When I came to CrowdTwist a year ago, I was tasked with the impossible: quantifying loyalty.

That’s a tricky mandate, given how ephemeral loyalty is. Who are we to measure that? Who are we to say that I’m loyal to my school more than you’re loyal to your school (unless you went to Cornell: you win. I’d never stay there for a winter, nevermind four in a row).

So like anyone who has tackled a big problem, we try to break loyalty down into its core components.

Length: How long have you been loyal and how long will you continue to be loyal?

Depth: How much time/effort/money are you devoting to the object of your loyalty?

Breadth: Is your relationship all-encompassing (are your supporters/customers immersed in your brand) or is your brand a small slice of their interest in your field?

At CrowdTwist, we track all of these numbers for our clients, so our clients can get to know their supporters and listen to their needs. One of the more interesting things to come out of our research is how people’s attachment to different products wanes over time.

We all know that feeling of discovering a new person that we are excited about. While the feeling we have towards music or products aren’t of the same intensity, we do feel strongly about them. I remember the first time I heard Disarm by the Smashing Pumpkins and my first car with positive memories like I have for old friends. But just like many old friendships, I’ve moved on to other things and my attachments to those early loves have faded away.

We see this clearly when we look at customers. The longer they go without connecting with a seller, the less likely they are to ever come back.

Interestingly, for different products, we generally see different patterns. For media and music (in red) we see passionate relationships: users come back almost every day. However, when users lose interest, they are gone for good quickly.

The loyalty people have towards product manufacturers (in blue) is different: what they lose in depth they make up for in length. Drop-off rates are higher at the beginning, but a higher percentage of members are engaged weeks later.

In a lot of ways, this is the difference between how we are loyal to our lovers and friends. The music we love can be consuming, but once the fire is gone there’s no looking back except for nostalgia and remembering what once was. The products we care about, on the other hand, are like old friends: we may not talk for a long time, but we can pick back up like old times when they’re around.

Here at CrowdTwist, we’re trying to help companies keep those friendships bright, and making sure their customers still love them tomorrow.

After spending two days in Chicago at IRCE2012 I have to admit, I feel badly for brand marketers who go in search of services and technologies to help them drive their businesses. Booth after booth, manned by sales guys in branded polo shirts, aggressively selling some variation of the same thing. The only real difference for attendees is the color, shape and name of the magic box being offered. The messaging and approach almost all identical.

Most unusual to me was the vast number of companies who dressed up young girls in skin tight outfits to lure in the consummate and lonely business traveler. Someone must have thought men could be easily romanced into signing contracts or at least handing over their contact info in exchange for some female conversation. One booth even had several young girls walking around in nurses outfits, the kind made of white latex, not cotton. I guess trade shows fall outside HR rules and jurisdiction.

Now I’m not suggesting there weren’t great companies with cool offerings, but in the quest for differentiation an interesting phenomenon occurs and that’s a vast sea of sameness. This issue plagued early home appliance manufacturers with their rows of washers and dryers all of which looked identical. Well, this has now invaded every single industry and maybe none as much as technology. Nothing compelling. Nothing unique. Nothing that excites the intellect.

What if you chose to offer people with utility that paralleled your businesses value proposition rather than being part of the noise and blending in? My advice to exhibiters: When faced with a sea of sameness, think about what you can do to be different. Car giveaways don’t drive qualified leads any more so than iPad giveaways.

• How can you use the soft-sell to outsell? 
• How can you raise brand awareness without contributing to the mound of inserts and flyers that find their way into the garbage?

One of the most engaging trade shows I’ve ever attended was NATPE (The National Association of Television and Production Executives). The thing that was most interesting was that every booth was either a mega-production company or independent operation each with different massages, awesome content and unique experiences. It was as much fun for attendees as it was for exhibitors and was the kind of place you left wishing you had more time to see more things.

The big lessons learned were:

• People engage when they’re intrigued and intrigue isn’t about being a different shade of gray but rather having a different approach all together. 
• If it’s been done, don’t do it. 
• If it’s being said by everyone else, say it differently. 
• If you don’t know how to stand out, find someone who can help you. Creative people do it best.

