Customers who own stock in a company are more loyal and demonstrate what we call "active" loyalty behaviors such as referrals, recommendations, likes etc.
New York, NY (PRWEB) October 12, 2011
“We believe this is a concept whose time has truly arrived,” says Skip Kitchen, a loyalty industry veteran and a principal in LoyaltyShares LLC, a New York based company set to change the way sponsors think about loyalty programs.
“Traditionally,” he notes, “loyalty program reward points are redeemable for travel or merchandise – or even services from the sponsor. Yet, fully one-third of points, around $16 billion, go unredeemed. And that’s a shame. All that work to acquire a loyal audience, only to find members aren’t really engaged with the brand.”
LoyaltyShares LLC is launching what it calls a Loyalty Equity Acquisition ProgramTM or LEAPTM . LEAPTM is not a loyalty platform, but a patent pending way to include the sponsoring company’s publicly traded stock as an award redemption option without disrupting or changing the current loyalty program process and technology.
“We think the market is ripe for the LEAPTM option,” Kitchen says. “Using stock as an award creates company ownership and truly drives customer engagement in the sponsor’s success. Early indications have convinced us that this will be widely attractive and revolutionize the way customers support and promote the companies that earn their loyalty.”
Paul Hebert, another loyalty industry veteran and a principal in LoyaltyShares LLC, sees additional advantages relating to a sponsor company’s balance sheet and marketing efforts.
“Not only does the new option drive increased active loyalty,” according to Hebert, “it also provides an answer to a huge liability issue for many sponsors – maintaining a reserve for unredeemed points. That reserve is money just sitting around doing nothing to drive loyalty. Our LEAPTM solution enables a sponsor company to transform its debt reserve into equity – shares of stock. Those shares are then in the hands of a company’s most engaged customers – who are now even more invested in the company’s success. And there is the real potential for their awards to increase in value. It’s win-win for everyone.”
The LEAPTM option, upon which a U.S. patent is pending, is based on methodology developed by Ellen Philip Associates, Inc., a New York company that for over 31 years has specialized in IT support projects for firms in the securities transfer community. Ellen Philip Associates has joined LoyaltyShares LLC in a working alliance.
“The concept of rewarding loyal customers with shares of stock is not brand new,” comments Kitchen. “We’re working off of an established precedent, but as you can imagine, any program involving the issuance of securities is not something you just wake up one morning and put in place. It’s something that has to be done in a very particular way – not only to meet regulatory requirements but to fit in with established practices and procedures relating to equity ownership.”
In addition to providing a template for implementation and guidance in planning, LoyaltyShares LLC will have an ongoing program role as data intermediary. It sees itself as a traffic cop, so to speak, to facilitate the flow of information to and from program members, the reward-points system, and the system for administering program shares.
Kitchen and his colleagues are convinced that current market realities and new forces at work in the customer loyalty space will induce companies and CFOs in particular, to take a serious look at the LEAPTM option.
“There’s a marketplace out there that’s simply crying out for the next big idea,” Kitchen says. “We have that idea, and we know how to make it work.”
Skip Kitchen II – Sr. VP Business Development at SkipKitchen(at)LoyaltyShares(dot)com
Paul Hebert – Sr. VP Marketing at PaulHebert(at)LoyaltyShares(dot)com