Re: UKNM: Internet Loyalty Schemes

[Ken Cowley]

I think the use of the term 'loyalty' is interesting.


Beenz certainly go out of their way to suggest that they're supposed to be

used to incentivise particular behaviour while on a site (click this link,

fill in this form). You can see how this might work - you open a site you've

not been to and one of the links promises you something (anything will do)

if you click on it. It's only human nature, goes the argument. The beenz

presentation talks about visitors 'doing work' at a website (clicking,

filling in forms) for which they 'get paid' (in beenz). But this is not

loyalty. (I'm sure brand managers will point out that you don't 'buy'

loyalty anyway - granted, but out of scope of the thread).


Loyalty schemes should reward frequent purchases (eg) but the economics -

certainly of beenz - militates against their use this way. You get to give

away a nominal .5c for every cent you spend with beenz, and the redeemers

typically offer a CD for the equivalent of a few million quid (slight

exaggeration but not much). In yer common or garden loyalty scheme the

perceived reward exceeds the cost to the issuer - eg Tesco points cost Tesco

the redemption price less their margin (cost price). So everyone thinks

they're winning, and Tesco most of all cos they get all that juicy marketing

data. The equivalent of this is on sites like CDNow where you get the

perceived value of a 'reward' CD for so much spend, which costs the site

wholesale - or less possibly if a record company gives away some promo

copies for highlighting. Giving away beenz is a lot less 'rewarding' in

value for money terms than giving away a free paperback every ten or

something. Also, in a loyalty points scheme you want people to come back to

you, not waltz off to spend their beenz at thatotherbookstore.com. 'You like

our stuff? Get more of the same' is more reinforcing of you and your offer

than 'You like our stuff? Get this funny money that you can go off and spend

somewhere else'.


I'd suggest that the best reward offers are put together by the sites

themselves, and that these are the best for the site. There's an opportunity

in a 'loyalty server' add-on for commerce web-site software, methinks.



----- Original Message -----

From: Fergal O'Brien <

fergalobhotmail [dot] com

>

To: <

uk-netmarketingchinwag [dot] com

>

Sent: 24 January 2000 09:18

Subject: UKNM: Internet Loyalty Schemes



 > I am trying to do some research on Internet Loyalty Schemes. Does anyone

 > know of any besides 'beenz' or 'ipoints'? Any suggestions would be greatly

 > appreciated.



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