CA2354287A1 - Incentive program having rewards - Google Patents
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- CA2354287A1 CA2354287A1 CA 2354287 CA2354287A CA2354287A1 CA 2354287 A1 CA2354287 A1 CA 2354287A1 CA 2354287 CA2354287 CA 2354287 CA 2354287 A CA2354287 A CA 2354287A CA 2354287 A1 CA2354287 A1 CA 2354287A1
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Abstract
A participant loyalty incentive program includes a participating incentive-earning business, a participating incentive-redeeming business, and a gateway system adapted to read electronic transactions with the participating businesses using payment mechanisms pre-selected by purchasers who wish to take advantage of the program. The gateway system is preferably also adapted to automatically debit one or more accounts of participating businesses for the cost of the incentive once it is redeemed, and to credit an account of a purchaser.
Description
INCENTIVE PROGRAM HAVING REWARDS
TECHNICAL FIELD OF THE INVENTION
The present invention relates generally to the field of incentive programs, and more particularly to incentive programs having upfront rewards.
BACKGROUND OF THE INVENTION
Many types of incentive programs have been developed to incent participants to engage in particular behavior that is determined to be favorable to a sponsor of the award program. For example, award programs have been established that encourage participants, and.even non-participants, in the award program to patronize particular locations, to patronize particular stores or networks of stores, to use a particular form or method of payment, to spend certain amounts of money, or to purchase particular products. These incentive programs require the purchaser to visit a store or a particular location in order to obtain and/or redeem the incentive rewards earned by the participant.
Prior art incentive programs generally comprise two categories. One of these categories comprises incentive programs in which the incented behavior must be completed before the reward is provided to the participant. Examples of such programs include those in which the participant must purchase a certain number of items, and then are given a like item free. The programs in the other category require certain behaviors be performed even after the reward is provided. For example, in certain prior art programs, a customer is given a credit toward the purchase of a cell phone in return for signing a cell phone service contract.
If the customer subsequently breaks the contract, they are charged for the credit as part of the cancellation fee. Both types of programs have limitations that restrict their . overall effectiveness.
One of the critical constraints on the effectiveness of incentive programs is the cost of the rewards offered. In order to be effective, a program must produce a cost-effective incentive to the participants. Thus, the actual cost to the business used to produce the subjective value the participants place on the rewards offered is a crucial measure of the effectiveness of these programs. This limitation to the incentive effect of such a program is therefore restricted, firstly, by the cost that a sponsoring business is willing and able to incur, secondly, by the nominal value of the rewards that it can afford based on that cost, and, thirdly, by the subjective value that the participants place on the rewards relative to their nominal value.
In certain prior art programs, the entire cost of the reward is borne by the business upfront, before any of the benefits of the program are realized.
Thus, the cost to the business is typically equal-or somewhat greater than-the nominal cost of the rewards provided. This is the worst possible case, and represents a major obstacle to the effectiveness of such a program.
Another obstacle to the effectiveness of certain prior art programs is that the incentive to the participant is psychologically remote, because it can be obtained only after performing one or more required behaviors. To the extent that the desired behaviors require effort on the part of the participant, the relative immediacy of this effort, as compared to the relative remoteness of the reward, diminishes the tendency of the reward to incent the desired behaviors.
Furthermore, psychology studies have shown a quantifiable, statistically significant loss-averseness in the average person. In other words, people asked to place a quantified value on art object or right systematically place a higher value on that object or right when they already possess it than when it merely represents an opportunity. For example, in one experiment in which people were asked to place a dollar value on certain mugs, individuals who were first given the mug, then offered the opportunity to sell it, placed an average value on the mugs over twice that placed by another group who were first given some money, then offered the opportunity to purchase one of the mugs. A third group, who were not initially given either money or a mug, but were simply offered a choice between a certain sum or a mug, placed an intermediate value on the mugs. Thus, the experiment demonstrated that the subjective value of the mugs more than doubled, on average, after the individual actually possessed it.
Therefore, the subjective value of a given reward in an incentive program is diminished when it is presented only as an offer. Because the objective cost of the rewards offered by an incentive program is a primary constraint on such programs, this diminishment represents a major obstacle to their overall effectiveness.
The subjective value of the rewards is also typically minimized by the fact that the reward is selected for the participant. Individuals place widely varying subjective values on different items and rights. If rewards are selected for the participants and offered to them in return for their participation, the subjective value of the rewards will likely be roughly the average value that people generally place on those rewards. The subjective value can be improved somewhat by offering participants a list of rewards from which they can choose for themselves, since they will naturally choose those they value most highly. However, the optimum subjective value is still not achieved unless the participant is free to select the reward from anything available in the marketplace of up to the nominal cost chosen by the business.
Another obstacle to the effectiveness of incentive programs is that they often are structured to provide acute rewards for a single, relatively important act.
This structure is tolerable when a business is primarily concerned with transactions that are relatively important but relatively infrequent. For example, a given construction company may predominately depend upon the sale of houses for revenue, profit, or both, and tk~erefore be relatively unconcerned with the ongoing behavior of its customers. However, most businesses depend upon a larger number of less important transactions, and therefore need incentive programs that are structured to incept ongoing behavior. Furthermore, even for those businesses that are relatively unconcerned with ongoing behavior typically have a substantial interest in it, since repeat business and customer loyalty contribute substantially to the performance of these businesses in absolute terms. Thus, the failure to influence ongoing behavior is another important constraint on the effectiveness of certain prior art programs.
Another obstacle to the effectiveness of certain programs is that, typically, in order to obtain an award, the purchaser must remember that the award system is available. This problem often manifests itself when a particular form of payment is required, or the purchaser is required to display an identification card, or keep a coupon and present it at the time of purchase. When the purchaser forgets to take the appropriate steps to obtain his or her incentive award, and later remembers that an award was available, the sponsor of the incentive program may unwittingly create frustration and negative feelings toward the sponsor in the very participants whose loyalty is sought.
Other problems associated with incentive award programs involve the management of information required to operate the program. In some award programs, the sponsor or transacting store involved in the program must enter data regarding the purchaser and/or information beyond that normally required for a transaction into a computer system so that the award information may be determined. This increases the time cost and expense to the sponsor. The award information must also be communicated in some manner to the purchaser or participant, thus resulting in the additional expense of providing statements to the participant.
In recent years, there has been tremendous growth in the use of electronic transactions to make purchases. Such transactions may involve the use of a credit card, a debit card, a check card, or other such devices having an account associated therewith. Because transactions using these cards include information about the identity of the card holder, they provide an opportunity to make participation easier for the participant by reducing or eliminating the need to plan ahead to take advantage of the program- for example, by remembering to take coupons to the point of sale. Such transactions also provide an opportunity to reduce the time and expense of administering the system, such as those associated with entering data into a system in order to record the incentives earned by purchasers.
While the prior art has attempted to provide various types of incentive systems to award and provide incentives for participant behavior, the need for improvements remains. A system is needed in which the cost to the sponsoring business is less than the nominal cost of the rewards provided to the participants.
' A system is also needed in which the reward is psychologically immediate, while any effort necessary for the participant to perform the desired behaviors is relatively remote. Likewise, a system is needed in which the rewards can actually be provided, rather than merely offered, to the participating participants, so that the subjective value of the rewards is maximized. A system is also needed in which the range of options for the rewards offered is as wide as possible, and approximates the range of products and services available in the marketplace.
Furthermore, a system is needed which is structured to incent ongoing behavior, and to encourage the relatively frequent performance of behaviors that are, independently, relatively less important. A system also is needed in which it is easier for both purchasers and businesses to participate. The present invention is directed toward meeting these needs, amongst others.
SUMMARY OF THE INVENTION
A first embodiment method of incenting a participant comprises: (a) giving the participant a reward; (b) comparing actions of the participant performed subsequent to step (a) to a pre-selected set of criteria; and (c) withdrawing the reward unless the actions compared in step (b) conform to the pre-selected set of criteria; wherein step (c) is the only step in which the reward can be withdrawn.
