Citibank Rolls Out New ThankYou Rewards Program for Small Business – Yahoo! Finance.

Citi has launched ThankYou Rewards for Small Business. Now the Small Business owner can combine their Small Business Point with their personal accounts. Small Business owners can now earn points for their checking relationship as well as other business earning opportunities.

Small Business customers must have a CitiBusiness Streamlined checking or CitiBusiness Flexible checking account. Customers must perform two online bill payments or have two checks paid each month.

Small Business owners can then have all their Citi ThankYou points add up from all their ThankYou accounts.

AAA RoadSide Assistance Membership and Partnership Marketing

Membership:

AAA of America reports that total membership is at 53 million members. This is up from 52 million reported members in 2010 and up 3 million members since 2007 – see below for a rundown:

• 1993  = 35 millin members
• 2001 = 44 million members
• 2007 = 50 million members
• 2010 = 52 million members
• 2012 = 53 million members

One things for certain, AAA memberhsip seems to keep growing on a yearly basis.

Membershiip Demographics

• 60% are in the age range of 35 65 years
• 55% are female
• 61% of members are married
• 45% have earned a college degree, post graduate degree, etc.
• Average income is $71,500 per household

Partnership Statistics

AAA, with 53 million members and seemoingly strong demographcs seems to be an ideal organization to partner with.  Of course there are other factors to be concerned with such as database targeting, etc. However, how good is AAA as a Partnership Marketing entity? Lets look at some facts regarding their “Show Your Card and Save” Program. The “Show your Card and Save” Program allows AAA members to show their “card” and save (with discounts) at over 164,000 hotels, restaurants and retail establishments. Discounts vary by location.

Here are some statistics on the “Show Your Card and Save” Program:

• 75% of members are “aware” of the Show Your Card and Save Program
• Average savings annually per AAA member household is stated to be $100
• Annual member savings in 2009 was said to be $2 billion

Interestingly enough, $2 billion divided by 51 million members  = $39.22 in savings per member. Thus, a couple of things to note here:

1. Penetration and active usage oof the Show Your Card and Save Program within the total member base of 53 million members is probably in the 50% range (especially since only 75% of members are aware of the program)
2. How many members in AAA program are in the same household and simply “Associate” members, and not full members (i.e. get the membership at the discounted rate). For example, if a standard memberhsip is $66 per year an associate membership in the same household is FREE the first year and then $30 each subsequent year.

How Good is AAA for Partnership Marketing

AAA claims a wide membership base that has “attractive demographics” for potential partners and can increase loyalty for their partners. Here are some statistics that are relevant to potential partners:

• 53% of reported AAA members transactions for partners were from “New Customers”
• AAA members spend 30% more than non AAA members based on average dollars per transaction
• 25% of AAA members “buy up” (not sure the definition of this will get clarification)
• 35% of AAA members spend more frequently than non AAA members (need more clarification on this)

All in all, AAA touts some impressive membership and partnership numbers but as in many cases the statistics need further examination (how the calculations are performed, etc.). 

Coming Soon: Citi 2G Credit Card That Lets You Pay With Points – DailyFinance.

Citi has been testing a new “2G” Credit Card that lets you redeem points “instantly” at the POS by activating a chip on the credit card. The Citi 2G Credit Card  comes in two iterations:

• Citi PremierPass 2G
• Citi DividendPass 2G

The terms and conditions vary on each card.

How it Works

The 2G Credit Card has technology embedded in it (From Dynamics, Inc.) which allows the user to “switch on” the capability to redeem points at the POS. Its a manual function so the user has to “click” a small button located on the card to activate points redemption.

Essentially, the user can use “C” for credit or “R” for rewards. The cardholder simply presses the button on the card for Credit or Rewards.  Transactions for Rewards are completed in amounts of $10.00. So, if you do not have $10 in points available in your Rewards account the transaction will simply be a “credit” one.

The credit card can be used anywhere that Citi credit cards are accepted.

Value

The Value of the points redeemed at the POS vary from $.01 (penny a point) to $.008 depending on the card. 

Requirements:

• 1,000 points for $10 POS Redemption (Thank You Preferred or Prestige Account)
• 1,200 points for $10 POS Redemption (Standard Thank You Rewards Account)

Overview

In the march towards “instantaneous” rewards and total “fungibility” in reward points we see the push to give  Loyalty and Rewards members the ability to “redeem” their currency at will instantly. Certainly the 2G card gives the cardholder an ability to redeem their currency faster and “on demand” in one sense. The cardholder still has to manually select a “rewards” transaction by pushing a button on the card, but this is a step in the direction of “anywhere” and “anytime” that the younger generations are used to.

