Update: e-Rewards Makes Loyalty Exclusive

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Straying from the standard strategy of making online loyalty points offerings ubiquitous, e-Rewards launched an e-mail rewards program last week in which members must be invited to join.

To kick off the program, invitations are being sent by e-mail and direct mail to leading customers of e-Rewards launch sponsors Blockbuster, Compaq, Delta Air Lines, Hertz and Vail Resorts.

Select customers can earn a dollar credit redeemable for sponsors' products and services for receiving a message, reading the offer and providing feedback. Members can earn additional e-Rewards by providing better profiles and taking surveys.

The invite-only strategy is necessary to make the rewards currency valuable, said John Rothwell, CFO at e-Rewards, Dallas. Loyalty programs that use e-mail my soon lose their motivational value because of the sheer volume of e-mails consumers receive, he said.

The exclusivity of the program will also assure a highly desirable target audience for advertisers and sponsors. e-Rewards expects to have five million members who fall into the affluent demographic category by the end of the year.

"We don't want people to enroll who just want something for nothing. We want the parents [of the people who have registered with] our competitors," said Rothwell.

To reach this demographic, sponsors such as Delta and Blockbuster have made their lists available to e-Rewards. These lists reach more than 125 million consumers, many of which have high disposable incomes. Rothwell admitted, however, that "there are a few frat houses thrown in there."

The response rates for e-mails sent to the sponsors' customers have been extremely favorable. In a recent test, 50 percent of those e-mailed responded within 24 hours. This quick turnaround time is invaluable for companies looking to test offers and promotions, according to Rothwell.

Direct mail will play a large part in announcing the service to invitees. Earlier this month, 200,000 pieces were dropped to Vail Resorts customers offering a free lift ticket to join the service. According to Rothwell, the reaction to the piece has been very encouraging.

Later this month, e-Rewards will test a drop of 100,000 pieces. The results of this test will be used for a mailing of more than 10 million pieces expected to go out in April.

Aside from the exclusive nature of the offering, the draw for consumers is the fact that they have control of the offerings. They can choose the number of messages they wish to receive (up to 30 a month) and the content of the ads. They can also modify the data they have provided at any time.

e-Rewards has received $20 million in funding. It is slated to receive an additional $40 in funding in the near future.
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