's column on
loyalty on the Internet
, August 1, 1997.
Big computers make it trivially easy to keep track of how often any given user has visited your website and to calculate that user's "frequent-browser points" the way airlines track customers' frequent-flyer miles. I envision three main classes of frequent-browser awards:
Reduced micro-payment fees
. If your site normally charges, say, 5 cents per pageview, you could give a discounted rate of 4 cents to anybody who racks up at least 100 pageviews, 3 cents to users with 1000 pageviews, and possibly even lower rates, down to maybe 0.01 cent for users with millions of pageviews. Such a discount program will shoot a hole through Nathan Myhrvold's complaint that micropayment schemes lead to "screwing your best customer."
Special access privileges
for valued customers. For example, they could be allowed to read a popular column before it is made available to the general public, or a music site could allow downloads of a special version of a soundtrack. It might also be possible to have discussion groups that are only open to high-volume users and thus not filled with postings by novice users. Remember, there are three main selling points in direct marketing: fear, greed, and exclusivity, so special privileges are a great way to motivate users to stay loyal.
Better server performance
for users with many frequent-browser points. The web server could give higher priority to serving requests from valued users so that they would get acceptable response times, even at times when the server is overloaded. The Web frequently sees so-called "flash crowds" where millions of users congregate at the same site with little notice (for example, because hot new software is available for download). It makes sense to dedicate most bandwidth to serving loyal customers and let the site tourists suffer.
Just as with airline loyalty programs, I expect that "frequent-browser points" might be earned in additional ways beyond sheer numbers of pageviews. For example, it is an obvious idea to award points to people buying products from your site and to people who try out a new service at an affiliated site ("follow this link and get 50 points").
Amazon.com has implemented the idea of frequent-user rewards for its A9 search engine: if you search enough on A9, you get 1.57% off your purchases on Amazon.com.
I personally spend about $2,000 on Amazon per year, so this discount would in effect pay me $31 annually to use A9 instead of my preferred search engine. I probably execute about 10 searches per day, so the $31 correspond to slightly less than one cent per search, which is much less than the immense profits search engines make on pay-per-click ads. The payments thus make sense for Amazon.
Since A9 has just as good search results as any other search engine, why don't I use it and cash in my $31? Because A9 is slower than my preferred search engine. Wasting several seconds ten times per day adds up to much more than $31 per year for a highly paid business professional.