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Wednesday, July 11, 2007

Exclusive Categories to be Phased Out

As discussed previously and again at the June Sponsor meeting, Foodservice Rewards is no longer offering category exclusivity, effective June 30th, 2007. Of course, Sponsors’ contracts that contain exclusivity clauses will be honored through the current term and private label brands will always be excluded from participation in the coalition.

The primary reason for the change of policy is to increase operators’ and DSR’s earning power and engagement. A secondary reason is to combat the rise of competitive programs, such as Brand Points Plus, which launched at this year’s NRA show.

Brand Points Plus appears to be a re-incarnation of Cool School which has steadily lost sponsors and operators to Foodservice Rewards. The program is fulfilled from the same address as Cool School and suffers from the same design flaws:

1) Point Expiration. Unlike FSR, whose points don’t expire, BPP’s Points expire after 18 months. Point expiration is one of the leading causes of participant dissatisfaction observed in BI's 50+ years' experience managing loyalty programs.

2) Proof of Purchase. Unlike FSR’s reward codes – which are now being entered on the website at the rate of over 1,000,000 per month – BPP requires mail-in proof of purchase, suggesting:

"The simplest and most efficient way to verify purchases is to request a velocity/usage report from your distributor(s). This report should list a summary of your qualifying product purchases for the time period specified (i.e. July 1st through September 31st, 2007)."

That might work for K-12 districts, (many prefer entering codes online) but when you are an operator like Mickey's Diner, what are the odds that a distributor will run a special report for you?

3) Verification. Unlike FSR, where each reward code painlessly identifies the corresponding product, pity the poor unfortunate soul at BPP who combs through each invoice or distributor velocity report trying to match distributor code numbers to qualifying manufacturers' products.

From their FAQ’s:

What if the manufacturer’s product code numbers do not match the code numbers on the distributor reports or invoices?

“Occasionally [read: almost always] a distributor will assign a product code that is different from the manufacturer’s code. If there is any question, ask your distributor for verification.”

4) Too few reward choices. BPP: 233 (only 10 of which are Foodservice specific) vs. FSR: 2,500+ (updated quarterly) and a reward auction featuring one-of-a-kind finds and experiences - ‘nuf said.

For additional comparisons, see the prior post cataloging the shortcomings of Step Up To The Plate, many of which are similar/the same.

As branded manufacturers, we are more effective all working together to add value for operators and ultimately, the exclusivity policy change will mean a more robust program for all constituencies: Manufacturers, Operators and Distributorships.

Please feel free to contact me with questions.

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