WO2008121003A1

WO2008121003A1 - Incentive system and method

Info

Publication number: WO2008121003A1
Application number: PCT/NZ2007/000067
Authority: WO
Inventors: Bernard John Mcnamee
Original assignee: Bernard John Mcnamee
Priority date: 2007-03-30
Filing date: 2007-03-30
Publication date: 2008-10-09

Abstract

The invention provides a method of providing consumer incentives. The method includes the steps of storing in data memory a record of a credit to a pre-detertnined value redeemable for goods and/or services offered by a first provider of goods and/or services; associating the record of the credit in data memory with a portable medium; providing the portable medium to one or more consumer when the one or more consumer purchases goods and/or services from a second provider of goods and/or services; and updating the record of the credit stored in data memory when the one or more consumer presents the portable medium to the first goods and/or service provider to redeem the credit or part thereof for goods and/or services.

Description

INCENTIVE SYSTEM AND METHOD

FIELD OF INVENTION

The present invention relates to the field of promotional and consumer incentive systems and in particular to a system and method for providing incentives for consumers to purchase goods and services from particular goods and service providers and or secondary providers of goods and or services.

BACKGROUND TO INVENTION

Goods and service providers that operate in industries that experience periods of intense competition and oversupply often have difficulty in maintaining profitability and in attracting consumers to purchase goods and services from them rather than from other goods and service providers.

Many goods and service providers resort to promotional offers such as heavy discounts, or expensive promotional offers such as the chance to win an overseas holiday, to attract consumers.

Retailers often work in isolation from other retailers and it is an intention of this system and method to bring retailers together in "selling groups".

The invention provides an innovative and all encompassing incentive system and method. It is an object of the invention to provide a revolutionary and smart methodology in this consumer incentive system and method using certain technology and infrastructure, or to at least provide the public with a useful choice.

SUMMARY OF INVENTION

In broad terms in one form the invention provides a method of providing consumer incentives including the steps of storing in data memory a record of a credit to a pre-determined value redeemable for goods and/ or services offered by a first provider of goods and/ or services; associating the record of the credit in data memory with a portable medium; providing the portable medium to one or more consumer when the one or more consumer purchases goods and/or services from a second provider of goods and/ or services; and updating the record of the credit stored in data memory when the one or more consumer presents the portable medium to the first goods and/ or service provider to redeem the credit or part thereof for goods and/ or services.

The term 'comprising' as used in this specification and claims means 'consisting at least in part of, that is to say when interpreting statements in this specification and claims which include that term, the features, prefaced by that term in each statement, all need to be present but other features can also be present. Related terms such as 'comprise' and 'comprised' are to be interpreted in similar manner.

Preferably the one or more consumer purchases the portable medium for a price that is less than the value of the credit.

Preferably the one or more consumer purchases the portable medium from the second provider of goods and/ or services.

Preferably the first provider of goods and/ or services is a provider of secondary goods and/or services.

Preferably the second provider of goods and/ or services is a provider of primary goods and/ or services.

Preferably the portable medium is a stored value device.

Preferably the portable medium is a transaction card compatible with Point of Sale (POS) equipment. Or the portable medium could be a range of stored value devices compatible with doing commercial transactions.

Preferably the portable medium is issued by a financial institution or a telecommunications organisation. Preferably the portable medium issued by the financial institution ot telecornmunications organisations purchased by the one or more consumer directly from the financial institution, or telecommunication organisation.

Preferably the record of the credit is stored and maintained in data memory by the financial institution or telecommunications organisaton. Alternatively, the portable medium is a stored value device and the record of the credit is stored and maintained in the stored value device.

Preferably the price paid for the credit by the consumer is transferred in whole or in part to the financial institution or telecommunications organisaton to cover or offset the costs of issuing the transaction card or device and maintaining the record of the credit.

Preferably when the portable medium is provided to the consumer the amount of the credit is deposited with the financial institution or telecommunications organisaton.

Preferably the amount of the credit is deposited with the financial institution by the second, goods and/or services provider.

Preferably the consumer may only redeem the credit in discrete portions in accordance with rules.

Preferably the rules are determined by the second goods and/ or services provider and the first goods and/ or services provider in conjunction with the financial institution or telecommunications organisation.

Preferably the first goods and/or services provider is a group of individual goods and/or services providers.

