Engage with the product, and remain loyal users and customers.
Project Essence
The service is suitable for property owners to encourage tenants to pay on time, for internet publications, online communities, and apps to encourage users to subscribe and remain on paid subscriptions, and for banks, insurance companies, hotels, and travel agencies to encourage people to purchase their services, and so on.
All of this can be done without writing a single line of code—making it suitable for businesses lacking technological expertise or for developers who don’t want to bother with creating their own loyalty platform.
The trick is that these perks and bonuses don’t need to be invented or funded by the business itself. Paylode’s platform includes a ready-made marketplace of such perks and bonuses from over 1,000 manufacturers and sellers who want to promote their goods and services to users and buyers of other companies.
You can give your users access to the entire marketplace or create your own collections of perks and bonuses that are most interesting to your target audience. You can even set it up so that users automatically see perks and bonuses from companies located near their location.
To start offering these perks and bonuses to users, no programming is required—simply insert the Paylode widget call into the desired location, and the widget will display the necessary selection of bonuses with the offer set in the widget.
The platform has just emerged from beta testing, but during this time, the startup has managed to attract over 50 initial client companies. I first noticed this startup in the spring of 2022 when it was still on its way to creating the current version of the platform.
In light of this, Paylode has now raised $3 million in investments, bringing the total investment in the project to $5.5 million.
What’s Interesting
The user’s journey from a random visitor to a buyer, from a buyer to a loyal customer, and from a loyal customer to a generous customer is not a smooth gradual progression but a series of individual leaps. Initially, significant effort is needed to get someone to make a first-time purchase, and then it gets easier. Initially, significant effort is needed to get a user to set up automatic payments, and then it gets easier. Initially, significant effort is needed to get users to upgrade to a new tariff, and then it gets easier. And so on.
To ensure such leaps occur, at the right moment, a person needs to be nudged—a task that sometimes requires the tiniest bit of effort. For example, by offering that very perk or bonus they can promise at that moment 😉
However, these “little things” have a significant impact on the overall growth of the business. Thus, the essence and value of Paylode lie in helping businesses navigate these critical moments more successfully. And all at someone else’s expense 😉
If we look at examples of perk and bonus offerings on the Paylode website, we’ll see offers like “get a 20% discount from another company for registering on our service,” “get 3 discounts of your choice from other brands if you finally place an order for items sitting in your cart on our website,” “get 18 free dishes from such-and-such restaurant by linking your card to our service,” and so on.
This significantly differs from the traditional scheme of giving perks—where the owner incurs a certain loss by offering their own perk for free or at a discount. For instance, when a subscription service owner offers a discount to a user canceling their subscription if they don’t unsubscribe. Or when a store owner offers free delivery, which they’ll pay for themselves, if the buyer places an order for items left in their abandoned cart on their site. Or when a hotel owner offers a free tour, for which they must pay a partner, if the visitor books a room in their hotel right now.
In Paylode’s case, the business owner is compensated for these perks by someone else’s losses—freebies or discounts given by entirely unrelated businesses to their own users and customers.
But for these unrelated businesses, these are marketing expenses through which they reach a new audience. And not just any audience but one that has already paid for something 😉
So, it turns out to be quite a convincing win-win.
Moreover, without any time-consuming hassle of searching for potential partners for such perks, negotiating terms, implementing performance monitoring mechanisms for the created partnership, terminating the partnership if it proves ineffective, finding another partner, and so on. That’s why Paylode calls its platform “partnership as a service”!
A similar story is happening with the startup Partnar, which I wrote about in early 2023. Now it has also developed its platform—turning it into a tool for cross-subscription to mailings from manufacturers and sellers. This startup raised $400,000 in Australian dollars in investments.
A similar platform for cross-marketing D2C brands was created by the startup Re:invent, which I wrote about last summer. However, it has only raised $150,000 upon exiting the Antler accelerator.
Where to Head
Traditional advertising is becoming increasingly expensive, and its effectiveness is declining. This forces everyone to look for new marketing channels that would be cheaper but still provide acceptable effectiveness.
Cross-marketing is a good way to open up such channels.
However, to achieve significant results, there should be many such cross-marketing partners because a) each of these channels is not highly scalable, and b) we don’t know which one will work well. But the problem is that establishing each of these partnerships takes too much time and effort, which often doesn’t even justify these costs.
Therefore, there’s no escaping the need for a platform that makes it easy and straightforward to do this. It’s similar to advertising through micro-influencers—it’s effective in principle, but negotiating with each one and monitoring the effectiveness of each turns out to be more expensive. That’s why platforms for connecting advertisers with micro-influencers like Primetag , Stack Influence , and Hummingbirds are emerging and attracting investments.
So, the possible direction to move in is the creation of platforms for cross-marketing that would allow simple, inexpensive, and effective ways to reach new audiences of other users and buyers.
The potential audience for such platforms is broad. It includes sellers, manufacturers, community creators, and newsletters, developers of cloud services and applications, service providers, and many others.
Moreover, such platforms can be created as either universal “for everyone” or niche-specific—where, for example, only D2C manufacturers, mobile app developers, creators of paid newsletters, or someone else from one or related fields engage in cross-marketing.
So, which sector would you target with a platform structured similarly to today’s Paylode?
About the Company
Paylode
Website: paylode.com
Latest Funding Round: $3M, 28.02.2024
Total Investments: $5.5M, Rounds: 3