I think its time for me to explain our philosophy relative to building rewards malls. The model is really simple. Define the participant groups, ask what they want…..and then build to suit.
There are literally millions of rewards and loyalty programs in the market place -Everything from credit cards, to big box merchants, to airlines to my favorite local yogurt store. Our task was to research the market, choose the aspects that worked and then add our own proprietary elements…..and unique platform to attract participants.
There are 4 basic participant groups involved in each private branded web mall that we build.
1) The individual members
2) The merchants
3) The member providers who enroll their members
…and of course the all important number 4 – the clients we build the rewards malls for.
When you are trying to build a large national rewards program you are faced with the age old question…which comes first, the chicken or the egg? The members want to be able to shop with a large number of recognized merchants before they join and the merchants require a large number of members before they participate.
A few years ago, as a startup, we had to utilize a small degree of smoke and mirrors and work a little magic….and make sure we designed a program and platform that was unique, sustainable and rapidly expandable. This meant applying our knowledge about each participating group simultaneously and quickly.
Let’s take a look behind the graphic you see above.
Members are just like you and me. We would all like something free or at least as close to it as possible. Studies show that some of the main detriments to any rewards program are:
Takes too long to earn enough points and is therefore not normally exciting
Point values are hidden so consumers don’t understand the value
Closed loop systems (earn and redeem at one particular merchant) are too limiting
Open loop systems (earn points that can be spent for products other than at the giving merchant – like air miles, catalog items or gift cards) offer limited redemption
Programs are normally based upon a breakage model (issue the points and set up blocks against using them)
As you can see in the graphic above, we set out to eliminate those objections. The additional benefit is that the member can earn and accumulate points from over 650 merchants in our mall and then spend those points like cash at any of those participating merchants for anything and everything they wish. Every point = $1.00 so it is easy to understand.
Members can even load their points onto a BSP Rewards stored value card and spend them like cash everywhere MasterCard (and soon Discover Card) are accepted. They even earn points on their points if they spend them with a participating merchant.
Now that is what is called rapid point accumulation combined with ease of spending and almost the total universe of redemption. The member spoke, and we listened.
We facilitate and encourage members to spend their points (usage model) as it makes them happy to do so and our participating merchants love it.
That brings us to the next participant group the merchants. They had their own wish list and it was even more complex.
But again, another story for another day.
