“Brands should always be thinking about ways to show gratitude to their customers,” said Elery Pfeffer, Nift Networks’ founder and CEO.
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Every retailer wants to turn new customers into loyal ones. Yet when budgets are divvied out, customer acquisition gets the lion’s share and loyalty is often left underfunded. A recent CMO survey among 300 senior marketing executives found the typical B2C product business spends 34% more on customer acquisition than building deeper relationships with existing ones. And for companies that generate most of their revenues online, acquisition budgets can run up to 50% higher.
This imbalance is hard to justify. Numerous studies show that new prospects convert at a rate between 5% to 20%, compared to 60% to 70% for existing customers. That means a dollar invested in customer loyalty and retention is likely to generate four to six times more revenue. “Chasing one’s tail” is how Bain describes companies that overspend on acquisition at the expense of existing customers. And Bain’s research shows why: increasing retention by only 5% can boost profits by as much as 95%.
Nift aims to bridge the gap by using one company’s acquisition budget to power another’s loyalty program. In effect, Nift’s model rewards customers of one brand with a gift from a non-competing company. The gift drives discovery of the new brand and strengthens the customer’s connection to the one they already trust—both companies win.
“The company donating the gift gets access to the other’s best customers—and the presenting brand gets to deepen loyalty with its own customers through a surprise-and- delight thank-you gift,” Nift founder and CEO Elery Pfeffer said. He added that the two companies do not compete so the exchange supports each partner’s strategy—customer acquisition for one, loyalty for the other.
Pfeffer describes Nift as the keystone—the central connecting piece that converts one brand’s investment in customer acquisition into loyalty gains for the other. And a company partner may play on both sides of Nift’s network: give thank-you gifts to its own customers and fund gifts for another company.
Over 15,000 Partners Fulfilling 50 Million Gifts Per Month
Nift got its start in 2015 in Boston, delivering thank-you gifts for some 10 local businesses—Nift stands for “Neighborhood Gifts” and its official name is Nift Networks. Today it delivers more than 50 million thank-you gifts a month across the U.S., Canada, the U.K. and Australia, drawing on a network of over 15,000 partners.
Financial service providers, such as Klarna, Afterpay, Zip, Cash App and Clearpay in the U.K., have embraced the model, along with major consumer apps and services, including iHeartMedia, GasBuddy, Planet Fitness, ParkMobile and Life360.
Retailers from Dell and Footlocker to Wine Insiders and Fabletics participate, and brands like Sam’s Club, HelloFresh, Disney+, Scentbird, Allbirds, Chewy, Firstleaf, plus thousands of local restaurants fund and fulfill gifts for Nift’s partners.
Still privately owned, Nift has raised $19.5 million in venture capital backing from Spark Capital, Accomplice and Foundry. In 2024, it ranked number 109 on the Deloitte Technology Fast 500 list of the fastest-growing technology companies in recognition of its 1,111% revenue growth from 2020 to 2023. Pfeffer added that rapid growth continues, with revenues doubling over the past year.
The Loyalty Connection
In the early days, Pfeffer recognized that most loyalty programs were built on the same template—points, tiers, discounts and cross-sell offers that feel transactional. “They are largely based on points and discounts that are essentially a cross-sell,” he said. “And because loyalty programs are chronically underfunded, we asked why not take somebody else’s advertising budget and turn it into your loyalty budget through a gift.”
Here’s how Nift works. A partner sends a gift notice to a customer at a moment when it wants to say thank you or recognize engagement—during checkout, after a review, when a payment is made or after an app is download. Nift has identified 15 to 20 ideal “thank you” moments, such as when a financial services customer makes several payments on time or a gym member meets a personal milestone.
When a customer receives the gift notice, they click through to the GoNift.com site, answer a few questions about their interests across categories, like restaurants, fashion, entertainment and more, and are presented with two matching gift options based on their interests. The customer selects one—a gift might be a $30 gift certificate, trial membership or other meaningful thank-you—and receives a Nift certificate, typically redeemable within 30 days.
It all adds up to one thing: the customer feels valued by the gifting company. And Nift’s model aligns with what brands say they need. In Loyalty350’s “State of Customer Loyalty” survey of 160 brand marketers, 73% said they were looking for enhanced personalization to improve their loyalty program; 64% were considering new reward options, such as experiences; 46% were exploring brand-to-brand partnerships; and 42% were interested in surprise-and-delight rewards.
On the flip side, Nift reports its gift-funding partners see 2.5X greater returns on the cost per customer acquisition than through regular channels. For example, wine retailer Wine Insiders grew new-customer volume 151% in six months with Nift and participating restaurants average three Nift-driven customers per location per day.
Fabletics participates on both sides of the model. “We partnered with Nift because we’re always looking for fresh ways to attract new customers while strengthening brand engagement,” said Michael Gorodetskiy, Fabletics vice president of growth.
“The performance-based model has allowed us to scale efficiently, increasing membership signups and driving new order volume and retention while keeping our brand experience front and center,” he continued.
Nift’s Secret Sauce—Gratitude
Forrester principal analyst John Pedini says the customer loyalty strategy is both an art and a science. Brands, he wrote, continue to invest in the science—technology, rewards and promotions—because they have easily measurable KPIs. But they often overlook what actually creates differentiated experiences, personalized engagement and emotional loyalty.
“The ‘art’ of loyalty requires a different focus on getting members to feel something, and that outcome requires a different mindset, skill, and resource commitment,” he observed.
That is the gap that Nift aims to fill. Pfeffer argues that gratitude—not points or discounts—is the emotional connection that most loyalty programs are missing. “When brands think of their busiest season coming up, they are focused on how much money they can generate and aggressively promoting their brand,” Pfeffer shared.
“But companies also should think about expressing gratitude to the customers that make it all possible. My experience is that gratitude comes back around. Brands should always be thinking about ways to show gratitude to their customers,” he concluded.
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