PointLoyalty - loyalty programs online

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.