Postcards from Perkistan

The perk world is far from boring. This week I’ve been doing the update for some of the larger programs out there, and every now and then I come across a perk that is, well, I question it’s existence. For one reason or another I’ve found these few perks throughout the week. Let me know the most interesting perks you’ve come across below.

Trek to the South Pole with BankWest… Sounds cool, and it will be, but it’ll also set you back 19,359,900 rewards points, or a measly $9,679,950 spend with the platinum More Rewards Card.

Get a Rebate on your Holden with Westpac. Very few programs embrace car manufacturers, and perhaps there’s a reason for it, but when this increases your redemption value to 2% opposed to 0.58% (for a Myer Gift Card) it could be a neat addition…

Goggles for your… Dog? Need I say anymore?

Keen to hear what interesting and cool things you’ve come across.

Cheers,
Graham

Released yesterday the Virgin Flyer credit card is only the second card with a direct-earn option with Virgin Blue’s Velocity Rewards program. All the major banks have a link with Velocity Rewards, but this is so the user can transfer their points and is not direct earn.

The spending limits on the card are a little funny at first inspection but clearly define the target audience. Earn 1 Velocity Point for every $1 you spend on the card up to $1,500 per month, and then 1 Velocity Point for every $2 after that. Earning 1 point per dollar is in line with other credit card rewards programs when redeeming for cashback and gift cards.

Each time you purchase a Blue Saver, Flexible, Corporate Plus, or Premium Economy ticket you will be eligible for a second ticket in the same booking class free providing there is availability. Free doesn’t include any extra costs for baggage and credit card surcharges. Limited to four sectors worth of travel per year. A nice addition to the card and ties in nicely with a family holiday.

If you register now and use your card before October 15 you will receive a free Go! flight. This fare is limited to routes that are 1,000km or shorter and are on a specific list in the terms and conditions. Major routes such as Melbourne-Sydney are included. The value of this fare varies, but on some flights this will offset the first year’s annual fee.

A balance transfer rate of 6.9% for 6 months is hardly comparable to other available cards on the market, with some even offering 0% interest for 6 months.

$99 per year? The fee isn’t justified when only evaluating the Velocity points-earning potential, but with the buy 1 ticket get 1 free I can easily see a way for frequent flyers to be offsetting that annual fee each year.

Visit the Virgin Flyer Website

Cheers,

Graham.

‪We’ve just come across mozo.com.au, a pretty cool competitor for RateCity and other rate aggregators out there. They’ve been in the media this week as they have just launched a brand new tool to compare rewards credit cards.

The Rewards Revealer allows you to enter details about your credit spending habits and the type of reward you like. Then, based on the points you will earn and annual fees, the Rewards Revealer will show you the “highest rated” credits cards based on the dollar value of the redeemable rewards.

This is a great tool to start your research in to a rewards credit card that may be right for you. Keeping in mind that the tool is calculating rewards on the base earn-rate of the cards only.

In Mozo’s press release they knock rewards credit cards saying they are “Unrewarding” and that they “fail consumers”. They’re right on face value. The rewards don’t look too crash hot when reviewing individual programs with the Rewards Revealer. But utilising loyalty programs is much broader than just a $ value for point calculation.

The Rewards Revealer does not take in to account the complimentary services that come with premium credit cards, such as insurance and concierge services that don’t have a monetary value.

Though they are pretty open about not including bonus shopping days in their calculations, it’s these and other personalised rewards that consumers love – like access to pre-sale tickets and other ‘clubs within the club’. These are a critical part of the rewards credit card decision making process.

Use your credit card to earn points at the same time as using individual retailer rewards cards and you get even more advantage. Research we have conducted here at Perkler HQ reveals that an average family of four can save over $4,100 through the use of rewards programs in their everyday spending.

We agree completely with the Mozo conclusion that on paper credit card point scales offer little direct cash benefit, but we still maintain the broader loyalty redemption market is strong. As we always say – if you are going to shop there anyway, why not get some kind of benefit?

