Unified loyalty cards

Posted on May 26, 2010 by admin

Last weeks we study the following issue – why unified loyalty cards did not get widespread adoption. What we mean by unified loyalty card? It’s a card that gets accepted in every store like store’s own card. Advantages are evident – small merchants do not need to issue their own cards, larger enterprises will get a card that is a duplicate of their own one. If such card exists producers will be able to get a lot of sales analytics. All the complexities preventing widespread adoption are technical (i.e. solvable). According to interviewed experts the problem is only in “bootstrapping” such a program, involving several major retailers and attracting vendors of equipment (POS terminal, RMS, software). Despite the number of obstacles we get an impression that the thing is doable.

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Google and Google Apps authorization

Posted on May 17, 2010 by admin

We have added an option to enter PointLoyalty manager using accounts in Google and Google Apps. Users can login directly from the start page of www.pointloyalty.com website.
Minimum set of data required to start working is created automatically. Later one can update personal profile information.
Note that you can change the automatically generated password and login to the system using Google authorization as well as old way.
PointLoyalty Manager is available now at Google Apps Marketplace under ‘Sales&Marketing’ directory.

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Online Customer Rewards service PointLoyalty (continued)

Posted on April 22, 2010 by admin

Market

The main group of our customers is small and medium business companies, which cannot afford the development of their own bonus programs, and either didn’t use them or were involved into coalition programs.
Primary market – retail (10% of the total number of loyalty programs participants), including e-trade, social networks and communities that need flexible systems of rating calculation.
Global market – USA ($1.2 billion on loyalty programs support in 2003, $2 billion- in 2009), also Europe– about €1.5 billion. In e-trade the approximate world expenses on loyalty programs amount to $200 billion.

Current status

SaaS service of PointLoyalty is fully developed and available in Russian and English versions.
Currently, we are improving the service features and entering into cooperation with partner companies:
• Technology companies: such as a company, involved in SMS informing, POS, RMS systems developers.
• Partners involved in product promotion: SaaS marketplaces, system integrators, marketing agencies.

Investments

Investment money will be focused on the following areas:
1. Product development:
• Accounting systems integration.
• POS terminals and RMS systems integration.
• Add support for coalition loyalty programs.
2. Promotion, advertisement.
3. Office, technical support, equipment.

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From presentation “Online Customer Rewards service PointLoyalty”

Posted on April 14, 2010 by admin

Problem

The main problems faced by small and mid-size companies when implementing loyalty programs include:

• High price of software offered by software development companies ($0.5-2 million), or the need to create their own processing systems for bonus programs.
• Lengthy time until the launch of the program. New development takes about 1 year, setting up the current one takes no less than 6 months.
• All existing solutions offer a limited number of bonus schemes, essentially repeating the discount models and not taking into account customer types and history of relations with the customers.

Solution and technology

SaaS service of PointLoyalty Company is a solution of the above problems. SaaS service is a universal system which allows you to establish the rules of the program and, based on these rules, to calculate bonuses for loyalty programs’ clients working for small and medium-sized enterprises.

SaaS solution from PointLoyalty Company is a service fostering the new generation of customer loyalty programs. This software has the following properties:

• Availability – the full featured standard edition of the service is free of charge.
• Usability – it takes 20 minutes to create a new version of the running loyalty program.
• Flexibility – the system is operated by marketing specialist and supports all necessary rules to stimulate customers’ purchasing activity with no IT department involvement.

Competitors

• System integrators doing customization and deployment of ready solutions for loyalty programs (e.g. – Manzana Loyalty) or in the development of custom software (e.g. – Vesdia, Comarch). These integrators hold a high price bracket which is not our priority for the first three years.
• Companies offering simple, pre-defined systems for bonus calculation to loyalty program customers (e.g. – StickyStreet). The functionality of our solution considerably exceeds the functionality of such competitors.
• Software designed for POS systems (standard discount systems, simple bonus programs) is not suitable for e-trade and doesn’t focus on customization.

Business model

The following represent a number of ways for the service monetization:
• Charge for the technical support.
• Subscription fee for full featured system.
• License sales if the system is used in customer’s network.
• System integration with client’s software.
• Consulting.

The main competitive advantages of our Company:
• It takes minimum time to start a project – without administrative delays the running program startup takes a few days.
• Free of charge use for small projects and for any type of projects in the implementation and testing phase.
• Easy integration with external applications – support for online data transfer (REST API, web services) and significant data volumes (data files downloading, transfer via FTP etc.).
• Ready made module for communications with members of loyalty programs (view bonus points, see offers and promotions).
• Scalability – supports cluster computing.

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On personalization of loyalty offers in coalition programs

Posted on March 19, 2010 by admin

Take a look at this interesting discussion on coalition loyalty programs and their prospects in US.
Indeed, it is hard to recall any targeted offer in all coalition programs we have encountered so far.