For those who attended IRCE2012 for the speakers and work sessions, you lucked out. Most of them were great. Awesome presentations by senior leaders from major brands. The real value of the show was the insights shared around social strategies, management of data and marketing in a multi-channel environment. I was most impressed by the following list of folks and their presentations:

• William Lynch, CEO, Barnes and Noble who spoke about: How the web has become the engine that drives retailing
• Joel Anderson, President & CEO, Walmart.com who spoke about: Creating innovation through the next generation of retail
• John Jackson, CEO of Decision Step & Buy.com who spoke about Social shoppers and how e-tailers spin knowledge into gold
• Tom Funk, Senior E-commerce Manager of Green Mountain Coffee Roasters who spoke about: The many flavors of a social strategy
• Scott Ballantyne, Chief Marketing Officer of Fab.com who spoke about how they gained 1 million members through social marketing
• Alexis Maybank, Founder and Chief Strategy Officer of Gilt Groupe who presented Innovative ways of connecting with today’s consumer
• Sam Yagan, CEO of OKCupid who presented an awesome look at the data they’ve captured and what it’s taught them
• Lauren Freedman, President from the E-Tailing Group who provided a look at what consumers are saying they want from the shopping experience. 

Thanks to all those above for making it a great show. Overall, I think the organizers did a great job of drawing in top talent and filling the conference halls and presentation rooms. It was interesting and valuable and the presentations were pointed, direct, and DIFFERENTIATED.

Contributed by Irving Fain – CEO & Co-founder of CrowdTwist

I’ve had so many proud moments over the last few years watching CrowdTwist grow from an idea that was formed around my kitchen table to what the company has become today. None, however, have been more exciting than watching our team grow.

You see, it’s a funny thing building a company. There’s an incredible amount of energy, effort and heft required in the early days and so much of it is fueled by the vision (and belief) of a small number of people. As one of the co-founders, it was my job to continually define the beacon in the distance that we were all running towards. Sometimes that beacon needed to move to the left or the right depending on what we were hearing in the market, learning from our customers or focusing on as a company. Regardless of where the seeds of change originated from, evolution was (and continues to be) a constant.

What has changed, is where that evolution comes from. The ideas and future for CrowdTwist no longer solely reside with myself, Mike and Josh (my other two co-founders). Instead, our company has become a shared vision of all the incredible people who’ve chosen to make CrowdTwist part of their lives. This is invigorating, and the group of stellar people we’ve brought together at CrowdTwist is now infinitely more powerful than any one individual. Therefore, as the power of our collective has increased, so has the power and quality of our product, platform and vision.

What you see today is no longer the result of a small group of people, but rather an amalgamation of the thoughts, ideas, passion, creativity and enthusiasm of a group of people that’s unlike any I’ve worked with in my career. Across all areas of our business, we’ve insisted on hiring the best of the best because we believe that’s what our platform requires and what our clients deserve. Whether you’re talking about 10+ years at American Express steeped in loyalty experience, years spent analyzing massive sets of data for financial firms or decades of development with some of the biggest platforms of their time, the quality of the CrowdTwist team is breathtaking and it’s manifesting itself across all our interactions with clients (new and old) as well as the way we’re thinking about the market at large and our product.

So what am I most proud of? I’m most proud to see that CrowdTwist has grown to be much bigger and much better than just a vision or a person and that this evolution is able to be passed on to those that work with us – internally at CrowdTwist, and externally for our clients & our partners. The sum of the parts is always greater than any single individual and this team is defining greatness everyday.

We’d like to let everyone know exactly what we are so following is our Manifesto. It defines who we are and who we’re not. What we believe and why we’re here. It’s our way of informing the world that we’ll take responsibility for defining ourselves.

WE ARE NOT

Another social tool or gamification company, a badging system or inaccurate influence calculator.

WE ARE NOT

An optimization engine or short term engagement driver, a bunch of people exacerbating the data dilemma, or a platform that manages the behaviors of people who don’t want to be managed.

WE ARE NOT

Another shiny object that’s further fragmenting the growing digital divide, and we don’t throw around acronyms or industry lingo to try and make ourselves seem smarter than our clients.

WE ARE

The loyalists.

The builders of brands, purveyors of passion, and people who understand and respect people.

WE ARE

The curators of customers.

The demystifiers of data, analysts of actions and the lovers of lifecycles.

WE ARE

The providers of a platform that powers how brands recognize and reward loyalty.

