In response to Describe what makes your solution innovative.
My assumption is that businesses run loyalty programs in increase on their customer retention rates i.e. have more repeat customers. The underlying economics is also structured in way that it makes more sense for them to redeem points through products / services they offer. How are you navigating this? Encouraging them to actually contribute to the program.
Hi Joseph,
Thanks for the question. Yes, loyalty programs, when designed properly, deliver increased ROI for participants (credit cards, grocery stores, hotels, etc) through spend consolidation from existing customers, new customer acquisition and increased frequency of spend from both categories.
There are three main loyalty models: coalition (multiple ways to earn and redeem points), closed loop (earn and redeem in-store) and single source collection, with a catalogue of rewards (earn on a credit card, redeem within a catalogue).
To answer your question: HigherEdPoints works best in coalition and reward catalogue situations. We've pitched every loyalty program in Canada to have the HigherEdPoints reward added to their program, regardless of the type. It just makes sense to have a reward for which education is the outcome..less debt..and more disposable income to spend in their stores, plus huge corporate social responsibility benefits. We've proven we can drive customer acquisition, retention and spend consolidation through our existing partners.
For closed loop programs, the challenge is, two-fold: yes, we're a more 'expensive' reward option, but that's not the always the main barrier it's often technology that creates the challenge--in most closed-loop programs, redemption occurs through their POS systems, therefore adding a reward which is catalogue-based often butts up against so many tech hurdles, the loyalty program manager looks at their priority list and we fall to the bottom relatively quickly. We've looked at creating a gift card, which could be paid for at cash, using loyalty points--but again, the economics aren't attractive enough for the big gift card distributors (not enough margin).
We've overcome this in some cases where they loyalty points can be transferred from a non-participating program into one of our participating programs...but the closed-loop biggies in Canada PC Optimum and Canadian Tire Triangle have yet to be conquered. We've set up a "get my loyalty program on board" request form and we share the many many requests with the loyalty operators. By using one of the credit cards from our loyalty partners in those retailers, our members are still able to accumulate points for the HigherEdPoints reward through those who do participate.
We can't win 'em all...but we feel we'll eventually be able to convince senior management at the closed loop programs that the ROI from increased spend, as well as CSR benefits make adding HigherEdPoints a no-brainer.
In response to What is your solution?
Hey! As a researcher in the field of Higher Education, I find the idea fascinating. I'm still not sure exactly how this would work though - how would students collect the loyalty points? How do the colleges benefit? I would expand on that. Also, feel free to check out and comment on our solution www.GiveInternet.org
Hi Roussaoudane,
Thanks for the note--we'll check your solution out too!
In Canada, you can't buy anything without being asked for your loyalty card at the time of purchase..so collecting the points is relatively easy. You're right though, students can't spend enough to collect the points to fund their education--it's mainly parents, grandparents, aunts/uncles and employers who are redeeming their loyalty points in order to help the student fund tuition.
That's what makes us an attractive reward option for our partners--we get the whole family and broader network of each student engaged with acquiring and using their program. Funding education is a 'family affair'. That's why our tag line is "it takes a village to raise a mind"....because the funding piece certainly does..
One example is of a student who's aunt and uncle switched their credit card to one of our program partners..they put their business spend on the card and helped their nephew offset $17,000 CDN of his government student loans...(the story had their first contribution..they continued to use the card for a year and they paid another big chunk, totaling $17k--that's music to any credit card issuer's ears!)
See Anthony's story here:
https://www.higheredpoints.com/2017/12/19/millennial-finds-passion-university/ />
Thanks for the question!
Suzanne
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