March 2008 Archives
It's been a rough two weeks for Solidus Network. In bankruptcy, the owner of Greenpoints has struggled to unload its "non-core" businesses, and as a result it had to shut down its Pay By Touch payment system. Pay By Touch allowed members of some supermarkets and gas stations to use their fingerprint as their "loyalty card." The loyalty system was in place in an unknown number of Super Value stores including Piggly Wiggly, Jewel-Osco, and Cub Foods. The scanning equipment is still in stores but is in the process of being removed.
Adding insult to injury is the announcement by a Portland, OR company called Chockstone that they had developed "Single Swipe," a card scanning system that would also eliminate the need for carrying separate loyalty cards. It somehow (not a techie here, so this is no doubt over-simplified) attaches your loyalty info to an existing credit or debit card.
BrandWeek says that Chockstone's loyalty network currently includes Subway, Chili's, and Ticketmaster...but I'm sure they'd be willing to step in and take up the slack created by Pay By Touch's bankruptcy. :)
The question is, without a card to remind people that they belong to a loyalty program, will they remember to swipe their card? Also, my question as a consumer would be, what if I use more than one credit card and I forget which one I signed up with? You'd pretty much have to use your debit card to be sure, right?
Anyway, it means less clutter in my wallet, and that's a good thing.
LeverageCard.com is an interesting new program available in Beta right now, where you can register your loyalty programs (travel-related, entertainment-related, and those for miscellaneous merchants), you can register any gift cards you're holding, and you can answer some demographic and interest questions in return for highly targeted offers. You can also swap GCs you have for other GCs that you want. AND you can earn interest on GCs that you're holding.
The site is pretty extensive. I was able to register my accounts at Hallmark Crown Rewards and Best Buy RewardZone, as well as a Starbucks GC I received recently for completing a survey. Then I answered the profile questions and went to see what offers I'd be given. The listing was pretty substantial -- about 50 offers, and for each one the site tells you WHY you were targeted for that offer.
As an example, one of my offers was a free beanie baby with purchase at Nickelodeon. Click next to the offer and it'll tell you that I was targeted for the offer because I answered that I had multiple kids. Ah, makes sense.
I was offered $30 off a $150 purchase at Petite Sophisticate because I'm a female between 18 and 65, with traditional style in clothing, petite in stature, and my income was in a certain range.
Neat.
If you want to give the site a try -- it's FREE -- please put my email address, comparerewards@yahoo.com, in the "referrer's email" field and they'll give me a buck. And I would appreciate that. :)
It's always baffled me why retailers put together loyalty programs and then completely drop the ball when it comes to maximizing their potential benefits. I touched on this a few weeks ago when I mentioned JCPenney's practice of only incentivizing card holders to make return visits to the store. Why don't they have some sort of overall loyalty program in place to gather information and target offers to customers that pay by other means as well?
There's an interesting article in this month's Internet Retailer called, "Do you know me?" It talks about how Petco appears to be blazing a trail when it comes to gathering customer information to best target offers for future purchases.
What's so novel about their approach? They are among the first (if not THE first) to put together information on customer behavior in-store and customer behavior online. They are combining the customer's on- and offline purchases, shopping patterns, and even the pages the customer looks at online, to make educated guesses about the type of items they can feature in personalized emails to that customer.
Say you went into your local Petco and bought kitten food, a kitty bed, and a feed bowl. They can figure out, "Hey, this guy has a new kitten," and can send out email offers on other items that new kitten owners might buy (like maybe one of those cool Drinkwell fountains, an Idiots Guide to Kittens book, or basics like cat litter). If they see that you've been looking at cat playhouses online, they could send you a printable coupon to buy one in-store, or a discount coupon on shipping heavy items purchased online.
Why is this so novel? Doesn't it seem like something obvious that loyalty programs should be doing? Apparently, the article says, despite the fact that 59% of respondents to some survey on the subject said they'd be more likely to purchase if they were given offers based on their prior purchases, senior management hasn't made this a priority. Online data and offline data are kept in separate "data silos."
It takes time and manpower to merge the data -- the article says Petco spent 6 months creating a "data mart" to put it all together -- but the potential payoff is huge.
