There’s something entirely addictive and exhilarating about saving money that some consumers can’t get enough of. Online rewards startup Swagbucks feeds this need and has attracted more than 6.5 million rabid users to its platform, who have earned more than 5 million total rewards worth more than $30 million since 2008.
The holiday shopping season is the company’s bread and butter and, accordingly, it’s rolling out a new Shop and Earn platform to make the most of the period. Previously, Swagbucks members watched videos, played games, completed surveys, and used the company’s search portal to earn Swag Bucks, which were redeemable for gift cards and items like jewelry, electronics, appliances, or apparel. Now they can do so by shopping.
The new Shop and Earn platform allows consumers to earn the same types of rewards as above simply by shopping at the company’s 300 plus online retail partners including Target, Wal-Mart, Kohl’s, Best Buy, Macy’s, Sears, K-Mart, the Apple Store, and Disney. As part of the program, the retailers also offer exclusive coupons and discounts to shoppers within the platform. Rebates on shopping range from three to seven percent of every dollar spent, depending on the merchant. The company plans capitalize on the pre-holiday timing of its launch by doubling and tripling these rewards rates respectively on mega-shopping days Black Friday and Cyber Monday.
“Everyone looks for the best deals and sales on the Web, but Swagbucks actually rewards shoppers for the dollars they’re already spending with added value in tangible products,” says Dudelson.
Not surprisingly, Swagbucks does extremely well with “mommy bloggers and coupon cutters” typically locatedoutside of major cities, but given the breadth of its offering it has members in nearly every demographic, claims COO Scott Dudelson. The company’s audience is decidedly older than social rewards sites like Lockerz. According to women I’ve spoken to in the target demographic, most affiliate shopping sites are seen as more one dimensional than Swagbucks, which offers both a wider variety of retailers and more ways to earn rewards than many of its competitors.
Just how successful has Swagbucks been? The four-year-old, bootstrapped-profitable company with 63 employees is on pace to generate $35 million in 2012 revenue – up from $23 million in 2011. The company was rated one of Inc magazine’s 43rd fastest growing companies in 2011 and the Los Angeles Business Journal’s No. 3 fastest growing private company in LA.
The key to Swagbucks’ success seems to be the strength of its community. Its member are fiercely loyal and addicted to the saving. Extending the rewards opportunities to categories of shopping which users would do regardless should only increase sentiment.
Closing the viral loop, the company already offers rewards for referring new users and plans to roll out additional social features as well as the option to gift Swag Bucks to other users. Nerds and criminals have been trying for years to create a purely digital currency via BitCoin and other similar solutions. Swag Bucks, if it can grow large enough, has the opportunity to become a digital currency for an infinitely more desirable and influential audience: housewives.