LoyaltySharesSM
The Concept.
Give customers a concrete stake in your company’s success by building your loyalty program on shares of publicly traded common stock, instead of rewards that might be of little perceived value or difficult to redeem. Or make more conventional rewards convertible into shares, as an option. It’s something innovative and different in a field that's running short of ideas.
How Program Members Benefit.
Program members receive a liquid asset over which they have complete control. It’s theirs. They can hold their reward shares. They can increase their holding by purchasing more of your products or services or through optional cash investments. They can transfer shares as gifts to family members or friends. They can liquidate their holding, should they choose to do so. It’s up to them.
Stock ownership gives them a vested interest in the prosperity and growth of your company - a strong reason for wanting to see the share price head north.
Three Mechanisms You Need.
Mechanism #1:
One key mechanism is something most public companies already have in place - a direct purchase or dividend reinvestment plan. Such plans go under a variety of names and differ somewhat in procedure but they have a basic feature in common. For enrolled participants they make possible the systematic purchase of both whole and fractional shares of your stock. This mechanism would be administered by your transfer agent in the usual manner.
Mechanism #2:
Another key mechanism is also something most consumer-oriented companies already have in place - a system that keeps track of sales. You need to know who buys what, and how often.
Mechanism #3:
The third essential mechanism is what we contribute to the process. It’s a tailor-made, Internet-based system that not only ties in with the two other key mechanisms but also interfaces with loyalty program members and the sponsoring company. It’s the heart of everything. It manages a two-way flow of data between program components – members, the dividend reinvestment plan and the sales-tracking system. Exclusive e-delivery is a prerequisite for program membership.
What’s the SEC’s Position?
The Securities and Exchange Commission has approved the concept, and there IS recent precedent. This precedent was set by the customer loyalty system built by Ellen Philip Associates for a hotel chain. The system was used with success until that company went private and was obliged to terminate the program.
` To Learn More
Contact Ellen Philip – ephilip@ellenphilip.com.
Phone: (212) 807-0477