What do you think? Do you like having personalized offers based on your web browsing and in-store and online purchases, or do you think it's too intrusive? Are you willing to give up some amount of privacy in order to get good sale promotions?
Virtual Discount Card Program Review
An account is not required to use this service; visit the site here.
Date Launched: 3/21/2008
Reward Per Dollar Spent: Varies
Minimum to Cash Out: None
Cash Out For: PayPal
Earn For: Shopping (straight cashback rebate site)
Limit One Account Per: Individual 18 years+; international users are welcome.
Notes:
Users do not have to sign up for an account; simply shop through the site's links to your desired merchant and provide your PayPal address. The rebate will be paid to the shopper's PayPal account when the site is credited for the sale. "Payments will typically be received between 45 and 90 days after the transaction is completed."
VirtualDiscountCard.com is run by Andrew Cram, the mastermind behind RewardsDB.com, a site I've linked to for quite a while for his great comparisons of many rewards programs' shopping rates. When I asked him whatever possessed him to want to get into the exact type of business that he and I both cover, this is what he told me:
"The cashback industry is not operating as a free market place. As I looked at redemption rates vs affiliate commissions through RewardsDB I became aware that not only are the 'Big Boys' keeping a large percentage of the commissions for themselves, but they also tend to cluster around a common cashback rate regardless of the affiliate rate. My goals are pretty simple;
*To create a program with a consistently good rate of return for the customer (which is why I pass on 90% of the affiliate payment for all merchants)
*To remove the hassles associated with account based programs.
I wouldn't have started the program if I didn't see room to offer customers a higher cashback rate than they are now receiving from the other programs. There are a couple of merchants where VirtualDiscountCard won't initially offer the highest rate but as we prove ourselves we should be able to negotiate a higher rate etc. Otherwise, we are launching with the highest rates for each merchant, and still operating at a profit. If the 'Big Boys' up their rates and offer more than we can then we will bow out having gotten everyone a better deal...
The benefit of our transactional system is that customers aren't tied down, if someone else offers a better rate they are free to take it since they don't need a minimum balance from us to get their money."
My Take:
I've seen a list of VirtualDiscountCard's rates and they are indeed incredible. The program is being run by a guy who knows the shopping rewards business well -- as a user and an analyst. I think the site has great potential...IF we remember to use it. Most rewards programs send monthly statements or other email promotions to help build top-of-mind-awareness. Without requiring any type of account signup or downloadable toolbar (not that I advocate those, mind you...I don't), I think VDC's real challenge is going to be in reminding online shoppers to go there first.
Great rates, knowledgeable owner, no minimum to cash out...sounds like a winner to me. Bookmark it and remember to start your shopping sessions there!
Swagbucks (Prodege) Review
Please click here (aff) to join!
Who is Eligible:
Residents of the U.S. and Canada age 13 or older; residents of the U.K. age 16 or older.
How It Works:
Make searches and win Swagbucks, redeemable for GCs and merchandise. Searches can be made at any of Prodege's search and win websites. Swagbucks appears to be the primary website but Prodege lists 77 total affiliated websites (most of which start with the words "SearchWith," like SearchWithBeyonce, SearchWithWillieNelson, SearchWithKiss, etc.). All sites use the same login and the same basic prize catalog, but they have a handful of redemptions that are specific to each site; for instance, Beyonce's site offers her 2007 tour T-shirt as a redemption.
Merchandise redemptions include song and video downloads, football cards, posters, t-shirts, iPods, Apple Power Books, and more. Gift card redemptions include Amazon, Barnes and Noble, Target, iTunes, Gap, BestBuy, and AMC Theaters. The primary site, Swagbucks, has the best prices for redemptions: 36 Swagbucks = a $5 Starbucks GC, 40 Swagbucks = a $5 Amazon GC, 60 Swagbucks = a $10 Barnes and Noble GC. I just cashed out for my first redemption and will update this post with my wait time until receiving the prize once I get it.
You can also earn Swagbucks for shopping through the Swagbucks site.
And, if you refer someone and they win, you win, too!
How Often Do People Win?