In another form the invention provides a consumer incentive system comprising a record of credit maintained in computer memory the record of credit redeemable for goods and/or services offered by a first provider of goods and/or services; an association component configured to associate the record of credit with a portable medium; an updating component configured to update the record of credit by recording the credit on presentation of the portable medium to the first provider of goods and/ or services by a consumer. BRIEF DESCRIPTION OF THE FIGURE

By way of example only, preferred forms of the incentive system and method will now be described with reference to the accompanying figure in which:

Figure 1 is a block diagram illustrating preferred forms of the invention.

DETAILED DESCRIPTION OF PREFERRED FORMS

Figure 1 shows a block diagram illustrating an overview of preferred forms of the system and method of the invention.

The invention provides a system and method by which one or more consumers 130 are provided with a credit redeemable for goods and/or services provided by a first goods and/or services provider 105 when the consumers) purchase goods and/ or services from a second goods and/ or service provider 110. The record of credit is reduced in value when the credit is redeemed.

It is preferred that the goods or services offered by the first and second providers be related. However, this is not a necessity and should not exclude other unrelated goods and/ or services. In particularly preferred embodiments the goods and/ or services offered by the second provider are primary goods and/or services and the goods and/or services offered by the first provider are secondary goods and/ or services in the sense that consumers who purchase primary goods and/or services are either likely or obliged to purchase secondary goods and/or services as a result.

A good example, but not exclusively, of the relationship between primary and secondary goods and/or services, as the terms are used in this specification, is the relationship between cars and petrol or gas for running a car. In this example a car is a primary good and the petrol or gas is a secondary good since the car will not run if it is not regularly filled with petrol or gas.

A further example of this type of relationship, but not exclusively, is between the services of a real estate agent and/ or mortgage broker as a primary service and the goods sold by home furnishing and home appliance stores as secondary goods, since new home owners will very likely require furnishings and appliances. Another example of this type of telationship, but not exclusively, is between the services of a travel agent, airline, or tour operator providing a consumer with bookings for travel to a destination, these services being a primary service and the goods and/ or services available to the consumers) at, or enroute to, the destination. Typical of such latter goods and/or services are those provided by restaurants, retail and souvenir shops, local entertainment and attractions, museums and art galleries, and local tour operators, these goods and/or services being classed as secondary goods and/or services.

There are numerous other possible relationships between primary goods and/or services and secondary goods and/ or services. A credit obtained from a primary retailer for example a secondary goods and/ or services provider 110 could be redeemed at any number of secondary retailers for example first goods and/ or service providers 105.

The value of the credit when redeemed for goods and/ or services of the first provider 105 is determined for the incentive system and the second provider 110 offers this credit either free or preferably for a reduced price, when consumers) purchase goods and/ or services to a certain value or amount from second provider 110.

By way of example, in the case of a first provider that is a gas or oil company and a second provider that is a car dealership, a credit of $1,000 may be decided by the second provider as the amount for the incentive system and method. The second provider may then offer the credit to consumers who purchase a car from the second provider either as a free offer or more preferably for a reduced amount such as, for example, an additional cost of only $100. Preferably, the second provider offers this credit only if the consumers) purchase a vehicle for more than a threshold value.

The system and method of the invention may therefore allow the second provider to offer a consumer incentive for purchasing from them rather than their competitors without needing to reduce the price on their inventory. This may be particularly beneficial where the dollar value of the goods and/ or services is high and the second provider offers finance to assist its customers to purchase from them. In this type of situation, a reduction, in the price of a good will result in lower turnover on the finance arrangements. A good example of this type of situation is whet e a cat dealership offers its customers finance to purchase a car. If the price of the car is discounted, the dealership will not make as much on the finance arrangements. If, on the other hand, the car dealership employs the system and method of the present invention as the second provider, the car dealership may be able to maintain their turnover on such finance arrangements. Furthermore, if the credit is offered to the consumers) for a reduced price, the price paid may add to any turnover on the finance arrangement.

This example also illustrates that total sales turnover may also increase as a result of using the system and method of the invention because not only the non-discounted car, but also the credit have been sold.

In some embodiments, the invention may also provide to the first provider the benefit of a locked-in customer relationship, since the credit may only be redeemed by repeatedly purchasing goods and/or services from the first provider. This pattern of repeated purchases by the customer will provide the first provider with an opportunity to build customer loyalty and encourage repeated visits and purchases, even after the credit has been redeemed in full.

