InvestorsHub Logo
Followers 108
Posts 9006
Boards Moderated 0
Alias Born 09/01/2000

Re: None

Monday, 03/04/2002 12:56:01 PM

Monday, March 04, 2002 12:56:01 PM

Post# of 66736
Finding Rewards in Loyalty

"According to an Accenture study conducted to gauge business leaders' outlooks on 2002, 91 percent of executives said a greater focus on customer service and building customer loyalty is critically important."

As business settings become more and more customer-centric, it has also become more important than ever that technology adapts and plays a role in customer contentment. The focus today has been narrowed to technology that can deliver operational improvements and perceptible return on investment, while improving the customer experience. Interactive kiosks are meeting the challenge by providing access to computer environments which customers have grown so comfortable with, but also providing the loyalty programs they have come to expect.

The Ottawa Senators, an NLH hockey team, is on the cutting edge of rewarding loyal fans with this new shift towards kiosk technology. The team is offering patrons a free rewards program known as "Swipe and Score" via 15 kiosks. Customers can sign up at the game by stopping at a kiosk or by visiting the team Web site.

In addition to scoring valuable points redeemable for prizes like concession food and hockey pucks, customers can also win season tickets or a trip to a Senators road game.

This exclusive fan rewards program was developed in 2000 to thank regulars for their loyal support of the team. A representative from the Senators told KIOSK Magazine that they consider the loyalty program a great success. To date, more than 20,000 fans have signed up for the program.

Another such company that is rewarding customers through kiosks is Petro Stopping Centers and their Passport loyalty card program. The company has fifty-five gas and convenience stores equipped with touch screen kiosks that enable drivers to earn rewards such as showers, meals, merchandise, and free long distance calling.

"We have over 2 million cards out there, with about a quarter of a million customers using the program on a regular basis," noted Dave McClure, marketing director for Petro. At the Petro Passport kiosk, drivers simply swipe their Passport card and use the computer touch screen to choose their reward, and print an award certificate.

Every gallon of fuel purchased at the pump or the Petro Lube earns one point. Then, the driver simply swipes his Passport when he pays to receive the points. The kiosks act as redemption or rewards accumulation checking stations. Customers can find the kiosks conveniently located in a central location in any store.

Personalization is the theme of another loyalty kiosk, this one is in the Sainsbury's chain of grocery stores. The kiosks announce sales and track how many points a customer earns and can use in exchange for discounts. The kiosks also print out coupons tailored to individual customers.

Sainsbury's began rolling out interactive touch screen kiosks several years ago in a revolutionary step towards enhancing consumer promotions. As the first European retailer to offer such a personalized service when customers enter the store, the company found the pilot test of their kiosks to be so successful that it was followed up with an all-store rollout of hundreds of units.

The Sainsbury's kiosks link their customers with a Reward Card database and produce offers based on specific individual shopping habits and tastes. This provides valuable insight into what the individual customer usually buys at the store and enables the kiosk to select a range of product offers likely to appeal to customers.

To use the kiosk, customers simply swipe their Sainbury's Reward Card through the terminal. Then they can choose the offers they want by touching the terminal's screen. Bar-coded vouchers, which can be redeemed at the checkout, are printed right at the kiosk.

Grand Casinos of Minnesota are using a similar loyalty kiosk program to empower customers. With the use of several casino-owned kiosks, customers can swipe their Grand Advantage card at the kiosk for valuable rewards like cash or a free buffet dinner.

Each guest simply swipes their card in the kiosk and an interactive screen presents a menu of options such as taking a spin on a virtual wheel for a cash prize up to $100. When the customer has finished with the application the kiosk prints a coupon used for prize redemption.

The Lacek Group, designer of the Grand Casino loyalty kiosk program, told KIOSK Magazine that the kiosks were developed to provide a way for loyal patrons to be immediately rewarded with frequent visits. "Our customers told us they wanted instant promotion rewards, that's what we've given them, and they love it!" said Sondra Paxton of Grand Casinos.

Besides rewarding loyal customers, the kiosks have taken some of the burden off of staff who previously had to manually take each customers Grand Advantage card at the counter. Now customers don't have to wait in line to receive credit. The convenience of this loyalty program speaks for itself. Since the kiosks were deployed last year they have tallied more than 60,000 users.

