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Loyalty Pays For EmailCash

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Despite dramatic restructuring of corporate customer loyalty programmes, such as frequent flyer points, a pure online startup is posting admirable financial results.

EmailCash opened their virtual doors in June 1999 as a provider of online direct marketing, incentive, loyalty programs and services.

"Members register for free," Jeff Glazer, director of marketing, sales and alliances, explains, and "supply basic demographic information." Consumers earn rewards when they make purchases from the company's online partners that number over 300.

Members also earn reward points for completing online surveys, reading permission-based emails, referring friends, and visiting selected websites.

Glazer believes, "the system is superior to other reward programs due to the fact that the reward points never expire, and the reward points can be redeemed for cash or product, or used to bid on new product auctions."

The company's revenue streams include ecommerce transactions (25%), email direct marketing (35%) and market research (35%). Advertising and sponsorship (5%) also contribute to EmailCash's bottom line.

According to managing director, Bob Cheng, "over $1.46 million in revenue has been generated so far for this financial year, with a net profit over $270k. Proof of concept has now been firmly established, before we embark on market expansion."

Of the company's 200 000 members, 1500 are registered 'Gold' members (at a cost of $49.95), entitled to exclusive offers, discounts, freebies and 20% bonus rewards points, among other benefits. "This is a relatively new initiative," says Glazer, "and growing steadily through word-of mouth."

Alliance partners pay $450 per year to be listed on the EmailCash site, plus a commission is paid to the company per transaction, from 5% to 35% depending on the offer.

Direct marketing is also a key component of the company with targeted permission email and SMS. EmailCash also have alliances with researchers such as AC Nielsen with polls and online surveys.

The company attempts to match the requirements of marketers to the profiles of Internet users, through the technology of the Internet. "EmailCash brings to marketers newer, richer interaction with consumers, and brings to consumers a way to get rewarded for taking various actions."

Glazer continues, basically a "a marketer can reach a prospect for their product directly via email, using EmailCash as the conduit for the delivery of the message. Because we have rich and clean demographic information on our members, which they have given us permission to collect and use, marketers can drill down specifically to target by age; income gender, interests, occupations, postal codes, state, occupational categories (subscriptions to magazines, sports etc, mobile phone usage, etc.....)."

"This," says Glazer, "together with the reward component, is so compelling that we are able to guarantee our marketers a 25% click through response rate on our permission based email."

That demographic includes a fairly even mix between male (57%) and female (43%) customers, heavily skewed towards under 40s. The strongest number of consumers is 20-30 (29%), under 20 second (26%) and 30-40 (22%). Majority wage bracket is $40-$60 000 (20%) and $20-$40 000 (15%).

The most popular purchases are gifts, CDs, DVDs, music, books and phone cards.

In March, the site underwent the seventh upgrade. This, says Cheng, places EmailCash in good stead for continued growth.

"We immediately witnessed a spike in membership numbers and user feedback is encouraging. Of course, the most important and objective measure for us is evidenced in the sales we generate for our ecommerce partners, because they keep us alive and profitable."

Noting that sales figures are up 29% on last quarter, Cheng explains, is the combined result of limited marketing, reliance mainly on word of mouth and "constantly refreshing. EmailCash has managed to attract, and keep, 200 000 registered consumer members."

EmailCash will soon launch what they claim to be the world's first 'e-auction' for a brand new car, which someone will busy for less than $2000, promoted across various television channels.