Digging Deeper with ifeelgoods: Winning Hearts and Minds with Targeted Rewards
Payment Week’s Andrew Barnes’ series, “Digging Deeper with Startups” is based in Silicon Valley and focuses on key innovators and how they are disrupting digital payments and commerce.
Ifeelgoods, a VC funded Silicon Valley startup, is enabling brands to incent, convert & reward users with personalized offers. Over 150 advertisers including Wal-Mart, Gap and L’Oreal have used ifeelgoods’ catalog of over 1,000 digital rewards to improve their marketing campaigns.
Andrew sat down with ifeegood’s co-founder and VP of Business Development, Suchit Dash, to talk about ifeelgoods, its business model, and its new platform that lets clients test many different reward structures.
Andrew Barnes: Suchit, thanks for sitting down with me today. What are some of the tough marketing challenges out there to be solved and what are you doing to solve them?
Suchit Dash: If you look at the past 50 years, when you walk into a standard shopping mall or you go to an online website, you’ll see that marketers are essentially shoving the same types of promotions down a consumer’s throat. Buy one get one free, 50 percent off, 10 percent off, et cetera.
Marketers are becoming much more targeted with respect to whom they’re going after. Now a marketer can be able to say, “I’m looking for a female that is 25 to 35 living in San Francisco,” as an example. Yet the marketing message is still saying, “Shop on my website, and we’ll give you 50 percent off.”
We are able to make that promotion much more targeted. We believe that tools like prepaid gift cards, or subscriptions, or other types of digital content are the right rewards.
As an example, when you’re looking for that customer who lives in San Francisco who’s 25 to 35, who uses their iPhone on a daily basis, it’s probably much more enticing to them to offer them currency on their iPhone, or the newest app, or a subscription to the New York Times – things that they actually care about and want.
We’ve done a lot of testing and this has a tremendous impact in terms of click-through rates and conversion rates for the end customer and for the brand. The consumers are ultimately happier. They’re getting something that they care about, that they want.
Interesting. You say that you reward for any trackable action? Whether it is online, offline, or mobile. Define, if you would: “trackable.”
Yes, absolutely. One of the things that we found very early on was that when you start to offer digital content to end customers there’s a variety of ranges in terms of cost. It never made sense when a brand would potentially say, “Hey, sign up for my newsletter. I’m going to give you a quarter, or 50 cents” because the consumer would never find it appealing. Yet with some of this really cool new digital content, if I offer you a free song or a movie, which may be worth the same value, the perceived value to the customer is very different.
We developed the product so that whether you’re offering a reward for someone who signs up for the latest newsletter, or does an action on your social media channels, or walks in your store, we believe all of these actions can be rewarded. The value that you ultimately give to the customer will vary.
Tell me a little bit about the back-end business model. Where’s the flow? Where is the money and to what extent does payments figure into that?
One of the things that we did early on was to build a system that’s agnostic to the type of payment instrument. We don’t look at the transaction or take any sort of personal identifying data on the actual transaction itself. We’ve really kept it at a higher level so that after the consumer makes the purchase is the first time Ifeelgoods will serve up the reward.
We typically enable marketers to test across a number of different rewards simultaneously. The platform that we’re releasing enables any marketer to test five or ten different rewards. We don’t know what the best reward, the best value, or the best currency is. Or what will work with the demographic so what we’re enabling is marketers to test their way towards success and enable data to actually prove that out.
And your revenue model?
We charge a fee to online marketers to utilize this platform. Then with the prepaid providers, we’ll get prepaid customers who want to distribute their content more widely. We bring to them millions of impressions and really high-quality retailers. So in a lot of scenarios we’re getting this content for free from them. A lot of the time, we’re actually driving new customers to them. In other more traditional channels we will work with them on different rates.
Suchit, you’re making a very interesting announcement around pioneering a new distribution channel with prepaid brands by tapping into advertising and promotional industries. Can you say a little bit more about what you’re doing that’s disrupting or innovating in the marketplace regarding prepaid?
Absolutely. If you look at the traditional prepaid market, distribution really came in the form of physical form factors, where prepaid brands would actually work with different card providers, design a beautiful-looking card that would actually then be put on a physical shelf in grocery stores and in large big-box retailers, as an example. Really, that was their form of distribution.
That market, frankly, is a lot bigger than simply just selling cards. You’re tapping into a huge online advertising ecosystem and promotion ecosystem. There you get a tremendous amount of impressions, arguably more than you would see when people walk into a store itself. You’re going to get exposed to new paid customers. These are new customers that will come to your site for the prepaid brand and they’ll have cash in hand, making them a very valuable potential customer.
