Make Life More Rewarding

Transcription

1 Make Life More Rewarding Boost Your Buying Power This Holiday Season Getting Customer Loyalty Programs Right Reap the Benefits of Charitable Giving ALSO IN THIS ISSUE: > Save Some Green With Green Holiday Gifts > How Americans Donate and Where the Money Goes pnc.com CALL-PNC

2 personal banking Boost Your Buying Power This Holiday Season With the holiday shopping season here, rewards points programs offer a great way to extend your purchasing power. As programs proliferate, however, it can be difficult to keep track of all of your options. Here are some tips on how to put these programs to work to benefit you the most. A Plethora of Points-Producing Options What started with frequent-flyer miles and sandwich-shop punch cards has expanded to encompass just about every product and service imaginable. In their quest to drive customer loyalty, more and more businesses are offering rewards programs, and you can generate points for doing everything from renting a car or staying in a hotel to signing up to receive communications or paying bills online. Here s a summary of some of the more popular rewards points programs: Travel Rewards Airlines, hotels and car-rental companies all widely offer rewards programs that allow you to earn points toward free travel. Many travel programs also provide cross-pollination possibilities, for example, with car-rental companies offering hotel or airline points with each rental. Even if you travel infrequently and don t believe you ll ever earn enough points for free services, it s still worth your while to join these programs when you do travel with exclusive customer service benefits and other perks available to members. Credit Card Rewards Just about every major credit card issuer now offers a rewards points program, and the myriad of possibilities can be daunting. You may want to link your credit card to one of your frequent-traveler programs to earn free travel faster, or you can take advantage of cards that allow you to earn points toward free merchandise or cash-back rewards. Just be sure to do something with so many credit cards available with rewards, there s no reason to be paying with plastic without getting something back. Making Rewards Programs Worth the Effort It can be cumbersome to carry a wallet or keychain full of rewards cards, but it can be well worth the effort if you play the game right. Here are some key considerations to keep in mind in regard to rewards points programs: Don t Pay a Fee Avoid programs that impose a sign-up or annual fee; they can end up costing you more than they save. Read the Fine Print Some programs have expiration dates on their points or restrictions on how they can be used. Make sure you know the policies of your programs so you can protect the value of your hard-earned points. Be Web-Savvy Visit program web sites for bonus offers and discounts; you might also be able to earn extra points by signing up for communications. Continued on page 3 Directions November/december

3 personal banking Business Banking A Growing Devotion to Customer Loyalty Programs Boost Your Buying Power Bank Rewards Program Many banks now offer rewards programs that allow you to earn points on your check card purchases and for everyday banking activities like online bill payment and direct deposit. Points can be redeemed for free travel, merchandise, etc. Why not take advantage of the opportunity to earn rewards points for things you re already doing? Retail Rewards Most major retailers, from supermarkets to sporting goods stores, offers a rewards program these days. These programs generally allow you to earn discounts on future or related purchases, so it makes sense to sign up for rewards cards from the retailers you frequent. By using your rewards credit or check card for qualifying purchases in a retail rewards program, you can double dip and earn points in both programs. Customer loyalty programs have been around for the better part of a century since the advent of S&H Green Stamps in the 1930s but they ve never been as popular as they are today. Consider these findings from Jupiter Research: More than 75 percent of U.S. consumers have at least one loyalty card. One-third of the shopping population carries two or more loyalty cards. According to Gartner Research, U.S. companies invested more than $1.2 billion in customer loyalty programs last year. In light of the following statistics*, that money apparently was well-spent: The cost of generating a sale from a new customer is estimated at four to five times greater than generating a sale from an existing customer. Recent studies have shown that customers who belong to a loyalty program visit twice as often and spend four times as much as those who don t. * Source: Echo Strategies, 2008 What to Look for in a Rewards Program Since enrolling in a rewards program entails somewhat of commitment you ll probably be steering more of your business to the program provider it makes sense to take a few minutes and consider some of the following questions to make sure the program is worth joining for you: Is it easy to earn points? Is it easy to keep track of your points? Are the point levels required for rewards achievable for you? Is it easy to redeem points? Can points be redeemed for something of value to you? Directions november/december 2009 pnc.com CALL-PNC 3

4 Business Banking A Customer Loyalty Program Can Improve Your Bottom Line A customer loyalty program can be a great asset to almost any business. It can help you collect valuable data on your customers and their buying behavior, generate repeat business and serve as an effective tool for enhancing cash flow. Setting Yourself Up for Success Here are some key considerations to keep in mind to help make your customer loyalty program a winner. Easy Does It Keep your program simple and offer rewards that are attainable in a timely manner. Complex program requirements or reward levels that are difficult to attain can work against you by generating negative feelings among your customer base. Market Your Program If you have a customer database, invite your customers to join your program via direct mail or ; if not, make it easy for customers to sign up at the point of purchase. You can also highlight your program in ads and throughout your marketing efforts. Track Your Results A loyalty program entails a significant investment of time and resources, so it s important to track the results of your program to assess whether it s having a positive impact on your business. This also will help you identify opportunities to improve your program. Identifying Your Best Customers In addition to generating business, a loyalty program will help you collect information on your customers and their purchasing patterns. You can use this data to understand, profile and target customers more effectively as well as design future promotions based on your customers preferences and buying habits. Increase Your Cash Flow All businesses have top customers that are responsible for the majority of their revenue and income. Since no business has unlimited resources, it s essential to know who your best customers are. Use the intelligence obtained from a rewards program to allocate precious resources for your key profit producers. Finding ways to generate business from your best customers will make the greatest impact on your cash flow. Designing a Program to Fit Your Needs Before launching a customer loyalty program, it s essential to establish objectives for your program as the definition of loyalty can vary depending on what type of products or services you sell and whether you market to consumers or businesses Start by defining what you re trying to achieve with your program are you trying to drive repeat business, increase purchase volume, generate referrals, etc.? Take a look at what your competitors are doing and figure out a way to differentiate your program from theirs. Be sure your management is firmly committed to the program. You can alienate customers by canceling a program once you ve started it. Directions november/december 2009 pnc.com CALL-PNC 4

