Next Jump and Why Data Win

By Jake • January 18th, 2010 • 22 Comments

Image from TechCrunchEver heard of a company called Next Jump? Me neither until I read this piece in the New York Times (h/t TechCrunch) last week.

Next Jump had stayed stealth for 15 years, raising $45 million in venture money and hiring 225 people, all the while signing 60% of the Fortune 500 as customers.

Not too shabby.

It gets better. Next Jump is in the data business. They operate employee discount and reward programs for about 90,000 companies, organizations and affinity groups reaching more than 100 million consumers.

They connect about 28,000 retailers and manufacturers, who typically provide deep discounts to Next Jump, to these 100 million plus consumers, of which 10 million actually become customers.

Why the discounts? Because Next Jump has great data.

Next Jump collects transactional data, preference data from its customers and demographic data about its customers from their employers. All of which, analyzed with a great algorithm, produces offers people really want to see.

This approach is better than social advertising offered by networks like Facebook. Next Jump is considered a benefits provider, i.e. they are contracted by HR to offer employees a benefit paid for by the company, and because of this status, they are granted access to some parts of the employee record, e.g. name, address, employment status, home and work address, marital status, and sometimes even job title or salary grade.

Next Jump cannot determine actual salaries, but the salary grade information is to put people into salary buckets, which is a key attribute.

Charlie Kim, founder of Next Jump calls income “the single largest predictor of future purchases,” so having this attribute is a huge differentiator. This is information most people would never put on Facebook, and it’s unaccessible to large online retailers like Amazon.

Next Jump knows that many people shop online at work, making them more likely to take advantage of an offer, especially one provided by their company as a perk.

Next Jump also gathers transactional data from credit card companies and collects preference information for all its customers, not only what they want to buy, but at what price point. Next Jump then acts as the broker, presenting these data to retailers.

Again, the fact that Next Jump is a benefits provider allows them better access to data.

Over the years, Next Jump has been collecting huge amounts of data and honing their algorithms, which makes for very high success rates.

The click-through rate on Next Jump’s offers is 60%. You read that right. 6-0. This is phenomenal compared to the 5% that is normally a high bar. Imagine your own behavior as an example. Do you click-through on 60% of the ads you see in email and on websites?

Next Jump is also excellent at converting browsers into buyers, achieving about 11, much higher than the 2% rate of effective e-commerce.

As they branch out beyond white label offerings to corporations and reach consumers directly, Next Jump’s goal is to become the Intel Inside of offers, e.g. Yahoo Daily Deals prominently features the “Powered by Next Jump” slogan.

Interesting, considering that back in 2005, when he defined Web 2.0, Tim O’Reilly declared “Data is the next Intel Inside“.

I found this all fascinating and mildy unsettling. The idea that the covenant of work allows benefits providers access to my employee records is fine, but I hadn’t considered that providers like Next Jump existed to market to me.

Not a huge deal, I suppose, as long as the data about me are purged when I leave an employer. Seem irresponsible (and illegal) to warehouse the data of ex-employees; I assume that HR would ensure these data were removed, but who knows.

I also wonder if browsing history would ever qualify as accessible to Next Jump. If IT released the web server logs to Next Jump, they could further hone their offers to address specific products, possibly at a user (IP or MAC address) level.

Seems intrusive, but if you’re shopping on work time, using work assets, you’re walking a thin line. Anyway, the possibilities for data mining get pretty Big Brother if you think on this for a while.

Check out both the NYT and TechCrunch posts for more information on Next Jump.

The future holds more of this, so you might as well get used to how it works.

Find the comments.


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  • former employee

    It might also be of interest how many people were hired and quit. It's a large number, probably over 40 or 50 in the last year.

    Next Jump can sell itself very well, but at the time I left and from what I hear from friends, they do not really use all this data they have at their hands. Constantly changing icons was a higher priority.

    It should also be noted that many Next Jump offers can be found elsewhere on the web too…

  • comments

    Reading the comments in the Tech Crunch article would be pretty useful to get a fuller picture…

  • http://theappslab.com Jake

    Thanks for the insight. That is an extremely high turnover rate. I can't decide if it's good or bad news that they aren't using all the data they collect. Probably bad that they have so much at all.

    You make a good point about their consumer offerings too. I didn't mention them much here b/c I wanted to focus on the corporate benefit angle, which I find both frightening and intriguing.

  • http://theappslab.com Jake

    I'm off to do that right now. Good tip. Unfortunately, most TC comment threads are awash w/cruft, here's to hoping I can find something useful.

  • TGM

    Dont belive the hype.. seriously. Charlie is prob the best marketing/sales person I have seen but what he says is complete bull… being a former employee myself – his concept of a working product was a pretty power point which he sold to investors as a true working product… Think Ponzi Scheme. Again, they do have some exclusive deal but most come from Links Syndication like Commission Junction etc.. His concept is incredible and a smart business but someone needs to put a real leader in there to make it a real company… Dig deeper and you will see the reality of his pitch is very thin..

