Michael Jaconi, CEO of Boston, Mass.-based loyalty rewards firm FreeCause and executive officer of FreeCause parent firm Rakuten, was recently instrumental in the parent firm’s lead in a $100 million venture capital investment in image-sharing service Pinterest.
Jaconi said his primary role in the deal is being a liaison between the parent firm and the tech communities in the East Coast, New York and Silicon Valley.
“We were intrigued with the impact of Pinterest,” Jaconi said. “Loyalty is driving a lot of buying today. Pinterest users are identifying the things that they love, and they are building loyalty with [what they love] with other users. Pinterest is a powerful asset and it provides a wonderful user experience. People use it to share images of things that they really love. It’s a way of building loyalty for things that they love. Other people discover [products and services] because of the things people share on Pinterest. There’s a better likelihood that someone will purchase something that you have shared.”
“It’s a vibrant property,” Jaconi added, discussing why the parent company had investment interest in Pinterest rather than in investing in a property such as Facebook, which had its much-maligned initial public offering only two weeks before the announcement of the Rakuten venture capital deal.
“We looked at [Pinterest] and the customer base that they had built up,” Jaconi said. “It’s a wonderfully designed property. It has a wonderful style that really draws you in. There is a team there very dedicated to giving customers the things that they want.”
Facebook, in contrast, has been accused by many as following the desires of founder Mark Zuckerberg and other executives, with little regard for customer preferences.
“It is so powerful for others to discover what you love and what you are loyal to,” Jaconi added. “With that loyalty they build a special and unique relationship to the [product or service].”
The sharing of what a person is loyal to is one of the strongest referral agents a product or service can enjoy, according to Jaconi.
Supporting Jaconi’s theory is a recent study by SteelHouse, a behavioral commerce company, showing that Pinterest users were nearly twice as likely to purchase products as Facebook users. Nearly all of the survey’s respondents said that Pinterest or Facebook played a role in their online shopping experience. Seventy-nine percent of Pinterest users are more likely to buy items they saw “pinned,” and 59 percent had actually bought a product or service that they had seen on Pinterest. By contrast, only 33 percent of Facebook users said they had purchased a product or service they had seen in a Facebook ad, on a news feed or on a friend’s wall.
Ninety-eight percent of respondents said online customer service reviews have a major influence on their decision to buy a product or services, and 76 percent said they always read reviews before buying. Twenty-six percent said they occasionally read reviews before buying.