5 INVESTMENTS It Pays to Be Generous With Charitable Causes Almost everyone shares a concern for the quality of life in their communities. Even if you can t afford to give much, you still can help enrich your community and yourself by joining in the spirit of charitable giving this holiday season. There are a multitude of reasons for making charitable contributions from avoiding a higher income-tax bracket to creating a legacy for your family or simply wanting to help improve the quality of life in your community. As the year winds down, it s a good idea to assess your finances and determine if charitable giving makes sense for you this year. The Basics of Giving Contributions of cash and property to qualified charitable entities such as religious, educational and medical research organizations generally are tax-deductible for the year in which they re made. The IRS web site ( has a search feature to help you determine whether an organization qualifies, and you should always consult your financial or tax advisor before making any substantial charitable gift. Did you know? If you volunteer for charitable causes throughout the year, while the value of your time is not deductible, you can deduct any travel and other out-of-pocket expenses that you incur in association with your volunteer activities. Here are some key considerations for popular types of charitable giving: Cash If you date and mail your donation by Dec. 31, you can deduct it from this year s taxes. To substantiate your gift, keep a cancelled check, credit card record or written receipt that indicates the charity and donation amount. Property One of the most effective ways to reduce taxes is to donate property such as stocks, mutual funds, artwork or antiques. As long as you ve owned the property for at least one year, you can deduct its full fair-market value while avoiding capital gains taxes on the property s appreciation. Used Items When donating used items like furniture, clothing, etc., your deduction is based on the fair-market value of the articles. Again, remember to get a written receipt for the items you re donating. Where the Money s Going Here s how Giving USA estimates last year s giving by type of recipient: Environmental/Animals Organizations $6.58 billion Arts/Culture/Humanities Organizations $12.79 billion International Affairs Organizations $13.3 billion Public-Society Benefit Organizations $23.88 billion All Others $48.98 billion Religious Organizations $ billion Health Organizations $21.64 billion Foundations $32.65 billion Educational Organizations $40.94 billion Directions november/december 2009 pnc.com CALL-PNC 5

6 Stretch Your Holiday Budget With Green Gifts From the Heart Holiday gift-giving doesn t have to be expensive. In fact, the most cherished gifts are ones that you create yourself. You can hold your holiday shopping costs down by being imaginative and thinking green with holiday gifts. Here are some ideas: Reusable Grocery Bags Create personalized reusable grocery bags for your loved ones by using old clothes or fabric that you have on hand. Homemade Potpourri Make a sweet-smelling and colorful potpourri using lemons, oranges, limes, apples and other fruits from your fridge or fruit bowl. Bottle Cap Magnets Make colorful sets of refrigerator magnets by adding a dab of glue and small magnets to the underside of your used bottle caps. Spring Bloomers Plant flower bulbs in a clay pot, personalize the pot with simple decorations and include growing instructions with your gift. Personalized Gift Cards You can use old family photographs to create personalized gift cards for free baby-sitting, chauffeur service, etc. Soup Kit Fill an old jar with all of the dry ingredients for a favorite soup. Add a tag with instructions for adding wet ingredients and cooking. This publication may provide reference to Internet sites as a convenience to our readers. While PNC endeavors to provide resources that are reputable and safe, we cannot be held responsible for the information, products, or services obtained on such sites and will not be liable for any damages arising from your access to such sites. The content, accuracy, opinions expressed, and links provided by these resources are not investigated, verified, monitored or endorsed by PNC. These articles are for general information purposes only and are not intended to provide legal, tax, accounting or financial advice. PNC urges its customers to do independent research and to consult with financial and legal professionals before making any financial decisions. The opinions and views expressed by the authors do not necessarily reflect the opinions and views of PNC or any of its subsidiaries or affiliates, nor does the inclusion of the articles in this magazine constitute endorsement by the authors or PNC of any of the products or services of others referenced herein. For More Information: PNC Directions is a publication of The PNC Financial Services Group, Inc., a highly diversified and growing financial services organization offering a wide range of products and services for individuals, businesses, corporations and government entities. No matter how simple or complicated your needs, PNC is sure to have the right products, knowledge, and resources to provide you with a variety of solutions. For more information, please call CALL-PNC, visit pnc.com or stop by any PNC location The PNC Financial Services Group, Inc. All rights reserved. PNC Bank, National Association. Member FDIC