PointMedia, developer of interactive kiosks used to sell merchandise and do interactive advertising promotions at the gas pump, has recently begun touting the loyalty capabilities of their kiosks. At the National Association of Convenience Stores Exhibition last October, several large customers saw the companies' kiosk and suggested that PointMedia find a way to use its technology to answer a growing need for CRM programs. Because the kiosk had been designed to allow for easy reprogramming, PointMedia was able to design and build a CRM loyalty application in just four months.
Traditional gas stations and convenience stores have been facing increasing competition from large discount chains like Wal-Mart and Costco, who are aggressively entering the retail gasoline market with low-priced fuel. The pressures being faced by existing station owners has meant they must find ways to retain their customers and compete with lower priced competitors. PointMedia believes one good way to do that is to identify their best customers and provide rewards for their patrons much like the airlines do with their frequent flyer programs.

Most convenience store and gas station owners have no idea who their best customers are. By finding ways to identify and reward them, the station owners can differentiate themselves from their competition and provide additional incentives for the customers to continue or increase their fuel purchases at stations with the CRM loyalty program.

PointMedia believes that any new CRM program that requires the customer to carry a loyalty card, key fob, or other identification device will achieve limited success because customers don't necessarily want to be carrying around another piece of identification. To be successful, the company felt that a CRM program must be easy to join and easy to use - that means nothing else for the consumer to carry. Instead, they tried to recognize the simplest way to identify the customer without adding an identification device- this resulted in the selection of the credit card and telephone number, for cash customers, as their choice for ID methodology.

The PointMedia kiosk works by playing information on the central area of the display for 15 seconds during each fueling cycle. Each customer can be identified by credit card number or Personal Identification Number (PIN), this information will include the customer's name, the number of loyalty points earned and available for redemption, and loyalty reward offers. If the customer cannot be identified, they are invited to join the loyalty program and given registration instructions on the screen.

PointMedia then provides the customer the option to print a coupon for the reward of their choice that can be redeemed inside the convenience store or at some other service, such as a car wash, provided at the site. Points may be saved and accumulated for larger reward offers. Rewards are displayed on the screen in a standard format and are set up at the start of the program. All customer reward items are specified and provided by the station owner, and may be changed at their discretion via a secure website.

Consumers new to this loyalty program can sign up in one of three ways: 1. Customers sign themselves up at the gas pump, simply by entering their phone number and zip code information into the kiosk, and confirming their registration information when it appears on the screen; 2. Website access to allow customers to sign up for the loyalty program online. This sign-up information is forwarded to station owners and provides online access to their rewards members; 3. Station owner's staff may also complete loyalty program registrations at the gas station when the consumer provides a completed application form at the store.

The PointMedia loyalty kiosk system supplies the store owner with reports summarizing the number of fuel purchases, fuel quantity, visit frequency and certain other information about the customers shopping habits. This information can then be used to adapt the program to best meet sales strategies and marketing programs.

Not all loyalty kiosk programs are about immediate rewards for customers. Rather, several groups have been using kiosks to conduct customer surveys to gauge individual shopping experiences. The data accumulated from these surveys can then be used to understand how to better serve customers- and thus improve loyalty.

For example, Texas-based MindSearch, a leading developer of marketing research systems, recently implemented interactive, multi-media kiosks to conduct polling and collect consumer opinions for various companies' market research needs. Currently located in high-traffic shopping malls in Atlanta, Chicago, Dallas, Los Angeles, Miami, Philadelphia and St. Louis, MindSearch plans to expand its kiosks in up to eight additional mall sites by this summer.

MindSearch is an exciting new approach to consumer research. It offers a faster and more cost-effective approach to gathering vital customer data. MindSearch uses vivid graphics, sound, interactivity and incentive rewards to attract willing respondents. By going anywhere in the world consumers may be found - at locations such as shopping malls, airports, and sports events - MindSearch is using kiosks to attract respondents for their clients' surveys.

Wherever MindSearch kiosks are placed, people and their opinions are captured using the appeal of fun, curiosity, rewards and touch screen interactivity. One of MindSearch's many differences is that while it does invite customers to partake, those who participate do so at a time of their own choice, anonymously, thereby eliminating issues of convenience, annoyance or privacy violation.