WE BELIEVE

People are valuable and that brands who recognize the value of everyone, everywhere, all the time are the brands that succeed.

More than anything though, we believe that people who give more, should get more (and the same is true for brands).

By the 1960’s the S&H rewards catalog had become the largest publication in the United States, and the Sperry & Hutchinson trading company was distributing three times as many stamps as the U.S. Postal Service. The program’s success helped ignite widespread brand adoption of consumer loyalty programs, which gained an initial foothold in the travel and credit card industries before eventually becoming a staple of nearly any industry that manufactured or sold products and services aimed at the global consumer.

In today’s digital era, we can see loyalty marketing practices everywhere. Checking in via Foursquare at a local café, for instance, often unlocks an offer or a discount associated with American Express. Purchasing a new book online may trigger an opt-in to a merchant’s book club, earning a customer points that can be redeemed for additional goods and services in the future. Even non-monetary consumer interactions with a brand online, such as posting a comment or contributing a product review, are often being rewarded with virtual badges or recognized with a place on a brand’s points’ leaderboard.

Each of these modern loyalty practices demonstrates both the incredible opportunity and the undeniable complexity of the digital marketing landscape. On the opportunity side of the equation, brands now have countless platforms, including Facebook, Google +, Twitter, Foursquare, a brand’s web presences, mobile, email and the online and offline points of sale, on which to identify, engage and reward consumers. These platforms are not only expanding a brand’s potential reach, they are redefining traditional measurements of customer value, which loyalty marketing has historically limited to the volume of monetary transactions that can be created by points and rewards frameworks over time.

For example, brands now have the opportunity to calculate a consumer’s value by his or her total influence across all digital channels, both in terms of soft metrics, such as engagement, or harder metrics, such the total purchase influence of an individual across all channels. Although customer “Joe” may have purchased $500 in a brand’s goods over the course of a year, his collective brand interactions, content contributions and social sharing may have created another $7,500 in transactions by way of his own social networks’ influence and reach. This kind of granular insight into individual customers’ behavior, reach and total influence across multiple digital channels is truly the holy grail of loyalty marketing in the digital era.

Achieving this holy grail is where the complexity comes into play. Brands have recognized that target audiences are spending more time in more places and have committed significant marketing dollars to reaching those customers. Unfortunately, most brands do not have the capability to track an individual customer across their digital, social and even offline properties. More specifically, brands often cannot tell that the Joe who made a purchase online last month is the same Joe who checked-in in via Foursquare at a brick & mortar store yesterday. Instead, brands are too often viewing customers through the lens of a singular digital or social channel, unable to understand the entirety of that customer’s interaction with their brand.

Adding to the problem, brands have embraced metrics such as engagement, likes, shares, follower counts and check-ins to measure loyalty. Unfortunately, these single-channel metrics are too often aligned with achieving a goal for the goal’s sake and are completely void of insight into how a customer that ‘liked’ a brand on Facebook is interacting with a brand on Twitter, sharing brand messages on Google + or spending money with a brand offline. Without this insight, how can a brand truly measure customer loyalty?

Fortunately, there are a number of steps a brand can take today to align loyalty programs with the modern digital landscape. First, brands must step back from the technology vendor-driven philosophy that interaction is everything. Engaging customers is important, but more important is understanding how to create meaningful, long-term relationships. Consumers are people with relationships, brand experience, expertise and passion. They are more than the amalgamation of the dollars they spend with a brand or the number of interactions on a brand’s Facebook page.

Second, brands must begin to take a holistic view their social and digital properties and their online and offline points of sale. To understand a consumer’s true relationship with a brand, marketers must see the full picture. These platforms and points of sale all represent the brand to a customer. Marketers must have the same aggregated view looking back in order to truly build a meaningful relationship.

Finally, marketers and technology vendors alike must begin to understand that loyalty cannot be measured by the engagement metrics commonly used today. These metrics lack insight into the broader digital picture and fall far short of defining a consumer’s relationship with a brand. It is imperative take a step back and demand a greater understanding of what these actions mean and how each channel and platform fill in the puzzle of today’s fractured and fragmented digital self.

The funding is validation that the definition of loyalty is changing and that brands need to broaden their focus to encompass the true cross-platform world that we live in today. CrowdTwist has been fortunate to experience continued demand for our solution and thus felt that this was the right time to raise a new round of funding to meet that demand head on!