A second embodiment method of incenting a participant comprises: (a) providing the participant with an account; (b) permitting the participant to use the account to make at least one purchase that is conditionally paid for by the participating business; (c) subsequent to step (b), observing certain actions of the participant through the existing transaction network; (d) subsequent to step (b), comparing actions of the participant to a pre-selected set of criteria; and (e) requiring the participant to repay the participating business unless the actions of the participant conform to the pre-selected criteria.
A third embodiment method comprises: (a) providing the participant with an account; (b) permitting the participant to use the account to make a purchase that is conditionally paid for by the participating business; (c) subsequent to step (b), comparing actions of the participant to a pre-selected set of criteria;
and (d) requiring the participant to repay the participating business for a portion of the price of the purchase unless the actions of the participant conform to the pre-selected criteria.
A fourth embodiment method comprises: (a) giving the participant a reward having a conditional cost to the participant; and (b) subsequent to step (a), forgiving at least a portion of the conditional cost if the participant performs one of the at least one pre-selected behavior.
A fifth embodiment method of incenting a participant to perform at least one pre-selected behavior having an associated value comprises: (a) giving the participant a reward having a conditional cost to the participant; (b) subsequent to step (a), observing certain actions of the participant through the existing credit system; (c) if an action is observed at step (b) that is one of the at least one pre-selected behavior, forgiving at least a portion of the conditional cost corresponding to the value associated with the pre-selected behavior performed; and (d) giving the participant an additional reward having a conditional cost if the entire conditional cost is forgiven; wherein steps (b) and (c) are performed using an appropriately programmed computer.
A sixth embodiment method of incenting a participant comprises: (a) giving the participant a reward; (b) comparing actions of the participant performed subsequent to step (a) to a pre-selected set of criteria; and (c) withdrawing the reward unless the actions compared in step (b) conform to the pre-selected set of criteria; wherein the participant has the option to decline to perform at least one action that would otherwise contribute to the satisfaction of the criteria without causing the reward to be withdrawn.
A seventh embodiment method of incenting a participant comprises: (a) providing the participant with an account; (b) permitting the participant to use the account to make at least one purchase that is conditionally paid for by the participating business; (c) subsequent to step (b), observing certain actions of the participant through the existing transaction network; (d) subsequent to step (b), comparing actions of the participant to a pre-selected set of criteria; and (e) requiring the participant to repay the participating business unless the actions of the participant conform to the pre-selected criteria; wherein step (d) is performed by an appropriately programmed computer; and wherein the participant can decline to perform at least one action that would otherwise contribute to the satisfaction of the criteria without causing the reward to be withdrawn.
An eighth embodiment method of incenting loyalty in a participant to a participating business comprises: (a) providing the participant with an account; (b) permitting the participant to use the account to make a purchase that is conditionally paid for by the participating business; (c) subsequent to step (b), comparing actions of the participant to a pre-selected set of criteria; and (d) requiring the participant to repay the participating business for a portion of the price of the purchase unless the actions of the participant conform to the pre-selected criteria; wherein the participant can decline to perform at least one action that would otherwise contribute to the satisfaction of the criteria without causing the reward to be withdrawn.
A ninth embodiment method of incepting a participant comprises: (a) giving the participant a reward; (b) comparing actions of the participant performed subsequent to step (a) to a pre-selected set of criteria; and (c) withdrawing the reward unless the actions compared in step (b) conform to the pre-selected set of criteria; wherein the incepted behaviors substantially exclude contractual obligations that the participant must incur to receive the reward.
It is one object of the present invention to provide a method for incepting loyalty in a participant to a business by means of actually providing rewards, rather than merely offering them to the participant, so that the subjective value of the rewards is maximized. Other objects and advantages of the present invention will be apparent from the following description of the preferred embodiment.
BRIEF DESCRIPTION OF THE DRAWINGS
Fig. 1 is a flow chart of a first embodiment method of incenting one or more behaviors in a participant.
DESCRIPTION OF TI-~ PREFERRED EMBODIIyIENT
For the purposes of promoting an understanding of the principles of the invention, reference will now be made to the embodiments illustrated in the drawings and specific language will be used to describe the same. It will nevertheless be understood that no limitation of the scope of the invention is thereby intended, such alterations and further modifications in the illustrated device, and such further applications of the principles of the invention as illustrated therein being contemplated as would normally occur to one skilled in the art to which the invention relates.
10 Fig. 1 is a flow chart illustrating a preferred embodiment method according to the present invention, indicated generally at 100. The method 100 is used in an incentive program to incent loyalty in a selected consumer to a particular credit card company. Specifically, the method 100 incents the participant to prefer a credit card issued by the company to other payment mechanisms. The method 100 begins at 110 by providing the consumer with a program credit card issued by the credit card company, along with information explaining the program, and how the consumer can participate. At 120, if the consumer chooses to be a participant in the incentive program, he or she is provided with a reward. In the preferred embodiment, the participant is free to choose the specific reward for himself or herself by making one or more purchases using the program credit card. The reward preferably is limited to a total cost below a pre-selected value. Thus, in those embodiments in which the participant is free to choose the reward by making one or more purchases, the total price of those purchases is preferably limited to a pre-selected value. In certain alternative embodiments, the reward is pre-selected for the participant. In these embodiments the consumer must be informed of what the reward is, so that he or she can decide whether they wish to receive the reward and participate in the incentive program. In these embodiments the cost of the reward also is preferably recorded on the program credit card account.
Although the price of the reward is preferably recorded on the program credit card account, the participant is not required to repay the cost of the reward so long as he or she performs according to specific pre-selected criteria.
Because the participant will not have to repay the cost of the reward if they satisfy the program's performance criteria, the cost of the reward is preferably recorded separately from the balance from other purchases made with the program credit card. At least some of the performance criteria are selected to serve the incentive program's goals, to encourage the participant to prefer the program credit card to alternative payment mechanisms. For example, the criteria may include making purchases with the program credit card totaling a pre-selected dollar value during each payment period, over the course of a year, or any other pre-selected period of time. For another example, the criteria may include maintaining a pre-selected balance on the card over any such period, or a pre-selected average balance.
Some of the criteria may not directly encourage the participant to prefer the program credit card to other payment mechanisms. Examples of such a criterion include requiring the participant to make timely periodic minimum payments.
Once the consumer has chosen to participate in the incentive program by receiving the reward at 120, subsequent purchases using the program credit card are observed at 130. When the participant makes a subsequent purchase using the program credit card, at 150 a portion of the cost of the reward is forgiven.
In certain embodiments, the portion of the cost of the reward that is forgiven is related to the price of the subsequent purchase. For example, in certain embodiments, 1°l0 of the price of each subsequent purchase using the program credit card is deducted from the outstanding balance on the cost of the reward. It will be appreciated that any function of the price of subsequent purchases using the program credit card may be used to determine the portion of the outstanding balance that is forgiven.
Thus, even if the participant fails to completely conform to the incentive program's performance criteria, the participant is only required to repay a portion of the price of the purchase corresponding to how far his or her actions deviated from those criteria. In this way, the participant can receive a portion of the value of the reward they receive based on how close they come to performing according to the incentive program goals.
Each time a portion of the outstanding balance is forgiven at 150, at 160 the balance is compared to zero. If a portion of the cost of the reward remains, the method 100 returns to step 130, and further subsequent purchases are observed.
If the entire cost of the reward has been forgiven, then the method returns to step 120, and a new reward is made available to the participant. In this way, the incentive program can continue to intent the participant's loyalty to the credit card company indefinitely. Alternatively, rather than returning to step 120 and providing a new reward, the method may simply end after the entire cost of the reward has been forgiven.
