1. The Next Big Thing
A Loyalty Based Online Merchant To Customer Platform
By Ahmed Elasra
20th of April 2012

2. Agenda
• Overview
• Online Customer Platforms – Today
• Loyalty Based Platforms
• Loyalty Based Platforms – Process Flow
• Process Flow – Details
• What do we have?
• Wrap up

3. Overview
Merchants have 4 basic needs Problem is
Identify different customer segments.
do not engage
Reach customers online (web/mobile).
online with
Get customers feedback & customer insights.
Because they don’t
See a real
Send targeted promotions.

4. Online Customer Platforms- Today
Merchants use social platforms (human to human interaction) that engage fans & followers.
Value proposition
Content/updates
Engagement rate
Low or average
Audience
Fans & followers
Most local merchants do not care much about creating a real value to their customers through social media
Merchants use daily deals websites that attract deal hunters.
Value proposition
Huge Discount
Engagement rate
High - impulsive
Daily deals Audience
Deal hunters

5. Loyalty Based Platforms
FOUND IT!!! A LOYALTY BASED PLATFORM IT IS…
Value proposition
Rewards & discounts
Engagement rate
High - ongoing
Online Loyalty Audience
Real customers
Is That All?.....NO
What does a successful loyalty based online platform look like?
To answer this question, we must understand the process flow

6. A Loyalty Based Platform Process Flow
1 Awareness 4 Sending Data
Customer becomes aware of Customer-purchase data is
the program. sent to the back-end.
Enrollment 5 Offering Rewards
2
Customer enrolls and become Merchants offer rewards to
a member in the program. customers who have enough
balance.
3 Customer – Purchase Association 6 Validating Redemption
While/after buying something, Customers redeem their points
the customer data is associated for real rewards through a
with the purchase data. redemption process.

7. Process Flow - Awareness
1 Awareness
Customer becomes aware of
the program.
 How will customers become aware of the program?
 How much money does the merchant need to pay to market the program?
 Does the program advertise itself (self-serve)?
A successful loyalty based platform is a self-serve platform that starts marketing for itself and anything else
that the merchant or the loyalty operator (if it is managed by a third party) does is considered an extra
effort.
If the platform is owned by a third party (an operator )it must be self-serve that starts advertising for itself
inside the store if the operator wants to break the geographical boundaries and go global.

8. Process Flow - Enrollment
2 Enrollment
Customer enrolls and become
a member in the program.
 What are the steps that customers will pass through to enroll in the program?
 Will an average customer feel that it is a complex process to enroll and give it up?
 How big is the customer segment that is eligible to enroll?
A successful loyalty based platform is easy for an average customer to enroll into, it does not require
multiple steps, it takes a very short time to complete the enrollment and it is all done at once.

9. Process Flow – Customer – Purchase
Association (1 of 2)
Customer – Purchase Association
3
While/after buying something,
the customer data is associated
with the purchase data.
 Who makes the first move – the waiter/cashier or the customer?
 Is the program transactional, based on location based check-ins or QR code check-ins?
 Is mobile payment or credit card payment a must to use the program?
 Does it require the customer to have a smartphone?
A successful loyalty based platform does not depend on customers to make the first move once they
become members, customers are naturally shy to break the ice.
The customer-purchase association must not require the customer to pay with credit card or use a mobile
payment app in order to cover a large customer segment.
A successful loyalty based platform is able to distinguish between customers based on their purchases &
visits and it can calculate the customer lifetime value (CLTV). Counting visits only using location based or QR
code check-ins is useless, it should take into consideration each transaction’s time, value and location (in
case the merchant has multiple branches).

10. Process Flow – Customer – Purchase
Association (2 of 2)
Customer – Purchase Association
3
While/after buying something,
the customer data is associated
with the purchase data.
 What are the security measures in place that guarantee a fraud-free operations?
 How much manual effort is involved? How much delay will it cause in the queue?
 How complex is the technical activity required from the cashier/waiter and the customer?
A successful loyalty based platform must be secure and guarantees that customers will not be able to
defraud the system whether by claiming rewards they don’t deserve or earning fake points (Hello location
based check-ins!).
A successful loyalty based platform must not involve a lot of manual or technical efforts when the customer
or the cashier/waiter is in the process of associating the customer and purchase data, it will either keep a
long queue of customers waiting or will alienate customers from using it.