  • http://theappslab.com Jake

    I'm glad to hear this b/c the prospect of a “benefit” mining that much data about me w/o an opt-in is unsettling. Seems like there's bad blood w/ex-employees, as noted in the comments here and on the TC post. Interesting stuff, even more so than the company itself and its products (or lack thereof). Thanks for adding your take.

  • QuestioningReader

    Interestingly, TechCrunch has taken ALL the comments off the page! I noticed it when I revisited the page, because I wanted to use the article and comments separately with a group of students. Some of the comments were almost more interesting than the original article. I wonder why… have they got a stake in that company, or what???

  • http://theappslab.com Jake

    Woah, that is odd. Maybe it was a request from the company or an investor. Fishy.

  • shopaholic

    very true, offers you can find on the web. but worth it for the offers you cant. i go there more or less to get their exclusive offers plus save me time of checking retailmenot or googling promo codes. plus my purchases often site accumulate points that i've later redeemed as gift cards. it's like a central location for me to check-up on deals.

  • comments still there

    disappearing comments is not some conspiracy. it was a tech crunch wide issue

    http://techcrunch.com/2010/02/06/your-comments-…

  • http://theappslab.com Jake

    I guess centralization of offers would be nice, like it is for travel deals. Maybe I'm too tied to Amazon after more than a decade. I'll be they have a robust profile of me based on my purchases and shipping history.

  • http://theappslab.com Jake

    Yup, just noted that in a post this week, apropos of blog commenting in general.

  • Albert

    Reading the posts above sounds like the perspective of a few disgruntled ex-employees. I get it that people need to vent, only trouble with that is that it gives us an obviously skewed perspective, not super useful.

    Judging from the comments here and on TC, the company is certainly making a lot of noise and not leaving people indifferent – they must be up to something good :)

    Time will tell I guess, we will have to watch and see what next jump does.

  • al

    no offense, but reading through the comments it sure sounds like a handful of disgruntle ex-employees at play here. that happens, understand the need for people to vent, but it creates a skewed view of things that doesn't tell the real story, so not that helpful.

    i will say one thing, for a relatively unknown company that hasn't come out till recently, next jump sure does not leave people indifferent. eliciting that strong of a response, they must be up to something good :)

    i guess we will all have to sit and watch, see where they go.

  • http://theappslab.com Jake

    Agreed. I've found the backlash of former employees here and on TC strange; like you said, for some reason, there's a strong response.

    Re. the company, it's more than a little unnerving, even if they're not doing anything smart with the data they collect.

  • former employee

    I know it's common for former employee's comments to be taken with large grains of salt, but I hope the sheer volume of former employees and how strongly they feel can convince doubters that they are portraying reality better than the general press releases. It's considered an honor to become a Next Jump Alumni. Glassdoor.com is another good place to see some candid reviews, including some potentially fake rave reviews (read the comments under reviews to learn more). The main benefit I gained from Next Jump was losing some naivete and learning what really mattered to me in a job (not just the salary, not just living in New York City, not just a lot of exciting talk). I learned to be a lot pickier in evaluating my options and asking specific questions about how companies are run. It was a bad experience that made me wiser for the next go around — and I'm thankful for that.

    The biggest question to ask yourself is if they are really going somewhere, why have/are most of their smartest employees from top schools, especially the ones not on visas, left/leaving? (and why were they hired in the first place for the mostly mindless work required)

  • http://theappslab.com Jake

    Sounds a lot like baptism of fire people of my vintage got back in the day after the original Bubble burst. I've found that negative experiences have helped guide my career choices much more than I expected.

    As for the feedback on Next Jump from its ex-employees, it does seem like a large number of nay-sayers. Plus, I'm surprised how many of you (?) found your way here to this little blog to voice your opinions. Definitely motivated.

    FWIW, the post was more devoted to scary data practices than the company, but someone pretty much debunked those.

  • Anon.

    As a current employee of NextJump I can understand that there are ex-employees that aren't happy. They gave a lot of time and energy to the company and it didn't work out for them. But they gave that time and energy for a reason and the people still here give just as much. Ultimately everyone at NextJump genuinely believes in the company and works hard because of that belief.

    As to whether or not we use the data – we absolutely do. We use it throughout the site, throughout communications and when building/extending merchant relationships.

  • Anon.

    As a current employee of NextJump I can understand that there are ex-employees that aren't happy. They gave a lot of time and energy to the company and it didn't work out for them. But they gave that time and energy for a reason and the people still here give just as much. Ultimately everyone at NextJump genuinely believes in the company and works hard because of that belief.

    As to whether or not we use the data – we absolutely do. We use it throughout the site, throughout communications and when building/extending merchant relationships.

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