Classic example is Westpac Altitude. Here at Perkler Jus uses his. The direct points value is pretty low – but using points to fly him and Mrs Jus to Melbourne for a weekend away from the kids is worth more than a dollar calculation - though he does love his kids

Check out the Rewards Revealer

and read what SMH have to say

A few months ago we covered cinema loyalty programs with the release of Hoyts Rewards, the last cinema to create a loyalty program. However, with this addition it meant that all major cinemas had a loyalty program that had some kind of frequency-based benefit… except Village Cinemas. Re-launched this morning the Village Movie Club has now added more loyalty-focussed offers. This is how the programs compare:

Australian Cinema Loyalty Programs

Taking a quick look at the table we can see that all the programs are very similar. This means we aren’t being forced to make another decision about where to take our money. This brings about a few observations and questions. If the programs aren’t competing with each other then the sole purpose can be to give something back to their regular customers, what a loyalty program should be from a consumer perspective. Given that all the programs are similar though, they aren’t gaining sales through the program, creating a low return on their investment, what a loyalty program shouldn’t be from a business perspective.

Are movie theatres wasting their time and money on their loyalty programs? Let us know below.

Cheers,
Graham.

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

Razorfish has an excellent market commentary report focusing on the consumer experience and how technology affects today’s consumer experience.

The big take-out?…”Brands will need to create content that engages and “reaches” consumers across channels, provide valuable services over mere advertising and master an increasingly complicated and expansive content distribution model. And, of course, they will need to rethink the way they create relationships (or conversations) with consumers before it’s too late.”

I’ll list some pretty compelling stats that they use to back this up:

• 40% of survey respondents said they have made a purchase based on advertising they saw on a social media site. And the vast majority welcome advertising in social media experiences—76% of all consumers think a wide range brands like Nike, Virgin and Bank of America should advertise in social media.

• The majority of survey respondents (75%) indicate they spend at least one hour a week on these properties, with a large number (19%) spending more than seven hours a week on social networking sites.

• The large majority of consumers (61%) rely on user reviews for product information and research, with a much smaller group (15%) preferring editorial reviews.

• According to our survey, the same number of consumers (65%) indicate loyalty programs that offer “points,” discount incentives or discounted shipping for multiple purchases (e.g. Amazon’s Prime) highly influence purchase decisions. Loyalty services—such as Best Buy’s Rewards Zone, Amazon Prime, and others—are key if retailers are to thrive in an increasingly competitive digital environment.

• While the vast majority of connected consumers have standard mobile handsets, 26% have smartphones

• Today’s connected consumers are equally distributed across all age ranges, with a slight skew to older segments. No longer are we seeing Internet technology adoption rates limited to only certain segments. Our study found widespread acceptance of these new service offering and finds older consumers much more likely to spend money online.

• All signs point to the continuing disintegration of “one-stop” digital destinations, at least as far as consumers are concerned. We’ve found that they don’t want a one-size-fits-all solution for their needs. Consumers prefer using multiple destinations, and then aggregating media and services, via simple tools like RSS, into a highly personalized view of their digital world.

• We expect to see greater reliance on social media to influence purchasing in the near future and not just from friends, but also from brands. This might even come full circle, shortly, where brands will regain some modicum of control and credibility if they can figure out how to play meaningfully in this space moving forward.

Some really interesting stuff. We here at perkler have backed our product based on the same views which is refreshing…we aren’t the only ones! What is crazy from our experience is the average Joe Blow marketer for ABC Brand who not only thinks he is doing a good job embracing digital media, but when asked on his/her strategy replies with confidence that his “team” is all over email, and are currently looking into SMS!

Wake up and smell the rewards flavoured coffee! Engage with users on their current level and as Jus noted in the previous post…return on customer loyalty will be exponential.

Razorfish’s excellent blog can be found here http://www.digitaldesignblog.com/. highly recommended reading, as is their report.

Dan

Got a nice post from Tim Winship today about services that let people know when award seats come up in frequent flyer programs. Tim is spot on when he asks the question “why don’t the programs do this directly?”.

He probably knows the answer as he has worked in and around travel and loyalty for 20 years, but if he’s asking then seems like they probably should!

At Perkler we ask a different question. Why sit around waiting for a reward seat when the programs offer so many other options?

Yes - I understand that there are a LOT of people out there who can use the flights and want to invest the time to try and get the award, good luck to them. But for the vast majority of consumers out there, instead of waiting for the award, get a retail reward.

