Method and system for cross-marketing products and services over a distributed communication network

[0001] This application is a continuation of application Ser. No. 09/267,110 filed Mar. 12, 1999, now U.S. Pat. No. 6,574,606.

[0002] 1. Field of the Invention

[0003] The present invention relates generally to methods and systems for conducting commercial transactions over a distributed communication network, such as the Internet, and more specifically, the World Wide Web. More particularly, the present invention relates to a method and system wherein a merchant loyalty service provider furnishes customer loyalty programs to on-line merchants in a manner that is transparent to the merchant's customers.

[0004] 2. Background and State of the Art

[0005] Presently, the primary focus of transaction-based Internet web site companies is on building name or brand recognition, market share, and customer service, as opposed to profit maximization. In many cases prices are set so low that even variable margin contributions are negligible when offset against expenses.

[0006] Some analysts believe that profitability ultimately will be achieved either by the realization of increases in volume that are large enough to cover overhead expenses and provide a substantial profit margin, or by eventual reduction in the number of competitors as the markets mature. However, it is likely that Internet-based businesses inevitably will face the same margin pressures as conventional businesses, and thus will need to find additional opportunities to expand margins.

[0007] One such opportunity is the development of secondary services such as customer loyalty programs or add-on service programs. Such services enhance profitability by providing increased revenue on each sale. Because of the focus of most transaction-based web site companies on establishing name or brand recognition and building market share, such companies today do not have the resources or ability to devote to the development and delivery of secondary services.

[0008] Accordingly, there exists a need in the art for providing customer loyalty programs to on-line merchants in a manner that requires little or no effort on the part of the merchant.

[0009] The present invention provides a solution to the problems and shortcomings in the art as described above, by providing a method for cross-marketing products and services to customers of specific merchant web sites on the Internet by a merchant loyalty service provider web site on the Internet, comprising the steps of providing a hyperlink to the merchant loyalty service provider web site from the merchant web site whereby the customer can access the merchant loyalty service provider web site directly from the merchant web site, providing at the merchant loyalty service provider web site a customer loyalty benefit offer related to the business of the merchant web site, receiving at the merchant loyalty service provider web site an acceptance of the customer loyalty offer by the customer, and providing the customer loyalty benefit to the customer in response to the acceptance.

[0010] According to another aspect of the invention, a system is provided which performs the method described above.

[0018] FIG. 1 is a block diagram of a system for providing enhanced secondary services to on-line merchants over a distributed communication network 10. According to the preferred embodiment of the invention, the distributed communication network comprises the Internet; however, any type of distributed communication network such as a wide-area network may be used in conjunction with the principles of the invention. For purposes of explanation only, the invention will be hereinafter described in the context of the Internet and the World Wide Web.

[0019] As shown in FIG. 1, the invention contemplates a plurality of merchant servers 14a-14c, a plurality of clients 16a-16c, and a merchant loyalty server 12, each operatively connected to the Internet 10 such that each server or client is able to communicate and exchange data with any other server or client. Merchant servers 14a-14c present commercial transaction-based web sites to clients (i.e. customers) 16a-16c who log in or access the merchant servers 14a-14c.

[0020] One example of a merchant web site is shown in FIG. 2 as web site 20. For purposes of explanation, a fictional company called Widgetz.com will be used. The merchant's web site typically contains artwork or stylized graphics 21 which identify the site to the customer as coming from the particular merchant. After a customer has entered an on-line order with the merchant, and the merchant has processed the order, typically the merchant will display to the customer a page indicating that the customer's order has been successfully processed and displaying an order confirmation number for the customer to retain if the future need arises to communicate with the merchant regarding the order.

[0021] According to a preferred embodiment of the invention, a banner ad 22 is placed on the order confirmation page. The banner ad will offer the customer a loyalty benefit, such as the opportunity to receive her next widget free. Alternatively, depending on the nature of the merchant's business, the offer may be for free shipping, a percentage or specific dollar amount discount, enhanced warranties, or free accidental death insurance, traveler's insurance, or term life insurance. FIG. 2 illustrates an example of an offer for a free widget for purposes of illustration. Additionally, instead of a banner ad, text 22 may be code or hypertext as is well known in the art.

[0022] When the customer clicks on the offer 22, the customer is brought to a merchant loyalty site 30 as shown in FIG. 3. Loyalty site 30 is actually located on merchant loyalty server 12; however, the site graphics 31 are made to have the same “look and feel” as the merchant's web site (this would be accomplished by prior contractual arrangement between the merchant and the merchant loyalty service provider). As such, the customer would perceive that she is still within the merchant's own web site.