Video  – See the Video Below on the Card

Click here: Google Latitude Leaderboards Takes Direct Aim at Foursquare – ABC News.

It seems that Google’s Latitude has “quietly” added new features that will allow it to directly take on FourSquare in the location based loyalty marketing space. Google has a new Latitude app available as of righ now for Android only, not iPhone. New features include:

• Leaderboard which displays who is the leader at a specific location as far as check in’s are concerned
• Points System for frequent check in’s

Google is also integrating the new feaures within Google+ to complement the social media aspects of that. As of now, Foursquare claims 15 million users and 1.5 billion plus check in’s.

How much of a premium do credit card loyalty programs charge for the redemption of merchandise vs. a cash back reward that has the equivalent market value? 

As our clients know we collect vast amounts of data from loyalty programs in four key market verticals (Financial Services including co-brand, Hotel, Airline and retail).  

We analyze the data literally hundreds of different ways in order to assess and analyze loyalty programs in a simplistic manner. Well, here is a simplistic analysis on how top credit card rewards programs (lets say these are the top five financial institutions withr regards to active credit cards issued) price their merchandise in comparison to an equivalent cash back reward. First the results:

The Rankings below show the Price Premium that Credit Card Rewards Programs Charge in Points for a 8GB iPod vs. an Equivalent Cash Back Reward (cash back with market value of $195)

1. Bank 1 – 50.26%   higher for 8GP iPod than equivalent $195 cash back reward

2. Bank 2 – 29.23% higher

3. Bank 3 – 12.43% higher

4. Bank 4 – 6.04% higher

5. Bank 5 – 1.54% higher

What This Means

What the results essentially tell us is that these credit card providers are all charging more (in points) for merchandise (based on market value of merchandise) then they charge for cash back. As an example, if at one credit card reward program it takes 20,000 points to redeem $200 in cash back rewards, at the same credit card reward program it might take 30,000 points to redeem a 8GB iPod (market price of roughly $200).

Why Do Credit Card Rewards Programs do this?

Since no rational person would redeem a 8GB iPod for a premium of 50% over an equivalent cash back reward (you could just redeem for cash back and go buy a iPod), why do credit card reward programs price merchandise in this manner? Its a good question and one that every loyalty program manager should assess and ask themselves.

First: Its highly likely that the program is using the “profit” on merchandise items such as iPod’s to “justify” their loyalty program. Since its relatively easy to show the profiit of these items on a spreadsheet (price redeemed vs. invoice price from supplier), loyalty program managers are tempted to price items in this manner to justify their programs.

Second: Some people do redeem premium priced merchandise. Thus, if people are redeeming for the premium price rewards and these merchandise items “give a profit,” why not price in this manner.

Our View

Our viewpoint is that its better to price merchandise items on an equivalent basis to cash back (1:1) for a number of reasons.

First: As we stated earlier, any rational person redeeming rewards would just redeem cash back rewards (for a lower point price) and then use their cash back reward to redeem an iPod.

Second: A consumer in a credit card rewards program may consider the program to be “unfair” if they see merchandise items (iPods, etc.) overpriced in comparison to cash back rewards.

Third: Our research shows us that merchandise rewards that are priced appropriately (1:1 vs cash back) will yield significantly greater demand (redemptions). This should allow the loyalty program over time to realize “profit” on merchandise redemptions due to the potential lower cost (invoice cost to the supplier).

Fourth: given that competitors are pricing merchandise and iPods more competitively (as seen by the examples above), can you afford to charge premiums on iPods and other merchandise items?   

Summary

In summary, while some credit card rewards programs continue to “charge a premium” for merchandise vs. cash back, we feel it is not a good long term strategy. It can alienate your best customers by telling them that they are in fact “dumb” if they actually redeem the reward; and furthermore its just not competitive with the best credit card loyalty programs.

Disclosure: Credit Card Reward Programs are among our clients and thus we do not reveal the names of those clients and the subsequent loyalty program analysis in all public research. In this case we have not included the names of the actual credit card rewards programs for this reason. If you wish to find out more information please contact us directly @ mail@agencionline.com

Thank you!

Click here to download from iTunes:  App Store – SPG: Starwood Hotels & Resorts.

Starwood / SPG have launched an update to their iPhone app which has some pretty cool new features.

1. The app has “state aware” technology integrated – which means that the app changes the look based on whether the user is Planning a stay, en route to a hotel, or already checked in
2. Integrated content after checking in includes the Hotel Room number on the app, dining recommendations, etc.
3. Find Hotel by airport code or map
4. Social media channels are built into the app as well allowing for a seamless experience if the user wants to engage Facebook, etc.

