U.S. patent application number 14/331005 was filed with the patent office on 2014-10-30 for system and method for managing customized reward offers.
The applicant listed for this patent is Inventor Holdings, LLC. Invention is credited to Michael D. Downs, Sanjay K. Jindal, Stephen C. Tulley, Jay S. Walker, Toby Weir-Jones.
Application Number | 20140324564 14/331005 |
Document ID | / |
Family ID | 27025590 |
Filed Date | 2014-10-30 |
United States Patent
Application |
20140324564 |
Kind Code |
A1 |
Walker; Jay S. ; et
al. |
October 30, 2014 |
SYSTEM AND METHOD FOR MANAGING CUSTOMIZED REWARD OFFERS
Abstract
In accordance with some embodiments of the present invention, a
method is provided for managing reward offers. A first performance
target that is associated with a financial account is determined.
Transaction data that is associated with the financial account is
received, and a second performance target for the financial account
is determined based on the teransaction data.
Inventors: |
Walker; Jay S.; (Ridgefield,
CT) ; Jindal; Sanjay K.; (Los Angeles, CA) ;
Weir-Jones; Toby; (Scotts Valley, CA) ; Tulley;
Stephen C.; (Monroe, CT) ; Downs; Michael D.;
(Wilton, CT) |
|
Applicant: |
Name |
City |
State |
Country |
Type |
Inventor Holdings, LLC |
Stamford |
CT |
US |
|
|
Family ID: |
27025590 |
Appl. No.: |
14/331005 |
Filed: |
July 14, 2014 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
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13857520 |
Apr 5, 2013 |
8781893 |
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14331005 |
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13366797 |
Feb 6, 2012 |
8423400 |
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13857520 |
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12237716 |
Sep 25, 2008 |
8126771 |
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13366797 |
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10218157 |
Aug 12, 2002 |
7430521 |
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12237716 |
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09422415 |
Oct 21, 1999 |
6434534 |
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10218157 |
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08921868 |
Aug 28, 1997 |
6018718 |
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09422415 |
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Current U.S.
Class: |
705/14.27 |
Current CPC
Class: |
G06Q 40/025 20130101;
G06Q 30/0234 20130101; G06Q 20/10 20130101; G06Q 30/0239 20130101;
G06Q 40/00 20130101; G06Q 40/12 20131203; G06Q 20/20 20130101; G06Q
20/105 20130101; G06Q 30/02 20130101; G06Q 30/0207 20130101; G06Q
30/0211 20130101; G06Q 30/0222 20130101; G06Q 30/0235 20130101;
G06Q 30/0226 20130101; G06Q 30/0215 20130101; G06Q 30/04 20130101;
G06Q 20/102 20130101 |
Class at
Publication: |
705/14.27 |
International
Class: |
G06Q 30/02 20060101
G06Q030/02 |
Claims
1. A central controller device for managing customized reward
offers, comprising: a processor; and a storage device operably
connected to the processor, the storage device stores instructions
configured to direct the processor to: determine a first
performance target and a target period for an account; determine a
reward associated with the first performance target of the account;
offer the reward to an account holder of the account; provide an
indication of the first performance target to the account holder;
after providing the indication of the first performance target to
the account holder, receive transaction data associated with the
account for the target period; compare said transaction data to the
first performance target to determine whether the first performance
target is met by the transaction data; after comparing said
transaction data to the first performance target, determine a
second performance target for the account; and provide an
indication of the second performance target to the account
holder.
2. The central controller device of claim 1, wherein determining
the second performance target comprises: determining the second
performance target based on the transaction data.
3. The central controller device of claim 1, wherein determining
the second performance target comprises: determining the second
performance target based on historical account data associated with
the account.
4. The central controller device of claim 1, wherein determining
the second performance target comprises: determining the second
performance target based on a specific merchant associated with the
transaction data.
5. The central controller device of claim 1, wherein determining
the second performance target comprises: determining the second
performance target based on a type of merchant associated with the
transaction data.
6. The central controller device of claim 1, wherein determining
the second performance target comprises: determining the second
performance target based on profile data associated with the
account holder.
7. The central controller device of claim 1, wherein comparing said
transaction data to the first performance target to determine
whether the first performance target is met by the transaction data
comprises: determining that the first performance target is met by
the transaction data; and wherein determining the second
performance target comprises: determining a target value for the
second performance target that is not less than a target value for
the first second performance target.