We’ll be using the proceeds from the raise to build out our team, so if you fit one of our job openings, shoot us an email. We’re running at full speed to continue improving and enhancing our product, and we’re always looking for the best people to come aboard.

The CrowdTwist Team

CROWDTWIST RAISES $6M IN SERIES A FUNDING

Social Loyalty and Rewards Platform Redefining Brand Loyalty in the Social Era

NEW YORK, September 19, 2011—CrowdTwist, a leading social loyalty and rewards platform, today announced that it has secured 6 million in equity financing in a Series A round led by SoftBank Capital and Fairhaven Capital. A recent graduate of the inaugural TechStars New York class, CrowdTwist will use the funds to support accelerated growth. kbs+p Ventures, Bertelsmann Digital Media Investments (BDMI) and several individual investors also participated in the round.

CrowdTwist’s platform engages and activates a brand’s audience wherever the brand is, both online and offline. Integrating seamlessly into a brand’s site and experience, CrowdTwist gives brands the ability to track, incentivize and reward customer engagement across online, social and mobile channels. CrowdTwist also helps brands identify their biggest cross-platform influencers and understand how an individual customer is interacting with their various properties.

The CrowdTwist platform has already proven a powerful tool for brands like JCPenney and LiveNation. Among its roster of clients, CrowdTwist has increased average time-on-site by 250%, average page views per visit by 4.5 and average purchase size by over 30%. CrowdTwist has also generated tens of millions of earned media impressions for its customers.

“Brands continue to increase their overall digital marketing spend, but they lack the tools to understand which customers wield the most value and influence and which engagement platforms are contributing the most to sales,” said Joe Medved, Partner, SoftBank Capital. “CrowdTwist solves this problem by providing cross-platform connectivity and actionable customer insight that drives measurable ROI for brands.”

To drive engagement, CrowdTwist first connects the myriad places where a brand lives, including a brand’s primary website, its online and offline points-of-sale, email, Facebook, FourSquare, Twitter, as well as other platforms. CrowdTwist then rewards a brand’s customers with points for any kind of brand interaction across these various channels, including linking their social accounts, interacting with the brand socially, sharing content, contributing reviews & ratings or making purchases. As customers accumulate points, they have the opportunity to earn any type of real-world rewards that the brand chooses. These rewards could include experiences, access, status or more traditional items, such as discounts or free goods.

On the back‐end, CrowdTwist’s analytics dashboard gives brands the ability to tie together previously disparate sources of data about individual customers across different platforms. For example, brands can understand which actions or content contributions have the most value, who is spending the most time with the brand or what customers produce the strongest brand benefit over time. CrowdTwist then arms brands with custom campaign tools to speak directly to these customer segments.

“Historically, purchases and point-of-sale transactions have been the foundation of brand loyalty programs, as these were the most common places for a consumer to directly interact with a brand,” said Rudina Seseri, Principal, Fairhaven Capital. “The emergence of multiple social channels, both online and mobile, has disrupted this model. Consumers can be rewarded for engaging with a brand online or sharing brand experiences via their social streams. CrowdTwist is positioned as the leader in helping brands take advantage of this growing trend in social loyalty.”

“While the era of the fragmented social web is presenting a new set of engagement challenges, it is also significantly changing how brands view and approach customer loyalty,” said Irving Fain, CEO and Co- founder, CrowdTwist. “Brands that take steps now to connect all of their online and offline audiences and enrich the overall customer experience are well positioned to discover, activate and retain their highest-value customers. Today’s funding by a fantastic roster of investors is an affirmation of this vision, and we look forward to continuing to build a world class team and product.”

About SoftBank Capital

SoftBank Capital is an independent venture capital firm focused on early stage businesses addressing ubiquitous, social computing. The firm addresses opportunities that deliver socially driven content, services and applications across platforms and devices. SoftBank Capital offers entrepreneurs valuable experience and resources, including its close association with SoftBank Corp. in Japan. The firm’s historical investments include Associated Content, Buddy Media, Danger, E*TRADE, GeoCities, GSI Commerce, Huffington Post, WebMD, and Yahoo!. SoftBank Capital has offices in Newton, MA, New York City and Buffalo, NY. For more information, visit www.softbank.com.

