Stash’s Stock-Back rewards just made my Starbucks taste a little better.
Cash-back, discounts, incentive gifts, experiential rewards … all of them are proven reward systems within certain ecosystems. But for the entrepreneur, nothing beats company ownership – stock – for creating enthusiastic engagement. I should know – I’m one of those people.
Way back in the early 2000’s a then-nascent motel chain experimented with the concept of giving away stock as a reward for stays – I was hooked from the moment I first saw the tent card on the nightstand. Unfortunately for my portfolio, that program and in fact, that motel chain were both short lived.
Perhaps it’s because I spend the bulk of my waking hours thinking about loyalty programs and reward schemes that I’ve become attuned to the out-of-the-ordinary, or maybe it’s just my overdeveloped sense of greed – either way, I’m intrigued by companies like Stash and Bumped that are making waves in customer loyalty by awarding tiny slices of company stock for purchases within their network.
Stash, the fintech startup, just announced the latest iteration of this concept. According to Bloomberg, “The rewards start at 0.125 percent of spending, less than some other cash-back credit cards, though the company said the rate could reach as much as 5 percent depending on deals and promotions. For purchases at, say, a local restaurant that doesn’t trade on the public markets, customers will earn shares in a related exchange-traded fund.”
I’m not sure I’m completely buying Stash’s pitch however. According to co-founder and President Ed Robinson, Stock-Back is their way of helping American’s build their nest eggs. By buying within Stash’s network and collecting stock rewards, the company hopes to “help people build better financial habits and invest in their future”. That’s an admirable reason for being, but at .125 percent of spend its going to take a couple of lifetimes to make any kind of significant financial impact.
It is worth noting though, that customers who accumulate stocks on Stash, get dividends on their holdings. “That's the gift that keeps giving you dividends,” says co-founder and CEO, Brandon Krieg.
It seems to me that the real beauty of Stash’s Stock-Back program is that it plays into some very powerful gamification principles by virtue of the nature of the reward. Who wouldn’t like to play in the stock market for the price of a cup of coffee? I’m game.
I mentioned Bumped earlier – although they and Stash are both offering small slices of stock as rewards, there are significant differences in their business models and indeed, their approaches to rewarding customer behavior. Stash operates as a wallet with a fairly robust suite of financial tools and services that are available to members. Bumped, on the other hand, sees itself as a tool to build “lasting relationships between customers and the companies they care about” - a much more “loyalty” oriented mission.
Mike Giambattista is Editor in Chief at The Wise Marketer and is a Certified Loyalty Marketing Professional (CLMP).
