Innovation That Matters

A lesson in loyalty marketing

Financial Services

Upromise offers a successful programme that lets retailers and brands win loyalty by helping customers save for their children's college tuition.

Just when we thought we possessed every loyalty card ever invented by supermarkets, airlines and gas stations, US based Upromise proves that if you pick a worthy cause, you can still attract millions of consumers eager to sign up for the next big thing in loyalty programs: saving money for your kids’ tuition! Upromise combines the popularity of frequent flyer-like schemes with the ease of credit card reward programs. Consumers register their existing credit card details with Upromise (no fees are charged), then shop at participating companies — using the credit or debit card they’ve registered with Upromise — to get up to 10% of their spending back for college – automatically. Sounds simple? Maybe that’s why consumers like it so much: since Upromise’s launch only two years ago, the service has welcomed more than 3 million members. Participating companies include Mc Donald’s, Microsoft, ATT, Citi Bank, GM, Exxon, and Coca-Cola. Upromise get a small cut from each transaction, and from dedicated investment accounts for members, in cooperation with with financial institutions like Fidelity and Salomon Smith Barney. Upromise’s only competitor is Babymint, which has signed up close to 1 million members. However, Babymint doesn’t offer the service of registering current credit cards — members need a dedicated Babymint card to participate. The success factors behind a college-savings program: • Choosing a ‘good cause’ that is a natural winner — what parent wouldn’t want to automatically save money for future tuition for his or her children? And what company would refuse to participate in such a lofty goal? Saving for college also appeals to other family members who might want to pitch in: grandparents are target number one. • Fully automated saving-schemes, as offered by Upromise, are a big plus: no hassle with having to show special cards, or forgetting to ask for savings you’re entitled to. • Endless possibilities for data-mining, coming up with special offers, setting up advisory units and services (MSN Money, CNBC and Upromise have already set up a ‘college finance center’ website). And don’t forget the lucrative business of administering large amounts of savings.


As tuition fees are steadily increasing, even in traditionally generous European welfare-states, Upromise-like concepts should do well around the world. And what about other positive, self-empowering saving goals? Sabbaticals, world trips… Themed loyalty may be here to stay.


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