Of course the app has all the core capabilities from the previous app which Starwood developed such as account information, etc.

The interesting thing about this new app is really the state aware technology, which deepens the interdependence of the app and the actual “stay” at the hotel. This deeper integration will, until other hotels develop such an app, have the ability to further increase the loyalty among SPG members.

American Express and Morgan Stanley Announce New Co-Brand Cards Created Exclusively for Morgan Stanley Smith Barney Clients – Yahoo! Finance.

AMEX and Morgan Stanley have launched two new co-branded cards:  A Morgan Stanley Credit Card from American Express and The Platinum Card® from American Express exclusively for Morgan Stanley.

Those people with eligible brokerage accounts from Morgan Stanley are able to apply for these two new cards.

Some highlights of the Mogan Stanley co-branded card:

• 10,000 Membership Reward Points after spending $1,000 in 3 months
• Membership Rewards points for all eligible purchases
• $0.00 initial fee, then $95 after

The Platinum Card from AMEX:

• 50,000 Reward points after spending $1,000 in 3 months
• Membership Reward Points on all purchases
• Access to Airport Clubs, a $200 airline credit, no foreign exchange fees and access to Platinum Card Concierge
• Annual fee of $450

As with Membership Rewards, points have no expiration date, and there is no limit on the number of points a Cardmember can earn.

Check it out here:  Loyalty Programs :: Retailers | iCache Digital Wallet.

The new Geode product from iCache is a iPhone case as well as a product to digitize all your payment cards as well as your loyalty cards.  Essentially, the product digitzes all your credit cards, loyalty cards and other payment cards by using the Geode case and a built in card reader.

The device then digitizes these cards into your iPhone so that the user can simply “select” the appropriate card each time they wish to use that card. For those merhcants not accepting an NFC mechanism this can be a big deal.  Also, the Geode provides security by using the users fingerprint to verify usage. Simply put your thumb on the iPhone to verify that you are indeed the owner of the payment cards on the device. 

The device is slick and offers the user a lot of features. Especially for loyalty (retail) programs where this lets the user get rid of those loyalty cards which they don’t want to carry around, this is a slick device.

Barclaycard Ring How It Works – YouTube.

Well BarclayCard has introduced their first “crowdsourced” credit card and here is the video promoting the card. Essentially BarclayCard has created a community in which users of the card have an input into the card design, the features, etc. The video is well done with excellent visuals and is easy to follow.

It will be very interesting to see how this card performs. As of now there were only 1,935 views of the video on YouTube suggesting that the viral nature of the video is not quite there yet. Perhaps that is an indicator that this card has not been widely promoted yet. Watch the video and see what you think. Thank you.

Chipotle’s Farm Team grows customer loyalty – Denver Business Journal.

Where you aware that Chipotle recently launched their loyalty program called Farm Team? Maybe you have not. The program seeks to find food “enthusiast” and people who have a passion for Chipotle. As of right now, the program is inviation only and its not exactly clear how invitations are handed it out which of course makes it a curiosity.

One person enrolled in the program states that you “take quizzes and as you progress you get rewards.”

You can see the site here:  https://www.chipotle.com/en-US/farm_team/farm_invitation.aspx 

But you will need an invitation code to enroll. No word on how many member enrolled yet in this brand new program which Chipotle rolled out last fall. More to come on this.

Thank you!

Bloomingdale’s Loyallist Program – YouTube.

In case you missed it, Bloomingdale’s did a nice launch video of their new Loyallist loyalty program. The video is nice, well done. Bravo for putting out on YouTube prior to launch. As of this writing the video only had 948 views and thats too bad. I wonder if they promoted the video clip on their twitter channel? Will check on that. Here’s the video:

BarclayCard UK and IHG / Intercontinental Hotels have launched a new “Black Visa” co-branded credit card in the UK.

The new “Black Visa” offers cardholders double point on each £1 spent compared to the standard Visa co-branded card, giving the cardholder 4 points per £1 spent at IHG properties, and 2 points per £1 elsewhere. Cardholders also get a free night voucher valid at over 4,400 properties each year the cardholder spends £10,000 on the card. 

Bonus: as a bonus offering, new cardholders will receive 20,000 bonus points after making their first purchase on the card.

No word on other benefits offers by the card but we will be adding this to our database of co-branded hotel credit cards and all details will be made available to our clients. Interestingly enough, the card has an annual fee of £99 and an APR of – 39.7%? Seems like a high APR but thats straight from the Barclays website folks. We will be confirming that.

See here: www.priorityclub.com /ukvisa

Click Here to Read More: Barclays Media Centre.

