Dynamic Earning and Loyalty Programs

One of the key pieces to what makes Scannibal different from anything you might be using today is what we call "Dynamic Earning". This means you re able to earn rewards to places you are not shopping and you can earn rewards to multiple businesses with one transaction. By allowing rewards to be earned in a totally new way, we are trying to provide customers with a single, effective, and most importantly,  seamless way to earn and redeem their rewards with almost no effort. Think about all the benefits of being able to earn rewards dynamically:


1. You can earn rewards while shopping at businesses that do not offer a rewards program.


2. You can earn rewards to multiple businesses with a single transaction


3. You are expanding your horizons by generating valuable incentives that encourage you to try new businesses.


4. You have the ability to earn a new gain on a purchase transaction.


While these are important, the last is possibly the most exciting. While I cannot get into details yet on exactly how, we are building a model that lets you earn more in total rewards that you spend on the transaction to generate these rewards. Imagine you spent $20 and earned a total of $30 in rewards. This new rewards value equation will change the way you view retail. This model means you save far more than any other couponing or rewards method short of someone giving you a product for free. This is part of strategy to create the world's first "Coalition Anti-Loyalty Platform". Below I'll discuss some of the current methods being used.


In-House Loyalty


These are the most common and growing quickly. These are the programs businesses put together and run under themselves. The problem with these is simple. Customers must spend and get rewards all within the confines of a single business. This makes sense for the business as they want to keep you coming back, but does it make sense from a user standpoint? We would argue that customer actually lose out when using these programs because they end up spending more money at the business even if the "rewards" make the consumer feel like they are spending less and because consumers lose choice. They begin to feel like they need the rewards to afford the goods they buy and get into a rut of buying the same things at the same places.


Coalition Loyalty


Another concept that just emerging in loyalty in the US is "Coalition Loyalty". These are programs where multiple businesses in different, and often strategically aligned industries allow users to earn rewards by shopping at one and redeem than at any of the members. While this is still far better than the completely silo'ed, one-dimensional, internal loyalty most companies use, it still have strict limitations. For example, these programs can only support one business per industry. They would never want multiple businesses within an industry in one coalition group because now those companies have to compete. Despite a potential bad connotation, competition is actually very good for business and for customers. Competition creates value and innovation. While these type of programs are just launching in the US, they are widely available elsewhere. They are still not getting it quite right.


In conclusion, there are plenty of options out there but none of them have been actually designed to optimize the "reward" concept until now. Using a new model, we will save every consumer, both users and non-users, money by creating a new and competitive retail environment in which each transaction is view as a valuable and sought-after commodity. We envision a world in which customers drive retail, not retailers dictating to customers.


What do you think? Leave a comment or follow on twitter @ScannibalApp.


Thanks and happy bargain hunting!

Coupon Challenges

Coupon Challenges

As we all know, there are tons of mediums through which to get coupons these days. Here are just some of them:

• Newspaper inserts
• Direct mail
• Email
• Manufacturer in-store
• Retailer in-store
• Online
• Apps
• Valassis (the things that print when you check out at the grocery store)
• Receipts

With so many different ways to find coupons, figuring out how to find, manage, and use them all is a full-time job in itself. The coordination needed to track all the different type, products, valid dates, redemption values, exclusions, and all that jazz is a ton of work! Its all about the cost/reward balance. The time and energy it takes to do all that is often not worth the actual savings. In this post I'm going to discuss some of the different challenges that arise in the current coupon environment.

Key challenges

• Steps in Redemption

By far the biggest obstacle in using a coupon is the shear volume of actions that go into using one. Lets break down the whole process of using a newspaper coupon, from start to finish.

1. buy a newspaper
2. flip through the adds to find the coupon you want
3. cut it out
4. go to the store
5. select your item
6. check coupon validity
7. go to checkout lane
8. give coupon to cashier
9. pay 
10. go home

That may sound silly, but to use a newspaper coupon, those are all absolutely necessary steps. The fastest way to more savings is by cutting down those steps to as few as possible.

• Coordination of Different Mediums

As mentioned at the beginning, there are tons of different mediums through which to get coupons. It may seem simple, but the logistics of using coupons when they are all over is quite complex. Think about  getting a mobile, email, and in-store coupons that you plan to use on one trip. First, you need to print the email coupon and remember to take it. Next, you need to make sure your phone is charged and with you on the way to the store. Finally, once you get your in-store coupon, you need to take a minute to read all the exclusions and make sure they are all going to work. The chances of all these steps working flawlessly and you saving as much as possible is not very good.

• Exclusions

Exclusions are something I have dealt with extensively in my professional experience. Exclusions are often one of the biggest reasons people get frustrated with coupons. So often people take all the right steps to get the coupons, check dates, and all that fun stuff just to find out at the register that the one thing they wanted is excluded in size .005 font way at the bottom. Unbearably frustrating. 

