Loyalty trends and best practices

Why I Like Facebooks Ban on Rewarding Likes: Better Data

by Justin Yoshimura
August 15, 2014
Why I Like Facebooks Ban on Rewarding Likes: Better Data

You might think that, as CEO of a company that powers loyalty programs for over 50 retailers, I would be upset about Facebook’s recent announcement that the company will prohibit rewarding "likes" with incentives, monetary or otherwise.

In fact, I'm a big fan of Facebook's move. For one thing, Facebook has restricted incentivizing social actions for years, so the new policy language only clarifies that stance. Also, I've long advised marketers against directly rewarding likes—500friends loyalty software actually disallows it—not only because it lives in a Facebook policy gray area, but also because it just feels wrong, and not in keeping with most brands' values.

But the biggest reason I like Facebook’s like-rewarding ban? It has to do with the real value that Facebook offers for retailers. Some would say that's attention or traffic, but I disagree.

It’s data. All-encompassing, personalization-powering, first-party data.

Just about every retailer I know has figured out that future success depends on personalizing customer experiences. That's why loyalty programs are all the rage these days, with even Walmart getting into the game: not because rewards alone are retail's salvation, but because rewards give consumers a reason to share information that retailers need to deliver on personalization. Transaction histories, of course, but also browsing behavior, service interactions, and product preferences. That’s also why you’re seeing more retailers offer rewards for non-purchase actions like filling out preference profiles, writing product reviews, and self-identifying in physical stores.

But even if they collected every possible byte during every single customer interaction, retailers would still be left with a highly flawed view, because those interactions add up to only a tiny fraction of who that customer is, what she does, and what she wants. To really power personalization, retailers need a window into what’s happening in the remaining 99.99% of her life.

And that’s where Facebook—along with other other pervasive social platforms—offers the greatest promise for retailers. When customers link their accounts to social profiles, the resulting customer picture, filled out with detailed lifestyle, demographic, and preference data, is like watching an HD movie after living your entire life with stick-figure drawings. Here’s just a glimpse of the picture that we show loyalty marketers based on social account linking:

Just some of the data that 500friends can offer retailers based on social account linking.

Imagine you’re a clothing retailer who wants to launch a new line inspired by a TV series, and you’re deciding between "Mad Men" or "Boardwalk Empire." Without a socially enhanced data picture, the best you could do would be to make some guesses, perhaps educated by Nielsen, about the demographics of your customers and how those match the demographics of each show. But if a large portion of your customers have linked their social accounts, you’ll know not only which show is preferred overall by your customer base, but also how your most important segments weigh in.

Which is the real reason I cheer this move by Facebook, and why all marketers should join me. Because in the future, when you make a decision like tying up with "Mad Men," you’ll be that much more certain that your customers will cheer too.

Justin Yoshimura is CEO of 500friends. Email him at


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