Abstract:
A method and system for calculating a discount to a customer at a business establishment. The method comprises determining the value of a parameter Mem PP, wherein Mem PP is a total purchase amount made by the customer at the establishment in a first time period. The value of a parameter Mem CP, wherein Mem CP is a total purchase amount made by a customer at the establishment in a second time period, is then determined, where the second time period is subsequent to the first period. The discount is then calculated using an algorithm involving Mem PP and Mem CP.

Description:
FIELD OF THE INVENTION  
         [0001]    The present invention relates to methods and systems for providing an incentive to consumers to patronize a business establishment.  
         BACKGROUND OF THE INVENTION  
         [0002]    In many commercial fields, a large number of business establishments compete with each other to attract and keep customers. The necessity of having to compete with each other has led to the development of various schemes that reward a customer for frequently patronizing a particular business establishment. This is particularly true in the field of grocery shopping, where many people shop several times a week, and often divide their loyalty among several competing establishments.  
           [0003]    For example, U.S. Pat. No. 6,460,019 discloses a system and method for rewarding a customer&#39;s loyalty to a business establishment and encouraging regular customer visits by offering a progressive discount on their purchases. The value of the discount is dependant upon the customer visiting the retail establishment on a regular basis. A customer&#39;s visits are tracked, and the customer is provided with a discount that is incremented by a pre-defined value if the customer visits at least once every pre-defined period. The discount may only be incremented once in every pre-defined time period and may be negated if the customer did not visit at all during the pre-defined time period.  
         SUMMARY OF THE INVENTION  
         [0004]    The present invention provides a method and system for inducing potential customers to frequently patronize a business establishment. In accordance with the invention, customers who frequently patronize the establishment are invited to join a club of frequent customers. A member in the club is entitled to a discount on purchases made during a present time period (e.g. the present calendar month) in excess of a first predetermined threshold amount provided that the customer purchased goods or services in an amount that exceeded the first threshold amount during a recent time period (e.g. the calendar month that preceeded the present calendar month) and purchased goods or services in an amount that exceeded a third threshold value during a time period that proceeded the recent period (e.g. the calendar month that preceeded the recent calendar month). This discount is referred to herein as the member&#39;s “self-discount”. Thus, for example, a member may receive a self-discount of 4% on the value of his purchases during the present calendar month in excess of the first threshold value, provided he purchased in an amount that exceeded the first threshold value during the previous calendar month. The term “time period” is used in a broad sense and includes a single time span, or two or more discrete time spans. It should also be noted that the recent and previous time periods are not necessarily consecutive time periods.  
           [0005]    In a preferred embodiment, a member of the club is further rewarded for convincing other individuals to patronize the establishment and to become members of the club of frequent customers. Individuals that have been convinced by the member to become club members are referred to herein as the member&#39;s “associates”. An associate of the member that purchased in the previous time period in an amount that exceeds a second threshold value is referred to herein as a “loyal associate”. In this embodiment, a member, in addition to the self-discount mentioned above, receives a discount on his purchases during the present time period based upon the purchase amounts of his associates during the previous time period. This discount is referred to herein as the “member&#39;s associate discount”. In this embodiment, the value of the purchases during the previous time period of all of the member&#39;s associates (loyal and not loyal) are totaled and divided by the number of the member&#39;s loyal associates during the same time period. This ratio is referred to herein as the “upper limit for the associates discount”. A member is entitled to an associates discount if he has purchased in excess of the first threshold value during the previous month. The member&#39;s associate discount during the present time period is based upon the value during the present time period of the member&#39;s purchases in excess of the first threshold value up to a maximum amount equal to the upper limit for the associates discount. The value of the discount is equal to a basic rate (e.g. 4%) times the number of loyal associates. For example, if the first threshold value is $800, and the upper limit is $1000, and the member has made purchases totaling $900 in the present period, the member receives a discount on the $100 that he has purchased in excess of the first threshold ($800), where the rate of the discount is a basic rate (e.g. 4%) time the number of loyal associates. If the member purchases during the present time period in excess of the upper limit (e.g. $1,100), he would receive the discount only on the difference between the upper limit and the first threshold. 
