Postcards from Perkistan

While doing an update of the AAdvantage program I’ve stumbled across some interesting 2008 stats for the program:

Q: How many AAdvantage Awards were claimed in 2008?
A: The number of awards claimed in 2008 in each AAdvantage mileage redemption category were as follows:

MileSAAver® and AAnytime® Awards: 2,858,222
Upgrade Awards: 769,527
Product Redemptions: 407,074
Special Mileage Awards / Other Airline / Other: 780,533
Total Redemptions - 2008: 4,815,35

It’s pretty interesting to see that most miles (60%) are redeemed for flights using American Airlines even though there are 20 leading airline partners that members can redeem their points with. Total redeemed on Flights is an astounding 92%.

All flights within continental US are worth 25,000 points flying AA. A flight from New York to Los Angeles on American Airlines is worth around $382. Meanwhile, if we compare this with a 25,000 point merchandise reward we are looking at getting $250 worth of value for our 25,000 points. It certainly seems that AAdvantage members are making the most of their points.

-Me

From the previous blog post I mentioned that the NAB Gold Rewards program has turned into two different cards (linked to the one account), the NAB Qantas Gold Visa (or MasterCard), and the NAB Qantas Gold American Express.

David Jones has just released (2/3/2009) a David Jones American Express card where you can redeem points earned for ANY travel (anything that a travel agent can book can be purchased with their voucher. Booked through AmEx), including Qantas flights.

Here we’ll compare the earning and burning options of the NAB Qantas Gold American Express ($145.50 annual fee) and the David Jones American Express ($99 annual fee) cards.

Shopping In-Store:

DJs: 2 points per dollar, don’t expire, no cap
NAB (in-store means Qantas): 3 points per 2 dollars for the first $3,000 per month; 2 points per 2 dollars for $3,001 to $10,000; Nothing over $10,000.

We’ll assume that you always earn 3 points per 2 dollars for the NAB card as that is it’s highest points-earning capability.

DJs $100 Gift Card: 13,300 points. At 2 points per dollar that is $6,500 to get $100 back.
NAB $100 Myer Card: 13,500 points. At 3 points per 2 dollars that is $9,000 to get $100 back.

DJs $100 Travel Voucher (includes Qantas): 15,000 points. At 2 points per dollar that is $7,500 to get $100 of travel.
For NAB they don’t have a specific dollar amount to redeem on travel, so let’s take a domestic flight from Sydney to Coffs Harbour. 1 “zone”, 275 miles, from $104 economy class.
Sydney - Coffs ($104): 8,000 points + 3,000 points for taxes = 11,000 points. At 3 points per 2 dollars that is $7,334 to get $104 of travel.

In-Store Conclusion: DJs has a HUGE advantage if you plan on redeeming your points for a shopping voucher. NAB Qantas Gold has a slight (2.26%) advantage if you plan on redeeming your points for travel with Qantas.

Shopping Everywhere Else

DJs: 1.5 points per dollar, don’t expire, no cap
NAB: 2 points per 2 dollars for the first $3,000 each month; 1 point per 2 dollars for $3,001 to $10,000; Nothing over $10,000.

We’ll assume you always earn 2 points per 2 dollars with the NAB card as that is it’s highest points-earning capability.

DJs $100 Gift Card: 13,300 points. At 1.5 points per dollar that is $8,867 to get $100 back.
NAB $100 Myer Card: 13,500 points. At 2 points per 2 dollars that is $13,500 to get $100 back.

DJs $100 Travel Voucher (Includes Qantas): 15,000 points. At 1.5 points per dollar that is $10,000 to get $100 of travel.
Using the same Qantas flight from Sydney to Coffs:
Sydney - Coffs ($104): 11,000 points. At 2 points per 2 dollars that is $11,000 to get $104 of travel.

Everywhere else conclusion: DJs extends it’s advantage over the NAB card when redeeming your points for a shopping voucher. NAB Qantas Gold loses it’s slight advantage and DJs gains the slight advantage (10% now though! 12.26% change…) when redeeming your points for travel with Qantas.