In certain embodiments, the value of subsequent rewards provided after the cost of a previous reward has been forgiven can be based on the participant's performance. For example, in certain embodiments each time the cost of a reward is completely forgiven, a new reward having a higher cost is made available.
Alternatively, the value of the reward provided could be a function of some other parameter the credit card company deems relevant. For example, the value of the reward could be a function of the credit limit on the program credit card, or some function of the participant's credit rating, or some function of the amount of prior charges made with the program credit card, etc.
In certain other embodiments, a new reward is made available whenever a portion of the cost of the previous reward is forgiven, such that the total outstanding balance on all the rewards remains below a pre-selected value.
Thus, in effect, the participant is provided with a reward fund from which he or she is free to choose rewards, and which is partially replenished when a portion of the cost of rewards already received is forgiven. For example, in certain embodiments the participant is permitted to select a reward by making purchases up to $500 in total value. If the participant then makes purchases that cause, for example, $100 of that cost to be forgiven, the participant is permitted to select an additional reward by making one or more purchases up to a total value of $100.
In certain embodiments, rather than forgiving the cost of the reward a portion at a time, the entire cost can be forgiven at once. Preferably, in such embodiments, at 130 the participant's behavior over a period is observed and compared to pre-selected criteria. If these criteria are satisfied at the end of the period, then at 150 the entire cost of the reward is forgiven. For example, in a certain embodiment the participant does not have to repay the cost of the reward for one year, so long as he or she uses the program credit card to make $100 of purchases each month and timely pays the minimum amount due. However, at the end of the year, the entire cost is permanently forgiven if the total purchases using the program credit card during that year totaled $2500.
Regardless of the mechanism used to calculate when and how much of the cost of the reward is forgiven, if the participant fails to meet the minimum criteria for participation, the reward is withdrawn. Thus, if the participant fails to meet the criteria of participation, then the unforgiven portion of the cost of the reward is added to the regular credit card balance and treated as any other purchase using the program credit card. In those embodiments in which the entire cost of the reward is forgiven at once if the participant's performance satisfies the program's criteria, this amount will be the entire cost of the reward.
Those skilled in the art will appreciate that, because the participant's behavior is observed over a period after the reward is provided, the method 100 is well structured for incepting ongoing behavior. Regardless of whether the cost of the reward is forgiven a portion at a time or at one time, the participant is aware that there is a benefit for repeating frequently the desired behaviors.
However, there is no obligation for the participant to perform any particular incepted behavior. Thus, the participant is simultaneously encouraged to perform the incepted behaviors as often as is practicable, yet free to decide in which instances it is desirable for them to do so.: The ability to provide an incentive to perform certain behaviors, without any obligation to perform any one of them, or to perform them in any particular instance, is therefore an advantage of programs according to the present invention.
It will be appreciated that the method 100 can be adapted to incept loyalty in a participant to a variety of other kinds of businesses, and to incept virtually any behavior such a business might find desirable. For example, a retail business would typically be more interested in having a participant select products that it sells, rather than selecting a particular payment mechanism. Therefore, in order to incept loyalty to its products such a retail business can employ the method substantially as described hereinabove. However, at 150 a portion of the balance of the cost of the reward is forgiven only when the participant purchases a product from the business. In certain embodiments, the transactions observed at 130 include transactions using payment mechanisms other than the program credit card provided at 110. For example, purchases from the business using any credit card could be observed and cause a portion of the cost of the reward to be forgiven. One means of observing such transactions is through the transaction network through services commercially available through such companies as GRS Group, of Chandler, AZ (www.GRSGroup.com) or Order Trust, of Lowell, MA
(www.OrderTrust.com). Alternatively, as described hereinabove, rather than causing a portion of the cost to be forgiven, such transactions can be observed and compared to a pre-selected set of criteria over a period to determine whether the entire cost of the reward will be permanently forgiven.
It will be appreciated that if transactions employing a variety of purchase mechanisms are observed in order to determine whether the participant is performing according to the criteria of the incentive program there is no need to provide a specific program credit card at 110. It may, nevertheless, be advantageous to do so, since this still provides a convenient means for the participant to select and acquire a reward of his or her own choosing.
Furthermore, in programs in which the participant is free to choose rewards for himself or herself, a program credit card also provides a convenient means for accounting for the value of further rewards available to the participant. Nonetheless, it will be appreciated that other means of providing a reward, and for tracking a reward fund from which the participant can select rewards, may be used. For example, other kinds of existing accounts, such as frequent flyer miles accounts, may be used.
One such type of account which can advantageously be used is an alternative currency participant account such as is taught by the co-pending U.S. Patent Application filed October 2, 2000, and entitled INCENTIVE PROGRAM USING
ALTERNATIVE CURRENCY, the specification and drawings of which are hereby incorporated herein in their entireties.
It will also be appreciated that a credit card company employing the method 100 can cooperate with other such non-credit card companies. For example, if the credit card company is employing an embodiment in which 1% of the purchase price of subsequent purchases using the program credit card is forgiven from the balance of the cost of the reward, it might cooperate with a particular retail company to offer an additional 0.5% for subsequent purchases from the retail company using the program credit card. Preferably, at least a portion of the additional amount forgiven is provided by the retail company, in return for the incentive for loyalty to the retail company the program creates in the participant. Similarly, various non-credit card companies can cooperatively employ certain embodiments of the method 100, as will be apparent to those skilled in the art.
The method 100 can also be used to incent behaviors other than purchases.
For example, certain businesses may desire that participants perform actions such as clicking on banners on their websites, or test driving vehicles they offer for sale.
10 In certain embodiments, such businesses assign a value to the desired actions corresponding to the amount of the cost of the reward that will be forgiven when a participant performs that action. In certain other embodiments, the business selects performance criteria to which the participant's actions are compared to determine whether the cost of the reward will be permanently forgiven, or whether the reward will be withdrawn. It will be appreciated that various other means of observing the participant's actions can advantageously be used, depending on the behaviors being incented. For example, if the business is incenting participants to click on banners on their website, computer software can be used to observe when the participant accesses the website and how often the participant clicks on a banner.
The method 100 minimizes the upfront cost to the business of providing the reward, because the reward is given to the participant conditionally, so that the business need not treat the cost of the reward as an expense. Instead, the cost can be carried as an account receivable on the asset side of the business's balance sheet. If the business elects to do so, the cost to the business will be the time value of the money, plus a one-time bad-debt provision. These values may vary depending on the nature of the business involved, but typical values are approximately 6% financing and 2% for bad debt. Thus, for example, the three-year cost to provide a reward having a nominal cost of $100 would be $20. When combined with the enhanced subjective value to the participant due to the immediacy of the reward, therefore, the business is capable of creating an incentive for approximately $20 that might otherwise require over $200 with prior art incentive methods. The subjective value is even further enhanced in those embodiments in which the participant is free to choose a reward for himself or herself using a program credit card, since virtually everything available in the marketplace can be purchased this way.
A method according to the present invention therefore offers not only the opportunity for a sponsoring business both to experience greater customer loyalty, but also to acquire more new customers at a lower cost. As an illustration, consider a situation in which a credit card business wishes to acquire new customers. Using a prior art incentive program, the business would have to send out a mailing to a large number of prospective customers, offering an incentive.
The cost of such mailings might be, in round figures, about $1 per mailing. If the nominal cost of the reward is $100, and the response rate is 1%, then the total cost per new customer would be $200.
An example illustrating the advantage of a method according to the present invention is shown in the following tables:
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ost Per New Account excludin incentive) $100 $100 ost of Incentive $100 $20 $80 otal Cost of Pro $2,000,000$1,200,000 $800,000 am otal Cost Per New $200 $120 $80 Account ~t Accoun~a t~, u~tiari. Cods ouseholds Receiving 1,000,0001,000,0001,000,0001,000,000 ailin otal Cost of Mailin $1,000,000$1,000,000$1,000,000$1,000,000 '' . -~=- _ .. : -:... ~ ~ , ost Per New Account (excludin incentive)~ $100 $67 $50 $33 a .