A record of all credits issued may be stored in data memory 180, preferably by a financial institution 115, such as a bank or telecommunications organisation , as shown in Figure 1. The credit is associated in the data memory with a portable medium such as a transaction card 120 or any other stored value device which is preferably issued by the financial institution or or telecommunications organisation as shown at 125 and provided to the second provider 110. An association component (not shown) associates the record of credit with the portable medium. The association component includes for example a table in a database that associates a record of credit identifier with a portable medium identifier.

As an incentive to purchase goods and/ or services from the second provider 110, the second provider offers a credit to consumers) 130, as shown at 135. The credit is preferably redeemable by using the portable medium.

The portable medium may also be an identification or transaction card provided by another institution and which provides a unique identification of the consumers) 130. The portable medium may incorporate the logo or other promotional material for the financial institution and/or any of the first and the second providers thus fostering goodwill for these businesses amongst the consumers who receive the credit.

It is preferred that the portable medium be a transaction card that is compatible with Point of Sale (POS) equipment that is in common use and However, the portable medium may be any other appropriate medium or stored value device for performing transactions such as a smart card or a cellular telephone or loadable or rechargeable or prepaid credit card. Alternatively, the portable medium may be an identification or transaction card that uniquely identifies the consumers), for example a citizen's identification card, driver's licence, or a bank card already issued and used to identify a user for POS or automatic teller machine (ATM) transactions.

In the case of the portable medium being a stored value device, the record of each credit may be stored on the respective stored value device.

After the financial institution has received a credit 150, which may include a price paid, for any article or service or property by the consumers) at 145, the financial institution enables access to the credit and activates the portable medium.

Once the portable medium is activated it may be redeemed as shown at 140 in return for goods and/or services from the first provider 105 as shown at 142.

Where the consumers) pay a reduced price for the credit as shown at 145, it is envisaged that the whole or part of that credit or reduced price paid by the consumers) will be passed on to the financial institution as a processing fee as shown at 150. The amount of the discount negotiated plus a fee to set-up the account will be passed on to the financial institution or the telecommunications organisation.

It is envisaged that the cost of providing the credit may be covered by the first and/or second providers. Typically the second provider will bear most or all of the cost. It is envisaged that the proportions paid by either the first or second provider may be any proportion of the cost of providing the credit, including a zero value portion. The portion of the cost paid by the first provider or a fee payable by the first provider to the financial institution or telecommunication organisation as shown at 160, can reflect the value that the first provider receives in increase in patronage, customer loyalty, and advertising benefits offered by the incentive system and method. The fee may alternatively represent the normal fee that financial institutions charge for the use of a credit card facility, for example 2-4%. The fee negotiated with the second goods and/ or service provider and the financial institution would reflect the cost of using the system. The fee 160 payable by the first provider to the financial institution or Telecommunication organisation may be replaced by a payment 'in kind', i.e. by a corresponding non-monetary transaction of corresponding value.

Every time a credit is issued or a portable medium 120 is activated the amount of the credit is preferably transferred to the financial institution 115. The amount transferred to the financial institution may include a price paid by the consumer(s) at 145 in addition to the amount of credit. This may provide an additional benefit to the financial institution for its participation in the incentive system and method in the form of interest earned on the credit before it is redeemed.

The first and second provider's portions of the credit may be paid directly to the financial institution as shown at 160 and 150. A portion of the cost of providing the credit and the cost of running the system is born by the first provider of goods and/ or services by way of a transaction fee on the first provider of goods and/ or services.

When the consumers) present the portable medium to the first provider to redeem the credit for goods and/or services the financial institution, for example a bank, will update the record of the credit stored in data memory 180 as shown at 190. The record of credit is reduced in value. An updating component updates the record of credit. An example of an updating component is a database function that retrieves the record of credit from computer memory, and updates the record.

The amount of the credit redeemed is then transferred back to the first provider as shown at 195. Preferably the redemption process is handled via standard POS equipment or telephonic devices capable of retail financial transactions.

In preferred embodiments the first provider 105 may comprise a group of individual providers offering preferably non-competing secondary goods and/or services. For example, where the second provider 110 is a real estate agent and/ or mortgage broker, the first provider 105 may be a group comprising one group or chain of electrical appliance stores, one group or chain of furniture stores, and so on. Preferably the groups or chains are national distributors of their respective goods and/or services.