Of course you may need to consider your shopping habits and your financial needs when choosing a credit card that is right for you and this is a mere glimpse of what both programs have to offer.

Here at Perkler we’ve just embarked on an eye opening campaign. Until now we have focussed our efforts on letting people manage their entire wallet in one virtual place.

In this new campaign we are responding to the current economic climate, and the need for people to get value from their loyalty programs immediately, by isolating the best possible loyalty perks on a product by product or brand by brand basis.

Our first port of call has been cosmetics. We figure make-up is the kind of thing people can still think about making small purchases on and get a ‘luxury’ item despite not being so flush right now. Having said that, Graham our database and community guy has been seen to weep as he has entered the RRP for some of these products!!!

You can see what we’ve found for cosmetics here - an interesting list that shows the big programs as well as the small have a lot to offer if you know where to find it. We’ve had LOTS of people looking for Napoleon Perdis and The Body Shop - very different brands in lots of ways.

Next cab off the ranks is likely to be cameras - always a really interesting product segment. But it could just as easily be a brand like Apple or an activity like travel.

So what would you choose - what product or brand or activity do you think rewards would make you purchase in the current climate? Be interesting to see the responses.

Justin

@JustinBarrie  on twitter

Just did a bit of an overhaul of all our credit card programs due to some big changes happening with the Qantas Frequent Flyer (QFF) program. A lot of banks have had to re-organise their rewards programs to create QFF specific cards and non-QFF cards. A lot of cards have been axed and there is a whole breed of new QFF specific rewards programs. One of the more interesting outcomes is with the NAB. NAB Gold Rewards card holders previously had one card, but with the new QFF program NAB Gold Rewards members will have two cards: Either a Visa or MasterCard and an American Express card. The Visa/MasterCard is so card holders can still use their credit card and earn QFF points where AmEx is not accepted. The AmEx card is provided so that card holders can gain maximum QFF points-earning potential wherever AmEx is accepted. Don’t we all have enough cards in our wallets already? And who wants to deal with another decision to be made at the checkout?

Also having a bit of a look at all the programs I’ve noticed some really sweet deals. Top programs include the ANZ eDine Add On and the David Jones Store/AmEx Cards.

eDine has thousands of participating restaurants, hotels, cafes, and entertainment locations across Australia and NZ where the discounts are often 20% or greater. The annual fee weighs in at a low $35 per year, so using the card just twice will often result in a discount that is more than what the program costs you each year. They are updating and finding new partners all the time, with their last update having in excess of 100 additions to the program. Pretty sweet!

DJ Cards are awesome! Every month they release a catalog that includes 25-30 exclusive offers, the smallest of which is a neat 20% discount and the largest is normally 30% (sometimes greater). The discounts come off a wide range of products including men’s, women’s and children’s fashion, manchester, and crockery. The discounts are always off leading brands, some of which are only available at DJs.

Extremely interesting news coming out of the World Mobile Conference in Barcelona. New Media Age in the UK reports that a number of keynotes sought to address the issue of an increasingly fragmented app market and the implications of this moving forward.

The list is extraordinarily large (though not surprising) for such a young industry. Apple, Orange, Microsoft, Google, Blackberry, Nokia, Samsung and O2 have all launched (or are launching) stores, and more importantly (worryingly), platforms for apps development and distribution.

The business man in me says that this makes perfect sense. Immature market, large global players trying to vie for dominant position and doing so the only way large companies know how to - by developing unique platforms and hoping they win the war (or a portion of it).

Then, inevitably, the launch of multiple platforms and stores is met with the cry for standards and cooperation (I can see the committee forming in The Hague right now…). So even before some stores have launched, people are crying out for a centralisation of the market!

The complicating factor in the most recent store announcements (Samsung, Orange etc) is that I understand platforms offering different stores, but hardware manufacturers offering stores that then offer multiple platforms (I assume) just completely complicates the market.

The long and the short of it for a start-up like us is that we simply have to pick our targets, and that number is going to be substantially less than the players I’ve listed above. We have to do analysis of our audience and each store/platform’s audience and pick the platform most likely to deliver us customers. That’s okay and relatively easy at a pure platform level. We have decided to go iPhone app in the first instance and are working hard with MoGeneration in Sydney to create a meaningful and powerful app for our users.