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otal Acquisition Cost Per $200 $167 $150 $133 ew Account-Full Cost ,~ ~ ~,.:ReduGed ~~ ~~za .= I ~~ ~
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Thus, the cost of acquiring new customers is reduced from $200 to $120 even if the response rate is unchanged. Because of the enhanced subjective value of the rewards, however, the response rate will certainly improve, even if the nominal value is unchanged. Depending on the increase of the response rate, even if the cost of the reward is unchanged, the cost of acquiring new customers is substantially reduced. For example, a 3% response rate reduces the cost of each new customer to $133, even if the business must bear the full cost of the rewards.
When both advantages of the program are calculated, the cost of each new customer is only $53.
It will also be appreciated that, because of the reduction in the actual cost to provide a reward of a given nominal value, the response rate can be further increased by increasing the nominal value of the reward provided. For example, if the actual cost is held constant at $100, the nominal value of the reward can be increased to $500. In practice, the optimal efficiency of the program is believed to be achieved by increasing the nominal value of the reward, but by an amount small enough that the actual cost of the reward is still lowered relative to prior art programs.
The preferred embodiment has been illustrated with a credit card.
However, any account can be used as alternative embodiments. Thus, for example, any form of accounts usable by the participant to perform the required transactions could be substituted for a credit card. Furthermore, because, in the preferred embodiment, the cost to the sponsor to provide rewards of a given nominal value is reduced, the response rate can be further elevated by increasing the nominal value of the reward offered.
While the invention has been illustrated and described in detail in the drawings and foregoing description, the same is to be considered as illustrative and not restrictive in character, it being understood that only the preferred embodiments, and certain alternative embodiments deemed helpful in further illuminating the preferred embodiments, have been shown and described and that all changes and modifications the come within the spirit of the invention are desired to be protected.
TECHNICAL FIELD OF THE INVENTION
The present invention relates generally to the field of incentive programs, and more particularly to incentive programs having upfront rewards.
BACKGROUND OF THE INVENTION
Many types of incentive programs have been developed to incent participants to engage in particular behavior that is determined to be favorable to a sponsor of the award program. For example, award programs have been established that encourage participants, and.even non-participants, in the award program to patronize particular locations, to patronize particular stores or networks of stores, to use a particular form or method of payment, to spend certain amounts of money, or to purchase particular products. These incentive programs require the purchaser to visit a store or a particular location in order to obtain and/or redeem the incentive rewards earned by the participant.
Prior art incentive programs generally comprise two categories. One of these categories comprises incentive programs in which the incented behavior must be completed before the reward is provided to the participant. Examples of such programs include those in which the participant must purchase a certain number of items, and then are given a like item free. The programs in the other category require certain behaviors be performed even after the reward is provided. For example, in certain prior art programs, a customer is given a credit toward the purchase of a cell phone in return for signing a cell phone service contract.
If the customer subsequently breaks the contract, they are charged for the credit as part of the cancellation fee. Both types of programs have limitations that restrict their . overall effectiveness.
One of the critical constraints on the effectiveness of incentive programs is the cost of the rewards offered. In order to be effective, a program must produce a cost-effective incentive to the participants. Thus, the actual cost to the business used to produce the subjective value the participants place on the rewards offered is a crucial measure of the effectiveness of these programs. This limitation to the incentive effect of such a program is therefore restricted, firstly, by the cost that a sponsoring business is willing and able to incur, secondly, by the nominal value of the rewards that it can afford based on that cost, and, thirdly, by the subjective value that the participants place on the rewards relative to their nominal value.
In certain prior art programs, the entire cost of the reward is borne by the business upfront, before any of the benefits of the program are realized.
Thus, the cost to the business is typically equal-or somewhat greater than-the nominal cost of the rewards provided. This is the worst possible case, and represents a major obstacle to the effectiveness of such a program.
Another obstacle to the effectiveness of certain prior art programs is that the incentive to the participant is psychologically remote, because it can be obtained only after performing one or more required behaviors. To the extent that the desired behaviors require effort on the part of the participant, the relative immediacy of this effort, as compared to the relative remoteness of the reward, diminishes the tendency of the reward to incent the desired behaviors.
Furthermore, psychology studies have shown a quantifiable, statistically significant loss-averseness in the average person. In other words, people asked to place a quantified value on art object or right systematically place a higher value on that object or right when they already possess it than when it merely represents an opportunity. For example, in one experiment in which people were asked to place a dollar value on certain mugs, individuals who were first given the mug, then offered the opportunity to sell it, placed an average value on the mugs over twice that placed by another group who were first given some money, then offered the opportunity to purchase one of the mugs. A third group, who were not initially given either money or a mug, but were simply offered a choice between a certain sum or a mug, placed an intermediate value on the mugs. Thus, the experiment demonstrated that the subjective value of the mugs more than doubled, on average, after the individual actually possessed it.
Therefore, the subjective value of a given reward in an incentive program is diminished when it is presented only as an offer. Because the objective cost of the rewards offered by an incentive program is a primary constraint on such programs, this diminishment represents a major obstacle to their overall effectiveness.
The subjective value of the rewards is also typically minimized by the fact that the reward is selected for the participant. Individuals place widely varying subjective values on different items and rights. If rewards are selected for the participants and offered to them in return for their participation, the subjective value of the rewards will likely be roughly the average value that people generally place on those rewards. The subjective value can be improved somewhat by offering participants a list of rewards from which they can choose for themselves, since they will naturally choose those they value most highly. However, the optimum subjective value is still not achieved unless the participant is free to select the reward from anything available in the marketplace of up to the nominal cost chosen by the business.
Another obstacle to the effectiveness of incentive programs is that they often are structured to provide acute rewards for a single, relatively important act.
This structure is tolerable when a business is primarily concerned with transactions that are relatively important but relatively infrequent. For example, a given construction company may predominately depend upon the sale of houses for revenue, profit, or both, and tk~erefore be relatively unconcerned with the ongoing behavior of its customers. However, most businesses depend upon a larger number of less important transactions, and therefore need incentive programs that are structured to incept ongoing behavior. Furthermore, even for those businesses that are relatively unconcerned with ongoing behavior typically have a substantial interest in it, since repeat business and customer loyalty contribute substantially to the performance of these businesses in absolute terms. Thus, the failure to influence ongoing behavior is another important constraint on the effectiveness of certain prior art programs.
Another obstacle to the effectiveness of certain programs is that, typically, in order to obtain an award, the purchaser must remember that the award system is available. This problem often manifests itself when a particular form of payment is required, or the purchaser is required to display an identification card, or keep a coupon and present it at the time of purchase. When the purchaser forgets to take the appropriate steps to obtain his or her incentive award, and later remembers that an award was available, the sponsor of the incentive program may unwittingly create frustration and negative feelings toward the sponsor in the very participants whose loyalty is sought.
Other problems associated with incentive award programs involve the management of information required to operate the program. In some award programs, the sponsor or transacting store involved in the program must enter data regarding the purchaser and/or information beyond that normally required for a transaction into a computer system so that the award information may be determined. This increases the time cost and expense to the sponsor. The award information must also be communicated in some manner to the purchaser or participant, thus resulting in the additional expense of providing statements to the participant.
In recent years, there has been tremendous growth in the use of electronic transactions to make purchases. Such transactions may involve the use of a credit card, a debit card, a check card, or other such devices having an account associated therewith. Because transactions using these cards include information about the identity of the card holder, they provide an opportunity to make participation easier for the participant by reducing or eliminating the need to plan ahead to take advantage of the program- for example, by remembering to take coupons to the point of sale. Such transactions also provide an opportunity to reduce the time and expense of administering the system, such as those associated with entering data into a system in order to record the incentives earned by purchasers.
While the prior art has attempted to provide various types of incentive systems to award and provide incentives for participant behavior, the need for improvements remains. A system is needed in which the cost to the sponsoring business is less than the nominal cost of the rewards provided to the participants.
