Ad-tech startÂup ifeelÂgoÂods has unearthed a big secret about sucÂcess in eâcommerce: peoÂple preÂfer getÂting someÂthing for free more than they like monÂey off discounts.
Eâcommerce anaÂlysts, web conÂtent manÂagers and eâcommerce manÂagers alike might want to sit up and take note: ifeelÂgoÂods disÂcovÂered that peoÂple are three times more likeÂly to click their way through an ad and 30 per cent more likeÂly to buy when theyâre offered a digÂiÂtal reward instead of a straight discount.
Gifts just work betÂter than discounts
Co-founder and CEO Michael Amar explains:
âWhen an online retailÂer tests a 10 perÂcent off and free shipÂping offer against an ifeelÂgoÂods digÂiÂtal reward offer of equivÂaÂlent cash valÂue, they are seeÂing douÂble and triple the CTR, 30 perÂcent or more improveÂment in conÂverÂsion rate, and a sigÂnifÂiÂcant earned media chanÂnel from the 60 perÂcent or more of shopÂpers that share their sucÂcess with the offer.â
The two-year-old startÂup spurns traÂdiÂtionÂal proÂmoÂtions like disÂcounts and coupons in favor of digÂiÂtal alterÂnaÂtives, clevÂerÂly taiÂlorÂing its proÂmoÂtionÂal gifts to cusÂtomer prefÂerÂences. If youâre lookÂing at child-friendÂly XâBox games for the kids this ChristÂmas, for examÂple, an ifeelÂgoÂods ad might appear offerÂing a free copy of the latÂest Angry Birds game, whereÂupon you might just go on to make an in-app purÂchase and benÂeÂfit the develÂopÂer in the process. Or if a cusÂtomer is surfÂing for Tâshirts feaÂturÂing a favorite rock band, he or she might be preÂsentÂed with an iTunes gift card.
SupÂple tarÂgetÂing transÂlates into major success
Amarâs felÂlow co-founder, Suchit Dash, says that ifeelÂgoÂodsâ whole approach is much supÂpler (and subÂtler) than simÂply shovÂing fixed rewards at conÂsumers. The firm tarÂgets conÂsumers with what theyâre already showÂing an interÂest in. For examÂple, itâs found that iTunes gift card offers genÂerÂate more clicks when theyâre feaÂtured on Appleâs iAd platÂform, reachÂing Apple device users who will be more likeÂly to take up the offer of a few extra songs.
And the companyâs clearÂly going from strength to strength: it raised $9.5 milÂlion in Series A fundÂing (takÂing its total to $11 milÂlion) and now has offices in New York, SilÂiÂcon ValÂley, and Paris, hanÂdling 150 reward providers and 100 adverÂtisÂers. AdverÂtisÂers include Coca Cola, Groupon, Wal-Mart, MeiÂjer, Renault and UniÂverÂsal PicÂtures and gift card disÂtribÂuÂtors include AmaÂzon, iTunes, Skype and ZynÂga. And the list is growing.