8. The central controller device of claim 1, wherein comparing said
transaction data to the first performance target to determine
whether the first performance target is met by the transaction data
comprises: determining that the first performance target is not met
by the transaction data; and wherein determining the second
performance target comprises: determining a target value for the
second performance target that is not greater than a target value
for the first second performance target.
9. The central controller device of claim 1, further comprising
providing the reward to the account holder.
10. The central controller device of claim 1, wherein the reward
comprises at least one of: a rebate; a discount; a gift; an
increase of reward program points; and an increase of an amount of
frequent flyer miles.
11. A method executable by a central controller device for managing
customized reward offers, the method comprising: determining, by a
central controller device of a credit card issuer, a first
performance target and a target period for an account; determining,
by the central controller device, a reward associated with the
first performance target of the account; offering, by the central
controller device, the reward to an account holder of the account;
providing, by the central controller device, an indication of the
first performance target to the account holder; after providing the
indication of the first performance target to the account holder,
receiving, by the central controller device, transaction data
associated with the account for the target period; comparing, by
the central controller device, said transaction data to the first
performance target to determine whether the first performance
target is met by the transaction data; after comparing said
transaction data to the first performance target, determining, by
the central controller device, a second performance target for the
account; and providing, by the central controller device, an
indication of the second performance target to the account
holder.
12. The method of claim 11, wherein determining the second
performance target comprises: determining the second performance
target based on the transaction data.
13. The method of claim 11, wherein determining the second
performance target comprises: determining the second performance
target based on historical account data associated with the
account.
14. The method of claim 11, wherein determining the second
performance target comprises: determining the second performance
target based on a specific merchant associated with the transaction
data.
15. The method of claim 11, wherein determining the second
performance target comprises: determining the second performance
target based on a type of merchant associated with the transaction
data.
16. The method of claim 11, wherein determining the second
performance target comprises: determining the second performance
target based on profile data associated with the account
holder.
17. The method of claim 11, wherein comparing said transaction data
to the first performance target to determine whether the first
performance target is met by the transaction data comprises:
determining that the first performance target is met by the
transaction data; and wherein determining the second performance
target comprises: determining a target value for the second
performance target that is not less than a target value for the
first second performance target.
18. The method of claim 11, wherein comparing said transaction data
to the first performance target to determine whether the first
performance target is met by the transaction data comprises:
determining that the first performance target is not met by the
transaction data; and wherein determining the second performance
target comprises: determining a target value for the second
performance target that is not greater than a target value for the
first second performance target.
19. The method of claim 11, further comprising providing the reward
to the account holder.
20. The method of claim 11, wherein the reward comprises at least
one of: a rebate; a discount; a gift; an increase of reward program
points; and an increase of an amount of frequent flyer miles.
Description
[0001] The present application is a continuation of U.S. patent
application Ser. No. 13/857,520 filed Apr. 5, 2013, entitled
"SYSTEM AND METHOD FOR MANAGING CUSTOMIZED REWARD OFFERS", which is
a continuation of U.S. patent application Ser. No. 13/366,797 filed
Feb. 6, 2012 and issued as U.S. Pat. No. 8,423,400 on Apr. 16,
2013, entitled "SYSTEM AND METHOD FOR MANAGING CUSTOMIZED REWARD
OFFERS", which is a continuation of U.S. patent application Ser.
No. 12/237,716 filed Sep. 25, 2008 and issued as U.S. Pat. No.
8,126,771 on Feb. 28, 2012, entitled "SYSTEM AND METHOD FOR
MANAGING CUSTOMIZED REWARD OFFERS", which is a continuation of U.S.
patent application Ser. No. 10/218,157, filed Aug. 12, 2002 and
issued as U.S. Pat. No. 7,430,521 on Sep. 30, 2008, entitled
"SYSTEM AND METHOD FOR MANAGING CUSTOMIZED REWARD OFFERS"; which-is
a continuation-in-part of U.S. patent application Ser. No.
09/422,415, filed Oct. 21, 1999, and issued as U.S. Pat. No.
6,434,534 on Aug. 13, 2002, entitled "METHOD AND SYSTEM FOR
PROCESSING CUSTOMIZED REWARD OFFERS", which is a continuation of
U.S. patent application Ser. No. 08/921,868, filed Aug. 28, 1997
and issued as U.S. Pat. No. 6,018,718 on Jan. 25, 2000, entitled
"METHOD AND SYSTEM FOR PROCESSING CUSTOMIZED REWARD OFFERS". Each
of the above-referenced applications is incorporated by reference
herein in its entirety.
