LOYALTY PROGRAMS HOMEPAGE

About us/Investor information

Overview
Industry Background 
Eastbiz Net Solution 
Our overall vision/mission
Information  about FAZOLE.cz - our successful open loyalty program

Overview

Eastbiz Net is an operator of web-based loyalty programs and also a developer of proprietary software technology for operating loyalty programs. 

Our main activity is developing the loyalty software and using the software as the main asset to create revenues and value for our company. Eastbiz has two sources of revenue: one from licensing software and the second from operating open (multi-party) loyalty programs. We believe there are two ways to operate loyalty programs, closed or open. A closed program is limited to a certain number of partners, for example airline companies operate their own loyalty programs to their passengers who can redeem or earn points also with a few selected partners like rental car companies or hotels. Such closed programs are limited to existing clients. Open loyalty programs, or multi-party programs, are open to any number of companies. Joining is usually simple and companies get instant access to a huge pool of new customers, that’s because they can access customers who have joined the program previously, customers of all companies who have at anytime used the loyalty program. 

Eastbiz Net’s loyalty software can be described thus; we offer ready-made solutions for closed or open programs, which can be easily adapted to different businesses. Generally, loyalty programs are becoming extremely widely used due to their effectiveness and low cost for acquiring and keeping customers.  Our web-based software offers a low-cost and unique solution when compared to the existing software on today’s market. Our solution can combine offline and online e-commerce with no need to buy expensive POS terminals, hardware, chip cards and not requiring expensive modifications of software in terms of time or direct costs, etc. 

Currently Eastbiz Net operates the successful loyalty program FAZOLE.cz, which is the biggest web-based loyalty program in the Czech Republic. Ventures in other countries are under way. 
 

Industry Background 

Airline companies started using loyalty programs approximately 20 years ago. They were proved to be successful and were soon copied by other companies. Loyalty programs work in this way: customers get points as a bonus for certain activities, usually buying. Then they can redeem points for different products, services or discounts. Loyalty programs exist in different forms: they can use magnetic and chip cards and POS terminals, coupons, etc. Offline loyalty programs are usually quite expensive due to the necessary hardware required and the cost of providing a flow of information to users (e.g. what they can redeem for points using printed catalogues, where they can get points, etc.). Internet based programs can utilize the advantages of simple and fast communication between users and companies and therefore they can be much more efficient.

The Internet lowered the entry cost for operating loyalty program. Because of their efficiency and proven results they are becoming a vital part of the marketing mix for every major e-commerce player. Loyalty programs are a very important motivational tool for attracting and retaining customers. 

The success of loyalty programs is shown in the latest trends on the Internet. Users are becoming an active part of marketing. They prefer to give voluntarily data and information about themselves in exchange for getting some bonus. Companies that cooperate with users have better results than companies trying get the same information with different methods. 

Even though the cost of technology to operate loyalty programs on the Internet is much lower than in the offline world, the start-up expenses to initiate your own loyalty program can be still very high. There is no easy and ready-made solution for small and middle-sized companies, and still there are many countries without major multi-party loyalty programs. The Eastbiz Net wants to fill this gap in the market.
 

Eastbiz Net Solution 

Eastbiz Net offers software designed to operate web-based loyalty programs supporting online and offline commerce. The main advantage of this offering is its simplicity. It takes 7 days to set up a loyalty program for any client in the world. Our ready-made software with easy scope for modifications can work for any client in any country. Localization of software to any language takes up to 7 days. Eastbiz Net completes installation all set up over the Internet. There is no need to come and install anything in person. The loyalty program can work for any application or client and is not dependent on the customer’s platform. The loyalty program is a module independent of the customer’s other software. 
 

Key elements of the Eastbiz Net's solution.
Ease of use
Our software is easy to use for both users and company management. 

Low cost
Due to the easy installation and modification, the software is available at low cost for our clients. Other advantages are the low development and support costs in the Czech Republic (where our development team is located). From our past experience all development expenses for new upgrades or software products were usually paid after selling only 3 licenses. 