We always envisaged moving to Blackberry for the corporate market and then Symbian for our second (to iPhone) consumer market. Apologies to the companies involved for the generalisations of your user groups

Now we have to contend with making decisions about those platforms and then extrapolate that out to unique requirements at a hardware (Samsung) and carrier (Orange) level - crazy!

So what do I think will happen? The same thing that happens in most maturing markets. People like us (app publishers) will stay away from the multiple choices (due to cost, effort) and stick to the big guns.

It just seems like it would all be a lot simpler if the corporations just faced the fact that some kind of shakedown in the market will take place (at a competitor or standards level) and worked to leverage the apps market together now, not then.

But I’m not responsible for the Orange share price I guess!

Justin

Big debate going in Australia at the moment (excellently described by ARA Chief Richard Evans). The Federal Government is about to send a range of stimulus bonus payments to a large number of people.

Debate - stimulus implies the money will be spent (in fact Treasury forecasts about whether or not Australia enters recession relies on this notion). Tension lies in the fact that people are talking about just saving the bonus and not spending.

So people in Australia who have spent a decade being told to SAVE (and haven’t), are now being told to SPEND (and maybe are going to save instead)!

I’ll leave the arguments up to the fans of Keynes and Smith - I’m taking a laissez-faire approach to the economic debate (oh my god, I just made an joke based on economics…). What I am keen to concentrate on though, is the way consumers can take advantage of spending and saving at the same time.

You guessed it - perks…

Imagine using that bonus payment in conjunction with an airline or credit card program to get an even bigger TV than the one you planned on. Or ensuring your family still got some good old fashioned entertainment by paying for movie tickets but at a greatly reduced price. With perks an individual could stretch the value of their $950 bonus to well over $1200 or even more.

Since the late 80’s and for most retailers the late 90’s loyalty programs have been introduced and financed. We’ve written enough on this blog about the quality of programs or reasons why consumers haven’t connected with them fully in the past.

Surely the time has come to promote and improve people’s access to programs so that they use them as a legitimate part of the purchasing decision. In the US Dan and I were blown away that brands advertised their programs on national TV. Seems logical. If you are a retailer and you want to get some ROI on that program you’ve invested in - advertise it…

So, at Perkler we’ve created the platform for consumers to understand their perks better - now it’s time for retailers to step up and engage with consumers who need the perks to make decisions about where they are going to spend that money. And they can do that as part of their overall marketing efforts, but they can also take advantage of sites like ours to engage with consumers and be seen as a differentiator - a retailer who actually places loyalty and perks at the top of the tree!

Our Twitter account @perkler and my personal one @justinbarrie follows @mediapost a tweet of all of the news coming from MediaPost Publications.

An article recently caught my eye from Online Media Daily. Gavin O’Malley was writing about the ‘line between media channels becoming increasingly blurred’. He quotes a range of statistics released in a report by Ketchum Public Relations that showed 44% of online shoppers read reviews from other consumers as part of their decision making process when purchasing.

As a result lots of small (and some huge) social communities have sprung up around specific consumer interest points. Interestingly a larger number of these people are now also broadening their reading to related blogs rather than just the comments and recommendations on a specific page.

None of this sounds entirely new - and frankly I don’t really see how this is different to how people shop offline either. I do tend to get recommendations from friends before I buy something big.

It’s more the dramatic increase in numbers and realisation that it is happening online that are interesting. In fact I remember reading something from the NRF around Christmas time about sites that have recommendations and reviews maintaining or improving their Christmas sales while others fell away.

And it’s exactly what we’ve been aware of and building on here at Perkler. When we say we are an online loyalty COMMUNITY, I can see some people reel and sigh “another 2.0″. But in the mission of simplifying loyalty programs, giving consumers power to manage and learn about everything they are entitled to - there seems little other option!

Our community features include rating and commenting. We’ve also built in functions where you can see other people’s virtual wallets (if they allow it) and we think that facilitates a really nice informal recommendation process.

