App Pays To Be Viral

Gail Chiasson, North American Editor

Atlanta-based Sionic Mobile has announced what appears to be a market first: free apps that both pay neighborhood merchants to sign up their customers and pay consumers to sign up their favorite merchants.

ION Loyalty for retailers and restaurants, a free app for tablets and smartphones, pays merchants whenever and wherever their ION customers use offers and helps them increase sales and cut credit card fees.

ION Rewards for consumers, a free iPhone or Android phone app, rewards users for buying things they always buy, paying with their phones, connecting with friends and signing up their favorite places.

“Rather than paying a sales team to sign up new merchants or outside firms to help us attract new ION users, we are paying that cash directly to our ION users and merchants,” says Ronald Herman, CEO, Sionic.

There are no special codes or complex referrals. Consumers using their first ION offer become that merchant’s ION customer for life. No matter where that ION customer spends using the app, the merchant gets paid.

The ION Reward’s Pioneer feature makes it easy and lucrative for ION users to sign up merchants. In many cases, bonus IONs worth $5 to $20 or more are rewarded for each new merchant sign-up on top of the rewards users receive every time any ION customer spends there.

We spoke to Bob Burroughs, vice-president product marketing about the company and how it expects to make money from the app.

“Sionic was founded in 2010 and this is our first product,” says Burroughs. “We get 5% on every time a customer redeems an offer from the merchant eg. on a $10 offer, we get 50 cents; on a $200 offer, we get $10. It’s based on valume.” (The 5% is only on the offered prduct or service, not on any additional items that the customer might also buy.)

“At first we are trying to saturate the Atlanta market, but we’ve looked at merchants in all markets across the US that have 50,000 or more population and have published a list on the app,” Burroughs says. “We want users to recommend those merchants and others that they regularly patronize so that we can sign them up.”

At the moment, the app can be used by iPhones and Android smart phones by consumers. Merchants can use iPhone, Android phones and tablets. Merchants have a special app that confirms the redeemed offer so there can be no fraud.

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