"There are a number of ways to apply the loyalty piece in our type of kiosk. Specifically we can gear gifts to the type of demographic we are looking for completing the survey," noted Jay Blinderman, VP Sales for MindSearch. "We can even do a study based on a match of a loyalty program currently in place by our client."

Although using kiosk technology to improve customer loyalty is a relatively new concept, research by Summit Research and Associates conducted over the past few months has concluded that loyalty kiosks are now the fastest growing part of the retail kiosk market.

Companies that make customer loyalty a guiding principle over short-term financial gains now have access to technology that can help them realize significantly enhanced customer satisfaction and even disadvantage their competitors.


The Satmetrix Fall 2001 Customer Loyalty Index/Price-Earnings Study concluded that companies with satisfied, loyal customers enjoy higher margins, greater profits -- and consequently, higher stock price-earnings multiples -- than businesses that fail to retain and satisfy their customers. Researchers at Satmetrix Systems found that the price-earnings ratios of companies with above-average customer loyalty scores are more than double that of their competitors. That spread translates into $1 billion in additional market valuation for even the smallest Fortune 1000 firm.


According to the global business consulting firm Bain & Company, an increase in customer retention rates of just five percent improves profits by 25 percent to 95 percent. The logic behind this math is predicated by the fact that customer turnover is enormously expensive. The high cost of acquiring new customers is something that can only be offset over time by maintaining profitable, high-margin relationships. Customer retention becomes a critical factor because in addition to continuing to purchase a company's products and services, satisfied customers also refer new business.

Finding More Rewards in Loyalty

Migros Turk T.A.S., the largest and oldest food retailer in Turkey, has long provided excellent quality and competitive prices to its more than 160 million customers. Headquartered in Istanbul, the chain of 450 stores has been on a healthy growth track, with annual revenues exceeding $1 billion. However, in 2000 its 3.5 million-member customer loyalty program faced mounting postal and fulfillment expenses.

Bonus checks, which functioned as in-store coupons, were getting lost in the mail and not reaching many customers due to address changes. Still other customers simply neglected to bring the valuable checks into the store for redemption. The company discovered they needed a fresh solution that would work for both domestic and international locations, including stores in four other countries.

So, in 2000, working closely with NCR, Migros adapted a sophisticated combination of data-management and Web-based technologies to resolve these challenges. The most dramatic factor in lowering operating expenses for the Migros customer loyalty program came from the World Wide Web. Migros began installing NCR EasyPoint' web kiosks in 130 store locations throughout Turkey. An additional 46 units were installed during 2001.

This solution enables loyalty club members to print their personalized savings checks at the kiosks in the store, saving Migros the expense of mailing and customers the hassles of remembering to bring their savings checks to the store.

Each customer receives a personalized loyalty card imbedded with his or her shopper identification information. This card is swiped on every shopping visit, so purchases can be tracked. When a customer swipes their card, the kiosk displays a personalized greeting. On the customers' birthday, it even plays a Happy Birthday song.

As a program member, a shopper is assigned a set of "spending targets," both personal and global, nearly every month. When visiting a participating Migros store location, the customer simply swipes the membership card to instantly view qualifying spending figures and to generate the appropriate savings check.

Within the first year of installation the EasyPoint solution helped Migros save more on postage than the cost of the entire program. The company feels customer satisfaction and loyalty have been greatly enhanced- a true win-win situation for Migros and its customers.


"Loyalty kiosks can be a terrific builder of customer retention. But they must offer value and not be perceived as just another way to infringe on personal data and be blatant examples of data mining. When the customer really derives benefit from the loyalty program - and the kiosks are a good adjunct to that program - then everybody wins.

Location is crucial and having a kiosk at the entrance to a store is key. There is no sense in deploying a kiosk if customers won't encounter it until they have finished shopping. And there are still too many out there where this is exactly where they are placed.

We are very excited about the use and growth of loyalty kiosks. They can really help to drive a business if they are easy to use, fast, and above all provide value to the customer."

-Francie Mendelsohn, Veteran Kiosk Consultant