Why is cross promotion difficult today?
For online businesses, creating referral programs to incentivise both customers and other businesses to help promote them has always been easy and a staple of any viral marketing campaign.
However, for offline businesses, this is incredibly difficult. There is no easy way to track the origin of any particular customer, nor the value that customer brings.
While word of mouth is still one of the most effective marketing tactics for businesses, due to its low cost and its inherent credibility, there is no easy way to incentivise it.
It is also currently very difficult for businesses to create cross promotions, as the value obtained by each partner is both impossible to track and hard to reconcile.
How Loop helps
With Loop, both referral programs and cross promotion partnerships are an integral part of how our platform works - and can help businesses dramatically increase their customer base with a very low budget.
In our cross promotion partnerships, many businesses joined by industry, location, or any other criteria agree to using a "shared token" (eg. a MELBOURNE token or a TOURISM token).
All the businesses who get invited to join the network agree to both accept this token as a form of payment and to reward this token to their customers.
Each business is rewarded with more exposure based on how much they contribute to the network - making sure that everyone is rewarded fairly.
Businesses can easily track the results of these cross promotion networks and see how much value they are obtaining from it, helping them to decide whether or not to continue participating.
An example of how this would work:
Restaurants in Melbourne agree to accept a MELBOURNE token.
Every time someone eats at one of these restaurants and pays through the digital wallet, the restaurant rewards them with 10% MELBOURNE tokens (eg. if their bill is $100, they give them $10 in tokens).
The restaurant must pay the network for these tokens, HOWEVER for every $1 in tokens they give out, they also receive $1 in tokens for themselves
Restaurants can use the tokens that they earn for a number of purposes:
(1) to use at other participating restaurants
(2) to pay or reward staff
(3) to incentivise and reward customers
(4) to "boost" their posts in the feed in the mobile app.
Boosted posts will get seen by more people in the MELBOURNE token network than regular posts. In this way - those who contribute the most to the network gain the most benefit from it.
The payment for tokens that are purchased from the network go into a "community fund" and can be used by the network as a whole to help promote the network through marketing campaigns.
Media and advertising companies
Media and advertising companies can benefit from Loop in a number of different ways.
Either they can join an existing network of retail or hospitality venues, OR they can create their own token to engage, incentivise, and increase the revenue from their own network.
Joining an existing network
Media and advertising partners who agree to help promote an existing network can do so under the agreement that a certain portion of the community fund (the money that restaurants use to buy tokens to reward their customers with) goes back to that media/advertising partner.
Broadsheet Melbourne agrees to help promote the network of businesses using the MELBOURNE token.
They fund an initial advertising campaign through their network, at low cost to them. All Broadsheet ads would include a Broadsheet referral code for people to claim free MELBOURNE tokens.
Every time someone spends money through the mobile app at a participating venue, and earns 10% of the bill back in MELBOURNE tokens, that money goes to the MELBOURNE community fund.
An agreed portion of all money going to the Melbourne community fund is given to Broadsheet, in return for more marketing of the network.
Because it is possible to track the users that Broadsheet is bringing to the network via their referral code, the community can easily see the value that Broadsheet is giving to the community.
Creating their own token
Broadsheet wants to create a BROADSHEET token in order to engage and incentivise their audience.
They contact their best restaurant partners and ask them if they would be willing to give BROADSHEET tokens to their customers. For example, for every $100 spent, a customer would earn 10 BROADSHEET tokens.
These tokens cost the restaurant nothing, and they get free exposure and promotion from Broadsheet in return, so of course they accept.
Any restaurant who wants to get extra promotion via Broadsheet could agree to run a special event (a wine tasting, a degustation, a "meet the chef", a cocktail night, or anything else they can think of). The only way to get access to the event would be by spending BROADSHEET tokens. This ensures that all attendees are true foodies who have spent enough at restaurants to accumulate the required number of tokens.
The restaurant gets great exposure, and Broadsheet has a happier and more engaged audience!