Promoting customer loyalty

Abstract

A method and system for promoting customer loyalty with respect to any transactional activity is disclosed. In an exemplary embodiment, the method includes an accumulation phase and a disbursement phase. In the accumulation phase, a recency, a frequency, and an intensity of the customer's purchases is monitored and a loyalty score is determined therefrom. In the disbursement phase, the customer is offered a reward based upon the customer's loyalty score, including alternatively a share of a prize pool in a loyalty lottery or a discount on a further purchase by the customer.

1 . A method of promoting customer loyalty comprising offering a reward to a customer based upon a recency, a frequency, and an intensity of purchases made by the customer.  
     
     
         2 . The method of  claim 1  further comprising: 
 monitoring the recency, frequency, and intensity of the customer's purchases; and    determining the customer's eligibility for the reward based upon the recency, frequency, and intensity of the customer's purchases    wherein the reward is offered to the customer if the customer is determined to be eligible for the reward.    
     
     
         3 . The method according to  claim 2  wherein the determination of the customer's eligibility for the reward is based upon a loyalty score of the customer according to a pre-determined mathematical formula incorporating the recency, frequency and intensity of the customer's purchases.  
     
     
         4 . The method according to  claim 3  wherein the predetermined mathematical formula is a decay function having the following characteristics: 
 (a) a calculated value associated with said decay function rises proportionally if the recency, frequency or intensity rises within a desired window of values for each of the recency, frequency or intensity; and    (b) the calculated value associated with the decay function becomes insignificant above a predefined threshold    wherein the customer's loyalty score is based upon the calculated value.    
     
     
         5 . The method according to  claim 3  wherein the customer's eligibility for the reward is determined by operating a lottery wherein the customer is a player, and the reward is a share of a prize pool of the lottery, whereby the customer is determined to be eligible for the reward if the customer is determined to be a winner of the lottery.  
     
     
         6 . The method according to  claim 5  wherein, if the customer is determined to be a winner of the lottery, the customer's share of the prize pool is based upon the customer's loyalty score.  
     
     
         7 . The method according to  claim 6  wherein the prize pool is divided between the customer and other winning customers on a prorated basis in accordance with the customer's loyalty score and respective loyalty scores of the other winning customers.  
     
     
         8 . The method according to  claim 5  wherein the customer's chance of being determined to be a winner of the lottery is based upon the customer's loyalty score.  
     
     
         9 . The method according to  claim 3  wherein the customer is determined to be eligible for the reward if the customer's loyalty score exceeds a predetermined threshold.  
     
     
         10 . The method according to  claim 9  further comprising reducing the customer's loyalty score by an amount based upon the reward if the customer accepts the reward.  
     
     
         11 . The method according to  claim 9  wherein the reward is a discount on a further purchase by the customer.  
     
     
         12 . The method according to  claim 11  wherein an amount of the discount is based upon the customer's loyalty score.  
     
     
         13 . The method according to  claim 12  wherein the amount of the discount is further based upon an amount of the further purchase.  
     
     
         14 . A system for promoting customer loyalty comprising: 
 a central database for recording a recency, a frequency, and an intensity of purchases of each of a plurality of customers, the central database being connected to at least one transaction terminal for receiving information of the purchases of the respective customers; and    a central processor for determining a reward for an eligible customer based upon the recency, frequency, and intensity of the eligible customer's purchases, the central processor being connected to a display for displaying the reward.    
     
     
         15 . The system according to  claim 14  wherein the determination of the reward is based upon a loyalty score of the eligible customer according to a pre-determined mathematical formula incorporating the recency, frequency and intensity of the eligible customer's purchases.  
     
     
         16 . The system according to  claim 15  wherein the pre-determined mathematical formula is a decay function having the following characteristics: 
 (a) a calculated value associated with said decay function rises proportionally if the recency, frequency or intensity rises within a desired window of values for each of the recency, frequency or intensity; and    (b) growth of the calculated value associated with the decay function becomes insignificant above a predefined threshold    wherein the eligible customer's loyalty score is based upon the calculated value.    
     
     
         17 . The system according to  claim 15  wherein the reward is determined by operating a lottery wherein the eligible customer is a player, and the reward is a share of a prize pool of the lottery if the eligible customer is determined to be a winner of the lottery.  
     
     
         18 . The system according to  claim 17  wherein the eligible customer's share of the prize pool is based upon the eligible customer's loyalty score, wherein the prize pool is divided between the eligible customer and other winning customers on a prorated basis in accordance with the eligible customer's loyalty score and respective loyalty scores of the other winning customers.  
     
     
         19 . The system according to  claim 15  wherein the reward is a discount on a further purchase by the eligible customer, wherein an amount of the discount is based upon the eligible customer's loyalty score.  
     
     
         20 . A computer program product for promoting customer loyalty, the computer program product comprising: 
 software instructions for enabling a computer to perform predetermined operations; and    a computer-readable medium bearing the software instructions;    the predetermined instructions including:    receiving information of respective purchases of each of a plurality of customers from at least one transaction terminal;    recording a recency, a frequency, and an intensity of the respective purchases of each of the plurality of customers;    determining a reward for at least one customer based upon the recency, frequency, and intensity of that customer's purchases; and    transmitting information of the reward to a display.