Organizations can use Facebook Deals to create simple loyalty programs for Facebook users. By checking in at business locations, Facebook users can unlock and redeem promos and discounts. Think Foursquare meets Groupon. To make it easy for businesses to choose a loyalty program, Facebook created four options for simple loyalty programs.
The following loyalty program options are excerpted from Facebook:
“1. Individual Deal: You can offer this type of deal to both new and existing customers. You may create Individual Deals when you want to launch a new product, get rid of excess inventory, offer seasonal incentives, or simply get more people into your store.
2. Friend Deal: Friend Deals allow you to offer discounts to groups of up to 8 people, when they check in together. Friend Deals are a great way to build even more exposure for your business because more stories are generated when multiple people check-in.
3. Loyalty Deal: To focus on rewarding your most loyal customers, create a Loyalty Deal. These deals may be claimed by customers only after a certain number of check-ins. Depending on your business, the number of check-ins may vary. Please note that you must create a deal that is redeemable after no fewer than two and no more than 20 check-ins.
4. Charity Deal: Create a Charity Deal to make a donation to the charity of your choice. This is a great way for your business to give back to the community while adding a human touch to your business.”
Ex. Individual Deal Ex. Loyalty Deal
Can Facebook compete?
Yes, on the surface, it seems like Facebook's attempting directly to oust the group-buying behemoth Groupon, but take a look at number 3 in the deal types above entitled Loyalty Deal. In this case, just like a loyalty punch card or stamp card, you get a reward when you visit the location after a pre-configured number of times. From the screenshot above, you can see that even the UI mimics a loyalty stamp card. Best of all for the business, the service is free and Facebook doesn't make a cut from the deal like in the group-buying model. Once Facebook releases Deals to over 200 million active users on Facebook, 1.5 million active business pages and tight knit online social communities, it seems a no brainer that Facebook Deals can be the winning formula to replace the cumbersome old loyalty stamp card - or will it? Here are my thoughts on why it won't:
1. User adoption to Facebook Places is still early - instead of checking in with Places, most people are still using the good ol' Facebook status update function to communicate where they are. Additionally, not to discount Facebook’s potential, there are other vendors farther ahead in providing location-based status updates among friends.
2. Location-based marketing is still in it’s infancy - most small and medium-sized businesses are still struggling with Twitter, let along trying to understand how location-based marketing can benefit them.
3. Consumers need a smartphone and a Facebook account to participate - even though smartphone and Facebook usage is rising dramatically each year, less tech-savvy consumers won't fit that demographic. This means that even if a merchant is using Facebook Deals as their loyalty program, the merchant will still have to offer an offline version of the stamp card.
4. Facebook is moving far from its core product - when you think of Facebook, you think of it as great tool for connecting people, sharing content and creating online communities. You probably won't think of Facebook as a provider of location-based services or couponing. These titles are reserved for Foursquare and Groupon respectively. Again and again, when large tech companies reach a certain level of success, they start to deviate from their core offering and take other people's spaces. As we know from the flop of Google Wave, Buzz and Orkut, that approach just doesn't work. How can Facebook compete with the laser focus of Groupon’s product and sales teams? Often it is simply the first-to-market who dominates.
Don't get me wrong though. As businesses and consumers become more tech savvy, we'll probably see Facebook Deals become an integral part of consumer loyalty. However, there will always be a place for the paper stamp card.
Excellent effort for a first post. You make several good points. In summary it seems as if you are saying that while Facebook's entry into loyalty marketing may seem good ... it's still a ways away, if ever.
ReplyDeleteIt's all too easy to view our experience in the marketing world as the norm of everyone. We have a tendency to become blinded by the newest and greatest thing in our efforts to be professionally be on the leading edge. We become myopic.
But in reality, you are so right ... most businesses (especially small and medium sized ones) can't even figure out Twitter.
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