David Raab Article Archive

Personal computers were supposed to let small companies compete with big ones by giving them equally sophisticated computer systems. But it turned out that even with cheap hardware, integration and maintenance cost more than small businesses could afford. The Internet was going to solve the problem with “hosted” systems run by specialists who spread the cost across many clients. But impractical business models, awkward Web-based interfaces and, above all, poor integration with other corporate systems meant this too was not quite enough.

It’s always dangerous to declare a Mission Accomplished before the dust has settled. But today’s hosted systems are priced realistically and provide competitive user interfaces. The remaining problem, interactions with external systems, appears to be solved by a technology known as Web services. How Web services work is important only to the people who run them; what matters to marketers is they may remove the final barrier to getting sophisticated software at an affordable cost.

SportTrak (Smart Button Associates, 800-661-2265, www.smartbutton.com) is a powerful customer reward system offered on a hosted basis. Like other customer reward systems, SportTrak lets customers identify themselves during transactions, offers rewards for customer activities, and tracks reward redemptions. In the process, it builds a customer database that can be used for conventional direct marketing promotions and customer analysis.

SportTrak is widely used by horse race tracks and has other sports clients including the Arizona Diamondbacks baseball team. It is also expanding into casino, leisure and restaurant industries. Smart Button has another product, LoyaltyTrak, to support rewards programs in other industries.

The first challenge for every rewards program is getting customers to participate. This is more a matter of marketing than technology, but SportTrak helps by accepting multiple identifiers for each customer. These could be program-issued member numbers or extrinsic identifiers such as credit cards or telephone numbers. Transactions coded with any registered identifier will be credited to the correct customer account.

Transactions can be imported as flat files or through Web services connections. Smart Button has dozens of prebuilt interfaces available for common transaction systems.

The data gathered about customers and transactions is predefined for each installation. Additions or changes are made mostly by Smart Button staff, although clients do have the ability to define survey questions and store customer answers.

SportTrak organizes transactions in terms of events, such as a baseball game or track visit. Events can be assigned to different programs, such as a season, to help compare results over time. Each event can have many types of transactions, such as ticket, merchandise and food purchases. For each transaction, users can define the points earned, revenue and cost. These values may differ for the same transaction at different events, allowing as much precision as the user has the patience to implement.

Transactions can also be given default values that are assigned automatically across all events. Users can enter simple values directly, but more complicated tasks, such as importing revenue from a point-of-sale system, require programming by Smart Button or the client’s technical staff. Users can also specify how many times per event each transaction can be credited.

Customers accumulate points based on transactions and can later redeem points for rewards. Each reward has a point value, dollar value, dollar cost, quantity available and eligibility conditions. The system also lets marketers give free rewards automatically; issue coupons and track redemption; and manage rewards for employee incentive programs. It can also track non-financial interactions such as inquiries and complaints.

Rewards and coupons can be linked to promotions. These may be on-going, one-time, special-event or instant winner. Promotions are assigned to user-specified customer groups, which are defined with customer profile and transaction data. A hierarchical segmentation tree lets users build multi-level group definitions. As with other aspects of the system, complicated segmentation rules may require some custom programming. Since customers will belong to different segments over time, the system lets users specify how often to update segment membership.

From the customer’s point of view, all these features come together at a Web-based kiosk, handheld terminal, or Web site. The customer identifies himself by logging in, and SportTrak responds with a welcome screen showing announcements, available points and promotions, and by printing out relevant coupons. Customers can take surveys, update their profiles, select rewards, and view their transaction history. Users can configure the site to reflect their organization’s preferences and can even define different sites for different user groups. Alternately, clients can embed SportTrak functions in their own Web sites, communicating through the magic of Web services. Kiosks can store customer data locally, so they will function even if the Internet connection is not available.

Marketers can also extract customer lists based on group membership or reward eligibility. The system can send personalized emails based on user-created templates. Or the lists can be sent to external systems for direct mail, telemarketing or other promotions.

SportTrak stores detailed information about each customer’s transactions, rewards and redemptions. It uses the financial components to calculate net profit for each customer. Standard reports compare group behavior across programs, track reward usage, and measure promotion results, although clients typically add custom reports during implementation. While the system keeps a history of list selections, it does not record the dynamic promotions seen by each customer.

SportTrak is targeted at all sizes of companies. Pricing starts with minimum of 2,000 members and ranges from $.10 to $.30 per member per quarter based on quantity. Implementation is additional but could be as little as an hour for a small operation using standard templates. The company says it took just two days to set up the Arizona Diamondbacks.

Smart Button was established in 1998 and originally offered client/server software. The hosted version of SportTrak was released in 2002 and now accounts for about a dozen of the firms thirty-plus clients. The system manages over 2.5 million names in total, including more than 300,000 at its largest single client.

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David M. Raab is a Principal at Raab Associates Inc., a consultancy specializing in marketing technology and analytics. He can be reached at draab@raabassociates.com.