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DOVER — Consumer rewards programs have changed considerably since the days when customers would receive a toaster or other items when they opened an account at their local bank.
Major airlines have long offered miles programs and large credit card companies now offer rewards programs to consumers, as do many retailers and major grocery story chains.
But a growing number of small- to medium-sized banks and credit unions are also getting into the loyalty program marketing arena. Dover-based RewardsNow Inc. is one of the leaders in creating and servicing loyalty programs in this emerging market. Founded in 1997, RewardsNow designs, implements and manages turnkey direct marketing and loyalty programs for the full range of financial services including credit cards, debit cards, loans, deposits and online banking.
President and CEO Steve VanFleet said the challenge for smaller financial institutions is to create a standalone program as an effective marketing tool.
“They don’t have the expertise or knowledge to do it, and we are able to customize a program to their exact needs,” said VanFleet, who joined the company five years ago after more than 25 years in the electronic payments and financial services sector.
RewardsNow has 300 clients, including one of its most recent additions, Portsmouth-based Service Credit Union. “It’s about 50/50 between banks and credit unions,” VanFleet said of the company’s client breakdown.
What began as a small company has drawn venture capital investments and continued recognition by Inc. Magazine as one of the fastest growing privately-held companies in the country. For the fourth year in a row, RewardsNow made the Inc. 5000 list with a three-year growth spurt of 358 percent as revenues grew from $2.6 million in 2006 to $11 million in 2009. The company ranked 85 nationwide in the advertising and marketing sector and 18 in the greater Boston area.
VanFleet said the company, which has 60 employees, will reach $15 million in revenues in 2010. He said the company’s successful growth is due to the “turnkey” aspect of its services, which provides complete coverage, from implementing the program to answering the phones when customers call. With the economic downturn, retaining customers and enhancing loyalty has become even more important to banks and credit unions.
“The next generation of loyalty programs requires a provider who can efficiently and cost-effectively integrate the latest offerings surrounding enterprise loyalty, merchant-funded rewards and broad-based redemption options,” VanFleet said.
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