About Fairhaven Capital Partners

Based in Cambridge’s Kendall Square, Fairhaven Capital is a venture capital fund dedicated to a thesis- based approach to investing in North American technology companies. This approach focuses investment efforts on markets where emerging companies and technologies can create significant value in three to five years. The Fairhaven team is focused on themes in the consumer, enterprise, financial services, materials, media infrastructure and security markets. Fairhaven is currently investing out of its second fund of 250 million. For more information go to www.fairhavencapital.com.

About CrowdTwist

CrowdTwist is a social loyalty and rewards platform that engages and activates a brand’s audience wherever the brand is, both online and offline. Giving brands the ability to track, incentivize and reward customer engagement across any online, social or mobile channel, CrowdTwist grows audiences, strengthens engagement, monetizes users and increases online and offline sales conversions. CrowdTwist also empowers brands to identify their biggest cross-platform influencers and understand how an individual customer is interacting with their online, social and mobile properties. Founded in 2009 by Irving Fain, Josh Bowen and Mike Montero, CrowdTwist is based in New York City. For more information, visit www.crowdtwist.com.

Media Contact: Nate Hermes, HermesPR 212-365-0908 press@crowdtwist.com

Kelly’s fans are among the most devoted in the world with thousands signed up for the program already. Best of luck, Kellebrities!

Doumer, believing that the rat population could be tamed, set up a system where rat catchers would be compensated for each rat they caught and killed. The initial results were promising: for the first week of the program, rat catchers killed an average of over 1,100 rats per day.

Had the program been a success, we would expect the quantity of rodents captured to decrease, as the remaining rats became harder to find. Had the program been merely ineffectual, the number of rats caught would stay flat or grow with the number of rat-catchers as the limiting factor.

Instead, the number of rats caught skyrocketed. Daily counts topped 4,000 by May and 10,000 by June. On June 12, 1902, 20,114 rats were handed over to the French, nearly 20 times the initial catch.

Confused and concerned by the numbers, the French began to investigate. What they found horrified them. The Vietnamese has begun to breed rats for the bounty. Instead of reducing the number of rats, the French had underwritten a massive agricultural subsidy.

****************************

Brands look to reward and engage their most devoted fans and followers. The cultivation of supporters and promoters is crucial to brand success. But some brands have been frightened off from rewarding these key consumers because of the fear of ‘gamers’. This is an over-reaction: in our experience, incentives certainly influence activity, but well under 0.5% of users attempt to game our rewards programs to a meaningful extent.

People have been dealing with those trying to ‘game the system’ for as long as there have been systems. Fortunately, we have several big advantages over early 20^th century colonists. At CrowdTwist, we are obsessed with the possibility of ‘perverse incentives’, the class of problems represented in the story above. Our analysis starts before the launch of a loyalty program and continues through reward redemption.

-          Program Design: The most important way to counteract gaming is to design programs with gaming in mind. Primarily, this is a question of valuation. How much do we value the actions we are trying to incentivize? What is the value of the reward? How many rewards do we want to give away?

-          Activity Monitoring:  All of our rewards programs include automated data monitoring where potential gaming is tracked. The triggers are based on statistical analyses of previous programs, as well as ‘common sense’ conclusions. While we can’t disclose the exact measures, we have analyzed dozens of identifiers for gaming and use a diverse set of tests.

-          Continual Iteration: Those looking to game the system continuously come up with new ways to obtain an advantage without contributing any value. From the US Mint to predictable product prices, externalities can impact how a program works in many ways. Continual adjustment is necessary to keep a loyalty program working as intended.

At CrowdTwist, our experience and familiarity with gaming infuses every step, from program design to reward fulfillment. We’re experienced at encouraging rat-catching and discouraging rat-farming, if you will. If you’re interested in learning more, shoot us an email and we’d be happy to continue the discussion.

We need your help! If you have a minute, please go to http://pennies.crowdtwist.com and sign up for the program. In return, JCPenney will donate money for each action you take across their many platforms like Facebook, Twitter, their site, mobile app and more! There’s no cost to you either – just a little bit of time.

Thank you so much for your support. We hope you will join us in supporting a great cause and having a lot of fun doing it!

Thanks,

The CrowdTwist Team