       
    
    
     BRIEF DESCRIPTION OF THE DRAWINGS  
       [0006]    In order to understand the invention and to see how it may be carried out in practice, a preferred embodiment will now be described, by way of non-limiting example only, with reference to the accompanying drawing, in which:  
         [0007]    [0007]FIG. 1 shows a system in accordance with one embodiment of the invention;  
         [0008]    [0008]FIG. 2 shows a terminal of the embodiment of FIG. 1;  
         [0009]    [0009]FIG. 3 shows a controller of the embodiment of FIG. 1;  
         [0010]    [0010]FIG. 4 shows a flow chart for an update program in accordance with one embodiment of the invention;  
         [0011]    [0011]FIG. 5 shows a flow chart for a method of calculatng a discount in accordance with one embodiment of the invention; and  
         [0012]    [0012]FIG. 6 shows a flow chart for a method of calculating a discount in accordance with another embodiment of the invention 
     
    
     DETAILED DESCRIPTION OF THE INVENTION  
       [0013]    [0013]FIG. 1 shows a schematic diagram of a system  100  for recording transactions made by a plurality of club members who are frequent patrons of a business establishment, and calculating a discount to which a member is entitled, in accordance with the invention. The phrase “business establishment” is used here in the broad sense, and may include several outlets of a chain, or several different businesses or business types that have decided to cooperate between themselves, so that all purchases made at the different cooperating businesses are considered equivalent for the calculation of the discounts.  
         [0014]    The system includes a controller  102  that communicates with one or more terminals  104  via a respective data link  110 . In FIG. 1, two terminals  104   a  and  104   b  are shown. This is by way of example only, and the system may have any number of terminals  104 . The terminals  104  are typically located at a position in the business establishment where a member pays for his purchases, such as the check out counter of a supermarket.  
         [0015]    Each terminal  104  has an associated input device  118 . The input device  118  is used to input data identifying a club member that has come to pay for his purchase. Each member may be provided, for example, with a card having a magnetic strip carrying data indicative of the identity of the member and his account number in the club. In this case, the input device  118  is a card reader, and data are input by swiping the member&#39;s card in the card reader. A terminal  104  communicates with its associated input device  118  via a respective data link  122 . Alternatively, the member may be provided with a card bearing a unique bar code. In this case, the input device  118  is an optical bar code scanner that may be the same scanner used to input prices of purchased items. The input device  118  transmits this coded information to terminal  104 .  
         [0016]    The terminals  104  and the controller  102  may be located at a single site, in which case the communication  110  between the controller  102  and the terminals  104  may a local access network (LAN). Alternatively, The terminals  104  and the controller  102  may be or may be located at different sites of the business establishments in which case the communication links  110  between the controller  102  and the terminals  104  may be a remote network connection. Such network connections include computer networks (such as the Internet or an Intranet) and telephone networks (such as a public switched telephone network). The connection may be a wireless connection such as a radio-based connection.  
         [0017]    [0017]FIG. 2 shows the architecture of the terminal  104 . The terminal  104  comprises a data processing system including a central processing unit (CPU)  136 , a random access memory unit (RAM)  138 , a read-only memory unit (ROM)  140 . The terminal  104  is adapted to receive data signals from the input device  118  and process the information in combination with data signals received from the controller  102  via link  110 .  
         [0018]    When a member makes a purchase, his identity is input to the CPU  136  from the input device  118 . The member&#39;s identity is transmitted to the controller  102 . Controller  102  stores data relating to the account of each club member, as explained in detail below. The controller  102  determines whether the member is entitled to a discount on his present purchase based upon the discount calculated at the end of the previous time period. (e.g. at the end of the last calendar month). The controller  102  then transmits to the terminal  104  the amount of the discount the member has earned, and this amount is deducted from the value of the member&#39;s present purchase. The value of the present purchase (after any discounts have been deducted) are then transmitted to the controller  102  which stores the data in the member&#39;s account The controller  102  also determines whether the member making the purchase is an associate of another member, and if so records the amount of the present purchase in the account of the member of whom he is an associate.  
         [0019]    [0019]FIG. 3 shows a schematic diagram of the controller  102 . The controller  102  is a data processing system comprising a central processing unit (CPU)  144 , a random access memory unit (RAM)  146 , a read-only memory unit (ROM)  148 , a clock  150 , and a data storage device  152 . CPU  144  is configured with communications equipment such as telephony communications and network communications equipment to communicate with the terminals  104  via data link  110 . CPU  144  is also coupled to the data storage device  152  via a bus  154 .  
         [0020]    The data storage device  152  stores a member database  156 . The member database  156  maintains a record for each member including information relating to the value of the member&#39;s unused discount earned during the previous time period, the total value of his purchases so far during the present time period as well as the total value of the purchases of each of his associates so far during the present time period. Each time that a member makes a purchase, the CPU  144  executes the update program  160 , which updates the entries in the member&#39;s file in accordance with the value of the purchase, as described in detail below. At the end of each time period, CPU  144  executes the discount calculation program  158  which, as described in detail below, calculates the discount earned by each member during the time period.  