FIELD OF INVENTION
[0002] The present invention relates generally to methods and
systems for promoting the use of financial accounts. More
particularly, the present invention relates to a method and system
which facilitates generating, communicating and managing a
customized reward offer presented to an account holder.
BACKGROUND OF THE INVENTION
[0003] Methods and systems for promoting usage of credit card
accounts are well known. Such methods and systems are generally
designed to reward a credit card holder for exhibiting behavior
preferred by a credit card issuer. Credit card reward programs
typically fall into one of three categories: reward accrual
programs, tiered reward programs and specialty programs.
[0004] Reward accrual programs promote usage of a credit card
account by rewarding a card holder for account usage with either
rebates or redeemable program points. In such programs, account
usage is typically measured as a function of either total charge
volume or total revolving credit. Generally, card holder
performance is measured monthly, and rewards are distributed based
on the monthly measurements.
[0005] Tiered reward programs promote usage of a credit card
account by rewarding a card holder for account usage at certain
predefined levels. Like other reward programs, account usage is
usually measured as a function of either total charge volume or
total revolving credit, but tiered reward programs distribute
rewards only to those card holders performing above certain
performance levels. In many tiered reward programs, several
performance levels are established by the issuer with each
performance level having an associated reward.
[0006] Recently, some credit card issuers have implemented
specialty programs which are tailored to a particular group of card
holders. GE Capital, for example, has introduced the "GE Capital
Gains Card" which is a travel and entertainment card that rewards
card holders for saving rather than spending money. GE offers a
card holder bonus points redeemable for airline tickets or gifts if
the card holder conforms to behaviors identified by the card
holder's company. For example, if a card holder conforms to a
corporate travel policy by flying with a preferred carrier or
staying at a preferred hotel, the card holder will be awarded
points.
BRIEF DESCRIPTION OF THE DRAWINGS
[0007] FIG. 1 is a schematic block diagram illustrating the
information flow between parties according to one or more
embodiments of the present invention.
[0008] FIG. 2 is a schematic block diagram illustrating the
components of a credit card issuer central controller according to
one or more embodiments of the present invention.
[0009] FIG. 3 is a table illustrating the structure of an exemplary
card holder account table stored at the credit card issuer central
controller.
[0010] FIG. 4 is a table illustrating the structure of an exemplary
performance target table stored at the credit card issuer central
controller.
[0011] FIG. 5 is a table illustrating the structure of an exemplary
target/reward table stored at the credit card issuer central
controller.
[0012] FIG. 6 is a flow chart illustrating the computer implemented
steps used to set customized rewards according to one or more
embodiments of the present invention.
[0013] FIG. 7 is a flow chart illustrating the computer implemented
steps used to determine earned rewards according to one or more
embodiments of the present invention.
[0014] FIG. 8 is a flow chart illustrating the computer implemented
steps used to periodically adjust performance targets according to
one or more embodiments of the present invention.
DETAILED DESCRIPTION
[0015] In one or more embodiments of the present invention, a
method is provided for managing reward offers. A first performance
target that is associated with a financial account is determined.
Transaction data that is associated with the financial account is
received, and a second performance target for the financial account
is determined based on the transaction data.
[0016] In other embodiments, a first performance target that is
associated with a financial account is determined. Transaction data
that is associated with the financial account is received, and it
is determined whether a card holder associated with the financial
account is eligible for a reward based on the first performance
target and the transaction data. Also, a second performance target
for the financial account is determined based on the transaction
data. In some embodiments, account data that is associated with the
financial account is also determined.
[0017] Some embodiments of the present invention provide the
benefit of giving a card holder a definite periodic performance
target. Also, in various embodiments, different types of rewards
and/or different levels of rewards may be provided to different
card holders, as some card holders may be more interested in a
particular type or level of reward than other card holders. For
example, a card holder who is not interested in offered rewards may
not be motivated to perform at a higher level. One or more
embodiments of the present invention provide for customizing
programs to the preferences of the individual card holders. Thus,
rewards need not be predefined for an entire population of
participating card holders.
[0018] Various embodiments of the present invention may provide the
benefit that the type of activity or behavior to be encouraged may
be based on the individual profile of the card holder. Without
analyzing the profile of a card holder, in some cases an issuer's
reward program could be increasing the risk of default on a
marginal quality account by encouraging increased card usage. For
example, by encouraging revolving charges, some card holders with
below average credit credentials may be encouraged to over-extend
themselves. In such a circumstance, a card holder actually may be
encouraged to behave in a manner that is detrimental to the credit
card issuer. Thus, according to some embodiments, individualized
performance targets may be set for each card holder, based on the
card holder's transaction history and/or preferences.