The site chooses random times to offer prizes -- if you're the person searching at that time or the first person after that time, you'll win a prize. The winners list is updated constantly; it seems that there's a winner at least every minute. My personal experience in using the program is that I win about twice a day. I never win twice in an hour or so; it seems like I do better taking a break and trying later in the day.
Like SwagBucks? You may also like these similar programs: BigDevil, Blingo, LuckySearch, MSN Live Search Club, and Winzy!
If you're in the Madison, WI area: Brian Wiegand, co-founder of Jellyfish.com, will speak at the Fluno Center - Howard Auditorium on April 3rd at 6:30pm. "Microsoft Acquires Jellyfish: Tales by Entrepreneur Brian Wiegand" is sponsored by Accelerate Madison and is free to its members or $30 for non-members.
For more information, and a link to sign up online, click here.
On Monday, I had to make a rush trip to JCPenney. There wasn't anything I needed, but I had received a coupon in the mail that was about to expire. "$10 off a $10 or more purchase," it said. Now how could I pass that up?
When I called to ask my mom if she had used hers and if not, if she wanted to come with me, she asked, "What coupon? I didn't get a coupon!"
Looking at the details on the coupon I had, I found that it was only available to certain JCPenney cardholders. My mother spends much more money at JCPenney than I do, but because she's not a cardholder, she didn't get the coupon incentive to shop.
Needless to say, my mom stayed home.
This got me to thinking about how department stores are completely missing out on the opportunity to cultivate loyalty among a huge segment of their customer base: those who shop at the store without using their department store credit card, paying by cash, check, or a major credit card instead.
Are those customers any less important to the department store's business?
When I go to a Hallmark store, I scan my Gold Crown Club rewards card every time. It's not a credit card, but a loyalty card. The benefit to me is that after every however-many dollars are spent at the store, I get a free GC. The benefit to the store is that they get to track my spending behavior and can use that information for targeted marketing. Grocery stores do this, too (in theory...though I have yet to see how they're really using the information to market to me). Why don't department stores do this?
If the department stores had any sense at all, they would implement something as simple as the Gold Crown Club card. Give customers an incentive to scan the card every time regardless of their payment method, such as, "Spend $100, get $5 off your next purchase of $25 or more." Then use the information you collect on the customer's purchasing habits to target specific offers by email, snail-mail, or coupons that print at checkout. Give incentives for shoppers to increase their average month's spending. Reward your good customers, regardless of their payment method.
Give my mom a reason to shop!
An insider at one of the rewards programs named as a defendant in the Source, Inc. rewards program patent infringement case tells me that they received an interesting letter from Source this week.
It was a form letter, apparently sent to multiple (if not all) defendants, stating that their rewards program was in violation of one or more of five patents that Source owned, and it urged them to contact Source to discuss licensing options in order to avoid litigation that would be costly to everyone involved. The letter was delivered by USPS regular mail, not certified and without delivery or signature confirmation. It was addressed to the company and not to any specific individual.
The impression that the insider got from this was that Source wanted a quick out of court settlement from everyone involved, and that they were in such a rush to get it settled, they didn't even take the time to personalize the letter for each defendant in the suit.
I think that the insider is right, and this is why:
If Source was genuinely interested in negotiating licensing fees out of court with these programs, wouldn't this letter have been sent BEFORE they filed suit?
Source went into this lawsuit on a high, having just settled with AmEx on a similar suit (no doubt for a nice chunk o'change). However, they're getting more than they bargained for with Rainbow Rewards, who sued to prove that their cashback rewards program did NOT infringe on Source's patent. In Rainbow's favor is that the suit is occurring in their home turf, in Colorado...not in Source's venue of choice, the patent holder-friendly Marshall, Texas.
If Rainbow Rewards wins, it will be a precedent that the defendants of the big multi-program case can use to show that Source's patents do not apply to them, either...and Source goes home the big loser. Source must be concerned about their chances in the suit, which explains the hasty letter to the rewards programs.
I'm trying to get a copy of the form letter to post here; if you're reading this and have access to it, please white out any identifying info and send a scan of it to me here (use a hotmail or gmail account to protect your anonymity if you'd prefer). Thanks!
