Loyalty Programs for Search

    February 10, 2006

A number of folks have commented on the survey that some Yahoo! Mail users received about search incentives.

I don’t know a lot about it, but I’m a bit surprised by the reactions to this hardly new idea. (A9 has had something similar for a while with Amazon.com)

Incentives won’t make Yahoo or MSN #1 search:

On the heels of saying they were not going to focus on being #1 search and then taking that back, Yahoo is now flirting around with an incentive plan for users who switch to their search. What a cliche this “incentives to do XYZ thing” is and for them it’s a sign of desperation to me.

That’s a pretty cynical view of the situation. Let’s look at it in light of other incentive programs. The airlines have been doing this for years. You fly with American Airlines and they’ll give you “mileage points” that you can accumulated and redeem for free travel and such. Discover Card offers cash back at the end of the year.

Why do they do this?

Because when you’re in a commodity business, you need to offer people a reason to choose you and stick with your service. They need something that helps to break the tie in their head. Choosing between two or more nearly indistinguishable services is always hard.

You might not think that web search is a commodity service, but I’ve seen public and private data that suggests we’re headed that way. It was only a matter of time, right?

Does that mean there won’t be other differentiating features? Of course not. But the core services are pretty darn similar today, aren’t they?

Some people fly American because they offer more room in coach. But those frequent flier miles don’t hurt either.

Jeremy Zawodny is the author of the popular Jeremy Zawodny’s blog. Jeremy is part of the Yahoo search team and frequently posts in the Yahoo! Search blog as well.

Visit Jeremy’s blog: Jeremy Zawodny’s blog.