STARTUP TO WATCH Adding Gravity to Loyalty Programs

When Eric Aubertin, founder and CEO of the e-commerce loyalty firm OneBigPlanet, sold his last company, eFundraising, to Reader’s Digest, he had time on his hands to shape the idea behind his next online innovation. He had a notion to develop a new type of consumer platform that would bring communities, corporations, organizations and social networks together in a new approach to a benefits program.

Clearly, this was new territory. Aubertin wanted to offer consumers a way to control their e-commerce experiences, much like Yahoo allows users to organize and filter information they receive. He wanted a platform that would encourage consumers to stay without having offers they didn’t want pushed at them. He also wanted communities, organizations and corporations that partnered on the platform to retain and increase both members and revenue.

To Aubertin, whatever solution he created had to include the characteristics of the new trends developing around social networks. He saw the 350-plus million users of social networks as a key factor in his success. However, he had to change the online environments because revenue was typically limited to advertising. His solution had to incorporate a new way to generate income.

Aubertin recently launched his brainchild,, debuting a platform driven by more than 1 million lines of code and a user interface that was redesigned about 10 times until it was user-simple. On the April 29 launch date of its new Commerce and Loyalty Platform, the company also announced an exclusive partnership with the U.S. Chamber of Commerce.

“I created a loyalty platform in 2002. Eighteen months ago I realized that nobody had a portal for doing this, so I expanded the concept on the Web to create a one-stop computer portal offered through communities,” Aubertin told the E-Commerce Times.

Consumer Focus

One of Aubertin’s goals is to offer a solution to ease the consumers’ online burdens. OneBigPlanet does not market to consumers directly. The portal connects consumers to the organizations and vendors that they select.

OneBigPlanet reasons that a lot of online shoppers are overwhelmed with the myriad shopping Web sites and price-comparison offerings on the Internet. In order to be effective shopping online, consumers have to spend too much time searching for product suppliers and discount prices.

With OneBigPlanet, consumers set up their own personal page and select preferences for the kind of product information they want. All the filtering controls are at the user’s disposal.

Social Networking

“It’s hard to believe how fast we are growing. We have several more contracts pending,” said Aubertin.

His staff is discussing partnerships with many of the Internet’s heavy hitters, he said. Potential partners include AOL, Yahoo, Google.

OneBigPlanet is getting traction at every level and with key players, he explained. For example, Aubertin is looking at a dozen different communities joining his network of partners in upcoming months.

Platform Planks

While Aubertin’s intent is to make the consumers’ life simpler online, OneBigPlanet targets the communities sponsoring membership on the portal. If all works as planned, consumers using the portal’s search and filtering tools will save time and money shopping online.

However, in order for users to reach that payoff, the portal has to be a rallying point for sponsoring organizations, corporations and communities. OneBigPlanet has to succeed in helping these groups find new members, retain and increase their membership and then generate more revenue for the partners.

Early Hurdles

“One of our early hurdles was raising money. We had to prove our model would work. To get started, we had to rely on personal investing,” said Aubertin about his startup pains.

Funding his new company took US$1 million from his and his financial partners’ pockets, explained the former hockey player for the Canadiens. That seed money grew into $3 million more.

Now OneBigPlanet is getting $10 million in venture capital funds.

Money Model

Aubertin’s loyalty platform relies on two sources of revenue to stay in business and expand the features it provides to users. Making money from the operation is challenging when consumers don’t have to pay to play on OneBigPlanet.

One revenue source is buying into the white label platform. The sponsoring community, organization or corporation has to pay a license fee to use the loyalty platform.

The other revenue source comes from an e-commerce version of old-fashioned commissions. Every time a consumer uses OneBigPlanet to make a purchase, Aubertin’s company makes a commission on the transaction.

Pressing Needs

To get to where Aubertin wants to take OneBigPlanet, he needs an infusion of $10 million. That, perhaps, is his biggest challenge.

“We need to partner with one of the big guys for funding. We need to move very fast on the right kind of funding,” he opined.

Delays in raising the needed funding could hamper the fledgling firm’s level of success. Speed is everything, said Aubertin.

New Segment Leader?

Aubertin is betting on the continuing rise in popularity of social networks, viewing them as e-commerce’s next goldmine. He wants to grow his loyalty platform with the right combination of features to guarantee consumer retention.

“In five years, I will be able to say that we built a new Internet segment. I want to be a leader in this next segment spiral,” Aubertin said.

Trendy Solution

What some early adopters of the OneBigPlanet concept like is its seamless simplicity. For example, the Poker Players Alliance (PPA) signed on as an affiliate member and had its presence on the platform up and running in three days.

“It doesn’t require any IT genius. It’s actually pretty compelling,” John Pappas, the PPA’s executive director, told the E-Commerce Times.

The organization saw a record uptake in just three days with a surge of 1,000 new members, Pappas said, adding that the concept is very innovative.

“We needed an online platform to get our constituents online. We are already getting real savings,” he added. “Being one of the first ones breaking into this at the ground level, we see ourselves as grassroots users.”

Highly Competitive Risk

While OneBigPlanet offers an innovative business model for online commerce, success is not guaranteed. This growing Internet segment is already littered with competition for loyalty providers.

“OneBigPlanet is just getting off the ground. Its model is an interesting twist,” Chris Henger, vice president of affiliated marking firm DoubleClick Performics, told the E-Commerce Times.

The value of Aubertin’s company to DoubleClick Performics is the potential to build a large audience and drive visitors to the firm, explained Henger. His company functions as an intermediary between advertisers and OneBigPlanet.

“There are other competitors in the loyalty field. There are pretty big participants,” said Henger. “For example, all airlines have e-malls for online sales.”

New Approach to Old Idea

The real test to OneBigPlanet’s success in the loyalty space may well be its staying power.

“The idea of online commerce to reward a membership group is not new. Aubertin is early in his business model’s evolution. He’s going after social networks,” suggested Henger.

The twist that just might work is a possible solution to a nagging question in the loyalty commerce business: How do you get friends of friends to do something to benefit you, suggested Henger.

Platform Plan

As the online community merges with social networks, OneBigPlanet offers a tool for driving membership and retaining users. The site’s new loyalty tool is based on Web 2.0 technology and business intelligence. The combination could help social networks overcome their current pain points, including sustainable revenue generation.

The consumer could stand to benefit from what Aubertin envisions. For example, OneBigPlanet provides access to exclusive instant advantages with over 250,000 merchants in 20 categories and organization tools.

Through the portal, members can save money, simplify their shopping and share feedback and deals with other community members, according to Aubertin. His portal is based on state-of-the-art business intelligence technology that tracks users’ behavior, interests and preferences to ensure that instant advantages are relevant and personalized to that particular consumer.

Some of the tools currently available on the portal include a consumer calendar and notifications. Buyers also can use a meta search Aubertin’s engineer’s designed based on consumers’ personal interests or advantage preferences.

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