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EcommerceBytes-Update, Number 290 - July 10, 2011 - ISSN 1528-6703     2 of 6

Using Facebook Credits as Ecommerce Sales Incentives

By Greg Holden

July 10, 2011

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As experienced merchants know, passion, emotion and a sense of excitement drive online consumers to make purchases. But marketers and businesspeople have overlooked one activity that makes consumers especially passionate: playing games on Facebook and other websites. If you think this is a casual activity that can't be monetized, consider the company Ifeelgoods.com: this marketing and technology firm, which describes itself as a "digital goods incentives provider," recently received $6.5 million in funding to give retailers a way to drive sales and build followers by offering a popular virtual currency: Facebook Credits.

Ifeelgoods.com currently helps more than 20 well-known retailers offer Facebook Credits as incentives for discounted purchases, newsletter signups, or software downloads. Those customers are currently big retailers like 1-800-FLOWERS, ShoeBuy, Shopping.com, and the Gap. But in the fourth quarter of this year, smaller businesses will be able to sign up for the same kinds of incentives with a self-service feature on the Ifeelgoods.com website, according to Scott Silverman, founder and Vice President of Marketing for Ifeelgoods.

Silverman sees a lively trend in which consumers, eager to get free Facebook Credits and other digital goods, sign up for content, send Twitter tweets, download software, and perform other functions that connect them with retailers. He saw the trend coming while he was executive director of Shop.org, the digital retail community of the National Retail Foundation.

"Shop.org gave me a vantage point where I saw a lot of trends developing like search and social media," he says. "What compelled me to leave a job that I loved, and what gets me so excited about this opportunity every day, is how large a market digital goods is right now and how little activity there has been to date by marketers and brands taking advantage of this (digital content incentives) as a marketing vehicle."

One of the most popular online activities is social gaming, he says. The average gamer is a 42-year-old woman - a profile that also fits a typical online shopper. Facebook Credits are used to expand farms on the popular Facebook game Farmville, for instance. Such games can quickly consume large amounts of a consumer's time and attention.

"When you participate in these games, you begin to see how powerful they are," says Silverman, who is a Facebook gamer himself. "You get penalized if you don't keep up with your farm. You get jealous of other people's farms: How do I get that? I need Facebook Credits, to keep up with the Joneses."

As of July 1, Facebook Credits are the only currency accepted on the social networking site. A Business Insider article reports that as many as 200 million people are believed to have used Facebook Credits at least once.

Ifeelgoods.com was launched in September 2010 with the goal of helping retailers substitute traditional promotions like coupons and rebates with digital goods such as Facebook Credits and Skype minutes. "Our vision is that we will have a catalog of virtual goods," says Silverman. "Down the road, we will be able to suggest to a retailer the most relevant goods to their product line."

Digital goods have a high perceived value, he adds: "People love them but they want them for free. They don't want to pay for them."

Ifeelgood's clients use Facebook Credits in many ways:

  • Earlier in the basketball season, before the Dallas Mavericks won the NBA championship and were working hard to sell tickets, they gave five free Facebook Credits to people who retweeted one of their ticket offers.

  • In mid-December, when the shopping site Shop at Home began offering 15 free Facebook Credits to people who downloaded a search toolbar after "liking" the site on Facebook, they had 150,000 fans. The number of fans has since grown to 1.5 million.

  • The website 1-800-Flowers.com received more than 4,000 orders after offering Facebook Credits as part of a Valentine's Day 2011 promotion.

When asked whether businesses actually attract more potential customers from giving Facebook Credits to those who sign up for newsletters as opposed to offering discounts on actual sales, Silverman acknowledged that "you're going to see lower conversion rates for a purchase than you are for email signups because they don't have to enter their credit card information."

He said smaller businesses can sign up for Ifeelgoods' digital incentives services, but wouldn't specify exactly how big a company should be to take full advantage of the program, or how much the program costs. "They're buying the Facebook Credits, and they are paying a technology fee to us, but I can't get more specific than that," he said. "It really depends on what their social media budget is."

Demonstrating the power of social gaming and convincing businesses that incentives are worth the expense has been especially rewarding for Silverman. "We're beginning to strip away the obstacles (to using digital goods as marketing vehicles) and I'm having a blast."

Do you have an interesting story about your business or a set of tips to share with other ecommerce entrepreneurs? Contact me at greg@gregholden.com and you may be profiled in a future AuctionBytes column.

About the author:

Greg Holden is EcommerceBytes Contributing Editor. He is a journalist and the author of many books, including "Starting an Online Business For Dummies," "Go Google: 20 Ways to Reach More Customers and Build Revenue with Google Business Tools," and several books about eBay, including "How to Do Everything with Your eBay Business," second edition, and "Secrets of the eBay Millionaires," both published by Osborne-McGraw Hill. Find out more on Greg's website, which includes his blog, a list of his books, and his fiction and biographical writing.

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