What our platform does is, it facilitates any prepaid provider or any paid product that’s digital to plug in to our platform. We immediately give them an ecosystem that they can tap into. We work with the top agencies in the world. We work with different marketing platforms so that online marketers now can take a look at the network of digital content that we have in our platform and say, “Hey, instead of just giving 50 percent off, why don’t I give a prepaid gift card? Why don’t I give this subscription to this newspaper or this service?”
Are we talking solely about digital goods?
Yes. We’re talking about digital content. If those brands all have an actual prepaid gift card but they also do coupons and promotions, we can actually push that through our network.
How does mobile differ from the online and offline experience? What are you learning, being at the cutting-edge?
What’s really interesting to us is, first and foremost, the mobile checkout experience for traditional retailers is improving. It’s something that, over time, we’re going to see the conversion rates become much better. The experiences are becoming much more responsive.
We’ve designed experiences so that whether you’re doing an online gift-with-purchase or an offline unpack reward, we’re starting to focus on things that are mobile-related experiences. Walking into a store, checking into that store, and earning a reward associated with that. We think that there’s a huge ecosystem in play there. We’re at the early stages beginning to test this with different advertisers.
Can you tell me a little bit about the supply and demand balance in the marketplace as it relates to advertisers and content?
What we quickly realized was that as advertisers were becoming much more sophisticated in their targeting, they were saying, “Hey, we’re really focused on this type of demographic that we want to go after.” We realized that we were structuring all of this reward or prepaid data about customers and there was a tremendous amount of matching that could be done. When an advertiser was focusing on a 35 to 45-year-old female that’s really interested in music, we had relevant prepaid products that would actually tap that into there.
We spent the last 12 to 14 months building out that catalog so that when an advertiser goes through our platform and says, “I’m searching for a 35 to 45-year-old female that lives in this location and likes these types of categories,” relevant products came up from the prepaid or pre-made content. We know we needed a large enough catalog so that advertisers had the capabilities of testing, and not just testing one, but testing 10 or 15 rewards to get to that optimal ROI.
You are on the front door, VP of business development and co-founder. Can you tell me about challenges in this startup phase and lessons you would like to pass on?
I think I’ve realized that startups are like an incredible roller coaster, not on a monthly basis but like on an hourly basis. I’ve learned how to manage that on a day-to-day level. You can’t get too excited. You can’t get too disappointed. You need to live sort of in the middle. That’s really the only way to kind of play this game for the long term and it can sort of cloud your clarity of thought.
I’d suggest seeking advice on how to keep focused on the end goal. Make sure that you are extremely focused on getting to that point because it typically helps your decision-making.
You’ve been successful on the fundraising side. How do you manage that? How do you manage the money coming in the door to be helpful for what you want as the entity?
My personal point of view that an alignment on goals and vision is critical. The market has changed. It’s gotten much more savvy, more digital. What the investors enable you to do is to work towards that vision and have a product ready for when the market is ready … it’s shifting. You need have the tools necessary to actually be able to scale that to the next level.
How many folks do you have working for you?
Our team is about 25, split between Palo Alto and Paris. We have our engineering and our technology teams that are based in Paris and have done an incredible job building our platform. Our teams in Palo Alto are focused on relationships with our partners and advertising relationships. More of our business development side of things.
About Suchit Dash
Cofounder & VP of Business Development
Suchit Dash is responsible for developing strategic partnerships with publishers, solution providers and other key players in the digital goods and social media industries. Suchit joined Ifeelgoods from PayPal where he was a product manager of PayPal Express Checkout. Suchit’s work contributed to PayPal’s focus on improving sales and conversion for its merchant partners. Suchit holds a BSE in Industrial Engineering and Economics from Northwestern University and currently resides in San Francisco, California.
Andrew Barnes, Senior Executive Writer, Emerging Markets
Barnes is a self-confessed payments and commerce “geek” working in Silicon Valley and San Francisco. He utilizes c-level relationships in tech, startups, retail, and financial institutions to identify emerging market opportunities and analyze challenging business models. Barnes recently launched “Digging Deeper,” a published series focusing on startups and key innovators that are solving digital payments and mobile commerce problems worldwide. He has held executive business development positions in Asia with Sprint, Global One, and 2Roam Mobile, and is an Advisor to the Electronic Transactions Association (ETA). Barnes has an MBA from Waseda in Tokyo 早稲田大学大学院 and a BA from Penn State. He can be reached on Twitter @AndrewinSV and Linkedin.