In a press release today, Jackpot Rewards announced that a lady named Karen Fink had won its first weekly one million dollar sweeps. (Congrats, Karen!) She found the site via BzzAgent (it's currently one of the Frogs in the BzzAgent Frogpond -- BzzAgent's fancy way of saying it's a website they're paid to promote).
She said she had joined Jackpot Rewards for the shopping rebates but thought the sweeps was a side benefit...of course now she thinks it's the other way around! ;)
Last week there were only 465 people in the $1 million draw (that is, 463 besides me and Karen Fink!). To qualify for the one million sweeps, you have to have two matching numbers in the Monday, Wednesday, or Friday drawing. The press release says that 507 people qualified on Monday...and there will still be drawings on Wednesday and Friday where more will qualify, so clearly the word about the site is spreading.
If you're a gambler, it might be worth it to you to sign up at least for the first month or two, JUST FOR THE SWEEPS. There aren't many people in the guaranteed one million dollar draw, and at $3 a week, your odds of winning a million bucks are better here than anywhere else.
However, the sweepstakes is the only thing Jackpot Rewards has going for it, IMHO. As I showed here, the site is NOT worth the $156 annual membership fee for the cash back rebates, when too many other rebate sites do it as well or better and for free. It irks me that the current press release still states that Jackpot Rewards "provides consumers with the most cash back on online purchases." I call bullsh*t on that. Prove it or drop it, Jackpot.
I haven't covered the bankruptcy of Greenpoints.com's owner in all that much depth -- their online shopping site is incredibly ho-hum and there are no participating grocery stores where I live, so it's just not a program that I ever use. I did come across a couple of interesting articles in the last few days about the shenanigans going on with Greenpoints' parent company, Solidus Networks, which does business by the name Pay By Touch.
ValleyWag.com is a blog that, through research and insider tips, has covered Pay By Touch in detail for a long time. It chronicles the company's downward spiral here: http://valleywag.com/tag/pay-by-touch/
A founding shareholder of Pay By Touch runs the Biometric Payments Blog at Blogspot. It focuses on the technology involved in the technology used by PBT to, well, pay by touch. He did, however, post a brief rundown of the events of the last few months at PBT here: http://biometricpayments.blogspot.com/2008/01/overview-of-past-60-daze.html. He likens the events to a "bump in the road" and says that PBT is "firmly committed" to the two divisions they intend to keep, which includes S&H (Greenpoints).
This blog post, by a former Pay By Touch employee who recently left the company after 2.5 years, describes what it's like to be in a startup company already in bankruptcy: http://bhc3.wordpress.com/2008/02/10/do-bankruptcy-and-startup-go-together/. He makes a good point that even after (if?) the company survives the bankruptcy, it will have to battle loss of employee morale, as well as the company being tainted by its "formerly bankrupt" label, which can make it less appealing to do business with.
The only conclusion I can draw from this reading is that it's not clear that Greenpoints is better off by being one of the business units Pay By Touch has decided to keep. The obvious concern is whether PBT can get the necessary funding to continue operating, as well as the organization and management in place to KEEP it operating. But that's just one concern.
The bigger question I have is: Pay By Touch knows biometrics (I assume), but do they know loyalty? It's a whole 'nother ball game. PBT thinks it can combine its biometric identification (fingerprinting or something a lot like it) with Greenpoints' in-store loyalty program and make it successful. It does have benefits to the merchant -- the "electronic wallet" payment system PBT sells eliminates the merchant's credit card processing costs, plus the merchant will never be deprived of valuable consumer purchasing insight when he forgets to use his loyalty card...it's all tied into the finger scan. PBT tries to sell customers on the service by saying that once their financial information and loyalty program info is scanned in (along with their fingerprint), they won't have to carry cards around with them anymore. But will shoppers, in an increasingly privacy-sensitive world, be willing to have all of their financial information and their shopping behavior, along with the most personal unique identifier of all, their fingerprint, handed over to some other party...in exchange for not needing to carry a wallet?
Maybe, just MAYBE, they'll be able to convince the younger generation to do this. But if you were born before 1984, you're going to have grave concerns about giving anyone that much access to your privacy. And as for that younger generation...how much in-store shopping are they doing, anyway, compared to online? Biometric technology isn't a real benefit there, is it?