But another exciting development is to start bringing content about brands from blogs and twitter directly into our space. We are working hard on this and think the blurring of media that Gavin O’Malley talks about will be there for all to see in our community.

People suggesting, rating and recommending programs to others. Feeds of anything people say about brands and programs on other social networks built in. A great consumer resource, and one that is responsive to how people are actually starting to shop.

Perkler staff got to go on a field trip the other day and the outcomes were really interesting. Graham and Linh headed off to one of our city’s largest malls (our hometown of Canberra is just a few hundred thousand people but we’ve always had a pretty good mall culture going back to the 70’s).

The boys visited every store in the centre asking about their loyalty programs and what they offer consumers. They visited everything from huge national and global brands right down to the local food court proprietors.

Considering we already have well over a thousand programs in the Perkolator, the results were interesting.

49 new brands were entered into the Perkolator, with 46 that they found already in our database. So in a mall of around 200 stores 95 had information in store about their programs. 

The most interesting thing is that of the programs we already had in our database 40 programs had to be modified. That means the websites of the brands had different information to their in-store collateral. In most cases there was more specific information on hardcopy material than we had seen in other public information on the program.

This might seem like a small point, just a slight difference in the information available, but it is critical in building relationships with consumers. If a consumer can’t trust that all of the brands touchpoints (web, brochure, advertising) gives the same information how do they know what they are entitled to.

I know there are different strategies at play here. Many brands leave detailed info in store because they are chasing truly valuable customers - the ones who have come in and are purchasing. But at Perkler we believe that loyalty should be used more to encourage people into the store in the first place. 

To do that you need to make loyalty rewards active and up to date for the consumer to make a decision. As times get tougher for retailers we are very confident stand-out loyalty offerings (rather than carbon copies of competitors programs) or at least stand out individual offers, will be a key marketing tool to getting people to purchase.

On the weekend I was at a Christmas celebration at my grandmother’s. One by one my Aunties asked how Perkler was going - there are hundreds of them (seems like) so it was a bit like pitching in Silicon Valley again!

Overwhelmingly they were most interested in how things would go for our community in the current downturn. They were worried that because we offer a retail service to consumers there was no future in it when people were overwhelmingly reducing their spend.

Then on the way in I heard this clanger of an interview on the ABC with Howard Davidowitz in New York. Sobering stuff - especially about the estimate he makes on up to 12,000 stores closing in the next calendar year.

So why do we still think (now more than ever) that retail is exactly the right focus for Perkler.

Firstly - it all comes back to the consumer frustration that we set out to fix. It was our original inspiration and remains our obsession to simply make the loyalty market less confusing for consumers.

Secondly - when retail gets tough, retailers should be getting more out of their loyalty programs. Consumers are certainly looking to be given a more compelling reason to spend - what’s more compelling than the combination of ‘better offers’ and ’special status’.

So, retail is getting hammered at the moment - no doubt. But that’s exactly why consumers and retailers should, and will, use their loyalty programs more.

This will probably be the last post before Christmas. Everyone here at Perkler wishes everyone out there in Perkistan a great holiday season, however you choose to celebrate it!

As a final note, the old comments section is getting inundated by spam at the moment (those blokes work harder than us!). So we will be turning the comments function off until after the holidays. If you want to engage with us you can find us via the contact us on the site, or follow us on Twitter @perkler.

Justin

Hey all,

Just a quick post to mention the updates done to the site today.

Firstly, you might notice a new panel both on the home page and next to your wallet. Every week a new featured perk will appear here. This might be a Perkler Rewards special offer, or it could just be some weird and whacky perk that we’ve come across.

Also, you might see perks starting to show up in your wallet with images. Another new feature.
Not only will we be attaching pretty pictures to the perks, but we’ll also be able to attach coupons to special offers, so keep an eye out.

To go with the perk images, we’ve improved the way avatar image uploads are handled - in short, no more squishy heads. If you’ve uploaded a picture for your avatar and it became distorted, you may want to try again.

Other than that, there’s a lot of little bug fixes.
Again, a big thanks to everyone that’s given feedback.