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Loyalty programs based on bonus points for internet shops. Slides for a conference.

Posted on March 15, 2010 by admin

1. What for the loyalty programs are.
- Retain existing clients through a flexible rewards system.
- Increase goods/services consumption by loyal satisfied clients.
- Getting new clients by recommendations from loyal ones.
2. Advantages of bonus points based loyalty programs.
- Selectivity – targeted offers.
- Economy.
- Game element, form an attachment.
3. Coalition programs vs. Private label programs.
- Pro – lower spending, easy to set up a program.
- Contra – lost of focus.
Examples of coalition programs:
- mnogo.ru
- malina.ru
4. When to use loyalty programs.
- High competition on the market of similar products/services.
- No significant flaws in company operations.
- More or less frequent repeat purchases.
5. Program effectiveness.
Before starting the program:
- Set real, measurable goal of establishing the program.
- Don’t expect an immediate result.
Measure effectiveness:
- Indicators – average total amount, activity and repeat rate.
- Feedback – questionnaires.
6. Internet online shop specifics.
- High degree of initial automation.
- Ready customer’s authentication – no problems with cards, purchases record support, etc…
- Easy to establish customer’s notification system to let them know about earned bonus points.
7. Examples.
- Working internet shop – http://www.ulmart.ru
- Internet shop (box edition) – http://www.comoper.com
8. Just a few numbers.
- By participants: in US it is about 1.8 bln. Members of loyalty programs. Average family take part in about 14.1 loyalty program, actively – 6.2.
- By industry: financial services, air industry, retail.
- By countries: USA, Canada, UK.
- By cost: loyalty programs’ support – 2 bln./year.
9.Summary.
- Online trade goes same direction as offline does.
- Local trade develops in the same direction as international.
- Serious adoption of loyalty programs in large cities is a near term trend.
PS
- Slides are in text format to simplify viewing.
- We’ll post a link to the conference a bit later.

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Integration with rewards calculation system

Posted on March 9, 2010 by admin

Let’s talk once again on integration simplicity.
After you make yourself familiar with PointLoyalty Manager bonus programs management system (this can take a bit more then 20 minutes) – you will need to decide how to pass the consumer transactions data into the system.
If you need online data processing, your programmers need to pass the data as follows:

ValueBean val1 = new ValueBean();
val1.setName(”sum“);
val1.setNumericValue(3800);

ValueBean val2 = new ValueBean();
val2.setName(”product“);
val2.setNumericValue(”printer“);

ActionBean action = new ActionBean();
action.setMemberId(”customer card for John Doe“);
action.setName(”purchase“);
action.setValues(new ValueBean[] { val1, val2 });

return action;

From this example you can see that
- “John Doe” has made a “purchase” of a “product” named “printer” and spend “sum” of $130.

In your information system there is a record of this purchase, so there should be no problem in passing this data to PointLoyalty Manager.
(Encryption, data protection, local installations of the product are out of this blog entry scope)
Full description of the integration mechanism.

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Loyalty programs – optional secondary software

Posted on March 1, 2010 by admin

We like reading discussions where people argue that loyalty software is a secondary thing to worry about – this statement indirectly advertises our product.
Using Pointloyalty Manager sets you free from software concerns at the start of customer loyalty programs and it is bound to our following advantages:
- simplicity
- wide functional support
- short time to start
- free or low-cost price policy

It is better to spend marketing budget on specialists managing loyalty offers, not to develop your own software solutions.

Software is indeed secondary, don’t waste your precious time on it – use our system.

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Promotion in social networks

Posted on February 24, 2010 by admin

At first glance the importance of social networks in promotion of your goods or services is really overrated.
Major drawbacks:
- Promotion specialists – almost all of them behave non-professionally and lack basic skills
- Groups – the most important mechanism to organize “fun clubs”. In practice it is hard to navigate there, they are full of spam and advertisements. Looks like they were created only to spend customers money.
- Virus videos – people send it each other only to have fun. It is doubtful that anybody will ever remember the brand which was mentioned there

We don’t want to challenge the importance of social networks and their future potential in promotion of your brands\services but right now we see the situation in a way we described here.

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Business applications for social networks

Posted on February 15, 2010 by admin

Last few weeks we were actively studying existing business applications for social networks. If the result of our research will be interesting – we will publish a separate post on it.
It is already evident that there are not that many marketing applications designed for social networks. Software developers could not create applications which could be interesting enough for network participants. Few existing applications could not spread widely among users – virus marketing did not work for them. So, preliminary summary – despite the common agreement on importance of representing business needs in social networks, such representation is very basic at the moment – only specialized groups and few applications with embedded promotions.

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