PointLoyalty - loyalty programs online

The more closely we look at coalition loyalty programs the less attractive they appear for member companies. It often looks like the brand of the program operator is advertised much more then the business of participating company. Besides, business offers of any company are getting lost in the long list of various offers from other coalition members and a customer will not associate the company brand with the bonus offer.

If some things are hard to explain it is easier to declare them an axiom. One of such axioms sounds like: “Small companies can only take part in coalition loyalty programs”. The main reason for this is a high cost of rolling out their own loyalty solutions. In our opinion the costs of launching a company own loyalty program is often overestimated.

We don’t want to say then any coalition loyalty program is a mistake. If you can consciously choose a small number of partners then you can gain significant benefits from cooperation, but if the program unites any firm of any kind of business then it makes no sense to join such program.

Here are a list of drawbacks of coalition programs getting any partner without selection:
- focus on coalition program brand, not the partner
- linking of reward program to partner brand is lost in customer mind
- bad or unclear organization of rewards

Such programs aim more to somewhat reckless people, not the loyal customers, but because of usually small rewards even this passion quickly disappears. Don’t forget the saying: “if you want something done right do it yourself”.

We are not arguing for hiring an army of programmers, marketing people, etc. It is sometimes enough to understand whether the coalition is really needed and what partners you want to cooperate and why. Please also consider that creating your own loyalty program is not that expensive nowadays.

I want to give examples of when I turned to be a loyal customer without any special reward programs.

1. Furniture shop
When we moved into the new office we had to buy a standard set of office furniture. I went into the first nearby shop and ordered everything we needed. After that I made purchases there three more times and recommended that shop to 5-7 of my friends (2 of them later purchased there something). How did they deserve my loyalty? They did it only by the charm of their salespeople.
No special actions, no smiles, no bonus points and discounts – just perfect service and answering all my questions.
As a result I am their loyal customer recommending them to all my acquaintances.

2. Hi-fi technics shop
Choosing the right audio equipment is a process that can take months. The point is not its high price but the fact that some people consider it a hobby.
How could one shop make me their loyal client? They did it by offering a set of additional services:
- preparing for my visit (they wired multiple combinations of equipment and this is not so simple task)
- allowing me to take home the amplifier for detailed review.
- etc

Besides, the true passion of salespeople for audio equipment and the serious knowledge in this sphere made quite good impression.
As a result I finished the search process and become their client (set of hi-fi components + additional accessories). I recommended this shop to my friends who also became their clients.

We are searching partners for cooperation – all IT and marketing consulting companies and individuals working on automation of marketing solutions.
Our goal:
- Make PointLoyalty Manager product used as a main system for organizing bonus points calculations.
Your interest:
- Guaranteed share of local installation cost and support fee.
- Potential to get additional orders on integrating the product with client’s software
- Consulting on using the system and consulting on common customer loyalty programs’ issues
- Attracting more customers by offering a new product as our official partner.

For details on partnership agreements, education issues, etc please contact sales@pointloyalty.com.

We ourselves have partially answered our own question about the fears of companies rejecting new loyalty programs because of financial crisis.
There is no data on other regional markets but on American market loyalty programs are booming despite recession in other sectors.
California state statistics: During last three months amount of coupons used grow 3 times compared to last year results. More and more consumers pay attention to any option for cutting spending or getting customer rewards. I.e. it means there are three times more people who want to participate in customer reward programs. Of course this client activity is not what initially waited from loyalty programs since in theory they target fedup and not scared consumer. We can see that despite financial crisis there is a big demand for such marketing tool as customer loyalty program and this gives us a hope for better times.

Everybody these days heard about worldwide financial crisis and its impact on the real economics. What it brings to marketing and customer loyalty reward programs?
Any financial turbulence naturally hit luxury market segment first. Buying things which are not necessary for your daily life can be postponed to a better time. But people have started to cut spending on things which were common to buy during stable years. Car sales, for example have declined by 20% comparing to the previous year. So, step by step, people reduce consumption, companies reduce spending and cut investments. There is a fear that organizations will cut most marketing efforts in particular deployments of customer loyalty programs.
Indeed, if crisis is here for a long time – many companies will fight for the survival and skip optimization of working with customers to retain the best of them. On other side some companies may decide to completely cut budgets on required modernization, automation, etc. People responsible for the budget planning can think following: we lived without this for 100 years; we will live without this next 100 years, nothing bad happened. If time to tighten the belts will come soon – such viewpoint has the right to existence but if the situation is not so bad we think it is better not to cut such important efforts. Reasonable investments are important for keeping the business running even in tough times.

After finishing the first version of PointLoyalty Manager product and www.pointloyalty.com web site our employees started to send links to it to all their friends in order to get impressions and critical comments.

The majority of answers were of the following type: “Great, I like this! But what are the bonus points?”
Of course, our product is designed for marketing people and customer loyalty specialists. But the fact that significant part of people does not know about bonus points surprised us.

Let’s try to find formal definitions of Bonus points term.

Definition from the Wikipedia:
Bonus - something extra that is good.

For marketing area and loyalty programs issues we can formulate the definition of “Bonus point” term as follows:
Bonus points – abstract points given to clients for customer operations which can be later converted into some kind of rewards.

Simple example – 50 bonus points to everyone purchased video equipment from June till August on weekends.

3 major issues coming out of this definition:
- Bonus point – unit for measuring client loyalty in some form. I.e. more bonus points client earns – better reward we must prepare for him since loyal clients have more value for the company.
- Bonus point – delayed reward and it is not necessarily a discount. This gives much more flexibility for your marketing force.
- Unlike discount cards bonus loyalty programs are more complex. As in example – we tried to reward clients for expensive purchases during low sales season.

Summarizing, we can say that bonuses is more complex but, in the same time, more flexible tool for raising client interest in working with your company.