' A system is also needed in which the reward is psychologically immediate, while any effort necessary for the participant to perform the desired behaviors is relatively remote. Likewise, a system is needed in which the rewards can actually be provided, rather than merely offered, to the participating participants, so that the subjective value of the rewards is maximized. A system is also needed in which the range of options for the rewards offered is as wide as possible, and approximates the range of products and services available in the marketplace.
Furthermore, a system is needed which is structured to incent ongoing behavior, and to encourage the relatively frequent performance of behaviors that are, independently, relatively less important. A system also is needed in which it is easier for both purchasers and businesses to participate. The present invention is directed toward meeting these needs, amongst others.
SUMMARY OF THE INVENTION
A first embodiment method of incenting a participant comprises: (a) giving the participant a reward; (b) comparing actions of the participant performed subsequent to step (a) to a pre-selected set of criteria; and (c) withdrawing the reward unless the actions compared in step (b) conform to the pre-selected set of criteria; wherein step (c) is the only step in which the reward can be withdrawn.
A second embodiment method of incenting a participant comprises: (a) providing the participant with an account; (b) permitting the participant to use the account to make at least one purchase that is conditionally paid for by the participating business; (c) subsequent to step (b), observing certain actions of the participant through the existing transaction network; (d) subsequent to step (b), comparing actions of the participant to a pre-selected set of criteria; and (e) requiring the participant to repay the participating business unless the actions of the participant conform to the pre-selected criteria.
A third embodiment method comprises: (a) providing the participant with an account; (b) permitting the participant to use the account to make a purchase that is conditionally paid for by the participating business; (c) subsequent to step (b), comparing actions of the participant to a pre-selected set of criteria;
and (d) requiring the participant to repay the participating business for a portion of the price of the purchase unless the actions of the participant conform to the pre-selected criteria.
A fourth embodiment method comprises: (a) giving the participant a reward having a conditional cost to the participant; and (b) subsequent to step (a), forgiving at least a portion of the conditional cost if the participant performs one of the at least one pre-selected behavior.
A fifth embodiment method of incenting a participant to perform at least one pre-selected behavior having an associated value comprises: (a) giving the participant a reward having a conditional cost to the participant; (b) subsequent to step (a), observing certain actions of the participant through the existing credit system; (c) if an action is observed at step (b) that is one of the at least one pre-selected behavior, forgiving at least a portion of the conditional cost corresponding to the value associated with the pre-selected behavior performed; and (d) giving the participant an additional reward having a conditional cost if the entire conditional cost is forgiven; wherein steps (b) and (c) are performed using an appropriately programmed computer.
A sixth embodiment method of incenting a participant comprises: (a) giving the participant a reward; (b) comparing actions of the participant performed subsequent to step (a) to a pre-selected set of criteria; and (c) withdrawing the reward unless the actions compared in step (b) conform to the pre-selected set of criteria; wherein the participant has the option to decline to perform at least one action that would otherwise contribute to the satisfaction of the criteria without causing the reward to be withdrawn.
A seventh embodiment method of incenting a participant comprises: (a) providing the participant with an account; (b) permitting the participant to use the account to make at least one purchase that is conditionally paid for by the participating business; (c) subsequent to step (b), observing certain actions of the participant through the existing transaction network; (d) subsequent to step (b), comparing actions of the participant to a pre-selected set of criteria; and (e) requiring the participant to repay the participating business unless the actions of the participant conform to the pre-selected criteria; wherein step (d) is performed by an appropriately programmed computer; and wherein the participant can decline to perform at least one action that would otherwise contribute to the satisfaction of the criteria without causing the reward to be withdrawn.
An eighth embodiment method of incenting loyalty in a participant to a participating business comprises: (a) providing the participant with an account; (b) permitting the participant to use the account to make a purchase that is conditionally paid for by the participating business; (c) subsequent to step (b), comparing actions of the participant to a pre-selected set of criteria; and (d) requiring the participant to repay the participating business for a portion of the price of the purchase unless the actions of the participant conform to the pre-selected criteria; wherein the participant can decline to perform at least one action that would otherwise contribute to the satisfaction of the criteria without causing the reward to be withdrawn.
A ninth embodiment method of incepting a participant comprises: (a) giving the participant a reward; (b) comparing actions of the participant performed subsequent to step (a) to a pre-selected set of criteria; and (c) withdrawing the reward unless the actions compared in step (b) conform to the pre-selected set of criteria; wherein the incepted behaviors substantially exclude contractual obligations that the participant must incur to receive the reward.
It is one object of the present invention to provide a method for incepting loyalty in a participant to a business by means of actually providing rewards, rather than merely offering them to the participant, so that the subjective value of the rewards is maximized. Other objects and advantages of the present invention will be apparent from the following description of the preferred embodiment.
BRIEF DESCRIPTION OF THE DRAWINGS
Fig. 1 is a flow chart of a first embodiment method of incenting one or more behaviors in a participant.
DESCRIPTION OF TI-~ PREFERRED EMBODIIyIENT
For the purposes of promoting an understanding of the principles of the invention, reference will now be made to the embodiments illustrated in the drawings and specific language will be used to describe the same. It will nevertheless be understood that no limitation of the scope of the invention is thereby intended, such alterations and further modifications in the illustrated device, and such further applications of the principles of the invention as illustrated therein being contemplated as would normally occur to one skilled in the art to which the invention relates.
10 Fig. 1 is a flow chart illustrating a preferred embodiment method according to the present invention, indicated generally at 100. The method 100 is used in an incentive program to incent loyalty in a selected consumer to a particular credit card company. Specifically, the method 100 incents the participant to prefer a credit card issued by the company to other payment mechanisms. The method 100 begins at 110 by providing the consumer with a program credit card issued by the credit card company, along with information explaining the program, and how the consumer can participate. At 120, if the consumer chooses to be a participant in the incentive program, he or she is provided with a reward. In the preferred embodiment, the participant is free to choose the specific reward for himself or herself by making one or more purchases using the program credit card. The reward preferably is limited to a total cost below a pre-selected value. Thus, in those embodiments in which the participant is free to choose the reward by making one or more purchases, the total price of those purchases is preferably limited to a pre-selected value. In certain alternative embodiments, the reward is pre-selected for the participant. In these embodiments the consumer must be informed of what the reward is, so that he or she can decide whether they wish to receive the reward and participate in the incentive program. In these embodiments the cost of the reward also is preferably recorded on the program credit card account.
Although the price of the reward is preferably recorded on the program credit card account, the participant is not required to repay the cost of the reward so long as he or she performs according to specific pre-selected criteria.
Because the participant will not have to repay the cost of the reward if they satisfy the program's performance criteria, the cost of the reward is preferably recorded separately from the balance from other purchases made with the program credit card. At least some of the performance criteria are selected to serve the incentive program's goals, to encourage the participant to prefer the program credit card to alternative payment mechanisms. For example, the criteria may include making purchases with the program credit card totaling a pre-selected dollar value during each payment period, over the course of a year, or any other pre-selected period of time. For another example, the criteria may include maintaining a pre-selected balance on the card over any such period, or a pre-selected average balance.
Some of the criteria may not directly encourage the participant to prefer the program credit card to other payment mechanisms. Examples of such a criterion include requiring the participant to make timely periodic minimum payments.
Once the consumer has chosen to participate in the incentive program by receiving the reward at 120, subsequent purchases using the program credit card are observed at 130. When the participant makes a subsequent purchase using the program credit card, at 150 a portion of the cost of the reward is forgiven.
In certain embodiments, the portion of the cost of the reward that is forgiven is related to the price of the subsequent purchase. For example, in certain embodiments, 1°l0 of the price of each subsequent purchase using the program credit card is deducted from the outstanding balance on the cost of the reward. It will be appreciated that any function of the price of subsequent purchases using the program credit card may be used to determine the portion of the outstanding balance that is forgiven.
