Problem: In the current landscape of sponsored posts and paid ads, discovering trustworthy brands has become increasingly challenging. While the most valuable recommendations often come from friends who know you best, there is no centralized platform for giving, receiving, or organizing these recommendations. Customers typically resort to storing recommendations in disorganized notes apps or relying on their memory, which is often ineffective.
From a brand perspective, online ads are costly, and tracking the exact return on marketing spend is difficult. For emerging direct-to-consumer (D2C) brands, customer acquisition costs can be prohibitively high, with no guarantee of accurate customer targeting. The most effective way to increase brand awareness is through loyal customers who provide authentic word-of-mouth advertising. From Invesp:
…word of mouth marketing drives $6 trillion of annual consumer spending and is estimated to account for 13% of consumer sales. Word of Mouth marketing impressions result in 5x more sales than a paid media impression and people are 90% more likely to trust and buy from a brand recommended by a friend.
Most brands try to use affiliate programs to drive and track this friend-to-friend advertising, but this creates the issue of “monetizing your friends,” which cheapens a recommendation and makes it feel inauthentic.
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Solution: A friend-to-friend recommendation platform that creates an authentic, refined, and exciting way to discover new brands. Rexy aims to capture the genuine joy of giving and receiving recommendations between friends - the excitement of learning about a new brand that is exactly what you’re looking for, the delight of sharing a hidden gem, and the affirmation of a friend reaching out because they know and trust your specific expertise.
Importantly, Rexy will not monetize the consumer perspective. Instead, it will focus on the social aspects of giving and receiving recommendations through gamification, social feeds, and non-monetary rewards. Rexy will draw upon motivational mechanisms used by platforms like Pinterest, LTK, and Instagram. However, Rexy will prioritize strong connections within micro-social networks, as opposed to loose ties in large-scale social networks. The platform will also be free from clutter caused by sponsored posts or large-scale influencers.
From the D2C perspective, Rexy will help lower customer acquisition costs, provide valuable customer data on both loyalists and new buyers, and enable precise tracking of return on marketing spend. Companies will only pay when a recommendation leads to a conversion, ensuring cost-effective and measurable marketing efforts.
Monetization: Rexy will serve as an affiliate marketer for all of the brands and products being recommended on the platform.
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)