         [0021]    [0021]FIG. 4 shows a flow chart for the update program  160 . As stated above, this program is executed each time that a member makes a purchase. In step  400 , the member&#39;s identity is transmitted from the terminal  104  to the controller  102  and is stored in the RAM  146 . In step  405 , the value of the member&#39;s present purchase is transmitted from the terminal  104  and is stored in the RAM  146 . In step  410 , the member&#39;s file in the member database  152  is accessed. In step  410 , the member&#39;s file is scanned and the amount of the discount to which the member is entitled on the present purchase is determined. The discount to which the member is entitled is then subtracted from the value of the present purchase to produce the net value of he present purchase (step  415 ). The net value of the present purchase (the original value less the discount) is then calculated (step  420 ). Then in step  425 , the net value of the present purchase is added to the previously stored value of the total amount of purchases made by the member so far during the present time period. The new total is stored in the member&#39;s file in the member database  156 , together with the date and time of the purchase, and this is transmitted to the terminal  104  together with the amount of the discount (step  430 ).  
         [0022]    In step  435  it is determined whether the member making the purchase is an associate of another member. If no, the process terminates. If yes, then in step  440 , the net value of the purchase is stored in the file of the member of which the purchasing member is an associate, and the process terminates.  
         [0023]    [0023]FIG. 5 shows a flow chart for the discount calculation program  158  in accordance with one embodiment of the invention. As stated above, this program is executed for each club member at the end of every time period (referred to herein as the “recent time period”). In the embodiment of FIG. 5, the member receives only a self-discount and does not receive an associate discount.  
         [0024]    In step  500 , a member&#39;s file in the member database  156  is accessed. In step  510  the total value of the member&#39;s purchases during the recent time period (referred to hereinbelow as “Mem CP”) is read. In step  515 , the value of the member&#39;s purchases during the time period that preceeded the recent time period (referred to hereinbelow as “Mem PP”) is read. It is then determined whether Mem PP exceeds a third threshold value referred to herein as Min PZ (step  520 ). If no, the value of the discount to which the member is entitled on his purchases made during the recent time period is set to zero (step  525 ). Then in step  530  this is recorded in the member&#39;s file in the member database  156 , and the process terminates.  
         [0025]    If it is determined at step  520  that the total value of the member&#39;s purchases during the previous time period exceeded the third threshold (Mem PP&gt;Min PZ), then in step  535  it is determined whether the total value of the member&#39;s purchases during the recent time period exceeded a first threshold referred to herein as Min P (step  530 ). If no, the process proceeds to step  525 . If yes, then in step  540  the difference between the first threshold (Min P) and the total value of the member&#39;s purchases during the recent time period (Mem CP) is calculated and multiplied by the first discount rate (RATE1) (e.g. 4%), to produce the member&#39;s self-discount. In the embodiment of FIG. 5, the member&#39;s self-discount is the discount to which the member has earned on his purchases in the subsequent time period, and in step  545 , the earned discount is stored in the member&#39;s file in the member database  156 .  
         [0026]    [0026]FIG. 6 shows a flow chart for the discount calculation program  158  in accordance with another embodiment of the invention. In this embodiment the member receives both a self-discount and an associate&#39;s discount. The initial steps in the embodiment of FIG. 6 are identical to those of the embodiment of FIG. 5, and are identified by the same numeral.  
         [0027]    In the embodiment of FIG. 6, after the member&#39;s self-discount is calculated in step  540 , it is determined from the member&#39;s file in the member database  156  whether the member has any associates (step  550 ). If no, then also in this case the member&#39;s earned discount is the member&#39;s self-discount and in step  555  the earned discount is stored in the member&#39;s file in the member&#39;s database  156 , and the process terminates.  
         [0028]    If however, at step  550  it is determined that the member has associates, then in step  551  it is determined whether Mem P&gt;PZ. If no, then the process returns to step  555 . If yes, then in step  560  it is determined from the member&#39;s file whether any of his associates were loyal associates during the recent time period. As defined above, a loyal associate is an associate of the member that purchased in the previous time period in an amount that exceeds the second threshold value. If at step  560  it is determined that the member does not have any loyal associates, then at step  561  the number of loyal associates is set to 1, and the process proceeds to step  565 . If, however, at step  560  it is determined that the member has loyal associates, then in step  565  the total value of the of all of his associates (loyal and not loyal) during the previous month is calculated, and this sum is divided by the number of loyal associates (this ratio is referred to herein as “the upper limit”). In  570 , it is determined whether the member&#39;s purchases in the present time period (mem CP) is greater than the upper limit. If no, then in step  575 , the member&#39;s associate discount is calculated as the (Mem CP−Min P) times a second basic rate (RATE2) times the number of loyal associates. If at step  570  it is determined that the member&#39;s purchases in the present time period is not greater than the upper limit, then in step  580  the member&#39;s associate discount is calculated as the Upper limit times RATE2 times the number of loyal associates. Then in step  585  the member&#39;s earned discount is calculated as the sum of his self-discount and his associate discount. The earned discount is stored in the member&#39;s file (step  590 ) and the process terminates.