Time saving
Our ready-made software solution can be installed and running very rapidly (7 days). 

Any platform.
Our solution is not dependent on the client’s current platform. Our clients can use any platform to run their existing applications (Windows NT, 2000, Linux, etc.). Our solution is not dependent on any platform. Connecting loyalty software with other software is achieved through the simple pasting of HTML codes to existing pages. 
 
 

Comparative table for Eastbiz Net solution and market leader Netcentives
 

	Eastbiz Net solution	Netcentives
Participation in open (multi-party) program	FREE participation and implementation– income comes from selling points	$50,000 USD
Implementation time for participation in open (multi-party) program	Usually 10 minutes to few hours. More complicated cases 2-5 days.	2-3 months
Licensing software	$18,950 USD	$300,000 to 2 million USD
Timeframe for implementation of licensed software	7 days	4-5 months

Our overall vision/mission
Offer fast, inexpensive solutions for web-based loyalty programs. Make loyalty programs accessible to any size of business.  

Bring open (multi-party) loyalty programs to different markets, especially by forming joint ventures in countries where first mover advantage can be acquired. 

Selling software for closed loyalty programs to companies around the world. Selling software means selling software licenses for cash or providing ASP (Application Service Providing), i.e. renting software for a monthly fee. 

Main highlights of the company's sales, marketing, distribution, positioning and pricing strategy
Flexible selling and distribution model 

We offer many options to sell our software and payments (financing, ASP, cash sales). The installation is always very quick and done over Internet by our team of programmers.
 

Information  about FAZOLE.cz - our successful open loyalty program in the Czech Republic.
FAZOLE.cz is an open (multi-party) loyalty program in the Czech Republic. FAZOLE.cz is a pilot project of Eastbiz Net. FAZOLE.cz is the biggest online loyalty program after 12 months from launch.

How it works:
Users get instant reward for their behavior. Users are collecting beans (points), which they can get for different activities (shopping, visiting websites, registrations, filling surveys, etc.). The beans can be redeemed for different products like mobile phones, GSM pre-paid coupons, T-shirts, electronics, restaurant certificates, etc.

Companies use FAZOLE as a reward tool designed to
•Stimulate purchase and repeat purchasing
•Gathering information and increasing registrations. 
•Attract and draw people to websites.

Advantages of using FAZOLE for companies:
•Reduced marketing costs through better targeting
•More personalized service through more accurate consumer data
•Lower acquisition costs and lower transaction costs by moving customers online.
•Reduced cost of sale through increased customer loyalty.

FAZOLE.cz is typical open (multi-party) loyalty program
•It is not a closed system for only of a few selected partners. Any company can join.
•Consumers can earn and spend anywhere. 
•They are well educated and know value of FAZOLE.
•Companies can instantly access a huge pool of new potential consumers.

Revenue model
•Income from campaigns – selling fazole (points). Eastbiz Net sells points to partners and to advertisers for use in such partner's or advertiser's promotional campaigns.
•Eastbiz Net earns revenues from corporate advertisers based on actual purchases of goods by members over the Internet.
•Banners and other forms of WWW advertising.
•Email and SMS advertising.
Our power is in gathered data and personalization of advertising messages.

Using of web site FAZOLE.cz
  
 
 

Number of users
 
The number of new registrations, registered users and use of FAZOLE.cz websites shows a strong growth trend and high satisfaction among users. About 30-40% of new users are attracted by word-of-mouth.
 
 

Number of realized orders in FAZOLE sales campaigns
 

The number of sales that are brought by FAZOLE.cz is substantially rising every month. Nine hundred orders came from FAZOLE.cz website to different merchants in January 2001. Companies that accept fazole (points) as payment are using the points for their advertising and marketing activities. For companies it is a very inexpensive way of marketing their online shops. Moreover they get new clients, who use their website for shopping online. They build confidentiality between perspective clients. Users see that they get what they ordered for fazole, so they believe that there will be a similar experience with a normal cash order.