of the Tasti Rewards program for spurring on some of my thinking. Morin created what I remember as the first pay for performance rewards program using the Twitter channel and Emerson pioneered the first retail loyalty program that allowed members to double their earnings by allowing passive social updates and check-ins.

Defining Social Loyalty has gone through several stages. Early on, the common description just seemed to tie social media to loyalty programs. With the experiments over the past year by American Express and Twitter / Foursquare, Walgreens and Foursquare, and the emergence of alternate payment systems like Dwolla, defining the space in a short phrase became more challenging.

Now, we have the launch of 500Friends, a self described Social Loyalty platform provider. According to this review in TechCrunch, the company was founded in 2010 by successful entrepreneur Justin Yoshimura and launched during mid-2011. Last week, the company announced it had raised a $4.5 million Series A round of funding led by Crosslink Capital, with participation from Intel Capital as well as Mr. Yoshimura. The platform, named  LoyaltyPlus, seems targeted to mid-size merchants as a plug and play solution to “allow merchants to reward their loyal customers who are tweeting about their purchases, posting to Facebook, referring friends, writing reviews, and signing up for rewards programs”.

The timing is interesting. As we speak, the Loyalty Expo is taking place today and tomorrow in Orlando Florida. Mark Johnson and Erin Raese have been persistent in developing this event and, in its 5th year, it has become the de facto annual convention for loyalty marketers.

As a group, we discovered last year that loyalty marketers are not altogther social, though I am sure their understanding and use of social channels has improved over the past 12 months. At the same time, the players in the Loyalty Marketing game are changing and old standards are being tossed aside.

One new software platform does not redefine our industry, but the announcement should signal to our industry that it’s time to recognize Social Loyalty not just as a term invented by consultants, but as a key growth area for the foreseeable future.

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