Thus, even if the participant fails to completely conform to the incentive program's performance criteria, the participant is only required to repay a portion of the price of the purchase corresponding to how far his or her actions deviated from those criteria. In this way, the participant can receive a portion of the value of the reward they receive based on how close they come to performing according to the incentive program goals.
Each time a portion of the outstanding balance is forgiven at 150, at 160 the balance is compared to zero. If a portion of the cost of the reward remains, the method 100 returns to step 130, and further subsequent purchases are observed.
If the entire cost of the reward has been forgiven, then the method returns to step 120, and a new reward is made available to the participant. In this way, the incentive program can continue to intent the participant's loyalty to the credit card company indefinitely. Alternatively, rather than returning to step 120 and providing a new reward, the method may simply end after the entire cost of the reward has been forgiven.
In certain embodiments, the value of subsequent rewards provided after the cost of a previous reward has been forgiven can be based on the participant's performance. For example, in certain embodiments each time the cost of a reward is completely forgiven, a new reward having a higher cost is made available.
Alternatively, the value of the reward provided could be a function of some other parameter the credit card company deems relevant. For example, the value of the reward could be a function of the credit limit on the program credit card, or some function of the participant's credit rating, or some function of the amount of prior charges made with the program credit card, etc.
In certain other embodiments, a new reward is made available whenever a portion of the cost of the previous reward is forgiven, such that the total outstanding balance on all the rewards remains below a pre-selected value.
Thus, in effect, the participant is provided with a reward fund from which he or she is free to choose rewards, and which is partially replenished when a portion of the cost of rewards already received is forgiven. For example, in certain embodiments the participant is permitted to select a reward by making purchases up to $500 in total value. If the participant then makes purchases that cause, for example, $100 of that cost to be forgiven, the participant is permitted to select an additional reward by making one or more purchases up to a total value of $100.
In certain embodiments, rather than forgiving the cost of the reward a portion at a time, the entire cost can be forgiven at once. Preferably, in such embodiments, at 130 the participant's behavior over a period is observed and compared to pre-selected criteria. If these criteria are satisfied at the end of the period, then at 150 the entire cost of the reward is forgiven. For example, in a certain embodiment the participant does not have to repay the cost of the reward for one year, so long as he or she uses the program credit card to make $100 of purchases each month and timely pays the minimum amount due. However, at the end of the year, the entire cost is permanently forgiven if the total purchases using the program credit card during that year totaled $2500.
Regardless of the mechanism used to calculate when and how much of the cost of the reward is forgiven, if the participant fails to meet the minimum criteria for participation, the reward is withdrawn. Thus, if the participant fails to meet the criteria of participation, then the unforgiven portion of the cost of the reward is added to the regular credit card balance and treated as any other purchase using the program credit card. In those embodiments in which the entire cost of the reward is forgiven at once if the participant's performance satisfies the program's criteria, this amount will be the entire cost of the reward.
Those skilled in the art will appreciate that, because the participant's behavior is observed over a period after the reward is provided, the method 100 is well structured for incepting ongoing behavior. Regardless of whether the cost of the reward is forgiven a portion at a time or at one time, the participant is aware that there is a benefit for repeating frequently the desired behaviors.
However, there is no obligation for the participant to perform any particular incepted behavior. Thus, the participant is simultaneously encouraged to perform the incepted behaviors as often as is practicable, yet free to decide in which instances it is desirable for them to do so.: The ability to provide an incentive to perform certain behaviors, without any obligation to perform any one of them, or to perform them in any particular instance, is therefore an advantage of programs according to the present invention.
It will be appreciated that the method 100 can be adapted to incept loyalty in a participant to a variety of other kinds of businesses, and to incept virtually any behavior such a business might find desirable. For example, a retail business would typically be more interested in having a participant select products that it sells, rather than selecting a particular payment mechanism. Therefore, in order to incept loyalty to its products such a retail business can employ the method substantially as described hereinabove. However, at 150 a portion of the balance of the cost of the reward is forgiven only when the participant purchases a product from the business. In certain embodiments, the transactions observed at 130 include transactions using payment mechanisms other than the program credit card provided at 110. For example, purchases from the business using any credit card could be observed and cause a portion of the cost of the reward to be forgiven. One means of observing such transactions is through the transaction network through services commercially available through such companies as GRS Group, of Chandler, AZ (www.GRSGroup.com) or Order Trust, of Lowell, MA
(www.OrderTrust.com). Alternatively, as described hereinabove, rather than causing a portion of the cost to be forgiven, such transactions can be observed and compared to a pre-selected set of criteria over a period to determine whether the entire cost of the reward will be permanently forgiven.
It will be appreciated that if transactions employing a variety of purchase mechanisms are observed in order to determine whether the participant is performing according to the criteria of the incentive program there is no need to provide a specific program credit card at 110. It may, nevertheless, be advantageous to do so, since this still provides a convenient means for the participant to select and acquire a reward of his or her own choosing.
Furthermore, in programs in which the participant is free to choose rewards for himself or herself, a program credit card also provides a convenient means for accounting for the value of further rewards available to the participant. Nonetheless, it will be appreciated that other means of providing a reward, and for tracking a reward fund from which the participant can select rewards, may be used. For example, other kinds of existing accounts, such as frequent flyer miles accounts, may be used.
One such type of account which can advantageously be used is an alternative currency participant account such as is taught by the co-pending U.S. Patent Application filed October 2, 2000, and entitled INCENTIVE PROGRAM USING
ALTERNATIVE CURRENCY, the specification and drawings of which are hereby incorporated herein in their entireties.
It will also be appreciated that a credit card company employing the method 100 can cooperate with other such non-credit card companies. For example, if the credit card company is employing an embodiment in which 1% of the purchase price of subsequent purchases using the program credit card is forgiven from the balance of the cost of the reward, it might cooperate with a particular retail company to offer an additional 0.5% for subsequent purchases from the retail company using the program credit card. Preferably, at least a portion of the additional amount forgiven is provided by the retail company, in return for the incentive for loyalty to the retail company the program creates in the participant. Similarly, various non-credit card companies can cooperatively employ certain embodiments of the method 100, as will be apparent to those skilled in the art.
The method 100 can also be used to incent behaviors other than purchases.
For example, certain businesses may desire that participants perform actions such as clicking on banners on their websites, or test driving vehicles they offer for sale.
10 In certain embodiments, such businesses assign a value to the desired actions corresponding to the amount of the cost of the reward that will be forgiven when a participant performs that action. In certain other embodiments, the business selects performance criteria to which the participant's actions are compared to determine whether the cost of the reward will be permanently forgiven, or whether the reward will be withdrawn. It will be appreciated that various other means of observing the participant's actions can advantageously be used, depending on the behaviors being incented. For example, if the business is incenting participants to click on banners on their website, computer software can be used to observe when the participant accesses the website and how often the participant clicks on a banner.
The method 100 minimizes the upfront cost to the business of providing the reward, because the reward is given to the participant conditionally, so that the business need not treat the cost of the reward as an expense. Instead, the cost can be carried as an account receivable on the asset side of the business's balance sheet. If the business elects to do so, the cost to the business will be the time value of the money, plus a one-time bad-debt provision. These values may vary depending on the nature of the business involved, but typical values are approximately 6% financing and 2% for bad debt. Thus, for example, the three-year cost to provide a reward having a nominal cost of $100 would be $20. When combined with the enhanced subjective value to the participant due to the immediacy of the reward, therefore, the business is capable of creating an incentive for approximately $20 that might otherwise require over $200 with prior art incentive methods. The subjective value is even further enhanced in those embodiments in which the participant is free to choose a reward for himself or herself using a program credit card, since virtually everything available in the marketplace can be purchased this way.
