AU2008100476A4 - Accelerated Reward Points and Award System - Google Patents

Description

ACCELERATED REWARD POINTS and AWARD SYSTEM 3 This invention relates to improvements in the current reward points system or loyalty programmes.

It explains the highly flexible innovative method of accelerating reward points thereby enabling members to redeem for their awards rapidly.

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Please take note that in this invention, Reward Points means the actual points earned upon purchase and Award Points means the required points needed to redeem a product.

SDESCRIPTION

31. Challenge )cGeneral Problem. It just takes long to accumulate enough reward points to redeem for Sawards.

FlyBuys Using Flybuys as an example, on its special deal, one needs 11,900 points to be able to redeem an 'iPod Shuffle 2GB' this award. On its normal deal, one requires 14,300 points.

Using their standard points earning method, at least one standard point is issued for every spent in a single transaction at a participating retailer. Using this standard point conversion, one needs a total accumulated purchase amount of 59,500, assuming your points have not expired when you reach this total amount.

Ipoint 11,900 points $59,500 (11,900 x Assuming you only make an average weekly purchase of $500.00 every week to any of the participating establishments, and also assuming all your purchases are eligible for points, it would take you 119 weeks to redeem this 'iPod Shuffle 2GB' which has a retail price of $89.00; That is 0.15% percent reward for your more than two years of loyalty. There must be a better way.

Credit Card.

Participating Credit Card can now be linked to FlyBuys to earn more points. One can earn an additional point 1 for every $5 spent on the credit card. Assuming you pay the balance immediately before any interests are charged, you effectively have earned 2 points for the $5.00 you have spent (1 point from the store and 1 point from the credit card company).

So, one just have to spend a total accumulated purchase of 29,750 to accumulate 11,900 award points.

2 $5 Ipoint 1 point 00 11,900 points 4 $29,750 (11,900/2 x

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Assuming the same regular weekly purchase of $500.00, this cuts your waiting time by half to a total of 59.50 weeks to redeem the $89 worth of product. That is still only 0.3% percent reward for your more than a year of loyalty. There must be really a better way.

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SLimited Opportunities to boost your points. There are currently only few options to purchase lower value items for earning reward points enough to be able to redeem award points for higher value items. There are great products to redeem but the problem of accumulating points quickly without spending so much is still a challenge.

0C SOf course, there are occasional bonus ways to boost your points such as buying 50.00 worth of vitamins to earn 1000 points or buying $30.00 worth of cosmetics to earn 300 points, which are only partly effective to earn points quickly. There are so much cosmetics or vitamins you would need before their actual expiry shelf life. There must be a better way.

2. A Better Innovative Way The new system described here is the better way. It is a combination of the different concepts of the various systems: Pension System, Credit Cooperative System, FlyBuys Rewards System and Network Marketing.

In the Pension System, one becomes a Receiver of benefits after several years of productive life being a Provider of benefits in terms of taxes paid.

In the Credit Cooperative System, every member pays a membership fee and is pooling their resources together and loan them out to members.

In the FlyBuys Rewards System, the membership is free and every member can accumulate points by purchasing items from participating stores Cole Group of Companies, OfficeWorks, etc.) and by using your linked participating Credit Cards (NAB Visa or NAB MasterCard).

In a Network Marketing System, a member earns rebates from his/her down line members' purchases.

A New System This system involves putting more margin component on each reward point and then k0 distributing these pooled margin-loaded reward points among members in systematic cycle 3 manner in which members are getting more rewards with greater value at an accelerated

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pace.

Unlike the Pension System, a member acts both as Receiver and Provider of benefits at the same time. However, because of the design of the distribution system, a member always become more of the Receiver than a Provider in terms of the volume of rewards points received than reward points provided to the network.

Like the Credit Cooperative System, each member has to pay a membership fee. However, unlike the Credit Cooperative System, the member is not required to return any reward points received from the pooled reward points. He/she is just encouraged to return to _network after the end of the cycle and become again both as a Receiver and Provider of OO reward points.

