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How To Measure Redemptions For Your Vendor

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How To Measure Redemptions For Your Vendor

Yet again, a really good way to use the Reporting Product feature to measure redemption of free products. One just has to think outside the square and use this feature in an innovative way. Just some good planning and systems, and utilising the integrated BONUS POINTS loyalty system will achieve this. Let us take an example and show you how to get this done.

We will assume that we are going to set up points for a brand of Pet Food. Let us call it KITTY FOOD. Now let us assume that these come in 3 sizes, KITTY FOOD 1.5KG, KITTY FOOD 5.0KG, and KITTY FOOD 10KG. Let us also assume that prices across most flavours of the same size are the same. Now you can allocate points that you want the customer to get when they purchase each one. This is simple and the loyalty point allocation is done.

We know that when a customer wants to redeem this product, it is difficult for the application to track this on a bill with many other items on it. When points are “claimed” it is a lump sum allocation to the total bill and is not allocated to any individual product. So, how do we measure this? In order to record that a product was redeemed, you could set up a parallel “Reporting Product” as a counting unit.

A Reporting Product/Service is a type of “product” that can be set up where its attribute will mean that it does not have a price, inventory, cost, etc and will not print Free or No Charge on bills, BUT will allow you to enter a quantity “sold” and that quantity can be reported on through the Reporting System.

You could even print a barcode for this item and have it on a laminated book/sheet at the front counter (or have it on the product itself) to scan when a customer wants to redeem that product. This would be in addition to the product with a price being scanned. If you have correctly categorised this Reporting Product you can produce reports of redemption for your Vendor. Let us use that example for KITTY FOOD and design a system for redemption measurement for one of the sizes as an example.

Let us assume that KITTY 1.5KG has 3 actual products called KITTY FOOD Chicken 1.5KG, KITTY FOOD Beef 1.5KG, and KITTY FOOD Lamb. They are all a similar price and all get the same number of points, and after so many points have been gained, they can claim any flavour. So, we can create a single Reporting Product for all three, and call it “KITTY 1.5KG REDEMP”. Since we may have several items and sizes from this Vendor called KITTY FOOD ???, let us also create a CATEGORY called KITTY REDEMP and assign the Reporting Product(s) to this category. We can now print a single barcode label for this Reporting Product to cover all flavours (KITTY 1.5KG REDEMP ) and have it with others on a laminated sheet or book at the front counter. Alternatively, we could have one label per product to stick it on the product itself – preferably on the underside of the bag so it is not scanned accidently instead of the real price barcode easily when there is no redemption.

Now, when a Customer has enough points and wants to claim the product, simply scan the product and also scan the “KITTY 1.5KG REDEMP” Reporting Product. This will record that a product in that range was redeemed. Then simply process the bill and take off points as payment/discount. As a bonus, this system also has the benefit of showing/recording what product(s) was/were redeemed on that bill for auditing purposes for the client as well as for the business and the Vendor. At the end of the month simply use a Product Category report (select category KITTY REDEMP) to collate all redemptions for your Vendor. There are several other reports that will extract information similar to standard product sales reports – except that Reporting Products will show Quantity without any financial value – it is used a “counter” only.

LIMITATION: Note that this is an example and assumes that all points will be pooled within your business into one great total. So, if you have more than one Vendor participating, everyone will need to understand that points are pooled and cross-redemption may be possible. Is this a problem? We don’t think so at all! One has to understand that loyalty systems are not about redemption but about allocation. Shoppers will buy products based on the fact that they will be gaining points to spend. What they spend it on is irrelevant in the longer term because they still have to purchase your product to gain further points. The only scenario, which is highly unlikely in the longer term on law of averages, is if the MAJORITY of clients purchase one Vendor’s product ALL the time and claim on another Vendor’s product ALL the time. But given that a number of purchases have to happen over a period time before there are enough points for redemption, this scenario would hardly have an impact on the overall scheme for the clinic.

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