Transactional, points-based loyalty is alive and well. In fact, it’s thriving, as any frequent flyer knows. However, the variety of loyalty mechanisms on the market today is constantly increasing, and many brands are beginning to rethink points and search for alternatives that may be more suitable to their customers or address new challenges. One unique alternative to points-based loyalty currently on the market is Bumped. It’s a platform that rewards consumers for their purchases from companies with actual stock in those companies.
To get an inside look at this platform, Loyalty360 recently spoke with Bumped CEO David Nelsen.
Nelsen entered the loyalty space in his work at Giftango, a provider that issued mobile gift card solutions. Giftango proved successful in attracting clients in the incentives and loyalty space, and Nelsen ultimately sold the company to Incomm. However, the experience left Nelsen understanding the need for a relationship-based approach to loyalty and wondering if the creation of a new reward mechanism was possible.
In launching Bumped, Nelsen answered that question in the affirmative, selecting part-ownership as the mechanism. He explained the appeal of stock-as-reward, saying “For the consumers it’s impactful because you’re actually creating threads of attachment between them and the company. They have to think for a second about where they shop, because now they’re an owner and there’s an actual attachment between them and the brands or banks that they work with.”
He elaborated on the emotional connection such rewards created. “Only 14 percent of people have directly owned a stock in that past, and I think it’s a material experience when somebody owns stock for the first time. I’m excited about that aspect of it: making shoppers shareholders and impacting them in a positive way, to get them to feel that the stock market’s not just for the elite, that there’s something tangible for them to be a part of.”
Often, emotional loyalty is largely unmeasurable, but Bumped has metrics that demonstrate the extent of the connection it can cultivate between brand and consumer. The company’s research showed that nearly two-thirds of Bumped users had told their friends about the company. In addition, Nelsen and team found that 55 percent of Bumped users shop less with competitors once they become an owner and that 31 percent of Bumped users said they’re willing to pay more for something just because they’re purchasing it from a company in which they own some stock.
Nelsen noted that this last statistic is particularly important, because “if everything’s built off price-point, we’re going to lose optionality as consumers.” The Bumped platform encourages consumers to think about something other than price.
Bumped’s appeal for brands lies in the opportunity for differentiation. Nelsen told Loyalty360, “From the brand’s perspective, it’s a different equation, where brands are trying to find some way to relate and build a relationship with their consumer. Points don’t necessarily do that. Points are great for a lot of things, but they’re a mechanism that’s been around for a long time, and in order to create some sort of differentiation for the brands to build new products to be able to relate to their consumer, this represents a new form or reward where they are able to build that relationship and attachment, potentially getting consumers to buy from them for reasons other than price-point.”
Asked whether Bumped is built primarily for brands or loyalty providers, Nelsen answered that it is a combination of both. “We look at ourselves as a platform,” he said. “If you look at all our IP, patents, and technology that we put in the marketplace, they all come down to this concept of ‘empowering a community.’ You need a brokerage or a brokerage dealer that ultimately has the ability to manage ownership appropriately for consumers and create a platform for the entire ecosystem to operate on top of.”