11. Process Flow – Sending Data
4 Sending Data
Customer-purchase data is
sent to the back-end.
 When customer-purchase data is associated, does it instantly reflect in the back-end or the data is delayed
and sent in bulks?
 Does the merchant need to have an internet connection in the store?
 Who is in charge of sending this data to the back-end? The cashier or the customer?
Customers do not like to wait until they receive points for their purchase, they might want to redeem their
points instantly once they get them. A successful loyalty based platform sends the customer-purchase data
instantly to the back-end once associated.
A successful loyalty based platform must not depend on having internet at the store in order to send the
customer-purchase data to the back-end, in some parts of the world having in-store internet is not as easy
as it seems to be (if you are in a modern country and not planning to go global you can ignore this point).
When the cashier is responsible for sending the data to the back-end, it saves time for the customer but it
may delay the queue for a while and when customers are responsible for that, they get the chance to see
their balance instantly which is kind of engagement itself but it might be boring for some customers, so
there is no right or wrong here although I personally prefer the second option.

12. Process Flow – Offering Rewards
5 Offering Rewards
Merchants offer rewards to
customers who have enough
balance.
 Is it a coalition or a merchant-specific program?
 Does it create loyalty to the program or to the brand (merchant)?
 What is the value proposition in the customer's mind? who is in charge of setting the rewards/coupons?
 Is it personalized to the customer needs or generic to everyone?
 Does the customer feel that getting a reward is feasible or it is too far to collect points for?
Yes in coalition loyalty there are variety of rewards and customers have fun but it builds loyalty towards the
program – the loyalty operator (a third party) not towards the merchant (the brand), do you want program
loyalty or brand loyalty? Period.
In a successful loyalty based platform, rewards are managed by the merchant or an account manager from
the operator who is always aligned with the merchant’s business and the rewards are typically discounts and
items from the same merchant to increase the perceptional value in the customer’s mind.
Customers should be given a wide range of rewards to match their different tastes and most importantly
customers should never get the feeling that it is too hard to get a reward otherwise the program will fail.

13. Process Flow – Validating Redemption
6 Validating Redemption
Customers redeem their
rewards through a
redemption process.
 When a customer claims a reward, how can merchants validate that this customer is eligible? showing an
app screen (Hello Fraud!)? handing the cashier a reward/coupon code?
 If it is a code, is it secure? is it possible that customers use it multiple times or in multiple branches?
To avoid the hustle of validating redemption, most loyalty based platforms use the online store model for
redemption where customers can claim their rewards online and the reward is sent to their address, but
what if a merchant would like to reward their customers with a special treat and a warm welcome along
with a free cup of coffee? That cannot be delivered!, hence, in a successful loyalty based platform
validating redemption must also be doable in-store as well.
You may ask how could it be validated in-store if there is no internet at the store , well… there are ways! ,
see the next slides.

14. What do we have?
Once we have a successful loyalty based platform Merchants will be able to:
 Segment their customer base
 Reach customers online
 Get their feedback
 Send them targeted promotion
 And much more!
Demographics Purchase data
Customer’s Qhat profile
Age
Gender
Location

15. Wrap up
So which loyalty based online merchant to customer platform has it all?
No credit No No internet
Self-serve Transactional
card smartphone at the store
In-store
No queue
Easy to use Brand loyalty Secure redemption
delay
validation
And merchants can install at their stores & use instantly in any part of the world?
SCALABLE
Say Hello to ….

16. If you’d like to try Qhat
Go to beta.Qhat.net and login with
email testqhat@gmail.com and
password TestQhatPassword
By Ahmed Elasra
www.Qhat.net
20th of April 2012
WeCare@Qhat.net Qhat Rewards QhatRewards