Tom Undgrodt: The economics of print and digital

The whole idea of Ideation selling the PowerPass rewards program to its customers speaks to a main idea I've learned in class with any small business out there today: in order to gain profits in the long run, you have to be willing to spend. In this case, businesses would use the PowerPass program which would ship catalogs to customers twice per year. Also there would be rewards for returning customers who buy specific items from the shop, This could be advantageous for a business which sees its main business in only certain times of the year such as Hallmark, which has its major spikes near the Christmas and Mother's Day holidays. Whereas Hallmark would usually have to wait for the rest of the year after Mother's Day for its next big wave of business, the catalog and rewards program provided by PowerPass would attract customers using the unique and innovative rewards system developed by Ideation. In order to attain this potentially double profit, businesses like Hallmark must be willing to spend upwards of $35-$50 grand every year which covers the costs of product listings, production, shipping. In terms of Ideation itself, it has some characteristics about it which are critical to the long-term survival of the company. Namely, they have clearly defined goals for the future and have done in-depth analysis on their competition. The ambition of the company is clear when Jay Upell talks about how he expects his company to expand by 100% in the upcoming year and that, even with many competitors in their market, they feel they can stave them off with their superior product and customer focus as opposed to offering “cookie cutter” services. When Bob Holland described how the PowerPass card worked it reminded me of something similar that I had in High School. Through the band program, we always got this plastic card which was to be shown at a number of restaurants in a catalog for discounts on items purchased. There was no points system like with PowerPass but it is something similar to existing products. It seems Ideation has a good mixture of people working behind PowerPass to make it a successful idea for the future. The combination of the owners who have the industry savvy and know-how to bring a product into the market and tech savvy people which they have hired to help in developing the program provides a balanced field of experts who each have unique perspectives on the product. I believe this is an important quality in the company and the entrepreneurs involved because there needs to be that willingness to work with outsiders when building such a new and untested product. In my business plan, I was hoping to also utilize a sort of rewards program for loyal customers so this would be a product that would interest me as an entrepreneur. The only problem, however, would be the amount of cash required to have such a program. It would be very hard in the first few years to pay for this. Chris Puzzuoli

Customer’s loyalty is the real secret of doing business and is one of the major keys of business success. It is essential for retailers to interact with the customers. Loyalty can be attained through establishing a true relationship with the customers. Companies use different strategies to increase customer’s loyalty. Strategies such as lower price, higher product quality and custom-made service are often offered to customers in return for their loyalty. PowerPass recognizes the importance of customer’s loyalty to companies and designs customized, all inclusive loyalty programs. The strategy of the loyalty programs is to build a trusted advisor relationship with the customer in order to maximize profit. PowerPass provides assistance for a range of loyalty programs, membership cards, database development, customer segmentation reports, promotional materials, and even assistance with employee training. PowerPass program is a success and it promotes the brand of the company, increases the average purchase, and brings customers back for repeat sales. The PowerPass program has its pros and cons. One of the advantages of this program is it achieves the purpose of advertising. Each time the customer receives a promotion reward or incentive it reminds the customer about the company. The program encourages increased sales and return business even during slow periods. Regular customers will recognize the value of their steady purchases will pay off with a reward or an incentive. The PowerPass maintains a database of the customers. The customer information can be used as target market group behaviors analysis and it provides valuable customer demographic information for market research. On the contrary, the collection and use of personal data poses a potential threat for abuse. Without proper security and customer privacy act enforcement, other external parties may have access to the customer information for their own research or marketing purposes. Some of the customers may not feel comfortable to share private and personal data in return for the privileges. Bryan Chan - EMU student