China's SmartClub launches points-based information exchange

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By: Wise Marketer Staff |

Posted on June 16, 2005

China's SmartClub launches points-based information exchange

The Shanghai-based SmartClub loyalty programme has launched a new service called 'SmartTalk' - an innovative idea that allows programme members and corporate partners to exchange information and advertisements for SmartPoints.

So many of the new developments in loyalty programmes are simply the application or enhancement of ideas that have been around for the past decade, now made possible by advances in technology. But Henry Winter, CEO for SmartClub, seems to have his own private store of new ideas that he dips into every so often. In The Loyalty Guide we described SmartClub as "bulging with good ideas"; this latest development confirms that view.

Some of the programme's ideas at that time included:

  • SmartClub uses consumers' existing cards as identification: either bank cards or their Shanghai Public Transport cards, of which there are over 6 million in circulation.  
  • Consumers have to register for the programme online, which pre-qualifies them as having access to the internet.  
  • Members supply comprehensive demographic information upon registration, and are offered an incentive for doing so accurately and comprehensively.  
  • Partners can ask SmartClub to conduct surveys within specific demographic groups of their own customers. The customers are paid in points for responding, and survey results are often in the partner's hands within days rather than weeks.  
  • Low-spending members can redeem small numbers of points for internet-based rewards (that are low-cost but are valuable to the consumer), such as English lessons, online dating services or even finding employment.  
  • Members can also earn points whenever they travel by subway, bus or taxi.

Too long to wait Winter's latest idea goes even further, and The Wise Marketer hasn't noted any other loyalty programme world-wide that has done this before (but if you know of one, do let us know).

According to Winter, "Consumers join points programmes so they can earn rewards, but even with our fifty-plus retail partners, online and offline, it still takes about RMB200,000 of spending to earn 200,000 SmartPoints and redeem for a nice digital camera. That might take our members two years. That may be ten times faster than competing points programmes that take twenty years to earn a pen, but it's still too long for our members to wait before getting value from SmartClub."

New solution This is a problem that has faced every loyalty practitioner for decades. One of Winter's solution is to open a number of SmartTalk bulletin boards online, to which members can contribute articles and information. They can then charge other members (in SmartPoints) for reading their contribution.

"For example, if a member publishes an article on SmartTalk about 'The Best Cantonese Restaurant in Shanghai', and charges five points for reading that article, other members each pay five points to the posting member to read that information. If 40,000 members read the article, the posting member could earn 200,000 SmartPoints in a few weeks instead of two years," Winter explained.

Dodging legal problems We asked Winter what would happen if someone wrote about "The Worst Cantonese Restaurant in Shanghai" instead - who would land up in court? His reply was straight-forward: "All articles are submitted to us [the SmartClub team] first, then we approve them, and then they go live. We are also testing a new hosting programme where we select one or two members to manage each category, and reward them with points. Those host members are then responsible for getting more and better posts in their category, and for vetting inappropriate posts. In case we miss something, every category has a direct complaint email link to one of our staff. If someone sees something they don't like, we will investigate and remove it immediately."

SmartTalk is personalised for each user, based on their basic member data (drawn from the SmartClub loyalty programme). As soon they log in, SmartClub members see the topics that are most likely to be relevant to them, sorted by that member's residential and working neighbourhood, occupation and industry, and personal interests.

Partners SmartClub's partners also use SmartTalk, but with a difference: they award points for members who read their messages or adverts. Each of SmartTalk's topics will be sponsored by an online business partner. The first three partners at launch were 51 Job (sponsoring the 'job search' SmartTalk bulletin board), BitAuto (sponsoring the 'SmartCars' community), and ShanghaiNing (sponsoring the 'Shanghai night-life' section).

SmartClub members earn points for viewing content from those partners, and are then encouraged to click through to the partner's web site for more information and the chance to earn more SmartPoints. The SmartPoints they earn in doing so are automatically combined with the SmartPoints they've earned elsewhere (for example, by taking the bus, eating at McDonald's, or shopping on eBay). SmartPoints can be redeemed for a variety of rewards (currently more than 500 of them) ranging from Starbucks coffee to Sony laptops.

Winter added: "We're looking to partner with the leading vertical communities in China to help them activate their members and make more money. We'll be announcing new category partners almost every week for the rest of this year."

At the time of writing, SmartClub's partners currently include McDonald's, C-Store, Chow Tai Fook, Sport100, 51 Job, BitAuto, and a number of eBay Powersellers. Exclusive contracts with China's leading public transportation card operators (Beijing, Guangzhou, and Shanghai) mean that more than 10 million people already carry a card that can earn them SmartPoints.

Customer profiling Any company can open an account and publish topics that award consumers points for reading content (known as "give points" topics). Many individual retailers have already gone to the SmartTalk partner web site and set up their own advertising. When consumers have been reading those topics, the advertisers can immediately see readers' demographic and spending profiles, and use SmartTalk's online tracking features to see if the same members actually become paying customers.

When we asked Winter how advertisers can see members' demographic and spending profiles, he explained: "We have a separate back-end system that allows easy analysis of member behaviour. All our clients have their own customised version of this toolkit. The system includes all purchase and community data as well. The system is also directly linked to our e-mail campaign management software, so after the retailer finds their target segment, they can click and send those members an e-mail - and then track the sales results."

Smart helpers Another clever feature called SmartAsk also allows members to ask questions, and reward other members for giving a useful and correct answer. It's not SmartClub giving the points, it's the members themselves. In effect, a member using this system directly rewards other members for their help by transferring points from their own SmartPoints account to the helper's SmartPoints account.

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