Unlike the FlyBuys System, each reward point will be loaded with more margin component.

This new Reward System will effectively be distributing most of the margin of each transaction back to the network.

And also, unlike the FlyBuys System which sits at the back of the sales transaction, the system is designed to run in front of the sales transaction and drives the margin. To do so, the company needs to become a reseller and not just facilitator of the sales transaction.

Like the FlyBuys System, credit card reward points will also be added to the reward system.

The difference is that these credit card rewards points will have to be converted first to the Company's reward system equivalent.

Like the Network Marketing System, a member will have down lines. However, unlike the Network Marketing System, a member will not be receiving rebate amounts from his/her down lines but only shared reward points. This reward system is not designed to earn income but only reward points. It is not a home-based business for members. It's more like of a "join- this-membership-and-you'll-get-to-choose-and-receive-really-cool-expensivegift/rewards -many-times-over-very-quickly" thing.

And unlike any Network Marketing System where up lines stay as up line of their network, the member from the top needs to go at the middle or bottom when the new cycle begins when he/she enters as a repeat cycle member. The system is designed to distribute the rewards points quickly and to more people in a circular spiral fashion.

3. Here how it works Product Point Derivation Engine.

4 A negotiated product to market is processed in the 'Product Point Derivation Engine'.

0C Based on the variables entered, the product can be classified as Goods and Services that can be offered for sale and earn reward points or Goods and Services that can be offered as Award items only. The main criterion used is the margin on each product item sold.

This system uses an algorithm that will compute for each product the Points Value that can be earned by the member and the Points Value that will be shared and distributed to q the network while maximising the margin distributed to the network without incurring a loss on each transaction.

SItems will be highlighted as either GR,' and/or RED:

NOTE:

__Those highlighted in GR EN should be actively promoted.

00 Those highlighted in can be offered as regular Sale and/or Award products but should Snot be actively promoted. This means the Net Margin is below the current set rule but is still C\ above the Final Effective Rate of Return Net Margin less the amount equivalent of the points attached to the item) Those highlighted in RED should only be offered as Award products as the margin is so thin it is below the Final Effective Rate of Return.

Credit Card reward point will also be included but the point itself and dollar equivalent will have to pass this system process to derive at the equivalent Points Value that can be earned by the member and the Points Value that will be shared and distributed to the network.

Member Hierarchy and Distribution Percentage System A new Member or a Repeat Cycle Member enters the required personal details and are processed by the system.

Depending on the demographic factors, the following variables can be set in the system to update the hierarchy: 0 The number period for each Member Cycle; i.e. the maximum number of periods before a member needs to rejoin the network again and start again.

0 The number of levels deep for the Cycle.

0 The different sharing percentage at each level the total of which should always equal to 100% The number of 1 st level down lines allowed The specific next levels to which each succeeding excess down line from the 1 st 0 level will be assigned to A New Member's or a Repeat Cycle Member's details will have to pass this system process and the hierarchy for that member together with the equivalent percentages for each hierarchy level will be built by the system using the variables defined as discussed above.

Every time any of the variables discussed above changes, all the hierarchies will have to be Ore-built.

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Earned Reward Points System Every time a member purchase, the earned reward points will be computed by the system based on the details from the 'Product Point Derivation Engine'.

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The reward points will effectively be distributed by this system using the Golden Rule Ratio between the member and the Up line members.

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Reward and Award Distribution and Tracking Engine The shared reward points for the Up line members will be further distributed by the system 0Cusing the hierarchy built by the 'Member Hierarchy and Distribution Percentage System'.

0 The system will maintain and process the balances for each member for every earned reward points from own level and down lines, and for every reward point redeemed for awards.

Award/Redeem Reward System A member can exchange (redeem) for award items part or whole of the total earned rewards points from own level and from those received from down line members as computed by the 'Reward and Award Distribution and Tracking Engine