SUBSCRIBER PERK IS IN THE CARDS

By: Carl Sullivan

New Loyalty Program Offers Digital Rewards



To keep subscribers, some newspapers have offered the a la Carte or
similar dining card programs that provide discounts at participating
restaurants. Now the founders of a la Carte are introducing WAM!
Loyalty.com, a digital currency program for restaurants, local
merchants, national chains, and online retailers.



The San Diego Union-Tribune will be the first paper to roll out the
program in June, sending two WAM! cards to all 320,000 home
subscribers. San Diego-based WAM! is busy distributing special card
readers to 500 local merchants throughout the area. Whenever a WAM!
card holder makes a purchase at these retailers, he swipes his card and
earns 10% to 20% of the purchase price in WAM! digital currency from
the merchant. One WAM! has an equivalent cash value of 1 cent and can
be spent at any participating merchant, simply by swiping the card and
redeeming the points.



‘Frequent users will build up WAM! very quickly, and there’s very easy
redemption,’ says Stuart Graham, president and CEO. ‘If you’ve got $10
worth of WAM! on your card, you can immediately buy a cup of coffee and
a croissant at the local deli.’



WAM! describes its operation as turnkey. ‘We fly a team into the city
and they spend eight weeks there securing all the merchants,’ and
explaining exactly how the cards and card-readers work, Graham says.



Graham and Chairman Dennis Wise founded a la Carte about eight years
ago, and now have 16 dailies participating (some newspapers call their
program card the ‘Press Pass’). The men are confident the new program
will attract users and newspapers (they say seven contracts are
pending).



As Graham points out, the card reader at local stores will print out a
receipt after each purchase which tells the customer how much WAM! she
has collected or used. Balances can also be checked on the company’s
Web site, which will be tied to online newspapers to drive traffic. So
essentially, the WAM! Card holder will be reminded of her points every
time she buys something at a participating merchant.



For the newspapers, subscriber retention is the goal. They’ll also get
data on how many customers are using their WAM! cards, and how they’re
using them. ‘It will be great to get back data on the spending habits
of subscribers,’ Graham says. The program will typically cost $1 to $2
per subscriber household; the old restaurant-only program cost $2 to $7
per card. And newspapers never knew how many card holders were actually
using their cards.



In San Diego, the program will give newspaper subscribers ‘a benefit
they can’t receive anywhere else,’ says Bruce Blair, circulation sales
manager. ‘Our research shows that our churn is very interested in the
utility of the paper – classifieds, entertainment, coupons. We think
the card really addresses that area.’



Blair is also hoping to win Audit Bureau of Circulations approval to
let subscribers redeem WAM! to pay for their newspaper subscription
renewals. The paper is even considering allowing WAM! to be payment for
classified ads.



And the Web component can’t hurt either. ‘It’s a good tie-in to e-

commerce,’ Blair says. ‘We’ve been looking for more ways to connect
ourselves with the Web.’



Beyond checking their WAM! account statements online, users may
eventually be able to earn WAM! online just for visiting certain sites
or for looking at certain ads. San Francisco’s MyPoints.com (not
affiliated with WAM!) is a Web site based on this model; users are
essentially rewarded for visiting sites.



An analyst who’s looked at the program thinks it has the potential to
be more successful than the traditional dining card program. ‘The old
program didn’t have the flexibility of the new cards, which will allow
users to build up points and spend them at any of the various vendors,’
says Anita A. Brown, executive director-investments at CIBC Oppenheimer
in Los Angeles. If successful, the program should create tremendous
good will among subscribers, she adds.




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Carl Sullivan (csullivan@editorandpublisher.com) is editor of
E&P Online.









(c) Copyright 2000, Editor & Publisher

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