Advantage PROMOTION Strategies:
 
      		**** Cancel to Return ****

Theory of Advantage Programs:

•	Why Monitor customer loyalty and buying frequency: 

Business establishments rely on repeat customers.  A sense of fairness, quality, and preference heighten a patron’s comfort with a business.  The Advantage system is designed to help differentiate one business from its competitors.  Strategies in the ‘Advantage’ system can take many forms but in general reward the customer for frequent buying of specific products.  The ‘Advantage’ system augments other promotion utilities such as coupons, senior discounts, mix/match discounts, ‘Rewards’ discounts (mixed strategies such as buy 5 get 1 free) based on member buying, employee discounts, and so on.

•	Definitions of Strategies:

Minimum Purchase:
Accumulate all sales for an ORDER as ‘PURCHASE’.
From ‘Advantage Strategy List’ find deal limit as ‘MIN-PURCHASE’.
From ‘Advantage Strategy List’ find deal amount as ‘DEAL-AMOUNT’.
	If ‘PURCHASE’ is greater that ‘MIN-PURCHASE’, one (1) item is discounted to the ‘DEAL-AMOUNT’.

An example would be to offer a turkey for $5.00 (‘DEAL-AMOUNT’) if the customer purchased $50.00 (‘MIN-PURCHASE’) of product.  If the retail price of the turkey was $11.50, the discounted price would be $5.00 if the ‘Minimum Purchase’ strategy was met for this item.

Cents Off:
If the ‘Advantage Flag’ is set on a bar coded item, dollars and units are accumulated as a purchase is registered.  In the ‘Cents Off’ strategy, if the accumulative buy of an item exceeds the minimum deal requirement, then one (1) item in this deal is given a discount of the ‘DEAL-AMOUNT’.  If the deal is met multiple times in the purchase, additional discounts are given up to the maximum limit.  The upper limit is not the number of deals allowed, but the upper quantity limit where the deal applies.

An example would be to set buy 5 loafs of bread and get $.50 off the 5 loaf with a maximum of 4 discounts.  This strategy would have the minimum set to 5, the maximum to 20, and the deal amount to 50 (ex, $.50).  If the customer had bought 11 loafs of bread, they would receive $.50 times 2, or $1.00 off their buy.

1.  Item direct discounting by percentage off or amount off.
		Example: 30% off regular price.
2. Split Price items.
		Example: 3 for $1.00 where $.50 each regular price.
3. Quantity price:
		Example: 1 at $.75, 6 at $ .65, 12 at $.60, 24 at $.50 each.
4. Manufacture Coupons where the discount strategy is on the barcode and the UPC standard table.  These strategies range from cents off, free, % off, and set amounts back.
5. Store Coupons where the store (headquarters) issues barcode coupons in advertising (or other means) that redeem against product and use the UPC standard strategy tables.
6. Store Coupons that use a number to reference local strategies.
		Example: Coupon #7 goes to strategy 5 to give $1.00 off a 12 			pack of Coke if redeemed before July, 2006.
7. Store Receipt Coupons that print at the time of purchase and encourage cross department buying.
		Example: Customer buys Cereal without milk, give coupon for 			20% off milk purchase.
 8. Item Discounts based on customer status or relationship.
		Example: Police officer gets 20% off pastries and coffee.
		Example: Employee get 20% off produce. 
9.	Frequent Shopper Points (Rewards) discounts.
	Example: Spend $500 at store chain facilities and allow 			redemption of points (500) against promotion items, such 		as wine or clothing items like tee shirts.
	Example: Buy 10 cups of coffee, get the 10th cup free.

Frequent Shopper systems must accumulate product buying per customer and require a tractable identity such as a member card. 

10. ‘Advantage’ system buying strategies include concepts like
	Cents off
	Buy more/Get more
	Buy quantity get least free
	Buy get free
Loyalty programs like ‘Advantage’ have many strategies.  The buying advantage is passed to ‘Member Customers’ based on their purchase and the match between items in the advantage at the time of purchase.  These programs are used to create frequent repeat buying and customer loyalty.
	Example: A customer has ‘Advantage’ card that is scanned.  	Active at this date is $.50 a gallon of milk for members.  The 	‘Advantage’ member would realize the $.50 savings.

Processing Sequence:

•	Processing Events—Point Accumulation: 

A PLU (touch point) named *Rwards when struck displays an entry dialog asking for a member magnetic card swipe.  The card identifies the member.  Each dollar of sales is accumulated into a reward summation.  Redemption of rewards points is left to the merchant’s discrimination.  Points may be redeemed as discounts on food, merchandise, services, gift cards, etc.  Historical information is provided to allow selective redemption and customer promotions.

Processing Events—Item Rewards: 

An item level stratagem could be as easy as buy 10 cups of coffee and get the 10th cup free.  To configure this strategy, a manager would go to the Option#1 on the point of sale terminal, strike the ‘Edit Rewards Strategies’ touch point.  A dialog appears with a PLU list to the left and a STRATEGY list to the right.  Select a PLU and an edit dialog displays at the lower margin.  Enter the item count in the DEAL box and select ENTER.  This strategy adds to the right side list.  Selecting ACCEPT will store the rewards list to the system disk.  This active list is distributed to all terminals in the network automatically once a day or when terminal constants are reloaded under manager control.

The current strategy list supports 40 PLU/STRATEGY combinations.  A strategy file named S_Rewards.csv is maintained in the POS directory of the file server.  This file can be updated using a common editor (such as edit, WordPad, notepad, etc) or through the POS terminal as explained above.  

Item redemption as a Terminal Operation is for the most part completely automatic.  The customer offers the ‘Rewards’ card to the operator.  The *Rwards request is made, a dialog appears, and if an item in their purchase matches the active strategies and the accumulations are satisfied, one of the items in the buy is repeated with a negative price (thus eliminating an item).  The reward item is printed on the receipt.  The sales accumulation shows redemption for the item times the DEAL requirement.  For example, buy 10 at 1.55 and get 1 free, would show a redemption amount of 1.55 times 10 or 15.50.  When a deal is realized, the summation for the particular card-item is set to zero (0).  The redemption process follows the card and the card-item accumulations are automatic and require no operator intervention.

•	Collection of Personal Information: 

The ‘Rewards’ system is card oriented; however, a database record is provided for customer information such as name, address, birth dates, etc.  This information is optional, but can be used for mailings, notices, advertising, and so on.  The collection of this type information is normally done after the rewards card is issued.  A copy of the original receipt shows the card number.  If an information sheet is filled by the customer, then this information can be entered into the system through the Option#1 path on any network terminal in the POS system.

CAUTION Regarding Rewards Use and Auditing: 

The Rewards information (histories and accumulations) are store in a relational database either on the local POS network or a remote server with Internet access.  If the remote option is selected, many facilities can share the query capability.  

Support utilities are provided to allow editing the database and to verify integrity of cards.

Stored Value (or Gift Cards) can be used for ‘Rewards’ cards.  Thus the business can have dual use of these cards to save expense and encourage use.