Points exchange grows and adds new services
Points International Ltd, operator of the Points.com loyalty points exchange and management portal, is to add a range of revenue-building, consumer-focused features to its web site, and has also reported a 20% increase in revenues for the third quarter 2004 (US$1.98 million) compared to the same period in 2003 (US$1.65 million).
According to Points International's third quarter financial statement, new business established in both the second and third quarters, as well as price increases for consumer activity implemented at the end of the third quarter, have contributed to the increase in revenue, and are expected to continue to generate revenue growth in subsequent periods.
Record growth The Points.com exchange powered the cumulative online exchange, sale and transfer of some 6.5 billion loyalty points and miles, up from 3.0 billion at year end 2003. As at the end of the quarter, Points.com's activity continued to show strong growth as there was a 186% increase in points transacted compared with the same period a year before. The average transaction size per exchange increased to 18,041 points, up from 15,663 in the third quarter of 2003.
New loyalty partners "Points.com continued its strategy of establishing partner relationships with the world's most successful loyalty programme operators," said Rob MacLean, CEO for Points International. "New relationships launched or announced in the third and early fourth quarter include partners such as British Airways, Prime Hospitality, Goldpoints, Frontier Airlines and Hawaiian Airlines."
Several new partners are expected to join the Points.com exchange and/or launch additional private branded solutions using Points.com in the fourth quarter 2004, including the previously announced relationship with Frontier Airlines. These new partners are expected to increase the exchange service's number of transactions and grow traffic significantly.
Adding new services In addition to the new partnership deals, the third quarter saw the company begin development of the next version of its consumer-facing web site. McLean says that in the second quarter of 2005 several major changes to the Points.com web site can be expected.
Today, the consumer interacts with a web site that centres on a single feature: the exchange of loyalty points and miles. The new web site will broaden its offering, and present each consumer with a personalised view of their own "reward programme universe".
Suggestions, Amazon style According to MacLean, the new site aims to help consumers get more value from the reward programmes they participate in, and to obtain their rewards in less time by consolidating their points and miles from those programmes. This goal will be aided by adding new mile and point management tools, including new ways to purchase and earn more points. In addition, the new system will be driven by an Amazon-style engine that makes relevant suggestions by association. This uses the consumer's individual programme, reward goals, and point balance data to suggest ways to the site's various tools.
"This reward programme management utility will also add new revenue streams to the Points.com business model, including a focus on subscription membership," said MacLean. "We anticipate significant revenue streams from the additional features on the site."
Upgrade schedule Investment is well under way, and the changes will be phased in over the course of 2005, with monthly releases beginning in the second quarter. During the second quarter, users will notice a new look and feel, reflecting a more consumer-focused approach. Over the course of the spring and summer, the site will gain the new Purchase, Earn, and Suggestion features. In the second half of 2005, the company will focus on driving greater volumes of consumer traffic to the new web site.
Points.com currently works with over 40 loyalty operators worldwide, including major programmes such as American Airlines' AAdvantage, Delta Air Lines' SkyMiles, eBay's Anything Points, InterContinental Hotels' Priority Club Rewards, and Starbucks.