Archive for August 2007

iBakeSale rolls out new merchant names

This past week, iBakeSale.com launched two hundred additional top-tier brands to their online mall. Names such as Best Buy, GAP, Old Navy, Zappos, Sephora, Brooks Brothers, PetCo and many others. This is a great announcement from iBakeSale.com because it brings their top-name brands up to about 450 of the best online retailers. This should hopefully give members greater choices of where to shop and save, thereby allowing them to donate more savings to important causes. To see the expanded merchant list, click here.

Loyalty program sign-up via kiosk?

In an article by The Wise Marketer last week, Pay By Touch announced plans to roll out kiosks with a variety of retail clients that will rapidly enroll customers in their loyalty programs. Pay By Touch, the biometric payments provider, is piloting its ‘Rapid Enrol’ kiosk with retailers in specific geographic regions, namely NY, New England, Wisconsin and Florida. This is obviously useful for retailers, who can eliminate tiresome paper trails and data entry for consumers with the new electronic enrollment. Plus, electronic enrollment is easier for customers and will most likely yield greater customer sign-ups. The interesting take-away is that Pay By Touch, which has developed a brand name in the marketplace with biometric payments at the point-of-sale with fingerprint recognition tied to credit cards, is going down the road of a seemingly unrelated business with kiosks. I’m not sure how this business will benefit Pay By Touch in the short term, given the cost-intensiveness of building and deploying kiosks. If Pay By Touch is looking to build additional functionality into these kiosks over time with self-checkout or biometric payments, then this seems to make long-term strategic sense. At first glance, it seems like a tangential business that will potentially create greater headaches than benefits over the short-term.

Citibank offers new cash-back rewards

Last week, Citigroup announced that it was launching a new cash-back credit card called CashReturns Card that offers cardholders unlimited cash-back. The big improvement over ordinary cash-back programs is that they will automatically write a check for the cash-back over $50 without the cardholder having to request it. This is in lieu of the $300 maximum cash-back most cards allow members to earn each year. The interesting twist to this card is that they have reduced the % back on each purchase to 1% in order to offer unlimited cash-back. By reducing the percentage from 2% to 1% and eliminating the 5% on gas and convenience purchases, Citi has basically made it impossible for an average spender to exceed the traditional $300 cash-back limit they removed. But in the process of reducing the cash-back percentage, they are able to create one rule for people instead of various tiers. The gurus at Citi must have seen the Capital One commercials and taken notice. The main implication of this announcement is that consumers want simplicity and they want cash. By combining both in one rewards card, Citi may have created a product that will compete effectively against the tons of other cards on the market.

Rewards that recycle…

I just came across this interesting article on The Wise Marketer this week that mentioned a company called RecycleBank, a US-based consumer rewards program that motivates people to recycle. This is a great idea. I would summarize their mission as Rewards for Good. Environmental issues are at the forefront of the political scene with issues such as pollution, global warming, deforestation, among others taking the spotlight. RecycleBank has found tremendous interest by public interest groups and governmental bodies who want to promote more environmentally-conscious consumerism. I’m not exactly sure how they make money as a for-profit organization, but the basis for their business model is very compelling. They use a weight system whereby garbage collectors weight recycled materials and then reward the individual or family with a certain number of RecycleBank dollars, which can be redeemed for incentives at a large network of retailers participating in the system. I think it’s worth checking out, considering it’s an interesting spin on conventional loyalty programs. I’m looking forward to these guys coming to my neighborhood to promote recycling. I’ll definitely sign-up.

Seth was published in iMediaConnection.com

My partner at OnCard Marketing, Seth Sarelson, was published yet again in a well-regarded online marketing publication called imediaconnection. After much follow-up and persistence from our killer PR team, imediaconnection has published Seth’s piece on Coca-Cola’s rewards program. It’s also got a killer mug-shot. Check out the full article by clicking here. Congrats Seth!

Cellphone rewards?

In another report by the guys at COLLOQUY, found here, there are rumblings that cell phone carriers might look more carefully at a type of loyalty or rewards program for heavy mobile users. While this is news to me, heavy cell phone users are expressing widespread interest in a cellphone loyalty program to reward them for their usage. Currently, these heavy users (i.e. most profitable customers) feel a bit neglected and unappreciated by the large carriers, the report claims. I think this would be a brilliant idea to institute a loyalty scheme for all cell phone users, not just the heavy users. It is amazing that the guys at Cingular/AT&T and Verizon haven’t thought of this yet. The loyalty options are limitless and could be applied to drive usage of text messaging or cellphone gaming etc. The carriers seem to be late to the loyalty game and need to start thinking of what increased loyalty could do for their customer churn and up-selling and cross-selling of products/services. The most obvious answer to the question of why haven’t mobile phone carriers instituted loyalty programs is that they feel it’s unnecessary to reward captive customers who are locked into contracts. They’d just be giving up unnecessary margin. The trade-off between short-term economics (i.e. Wall Street quarterly reporting) and long-term customer growth and retention (i.e. long-term profitability) is tricky. As a moderate cell phone user, I would certainly be interested in a loyalty program. At a minimum, it would just send me a message that they care about their customers.

Online retail loyalty can drive repeat customers

In a study by COLLOQUY, a loyalty industry rag, it was found that online loyalty programs can actually drive repeat customer business for retailers. That’s some pretty good news for the online e-commerce industry, since they saw a reduction in online shopping this past quarter. The key here is that loyalty programs need to be done right and that retailers need to jump on board this band waggon quickly before the market becomes flooded and consumers start to develop indifference to online loyalty initiatives. That is also great news for the multitude of online rewards programs, online malls, affiliate marketers and others who strive to drive repeat business for their retail merchants by marketing shopping offers to their members. These programs act as coalition loyalty programs, such that they aim to drive loyalty to a coalition of different retailers. The COLLOQUY report was focused around single-brand loyalty programs, like Macy’s.com for example. However, I would have to believe that online retail loyalty extends to the world of online rewards programs, which is a huge driver of sales referrals to hundreds of online retailers. To check out the COLLOQUY report, click here.