June 1, 2010 @ 2:37pm
Family Bundles, the loyalty co-op that unites independently owned businesses under one umbrella, is making plans to “re-launch” in Kitsap County, the original location where the program began test marketing in spring of 2000.
From 2000 through 2007, extensive testing in Kitsap County, West Seattle and Everett, as well as several communities in Southern California resulted in many revisions to the firm’s proprietary software program, in order to increase the benefits to businesses and consumers alike.
According to Kim Vogler, founder and CEO, “We had no idea when we began developing this concept, that it would require such an enormous amount of time — as well as investment capital — to get to the level of growth and development that we are now at,” she stated. “Now that we are coming out of our first primary launch in the Sequim-Port Angeles-/Port Townsend areas, we are prepared to “re-launch” at the original test sights, and begin to duplicate the program throughout the rest of the state, and into six other states.”
The basic business model has maintained much of the original profile. Family Bundles basically pays consumers to shop at local businesses, and then pays the participating members when their own customers shop at other businesses in the co-op. In order to reduce overhead for Members, 14 percent of all revenue is spent on advertising, on behalf of the members. Some of the more recent benefits includes a new software application that allows the loyalty cards to double as gift cards.
“The biggest difference between Family Bundles as a gift card, and other similar programs, is that we don’t charge monthly service fees, or transaction fees, and the dollar value of the gift cards never decreases, plus they have no expiration dates,” Vogler explained. “Another big advantage to members is that when consumers redeem the credits they earn, it’s like a cash sale, with no transaction fees or processing fees, so when that function replaces credit card transactions, and it’s an even greater saving to the merchants.”
During the first phase of the primary launch in Clallam and Jefferson Counties, over $660,940 ran through the Family Bundles loyalty co-op — with a membership of just 19 active businesses, and a relatively small cardholder audience of 985 active consumers. The financial gain for all participating was substantial. In Phase two, the focus will be to increase the Members to 150 active businesses, in multiple categories, and an active cardholder audience of 30,000, which includes new and existing members, and cardholders in Kitsap County.
“The past eight months have proven that the program is extremely attractive to consumers and businesses alike,” Vogler said. “The more a business rewards customers, the more they receive in the way of benefits, and the less the program costs to maintain. As one of the members put it, this is like our own ‘self generated’ stimulus program that actually makes sense, and doesn’t increase our taxes.”
Family Bundles will begin the re-launch of Kitsap County this month, starting in South Kitsap and working up towards Bainbridge Island. Currently, consumers are earning up to three percent back on all purchases, in the form of credits that spend just like cash, at all participating locally owned businesses.
The Wal-Mart Effect: Can it be reversed?
Published in the Kitsap Business Journal November 8, 2008 @ 1:00am | Kim Vogler
It didn’t happen overnight. It began forty years ago, when Sam Walton, an honest man with a vision, and a driving desire to bring low prices to the general public, launched what would someday become a corporation so huge, with influences on virtually every consumer, business owner and manufacturer, and in ways beyond any possible comprehension. Having been involved in the Advertising & Marketing Industry for over 40 years, I have observed the results brought about by Wal-Mart on the small to medium sized businesses in each community where we have lived. From Reno/Tahoe, NV, to Bozeman, Montana, and finally, Port Orchard, where we have lived for almost 20 years, I have seen, first hand, the erosion of the independent business community. For my entire career in Advertising, I have worked exclusively with independently owned businesses. I am keenly aware of the challenges that they face, just trying to stay afloat, and compete with the “big box stores” that they must compete with. Now, even the big chains are closing their doors, because no one can compete with Wal-Mart.
Almost nine years ago I was fascinated with the prospect of whether or not there could be a viable solution to reversing The Wal-Mart Effect. The one thing that I knew, for certain, was that none of the smaller businesses could ever compete with them, price-wise. Because Wal-Mart controls pricing and no one can drop their prices that low, and still stay in business. It didn’t take long for a number of our friends to join in our quest for a solution to this problem that has taken all of us on a nine year journey, that has cost us over one million, to date.
The key to the problem was to create a program that would allow independent businesses to join forces, sharing each others customer base, and then earning residual income when their own customers shop at other businesses in the program; this was the beginning of the program that we call Family Bundles. Our mascot, the bear holding a red heart, sends out the message to consumers: Look for the Bear That Pays You a Bundle. But it doesn’t stop with the rewards we share with consumers and businesses; the parent company also pays for much of the Advertising that supports our participating businesses. We call it “Pay after Profit” since Members only pay for the business they take to the bank!
At the time of this review, Family Bundles currently has over 70 Members on board. This is a small number compared to the goal that we are reaching for, and that goal will be to represent every business category that consumers have need of, in all of Kitsap County. It still surprises me when some of the independent businesses that we approach say, “We can do this on our own. We don’t need to be a part of any group.” Perhaps that is true, but history also proves in many areas that “no man is an island” and there is, indeed, safety in numbers!
The road that we have traveled has not been an easy one. Anytime you strike out to do something that has never been done before, there is much “trial and error.” Kitsap County is our primary Test Market, our Poster Child, if you will, and when we have completed our goals, locally, there are individuals in eight other States waiting to develop Family Bundles in their communities. And when our consumers travel to all of the other participating States, residual income is still earned by the local businesses that issued the original cards, while cardholders continue to earn “Credits” that can be spent right here in Kitsap County!
I have always had “surface knowledge” of what the Wal-Mart Effect had on the economy of our local communities, but it wasn’t until reading Charles Fishman’s best seller, The Wal-Mart Effect, that I realized how far reaching the damage was. It’s not just about small businesses closing their doors. It’s about manufacturers going “off shore” in order to meet the low prices that Wal-Mart demands, because they can’t pay decent wages in America and still fulfill Wal-Marts promise of “lowest prices, always.”
Over the past nine years, our Family Bundles Team has worked many events. Street Fairs, County Fairs, and other special occasions. We know, first hand, that if given a choice, most consumers would rather support the independent businesses, rather than Wal-Mart.
We also know that when our local businesses unite, everyone wins. The businesses earn greater profits, the consumers have more disposable income, and all of the dollars spent stay right where they belong — at home, in Kitsap County.
Several months ago I had the pleasure of talking with the author of The Wal-Mart Effect. Charles Fishman looked at the program that we have designed, and told me:” You truly have a concept that has the ability to reverse the Wal-Mart Effect, one community at a time.” I have always felt that we were on the right track. His comments just reinforced what we already knew was true.
I believe that this is a great opportunity for all local businesses to work together for a common goal. That being, allowing our local businesses to not only survive, but thrive.
There will always be Wal-Mart and the other Big Box stores here and in every other community, nationwide. But we can make our presence known, at the same time keeping our locally owned businesses alive and well. The message that we are sending to our loyal audience enforces the fact the “Quality Counts”, and “Service Is Important”, and in the long run, sometimes, “Spending a little bit more up front, costs less.” Next time you need to purchase a new lawnmower, rather than buy a “mower in a box” which you need to assemble, go to your local Snapper dealer, and next season you won’t have to replace the cheap version, which was probably Made In China. When we all work together, everyone wins!