A method according to the present invention therefore offers not only the opportunity for a sponsoring business both to experience greater customer loyalty, but also to acquire more new customers at a lower cost. As an illustration, consider a situation in which a credit card business wishes to acquire new customers. Using a prior art incentive program, the business would have to send out a mailing to a large number of prospective customers, offering an incentive.
The cost of such mailings might be, in round figures, about $1 per mailing. If the nominal cost of the reward is $100, and the response rate is 1%, then the total cost per new customer would be $200.
An example illustrating the advantage of a method according to the present invention is shown in the following tables:
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m ouseholds Tar eted 1,000,0001,000,000 otal Cost of Mailin $1,000,000$1,000,000 es onse Rate 1 % 1 %
ost Per New Account excludin incentive) $100 $100 ost of Incentive $100 $20 $80 otal Cost of Pro $2,000,000$1,200,000 $800,000 am otal Cost Per New $200 $120 $80 Account ~t Accoun~a t~, u~tiari. Cods ouseholds Receiving 1,000,0001,000,0001,000,0001,000,000 ailin otal Cost of Mailin $1,000,000$1,000,000$1,000,000$1,000,000 '' . -~=- _ .. : -:... ~ ~ , ost Per New Account (excludin incentive)~ $100 $67 $50 $33 a .
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otal Acquisition Cost Per $200 $167 $150 $133 ew Account-Full Cost ,~ ~ ~,.:ReduGed ~~ ~~za .= I ~~ ~
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Thus, the cost of acquiring new customers is reduced from $200 to $120 even if the response rate is unchanged. Because of the enhanced subjective value of the rewards, however, the response rate will certainly improve, even if the nominal value is unchanged. Depending on the increase of the response rate, even if the cost of the reward is unchanged, the cost of acquiring new customers is substantially reduced. For example, a 3% response rate reduces the cost of each new customer to $133, even if the business must bear the full cost of the rewards.
When both advantages of the program are calculated, the cost of each new customer is only $53.
It will also be appreciated that, because of the reduction in the actual cost to provide a reward of a given nominal value, the response rate can be further increased by increasing the nominal value of the reward provided. For example, if the actual cost is held constant at $100, the nominal value of the reward can be increased to $500. In practice, the optimal efficiency of the program is believed to be achieved by increasing the nominal value of the reward, but by an amount small enough that the actual cost of the reward is still lowered relative to prior art programs.
The preferred embodiment has been illustrated with a credit card.
However, any account can be used as alternative embodiments. Thus, for example, any form of accounts usable by the participant to perform the required transactions could be substituted for a credit card. Furthermore, because, in the preferred embodiment, the cost to the sponsor to provide rewards of a given nominal value is reduced, the response rate can be further elevated by increasing the nominal value of the reward offered.
While the invention has been illustrated and described in detail in the drawings and foregoing description, the same is to be considered as illustrative and not restrictive in character, it being understood that only the preferred embodiments, and certain alternative embodiments deemed helpful in further illuminating the preferred embodiments, have been shown and described and that all changes and modifications the come within the spirit of the invention are desired to be protected.
Claims (42)
1. A method of incenting a participant, the method comprising:
a) giving the participant a reward;
b) comparing actions of the participant performed subsequent to step (a) to a pre-selected set of criteria; and c) withdrawing the reward unless the actions compared in step (b) conform to the pre-selected set of criteria;
wherein step (c) is the only step in which the reward can be withdrawn:
a) giving the participant a reward;
b) comparing actions of the participant performed subsequent to step (a) to a pre-selected set of criteria; and c) withdrawing the reward unless the actions compared in step (b) conform to the pre-selected set of criteria;
wherein step (c) is the only step in which the reward can be withdrawn:
2. The method of claim 1, wherein the reward is selected by the participant.
3. The method of claim 2, wherein the reward is provided through an account purchase that may conditionally go un-repaid.
4. The method of claim 3, wherein the account is a credit card account.
5. The method of claim 4, further comprising:
(d) providing the participant with a program credit card;
wherein the credit card purchase must be made with the program credit card.
(d) providing the participant with a program credit card;
wherein the credit card purchase must be made with the program credit card.
6. The method of claim 4, wherein the credit card purchase must be repaid unless the actions of the participant conform to the pre-selected set of criteria, and may go un-repaid if the actions of the participant do conform to the pre-selected set of criteria.
7. The method of claim 1, wherein step (c) is performed by charging the participant for the reward.
8. The method of claim 1, wherein step (b) is performed by an appropriately programmed computer.
9. The method of claim 8, further comprising:
d) subsequent to step (a), observing certain actions of the participant through the existing credit system.
d) subsequent to step (a), observing certain actions of the participant through the existing credit system.
10. The method of claim 1, wherein the reward is a conditional gift of money.
11. A method of incenting a participant, the method comprising:
a) providing the participant with an account;
b) permitting the participant to use the card to make at least one purchase that is conditionally paid for by the participating business;
c) subsequent to step (b), observing certain actions of the participant through the existing credit system;
d) subsequent to step (b), comparing actions of the participant to a pre-selected set of criteria; and e) requiring the participant to repay the participating business unless the actions of the participant conform to the pre-selected criteria.
a) providing the participant with an account;
b) permitting the participant to use the card to make at least one purchase that is conditionally paid for by the participating business;
c) subsequent to step (b), observing certain actions of the participant through the existing credit system;
d) subsequent to step (b), comparing actions of the participant to a pre-selected set of criteria; and e) requiring the participant to repay the participating business unless the actions of the participant conform to the pre-selected criteria.
12. The method of claim 11, wherein the account is a credit card account.
13. The method of claim 11, wherein step (d) is performed by an appropriately programmed computer.
14. A method of incenting loyalty in a participant to a participating business, the method comprising:
a) providing the participant with an account;
b) permitting the participant to use the card to make a purchase that is conditionally paid for by the participating business;
c) subsequent to step (b), comparing actions of the participant to a pre-selected set of criteria; and d) requiring the participant to repay the participating business for a portion of the price of the purchase unless the actions of the participant conform to the pre-selected criteria.
a) providing the participant with an account;
b) permitting the participant to use the card to make a purchase that is conditionally paid for by the participating business;
c) subsequent to step (b), comparing actions of the participant to a pre-selected set of criteria; and d) requiring the participant to repay the participating business for a portion of the price of the purchase unless the actions of the participant conform to the pre-selected criteria.
15. The method of claim 14, wherein the account is a credit card account.
16. The method of claim 14, wherein step (c) is performed by an appropriately programmed computer.
17. The method of claim 14, wherein the portion of the price the participant is required to repay is calculated based on how far the actions of the participant deviate from the pre-selected criteria.
18. A method of incenting a participant to perform at least one pre-selected behavior, the method comprising:
a) giving the participant a reward having a conditional cost to the participant; and b) subsequent to step (a), forgiving at least a portion of the conditional cost if the participant performs one of the at least one pre-selected behavior.
a) giving the participant a reward having a conditional cost to the participant; and b) subsequent to step (a), forgiving at least a portion of the conditional cost if the participant performs one of the at least one pre-selected behavior.
19. The method of claim 18, wherein the portion forgiven by step (b) varies according to which of the at least one pre-selected behavior the participant performs.
20. The method of claim 18, further comprising:
c) giving the participant an additional reward having a conditional cost if the entire conditional cost is forgiven.
c) giving the participant an additional reward having a conditional cost if the entire conditional cost is forgiven.
21. The method of claim 18, further comprising:
c) subsequent to step (a), comparing actions of the participant to a pre-selected set of criteria.
c) subsequent to step (a), comparing actions of the participant to a pre-selected set of criteria.
22 22. The method of claim 21, wherein step (c) is performed using an appropriately programmed computer.
23. The method of claim 18, further comprising:
c) subsequent to step (a), observing certain actions of the participant through the existing credit system.
c) subsequent to step (a), observing certain actions of the participant through the existing credit system.
