Redeem yourself

John
John Gushue
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Why points and websites should mix it up

To paraphrase a well-known slogan, what’s in your wallet? More to the, um, point, how many reward points are in your wallet?

It seems that almost every time you buy anything, you have the opportunity to rack up some points, of one kind or another.

Supermarkets, drugstores, gas stations, banks — they all have a card that purportedly rewards you for being a good customer.

Canadians certainly seem to love their loyalty cards, or affinity cards, or whatever you want to call them, and they must work, because surely the businesses involved would have dropped them if they didn’t.

And let’s be clear about one thing: the cards primarily exist for the business. They, after all, know that incentive cards encourage people to buy more.

But there’s another phenomenon with reward cards. “Orphan points” is a phrase used in the marketing trade to describe the billions — yes, billions — of unclaimed or unredeemed points that consumers have built up over years of shopping and years of not following through on their so-called rewards.

This is one of the reasons why some businesses — yeah, you, Air Canada — put time limits on redemption. Others will let you transfer your points through venues like points.com.

But it’s obvious that many reward cards don’t deliver much satisfaction. As few as 20 per cent of loyalty card owners actually redeem all their points. That’s an awful lot of pent-up possibilities.

Clearly, consumers need actual incentives to use their so-called incentive cards.

After reading a bit lately about what motivates customers, it’s obvious that consumers are turned off, for instance, if they have to save and save and save before they can “earn” something substantial.

It’s also why a number of people in marketing are calling for better, stronger and faster connections between businesses and consumers.

Here’s one way to do this: link the bonus-point world with the virtual one.

Imagine this: you’ve piled up, say, 1,000 points on one of your cards. Sounds good, except that it turns out to be worth, say, a bottle of Coke.

But let’s say you could transfer those points to a game you play online, and sweeten the experience there.

Millions of people love swiping their bonus cards, but they also love playing games online, ranging from Facebook staples like “Farmville” (and various smartphone-ready competitors, like “Restaurant Story”) or subscription-based games, like the massively popular “World of Warcraft.”

What would happen if you could use the points you accrued — not in massive amounts, but in dribbles and drabs — on games you like to play every day?

Well, it’s no longer a fantasy concept for your fantasy league. Late last fall, Zynga — the people you can blame for all those “Farmville” notifications on Facebook — made a deal with American Express, which is hardly an upstart in the rewards business.

A few hundred points gets you an animal on “Farm

ville,” and a few thousand gets an appliance or something else that’s substantial on companion games, like “Cafe World” or “Treasure Island.”

I have no idea what any of those games are like, but I can see other applications. A month’s subscription to a game like “World of Warcraft.” A bonus from Netflix. A song from iTunes.

A bonus on your monthly smartphone plan. (Personally, I’d go for some currency I could use on Empire Avenue, the virtual stock exchange founded by some St. John’s ex-pats that I’ve described here before.)

I definitely think online connections are the way to go with loyalty plans, especially if redemptions can be made as quickly as a PayPal payment.

Both sides stand to benefit. Sure, you’d think that businesses would be content to see bonus points go unused — they’ve already made their original sales, after all — but those points are nonetheless a liability on their books.

More importantly, a redemption system like this opens up a whole new path of customer satisfaction and, to use a commonly used word in digital culture, engagement.

John Gushue is an online editor with CBC News in St. John’s.

Twitter: @johngushue. Blog: johngushue.typepad.com

Organizations: Air Canada, American Express, PayPal CBC News

Geographic location: Treasure Island

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  • dale evergreen
    February 10, 2011 - 11:11

    Points.com allows you to change your loyalty points into cash with Paypal. that's pretty sweet