A common refrain of loyalty program purveyors is that “it’s much cheaper to retain a customer than to acquire a new one.” Accordingly, Yotpo CEO Tomer Tagrin also believes that successful loyalty programs are an antidote to rising customer acquisition costs. “The only way for brands to survive is by increasing loyalty,” he argues.
Yotpo does a lot of things but can be described as a reputation management and user-generated content (UGC) platform. This week it acquired Boston-based Swell Rewards. Swell provides “incentive marketing” for retailers and brands, including incentivized reviews. The combination will provide a relatively closed loop of customer feedback, content/review generation, analytics and loyalty rewards.
Tagrin believes that the combination of the two platforms is unique in the market – a “one stop shop” for brands to promote social proof, encourage reviews and even address customer dissatisfaction. Yotpo’s pitch to brands is that they will be able to now “manage reviews, visual marketing, consumer insights, rewards, and referrals from a single platform.”
None of these reviews or UGC advocacy appear on third party review sites such as Google or Yelp. This was a primary question I had about incentivized reviews and where they would live online. It’s all on the brand or retailer’s owned and operated properties, social profiles or pushed to customers in email campaigns.
There’s also integration with the point-of-sale back end to understand whether the tactics and campaigns resulted in a purchase, both for analytics purposes and to identify verified buyers. Verified buyers are identified and labeled in their online reviews. The company authenticates them to prevent fraud.
Reviews are one of the top influences on consumer purchases according a virtual mountain of consumer research over the past decade. Surveys also indicate that the majority of consumers have positive experiences with most merchants but only a small faction today write online reviews.
Tagrin and I spoke at some length about the competitive need to be customer-centric and the value of customer feedback for brands and retailers. Unfortunately too many companies pay lip service to these ideas without really delivering a better experience. But it’s also challenging to do so across multiple channels and platforms.
Tagrin believes that Yotpo, together with Swell, can help brands be more transparent and more responsive to their customers, as well as being better able to identify and reward positive customer experiences, both as social proof and to reinforce loyalty.
The only way forward, he says, is for brands to build loyal communities or many of them will ultimately be crushed by Amazon.