24. A method of incepting a participant to perform at least one pre-selected behavior having an associated value, the method comprising:
a) giving the participant a reward having a conditional cost to the participant;
b) subsequent to step (a), observing certain actions of the participant through the existing credit system;
c) if an action is observed at step (b) that is one of the at least one pre-selected behavior, forgiving at least a portion of the conditional cost corresponding to the value associated with the pre-selected behavior performed;
d) giving the participant an additional reward having a conditional cost if the entire conditional cost is forgiven; and wherein steps (b) and (c) are performed using an appropriately programmed computer.
a) giving the participant a reward having a conditional cost to the participant;
b) subsequent to step (a), observing certain actions of the participant through the existing credit system;
c) if an action is observed at step (b) that is one of the at least one pre-selected behavior, forgiving at least a portion of the conditional cost corresponding to the value associated with the pre-selected behavior performed;
d) giving the participant an additional reward having a conditional cost if the entire conditional cost is forgiven; and wherein steps (b) and (c) are performed using an appropriately programmed computer.
25. A method of incepting a participant to perform at least one pre-selected behavior, the method comprising:
a) giving the participant a reward fund with which to acquire rewards;
b) subsequent to the participant acquiring at least one reward, observing certain actions of the participant; and c) at least partially replenishing the reward fund if at step (b) the participant is observed to perform one of the at least one pre-selected behavior.
a) giving the participant a reward fund with which to acquire rewards;
b) subsequent to the participant acquiring at least one reward, observing certain actions of the participant; and c) at least partially replenishing the reward fund if at step (b) the participant is observed to perform one of the at least one pre-selected behavior.
26. The method of claim 25, wherein the reward fund is a line of credit through a credit card that may conditionally go un-repaid.
27. The method of claim 25, wherein step (b) is performed by an appropriately programmed computer.
28. A method of incenting a participant, the method comprising a) giving the participant a reward;
b) comparing actions of the participant performed subsequent to step (a) to a pre-selected set of criteria; and c) withdrawing the reward unless the actions compared in step (b) conform to the pre-selected set of criteria;
wherein the participant has the option to decline to perform at least one action that would otherwise contribute to the satisfaction of the criteria without causing the reward to be withdrawn.
b) comparing actions of the participant performed subsequent to step (a) to a pre-selected set of criteria; and c) withdrawing the reward unless the actions compared in step (b) conform to the pre-selected set of criteria;
wherein the participant has the option to decline to perform at least one action that would otherwise contribute to the satisfaction of the criteria without causing the reward to be withdrawn.
29. The method of claim 28, wherein the reward is selected by the participant.
30. The method of claim 29, wherein the reward is provided through a credit card purchase that may conditionally go un-repaid.
31. The method of claim 30, further comprising:
(d) providing the participant with a program credit card;
wherein the credit card purchase must be made with the program credit card.
(d) providing the participant with a program credit card;
wherein the credit card purchase must be made with the program credit card.
32. The method of claim 30, wherein the credit card purchase must be repaid unless the actions of the participant conform to the pre-selected set of criteria, and may go un-repaid if the actions of the participant do conform to the pre-selected set of criteria.
33. The method of claim 28, wherein step (c) is performed by charging the participant for the reward.
34. The method of claim 28, wherein step (b) is performed by an appropriately programmed computer.
35. The method of claim 34, further comprising:
d) subsequent to step (a), observing certain actions of the participant through the existing credit system.
d) subsequent to step (a), observing certain actions of the participant through the existing credit system.
36. The method of claim 28, wherein the reward is a conditional gift of money.
37. The method of claim 28, wherein step (d) is performed by an appropriately programmed computer.
38. A method of incenting a participant, the method comprising:
a) providing the participant with a credit card;
b) permitting the participant to use the card to make at least one purchase that is conditionally paid for by the participating business;
c) subsequent to step (b), observing certain actions of the participant through the existing credit system;
d) subsequent to step:(b), comparing actions of the participant to a pre-selected set of criteria; and e) requiring the participant to repay the participating business unless the actions of the participant conform to the pre-selected criteria;
wherein step (d) is performed by an appropriately programmed computer;
and wherein the participant can decline to perform at least one action that would otherwise contribute to the satisfaction of the criteria without causing the reward to be withdrawn.
a) providing the participant with a credit card;
b) permitting the participant to use the card to make at least one purchase that is conditionally paid for by the participating business;
c) subsequent to step (b), observing certain actions of the participant through the existing credit system;
d) subsequent to step:(b), comparing actions of the participant to a pre-selected set of criteria; and e) requiring the participant to repay the participating business unless the actions of the participant conform to the pre-selected criteria;
wherein step (d) is performed by an appropriately programmed computer;
and wherein the participant can decline to perform at least one action that would otherwise contribute to the satisfaction of the criteria without causing the reward to be withdrawn.
39. A method of incenting loyalty in a participant to a participating business, the method comprising:
a) providing the participant with a credit card;
b) permitting the participant to use the card to make a purchase that is conditionally paid for by the participating business;
c) subsequent to step (b), comparing actions of the participant to a pre-selected set of criteria; and d) requiring the participant to repay the participating business for a portion of the price of the purchase unless the actions of the participant conform to the pre-selected criteria;
wherein the participant can decline to perform at least one action that would otherwise contribute to the satisfaction of the criteria without causing the reward to be withdrawn.
a) providing the participant with a credit card;
b) permitting the participant to use the card to make a purchase that is conditionally paid for by the participating business;
c) subsequent to step (b), comparing actions of the participant to a pre-selected set of criteria; and d) requiring the participant to repay the participating business for a portion of the price of the purchase unless the actions of the participant conform to the pre-selected criteria;
wherein the participant can decline to perform at least one action that would otherwise contribute to the satisfaction of the criteria without causing the reward to be withdrawn.
40. The method of claim 39, wherein step (c) is performed by an appropriately programmed computer.
41. The method of claim 39, wherein the portion of the price the participant is required to repay is calculated based on how far the actions of the participant deviate from the pre-selected criteria.
42. A method of incenting a participant, the method comprising a) giving the participant a reward;
b) comparing actions of the participant performed subsequent to step (a) to a pre-selected set of criteria; and c) withdrawing the reward unless the actions compared in step (b) conform to the pre-selected set of criteria;
wherein the incented behaviors substantially exclude contractual obligations that the participant must incur to receive the reward.
b) comparing actions of the participant performed subsequent to step (a) to a pre-selected set of criteria; and c) withdrawing the reward unless the actions compared in step (b) conform to the pre-selected set of criteria;
wherein the incented behaviors substantially exclude contractual obligations that the participant must incur to receive the reward.
Applications Claiming Priority (2)
| Application Number | Priority Date | Filing Date | Title |
|---|---|---|---|
| US69460500A | 2000-10-23 | 2000-10-23 | |
| US09/694,605 | 2000-10-23 |
Publications (1)
| Publication Number | Publication Date |
|---|---|
| CA2354287A1 true CA2354287A1 (en) | 2002-04-23 |
Family
ID=24789534
Family Applications (1)
| Application Number | Title | Priority Date | Filing Date |
|---|---|---|---|
| CA 2354287 Abandoned CA2354287A1 (en) | 2000-10-23 | 2001-07-27 | Incentive program having rewards |
Country Status (1)
| Country | Link |
|---|---|
| CA (1) | CA2354287A1 (en) |
Cited By (1)
| Publication number | Priority date | Publication date | Assignee | Title |
|---|---|---|---|---|
| US8510162B1 (en) | 2008-02-25 | 2013-08-13 | Radiant Systems, Inc. | Loyalty host interface |
-
2001
- 2001-07-27 CA CA 2354287 patent/CA2354287A1/en not_active Abandoned
Cited By (1)
| Publication number | Priority date | Publication date | Assignee | Title |
|---|---|---|---|---|
| US8510162B1 (en) | 2008-02-25 | 2013-08-13 | Radiant Systems, Inc. | Loyalty host interface |
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