Let’s talk about universal loyalty programs. Those of us earning frequent flier miles with an airline that is part of an alliance can likely redeem those miles for free flights on any airline in said alliance. The same is true of some credit card loyalty systems; every dollar you spend translates into a point that can be used at one of several merchants within the credit card’s network.
While the above examples truly embody the idea of a universal loyalty program, neither caters to small, local business owners or their patrons. Rather, those programs work best on a bigger scale; their loyalty networks are typically reserved for large, national (or international) chains.
In the very early stages of conceiving what would later become Ox&Pen, I knew supporting local businesses would be one of our critical objectives and that the loyalty component would be a huge driver in achieving that. I knew the network effect of the above mentioned loyalty programs could be extremely powerful for small businesses, but there were challenges in creating this with seemingly disparate neighborhood specialty shops.
Often, if our favorite mom-and-pop shop has its own rewards program, it involves a punch-card, where, you get something free with every 10th purchase, but rewards can only be redeemed at that location. This system works well for people who live or work nearby. But if a particular vendor is on the other side of town, the effort required to get there 10 times might outweigh the benefit of receiving something for free. In this case, the punch-card loyalty program isn’t really added incentive to visit that store over another, and both the consumer and the merchant miss out.
However, with Ox&Pen, you can earn loyalty points for purchases and social engagement at a card shop near your home on one side of town, for example, and later redeem those points using your smartphone at that new lunch place near your work on the other. You feel good because you are shopping locally and earning loyalty points at the same time. The owner of the card shop is also happy; he gains an incremental sale that otherwise may have gone elsewhere. What a novel concept: creating a “loyal” customer, even if just a one-time shopper.
Not only does Ox&Pen’s model provide its members with plenty of flexibility in how their hard-earned points can be used; but business owners benefit by joining forces with other small, local establishments. As a network, they can much better compete against their big-box rivals in the loyalty game.
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