The reason exclusions are put on coupons, especially at retailers, is the many of the brands that store carries have specifically stated that they DO NOT want customers to ever receive a discount on their product. I find it a little pretentious, but that's just me. Most of the time, the discount doesn't even affect how much the brand gets paid and the discount only affects the retailer (who gave you the coupon). The result is generally a coupon that goes unused and customer who has now had a bad experience.

• Purchase Stipulations

This is one of the smaller redemption challenges and some businesses are good about not using them. Purchase stipulations are when the validity of a coupon depends on purchasing multiple items. It may be more than one of a single item or a set of different items. The idea behind these is to pull you in with the promise of savings and get you to spend more total dollars. In some cases, the deals can be so good that they warrant making a big purchase, but be careful in determining if you actually want the other required products or if you need as many as you are required to buy to get the savings. Again, it's all about weighing what you give for what you get.

• Limited Validity

Limited Validity is when a coupon is only good for a specified amount of time or in a specific location. The biggest problems resulting from these is trying to use a coupon that has expired. We have all done it. Some places are good about honoring the coupon even if it is expired and others are very strict. These add to the complexity of coordination since almost none of your coupons will have consistent validity periods (number of valid days) or overlapping valid dates (calendar dates on which they are usable).

• Limited Applicability

Limited Applicability is when a coupon is only good on a very specific purchase such as purchasing a 20oz Sprite. If you try and buy a 12oz can, the coupon is no good. The idea is that they are trying to get you to purchase a specific SKU (Stock Keeping Unit). This may happen when a business is trying to promote a specific item or is trying to speed up sales of an item. Since it is possible that these may be a clearance strategy, keep in mind if that specific item in that specific size, color, flavor, etc., is something you will actually use.

Conclusion

These are a few of the different challenges you may run into while attempting to save money using coupons. The more you are able to avoid or leverage these, the more money you will save. Remember, the key to savings is reducing the friction between getting and redeeming a coupon. If you can find a way to streamline your process, you will be rewarded.

We are Creatures of Habit

At a start up networking panel today I happened to bump into an old acquaintance from the college days who has since gone on to manage multiple different projects and is now an investor. We caught up and got into talking about Scannibal and the idea of customer purchasing patterns. It got me thinking about an angle of the shopping experience that is often overlooked. Until now, coupons, ads, and marketing in general has been an attempt to create consumer patterns. A big part of Scannibal is creating an easy way for us, as customers, to do exactly the opposite. Our goal is to help break patterns.

Buying Patterns

First, answer these two questions

1. When you go shopping, do you usually go to the same few places?

2. What do you actually get for your loyalty?

If you are like most people, your answer to the first question was "Yes". Although many of us think we are thrifty, clever, diverse shoppers (yes, myself included), the fact is that over 80% of people make the majority of their purchases for a given type of good from one place. For example, if you buy groceries at Target, chances are that you almost always shop there for groceries. You are used to it, you know what to expect, and it's predictable.

For question two, think about all the loyalty programs you are enrolled in and all the cards, key chains, and email coupons you need to make them useful. What is the goal of these programs? These programs are all intended to try and funnel you into a purchasing pattern. The most useful info in the world for any business is being able to know who will come in, when they will come in, what they will buy, and how much they will spend. This means that being a predictable, traditionally "loyal" shopper gives businesses a virtual crystal ball.

Are they worth it?

When businesses have this much information and know what you will do, it gives them all the power. It leads to customers feeling like they owe these businesses for caring about them enough to give out a few rewards points. This seems backwards to us. Shouldn't the customer's needs and decisions based on all the options available determine where and how we shop? Big companies are spending billions of dollars to get you into these patterns and keep you from being able to actually make your own choices about how you spend money.

This all leads to the question of whether loyalty programs are actually saving us money, or costing us money. The fact is that the minimal savings you get as a reward is almost always outweighed by the additional money you spend because you got the reward. Wouldn't it be great if we had rewards that were meant to help us change our habits rather than rewards that try to reinforce them? When you think about it, the businesses are trying to use the same psychology on you that you use on your kids when you want them to clean their room. Don't fall for it!

Let's fix it!

 We believe that both consumers and businesses will benefit from a little more good-spirited competition. Our goal is to provide a platform to help level the playing field across all levels of purchasing, from buying lunch to buying a new TV. When businesses compete, customers win. Goods become cheaper, service becomes better, and those competing businesses grow and adapt in to much more responsible and healthy businesses. While the buying patterns that big marketing budgets are intended to create are good for a few big businesses, the customers ultimately lose out as their choices narrow and when choices narrow, the few choices that are left can charge whatever they want. Scary.

Stay tuned and thanks for reading

Hello World!

Hello World!

My name is Chris and I am the founder of Scannibal, a completely new way to think about getting rewarded for shopping.  Prepare your self for the future of spending money!(insert dramatic drum roll here)

more to come soon