Internet loyalty program FreeRide lets members take a free ride, literally, starting today. With its new GasCash program, FreeRide allows its 400,000 registered members to spend their points with a FreeRide-branded debit card. The card can be used at 16,000 U.S. gas stations, which include Exxon Corp., Mobil Corp. and Texaco.
Users earn points for everything from viewing ads to filling out surveys and buying merchandise online to sending in product proofs of purchase.
FreeRide still faces tough competition from other programs. Netcentives' ClickRewards, which issues airline miles, has 1.3 million members, and points program MyPoints has 2.7 million.
FreeRide later this month introduces a similar program called Supermarket Cash. Members who register for a grocery debit card can use accrued points toward purchases at more than 20,000 grocery stores and 14 major chains nationwide.
$12 MIL AD EFFORT
FreeRide, which recently closed a $12.2 million round of financing, is planning its first consumer campaign, a $12 million effort breaking this fall from Mezzina/Brown, New York. The ads, which will include TV, radio and print, will promote gasoline and grocery awards, as well as the program in general.
Mezzina is a minority investor in FreeRide; Chairman-Executive Creative Director John Mezzina has been on a leave of absence from the agency since the spring to be co-CEO at FreeRide.
FreeRide set up both grocery and gasoline programs through an exclusive relationship with Properties Group, a New York-based marketing company that specializes in debit card programs.
Expanding consumer redemption options is part of a successful rewards program, said Jordan Stanley, FreeRide president, co-CEO and founder.
"The linkage between the online and offline world is there to create more relevance to people," Mr. Stanley said.
"The more ways you have to redeem and earn points, the more appealing you will be to consumers," added Michael May, analyst at Jupiter Communications.
Consumers can earn points through FreeRide's 1,400 sponsors in 800 categories, including AT&T Corp., software retailer Beyond.-com, J.C. Penney Co., Toys "R" Us and Walt Disney Co. It also offers more than 600 areas in which consumers can spend their points. Most of FreeRide's revenue comes from commissions on points consumers earn, Mr. Stanley said, adding that commission margins can range from 25% to 250%, depending on the offer. By issuing rewards via debit cards, FreeRide walks a fine line for marketers.
"I think what FreeRide is doing is harnessing the cache of cash--it means more to the consumer without cheapening the offer from the merchant's perspective," said Mr. May.
Copyright July 1999, Crain Communications Inc.