It is also preferred that there be pre-defined rules concerning the amount of credit that the consutner(s) can redeem for a single purchase. This is particularly desirable where first provider 105 is a group of individual providers where it may also be desirable to limit the amount of credit that can be redeemed at at least one of the individual providers on any one occasion. It may also be desirable to limit the rate at which credit can be redeemed. For example, the redemption of a $1,000 credit may be limited to no more than $100 per week.

These rules could be determined by the second goods and/ or services provider and the first goods and/ or services provider in conjunction with the financial institution.

It is envisaged that the credit may have an expiry date. Any unused credit remaining after the expiry date may be transferred back to the financial institution 115 and/ or the second provider 110.

The foregoing describes the invention including preferred forms thereof. Modifications and improvements as would be obvious to one skilled in the art are intended to be incorporated within the scope hereof, as defined by the following claims.

Claims

WHAT WE CLAIM IS:

1. A method of providing consumer incentives including the steps of:

storing in data memory a record of a credit to a pre-determined value redeemable for goods and/or services offered by a first provider of goods and/ or services;

associating the record of the credit in data memory with a portable medium;

providing the portable medium to one or more consumer when the one or more consumer purchases goods and/ or services from a second provider of goods and/or services; and

updating the record of the credit stored in data memory when the one or more consumer presents the portable medium to the first goods and/ or service provider to redeem the credit or part thereof for goods and/or services.

2. The method of claim 1 wherein the one or more consumer purchases the portable medium for a price that is less than the value of the credit.

3. The method of claim 1 or claim 2 wherein the one or more consumer purchases the portable medium from the second provider of goods and/ or services.

4. The method of any one of the preceding claims wherein the first provider of goods and/ or services is a provider of secondary goods and/or services.

5. The method of any one of claims 1 to 3 wherein the second provider of goods and/or services is a provider of primary goods and/ or services.

6. The method of any one of the preceding claims wherein the portable medium is a stored value device.

7. The method of any one of claims 1 to 5 wherein the portable medium is a transaction card compatible with Point of Sale (POS) equipment.

8. The method of any one of the preceding claims wherein the pottable medium is issued by a financial institution or a telecommunication oganisation.

9. The method of claim 8 wherein the portable medium is purchased by the one or more consumer direcdy from the financial institution or telecommunications organisation.

10. The method of claim 8 or claim 9 wherein the record of the credit is stored and maintained in data memory by the financial institution or telecommunication organisation.

11. The method of claim 8 or claim 9 wherein the portable medium is a stored value device and the record of the credit is stored and maintained in the stored value device.

12. The method of any one of claims 8 to 11 wherein the price paid for the credit by the consumer is transferred in whole or in part to the financial institution to cover or offset the costs of issuing the transaction card or stored value device and maintaining the record of the credit.

13. The method of any one of claims 8 to 12 wherein when the portable medium is provided to the consumer and the amount of the credit is deposited with the financial institution.

14. The method of claim 13 wherein the amount of die credit is deposited with the financial institution by the second goods and/ or services provider.

15. The method of claim 13 wherein a portion of the amount deposited is provided by the first provider of goods and/ or services by way of a transaction fee on die first provider of goods and/or services.

16. The method of any one of the preceding claims wherein the consumer may only redeem the credit in discrete portions in accordance with rules.

17. The method of claim 16 wherein the rules are determined by the second goods and/or services provider and the first goods and/or services provider in conjunction with the financial institution.

18. The method of any one of the preceding claims wherein the first goods and/ or services provider is a group of individual goods and/ or services providers.

19. A consumer incentive system comprising:

a record of credit maintained in computer memory, the record of credit redeemable for goods and/or services offered by a first provider of goods and/or services;

an association component configured to associate the record of credit with a portable medium;

an updating component configured to update the record of credit by reducing the credit on presentation of the portable medium to the first provider of goods and/or services by a consumer.

20. The system of claim 19 wherein the portable medium is a stored value device.

21. The system of claim 20 wherein the stored value device includes computer memory, the record of credit maintained in the computer memory on the stored value device.

22. The system of claim 19 wherein the portable medium is a transaction card compatible with point of sale (POS) equipment.