BarclayCard has introduced their “Ring” Credit Card, said to be the first crowdsourced Credit Card in the U.S.   The card offers simplicity in regards to the “terms” of the card, i.e., the fees and rates. Additonally, the Barclays states that the profit and loss statement on the card will be made public to cardholders. Interesting concept to say the least. Three cheers to Barclays for trying something innovative.

In the Credit Card space one bit complaint from consumers is the “hidden fees” associated with the product. BarclayCard has gone on a path here to address this. The card will also have a “community” in which cardholders can discuss issues related to the card, etc.  We will be monitoring this new product in the market for signs of success. Thank you for reading.

Click Here for more:

Barclaycard Ring | Crowdsourced Community Powered Credit Card with Giveback, a Low Rate, and No Annual or Balance Transfer Fee.

Panera Bread’s loyalty program nearing 10 million customers.

Panera Bread has now reported that they are nearing 10 million enrolled customers in their loyalty program after launching it in 2010. Furthermore, Panera states that 40%-45% of all transactions now run through the loyalty program – BOOM this is nice as it indicates that they are NOT just getting enrollments but also activations and usage whicha are key.

Last month Starbucks reported that 25% of all transactions are going through their pre-paid loyalty card. If the data from both organizations is fully comparable, that would indicate that Panera has a higher usage / activation rate than Starbucks which seems hard to believe given what we perceive to be true about the brands. More to come on this. Thank you!

American Express Turns Twitter #Hashtags into Couponless National Merchant Offers and Cardmember Savings Using Its Smart Offer APIs.

In another  move which demonstrates that AMEX is light miles ahead of their competition when it comes to adoption of social loyalty / media mechanisms, AMEX has now integrated # hastags into their card offer system. AMEX cardholders can sync their card   HERE:  sync.americanexpress.com/twitter   with their twitter accounts.

When a cardmember tweets using the specified hastag # and has their card synced up, a couponless offer will be synced up with their AMEX card. When using the card the offer or discount will be automatically integrated at checkout. win win win.

Current merhcants include: 1-800-FLOWERS.COM®, Best Buy®, Century 21 Department Store, The Cheesecake Factory, Dell, FedEx Office, FTD®, Gulf, H&M, McDonald’s, Seamless.com, Sports Authority, Ticketmaster, Virgin America, Whole Foods Market and Zappos

Walgreens and foursquare team up for mobile coupon program – Chicago wellness | Examiner.com.

Walgreens is teaming up with FourSquare to offer customers who check in at any Walgreens store unique scannable coupons. When you check in the customer will get a unique coupon which can be redeemed at check out. Nice to see a large retailer embracing social media  / location based geo services. Next question, does Walgreens have free wi-fi in their stores?

New CITGO Loyalty Bucks Program Designed to Fit Marketers’ Unique Business Needs — HOUSTON, Feb. 27, 2012 /PRNewswire/ –.

Citgo launches their Loyalty Bucks program scheme and it has some interesting facets to it. First, Citgo General Manager Alan Flagg states that a loyalty program can increase inside store sales by 15% and increase sales at the pump by 10%. This is certainly compelling.

Also very interesting is that Citgo has developed a process whereby individual locations can tailor the loyalty program. Essentially, a location can select from one of three loyalty program approaches and tailor the program for their location. This is compelling and also brings in some complexity to the program which will be interesting to see how it works. We will be monitoring the success of this program through our Retail Loyaty Data Services.

Caesars Entertainment Launches ‘Escape to Total Rewards,’ Unveils Next Generation of Total… — LAS VEGAS, March 2, 2012 /PRNewswire/ –.

Caesars Entertainment is launching the Escape to Total Rewards Promotion ( www.TotalRewards.com/Escape).

for the next 90 days, members will have the chance to win over 90,000 prizes through the “Escape to Total Rewards” game.  Members can also earn points for their leisure activities such as shopping, dining and spa. This approach has the effect of creating an incentive for the leisure traveler.

Latest we have heard is that Carlson’s @ClubCarlson will be adding a new Co-Brand Loyalty Credit Card in Q4 2012. We have no details on the card yet but we will publishing the card attributes, benefits and EARN rates once we find out.

Starwood unveils annual category changes for 2012 – One Mile at a Time.

https://lacek.hs.llnwd.net/e1/starwood/2012categorychange/SPG_CategoryChanges2012.pdf

And @SPG weighs in with their Point changes for 2012. They have issued a lengthy PDF document detailing each hotel with Changes and thus far it looks like they are Increasing Point Redemption at approximately 185 Properties and Decreasing Points required at 142 Properties.  This is comparable to IHG who increased point redemption at 25% of properties and decreased points required at 20% of properties.