If it was as simple as you imply, everyone would be doing it. However,
from experience, it's not and firstly you will have to be a dealmaker,
secondly you'll need some funding.
Your point (1): Acceptance of the card in as many places as possible:
This is not a feasible concept. If it's in as many places as possible
what is the competitive advantage to the companies of doing it? Eg if
Bob's Autos in Exampleville accepts the card that's cool. But, then if
Jerry's Autos (the other auto shop in Exampleville) accepts it as
well, where's the competitive edge. They might as well not be doing it
- if Bob and Jerry are the only Auto shops in Exampleville consumers
will only ever go there so what's the incentive for them to offer 5%
discount?
Point (2): There is no way of finding this out because the labor
market it too liquid - published lists are already out of date. Trick
#1: If you have a teenage/university age kid, get them to call up
pretending to do a marketing assignment and ask some targeted
questions. I've done this before and got a major privately held paint
retailer to reveal how much paint they sell, how much specially
branded paint they sell, and what proportion was test pots. Duh!
You need to look in the marketing dept. for the person who manages
loyalty programs.
Point (3): The nitty gritty is that all other discount cards that are
your competition will be doing everything you'll ever think of EXCEPT
if you can find a specific niche no one else is doing. It's not the
gimmicks, it's the amount of PAIN you solve for the people who use
your card...and the amount of advertising you do to create awareness
of the card. Acceptance is borne of image - having the right brand,
etc will be the major factor in determining your success - you need to
be the Versace of discount cards.
Here's what you do:
Firstly: do you have the necessary knowledge? If not, try to find
someone who has already been down this path and partner with them.
Secondly: Determine which companies would be good fits in a
synergistic relationship, eg Bob's Auto, Dave's Windscreens, Jerry's
Car audio, Alma's drive in movies, etc. Going to Pizza Hut, Disney
Land and Nordstrom (for example) would not be palatable for all
involved. Rank you chosen ones in order of preference - you're going
to start with the least preferable first so you can get your mistakes
out of the way with.
Now next to the list you've just made, make a list of their less
desirable competitors. Call one each of these competitors and find out
who runs their existing loyalty programs and who their marketing
manager is (ask reception). Ask them if you could show them how to add
5% profit to their business would they be interested. They will say
yes (unless they're very thick). Tell them you'll get back to them
later (you may actually do, so don't burn bridges). Technically you
are now 'talking' to these companies.
Now you need to do an analysis on the companies you are targeting:
what's their current loyalty strategy, who would they partner with in
a loyalty strategy (the cluster of companies offering the discount has
to be synergistic and somewhat non-competitive), who is the person to
talk to, what are their interests and hidden agendas, are they owned
by a bigger conglomerate, etc.
Create a marketing plan detailing how you will publicise and gain
acceptance of your discount card (there are many books on marketing
and writing marketing plans so I won't go into it here.)
Create a business plan for yourself determining how many cards you
need to sell in order to make yourself a decent profit. Again, books
are available. This point is important or you'll end up losing money.
You might need to do some fundraising at this point as you'll be
surprised at how much you need.
Then you need to determine the technology of your card and the
manufacture costs. Many large companies want to track loyalty and
discount card usage so you'll need a compliant technology company to
hook you up with some kind of database system. You need to consider
how the companies that subscribe to your discount card get reports as
to the volume that's gone through your card. Can they mine the data,
etc? Don't spend anything yet, though because you need to get buy in
from the companies you want.
Prepare a marketing presentation (it's a stripped down version of your
plan with the bells and whistles highlighted). You now need to get an
audience with the people you have researched. This is by far the
hardest part and is the only way you will get acceptance within the
company. When you call say that you are already talking with, and have
interest from "competitor name" and that you would prefer to work with
them. Approach the least favorable first (based on your ranking) -
make sure these are relatively small players as they're more likely to
accept your proposal. Get them to sign a letter of intent, heads of
agreement of memorandum of understanding that doesn't bind or commit
you to providing them anything should it fall over. A lawyer can draft
one of those up for you. If they don't bite, go back to their
competitor who you've already made contact with.
When they've signed up, go to the next least most favorable and so on.
By the time you get to the big boys you'll have a number of other
participants to encourage them to join up.
Implementing the plan: you'll have everything planned out in your
marketing and business plans, so now's the time to execute. I can't
tell you how to do this because there's so many parameters and I'd end
up writing a book...of which there are plenty on Amazon :)
Your definition of 'sufficient business' (your second comment) will
not excite marketing execs. I have a lot of experience in this field
and if you do not respect the brand you will fail. Detail the
difference you will make not only to their bottom line, but their
brand perception particularly through the association of all the
companies involved in the discount card. If you're not a major company
with a history there is almost a zero percent chance of you getting to
the right person at a national chain store and having them accept your
proposal.
Make sure the stores you charge aren't operating on really tight
margins. You'll be offering eg a 5% discount. If the store's average
profit per item is 5% you won't get anywhere. Even if it's 10% you are
effectively halving their profit - they'd probably want you to release
the card to their competitors!! What could happen is that all their
loyal customers switch to using your card then their profits tumble.
Bear in mind to successfully create a national brand will cost you
US$5million minimum. Creating a local brand first is much cheaper and
you can expand later.
You need to be aware of the costs to the companies of running a
program like this - administration, training, etc.
Find a friendly lawyer who can advise you on protecting your ideas
without charging you the earth - always get a confidentiality
agreement signed, especially with big companies. Now that's gotta be
worth $100 :) |
