My first interview was with a Boston based college student named Lizzie. She is currently part of several rewards programs and is particularly incentivized by Dunkin’s rewards program to go there more often. She would otherwise rather go to Starbucks. When talking about bars she would go to if they potentially had a loyalty program network of bars at her disposal, she says she would “More likely go to bars with points, unless they are trash. I like going to popular places”. They would have to provide 1 free drink for every 5 for there to be much of a benefit. Our generation would particularly like this concept as they are “all about that free drink, and word spreads fast around college campuses”
My second interview was with a middle aged International business man named Max. Max has flown almost 2-million miles and has collected miles with Delta and the Skyteam network over the past two decades. He says that less frequent travelers will always pick southwest but once you get a bit of status in one of these airline networks, the perks are just so good; better choice of seats, fast track check-in and security, more bags, lounge access, cancellation out of your hands, upgrades etc. Max could envision a market place where he could trade a few delta miles for Thai air miles to get into a lounge in Bangkok, where the was no Delta lounge. He talks about retaining Delta status- you also have to spend “qualifying dollars” with your Amex card. In the past he’s seen deals where he can trade Delta miles with hotel points but “they don’t always translate fairly”.
Some takeaways from my 2 interviews:
1. Young people are price sensitive and will more easily adopt rewards programs and tell there friends about it
2. Crypto and Blockchain are buzzwords that have a bit of a “ick” factor to users. A design choice we could make would be to completely avoid marketing that side of it other than with investors. “Web3 Plumbing” or something like that
3. Fair point exchanges are essential for this market to work. Auctions, Vickrey mechanisms, Forex models are all worth exploring here. Smart and effective Market design will be essential for this product.
4. There’s great utility in the gameified “fun” aspect of this market, even in exchanges where the monetary benefit doesn’t necessarily make sense.
Name ideas:
pubpoints
brewpoints
beerbarter
Frequent friar
pintpoints
Pino
Rum
Draft:
We are working on building a better loyalty program that allows holders to trade their points between shops if points are left unused. We are still deciding on our vertical, but we have been starting to think about retail and consumer goods, such as beverages at coffee shops or bars.
From this article, the loyalty management market will be worth 17.65B by 2028 (TAM).
In our hypothesized vertical of Retail + Consumer Goods (Beer, Wine, Liquor), we would be going after 20% of our TAM which is 3.53B (SAM).
We think we can capture 0.05% of our SAM, which gives us about a 17.5M SOM.
There are about 3000 bars in SF according to SF Insider (https://sfinsider.sfgate.com/what-is-the-approximate-number-of-bars-in-san-francisco/)