[0023] The loyalty web site would present an offer to the customer, for example, for products such as cellular telephones, pagers, credit cards, magazines, insurance, or services such as memberships, extended warranties, and the like. These products would be offered either as a special benefit to the merchant's customer available at bargain prices, or as a free or “thank you” benefit to the loyal customer of the merchant's web site.

[0024] In the case of product offers, the customer will be offered the opportunity to receive a gift certificate, next product free, or free shipping as an added incentive for the customer to accept the offer. In the case of the “thank you” benefit, such as free insurance or warranty, the customer would be encouraged to buy an upgrade to the insurance or warranty provided as the free benefit. As shown in FIG. 3, the loyalty web page would contain fields for the customer to enter her personal information, including her e-mail address and phone number, as well as credit card information. When the customer has completed entry of the required information, she would click on an icon or hyperlink 32 indicating her acceptance of the offer. One example of a process whereby a customer accepts a loyalty offer is illustrated in FIG. 4.

[0025] At step 41, the customer at the merchant site 20 clicks on the banner ad or hypertext 22 and is brought to the merchant loyalty web site 30. At step 42, the customer accepts the benefit offer (after entering the required information) by clicking on the acceptance icon or hypertext 32. At step 43, once the merchant loyalty server 12 receives the information from the customer, the loyalty server transmits the customer information to the offer provider. For example, in the case of a wireless telephone, the loyalty server would transmit the customer's information to the wireless or cellular telephone provider or manufacturer for processing. At step 44, the customer would be sent back to the merchant's web site 20 after completion of the benefit application.

[0026] After processing by the offer provider and acceptance of the customer's application, at step 45 the provider notifies the loyalty server that the customer's application has been accepted. In response, at step 46 the loyalty server would send a free benefit or gift certificate to the customer for redemption, such as by e-mail. The e-mail also may contain a hypertext link to the merchant's web site. Of course, the certificate may be sent to the customer by any mode of communication, such as mail or facsimile, or by communication to the customer when the customer logs on to the merchant web site using a unique customer account or identification number.

[0027] FIG. 5 illustrates one example of a process whereby the customer redeems the certificate. At step 51, the customer logs on to the merchant's web site to purchase her next widget, and receives an order confirmation. At step 52, the customer hyperlinks to a merchant loyalty redemption web page serviced by the loyalty server 12. The redemption web page would be accessed in the same manner as the loyalty offer web page described above.

[0028] At step 53, the customer would enter her order confirmation information and gift certificate information on the loyalty redemption web page. The loyalty server verifies the entered information, and then issues a credit on behalf of the customer and transmits the credit to the merchant's server at step 54. The merchant then applies the credit to the customer's order. Such credit, for example, could be for a free widget, a discount, or for free shipping, as the case may be.

[0029] Alternatively, the certificate information may be passed to the merchant server automatically by the loyalty server. In this case, the customer would be given the option of redeeming the certificate upon entering an order.

[0030] FIG. 6 illustrates an example of a circumstance wherein no acceptance of a customer application by the offer provider is required. Under such circumstances, the offer provider will automatically compensate the merchant loyalty service provider for each new customer referral, and as such no acceptance confirmation would be needed for the free benefit to be applied. At step 61, the customer would hyperlink from the merchant's web site 20 to the merchant loyalty web site 30, as described above, where the customer would be presented with the benefit offer. At step 62, the customer would accept the offer, as explained above. The loyalty server at step 63 would then transmit the customer information to the offer provider, and at step 64 would immediately issue a credit or certificate to the customer, either by displaying the certificate to the customer, or by sending the certificate information to the merchant's web site. At step 65, the customer is then returned to the merchant's web site. At the merchant's web site, the customer would be given the option of applying the certificate to her next order.

[0031] The procedure of FIG. 6 also is applicable to those situations where a “thank you” or free benefit is automatically provided to the customer, with the opportunity for the customer to purchase an upgrade, as in the case of insurance or extended warranties. If the customer accepts the free or “thank you” benefit but does not want to purchase an upgrade, the customer will not enter credit card information but will be immediately returned to the merchant's web site.

[0032] In the case of insurance as a benefit, a customer would be offered a certain amount of free insurance while she is on a client web site. Once registered for this insurance, the customer will be offered an upgrade to a higher amount of insurance, or potentially a different type of insurance. In the case of either the free insurance or the upgraded insurance, insurance regulations require that the customer be provided with a certificate of insurance or policy for the provided coverage. According to the present invention, the certificate of insurance or policy is delivered to the customer electronically over the Internet in a secure fashion, with an option for the customer to select conventional fulfillment through the mail.

[0033] The invention having been described, it will be apparent to those skilled in the art that the same may be varied in many ways without departing from the spirit and scope of the invention. Any and all such modifications are intended to be included in the scope of the following claims.