Experiences, home appliances, discounts at retailers and gift vouchers are all available from these programs. With Christmas coming up you can use Perkler to help you find out about potential presents for people you love (and even yourself).

Redeeming these rewards isn’t always the most efficient use of points (Dan’s post yesterday highlighted how different programs offer different value) but if you aren’t using them anyway - the current economic climate is exactly the rainy day you’ve been looking for.

So next time you hear someone moaning about their frequent flyer program and how they can’t get a seat. Send them to Perkler and tell them to look for the reward and forget the award (that’s nice, we should trade mark it!).

Justin

Ok so I’ve written already about my foray into the DJ’s Amex card. I now own one and am a big fan of their simple program. 

I have to however now tell you just how much punch their perks possess. I was just comparing DJ’s perks against my other credit card - National Australia Bank’s Gold Rewards Visa and the perk value could not be more marked:

NAB has a $100 David Jones Voucher so the comparison is straight down the line. 

NAB:
Points needed for voucher: 15,000
$1 = 1 NAB point
Therefore need to spend $15,000 to earn the voucher

DJ’s AMEX 
Points needed for voucher: 13,300
1st 6 months: $1 = 3 DJs points
After 6 months: $1 = 1.5 DJs points
Therefore need to spend *$4,433* to earn the voucher or $3,325 if you spend it in an actual DJs store in the first 6 months. After 6 months you need to spend $8,866 or $6,650 respectively.

That analysis highlights what commonly is called a no-brainer. Even under normal perk earning conditions it takes half the spend to earn a $100 voucher! in the first 6 months its up to 5 times as quick. Now you may say that if you add in interest rate differentials and differences in interest free periods it changes but not in this case…rates are line ball and the Amex has up to 56 days interest free…NAB can only muster 44. To top it off annual fees are the same.

Did I mention that I have received $150 in vouchers for just signing up?

Nice work DJ’s…easily the perk program of the month.

Well, yesterday we went from Private Beta to Public. So Perkler is open and we are now setting about building this community of ours.

When people join Perkler and set up their virtual wallet they get a ‘rewards card’ placed at the top called Perkler Champions. This is Perkler’s very own loyalty program (stand to reason we should have one considering we are a loyalty community).

As well as offering perks, Perkler Champions is also the place any user can start a discussion about the site or our very own perks. All of our messages to Perkler members are delivered via the comments function in the wallet. Nice and neat.

So as well as offering feedback through our contact us, members of the Perkler community can (and should) join in the dialogue directly from their wallets - as they can about any program in their wallet.

So get in there, build your wallet, and while you get the most out of your programs thanks to the features we’ve developed help us make loyalty better by joining in the conversation.

Justin

USA Today reports that Target and Nordstrom are seeing more and more delinquencies on credit card payments on branded credit cards. The issue of credit and the capacity to pay is written about much more eloquently in the blogoshpere, particularly by people like Mark Cuban (who everyone at Perkler loves to read, but we are Pistons fans, not Mavs…)

Writes good finance blog, owns wrong team ;)

What we do know about here though is how these cards relate to us, the consumer, and our loyalty.

These branded credit cards always come attached to loyalty or rewards programs and have been a good way for retailers to encourage loyalty purchases and learn a lot about their customers through data mining (not to mention making good money through the financial model). For the consumer good, disciplined credit card use can get you some pretty good deals.

But if the current circumstances do change credit card use what’s left behind? The rewards program. We believe that now is EXACTLY the time when retailers big and small should be doing what they have been promising for years. Rewarding loyal customers.

Some do it properly, others let their programs turn into mere discount agreements that neither targets loyal customers or rewards them. Now you can build big databases that tell you a lot about people, or you can join in a community where people willingly share what they think, provide feedback and rate their programs against others.

That’s what Perkler promises. When you become a member you tell us where you are, what you have in your loyalty wallet and what your other likes and loves are.

Discipline = Reward

Eventually, rather than only being a target for a credit card relationship, you should get a message from Nordstrom through Perkler telling you that the perfume you love, is cheaper today, just for you and because you are loyal. That’s a reward and for retailers all it takes is interaction with us, the community.

If you get this because you are have a credit card as well - bonus.

cheers

Justin (more…)