1. System
[0019] Methods and systems according to various embodiments of the
present invention will now be discussed with reference to FIGS.
1-8. FIG. 1 illustrates, in schematic block diagram format, the
information flow between relevant parties according to one
embodiment of the present invention. As shown, a credit card issuer
central controller ("CCI") 200 transmits information to a credit
card holder 112. Although such information may be transmitted
electronically, it is preferably transmitted via a periodic account
statement (not shown).
[0020] According to one embodiment, CCI 200 accesses stored
historical account data associated with the account of credit card
holder 112 and determines a first performance target for credit
card holder 112. CCI 200 then selects a reward to offer credit card
holder 112 if he behaves in accordance with the first performance
target. As shown in FIG. 1, this first customized reward offer,
including the first performance target, an indication of the reward
being offered (e.g., a description of the reward, an indication of
the reward terms) and a first target period, is transmitted to
credit card holder 112 as indicated by reference numeral 120.
[0021] After receiving the transmission of the customized reward
offer from CCI 200, credit card holder 112 may initiate and
complete transactions affecting the credit card account in an
effort to achieve the communicated first performance target.
Transactions may be conducted, for example, with various merchants
using point-of-sale ("POS") terminals 114, 116 and 118. As
indicated by reference numeral 126, CCI 200 collects transaction
data from POS terminals 114, 116 and 118 through a conventional
credit card system network ("POS network") 110. This transaction
data is stored by CCI 200 and is used to manage the account of
credit card holder 112.
[0022] In some embodiments, CCI 200 evaluates the collected
transaction data to determine a second performance target for
credit card holder 112 prior to the end of the first target period.
In alternate embodiments, the determination of the second
performance target could be completed at or subsequent to the end
of the first target period. The determination of the second
performance target preferably is based on the first performance
target and the transaction information collected since the
transmission of the first customized reward offer. Alternatively,
the determination of the second performance target may be based on
the historical transaction data associated with the account of
credit card holder 112, on other credit card holder profile data,
on the first performance target, on the transaction information
collected, or on any combination thereof. After determining the
second performance target, CCI 200 transmits to credit card holder
112 a second customized reward offer identified by reference
numeral 122. This second transmission includes the second
performance target, an indication of the reward being offered
(e.g., a description of the reward, an indication of the reward
terms) and a second target period.
[0023] Upon expiration of the first reward offer, CCI 200 compares
the first performance target to the transaction data collected
since the transmission of the first reward offer. If credit card
holder 112 has achieved the first performance target, CCI 200
updates the credit card holder account to reflect the reward. In
some embodiments, CCI 200 transmits to credit card holder 112 an
announcement of the reward earned by credit card holder 112 for
achieving the first performance target.
[0024] FIG. 1 depicts only an embodiment of the invention. Other
arrangements of devices to perform various methods specified herein
will be readily appreciated by those of skill in the art.
[0025] Referring now to FIG. 2, CCI 200 is illustrated in greater
detail, in accordance with various embodiments. As shown, CCI 200
includes a central processing unit ("CPU") 210, a clock 212, a
random access memory ("RAM") 214, a read only memory ("ROM") 216, a
communication port 218, and a storage device 220. Communication
port 218 provides a connection between CCI 200 and POS network 110
allowing one-way or two-way communication between CCI 200 and POS
network 110.
[0026] Those skilled in the art will understand that devices in
communication with each other need not be continually transmitting
to each other. On the contrary, such devices need only transmit to
each other as necessary, and may actually refrain from exchanging
data most of the time. For example, a device in communication with
another device via the Internet may not transmit data to the other
device for weeks at a time.
[0027] As shown in FIG. 2, storage device 220 stores a database of
account, target and reward data, including a card holder account
table 300; a target/reward table 400; and a transaction table 500.
Tables 300, 400 and 500 comprise at least a portion of the database
stored by storage device 220 and are described more fully with
reference to FIGS. 3, 4 and 5 respectively. Storage device 220 is
preferably a magnetic disk drive, but could be a CD-ROM drive,
optical disk drive, RAM drive or any other conventional storage
device.
[0028] The databases are described in detail below and depicted
with exemplary entries in the accompanying figures. As will be
understood by those skilled in the art, the schematic illustrations
and accompanying descriptions of the databases presented herein are
exemplary arrangements for stored representations of information. A
number of other arrangements may be employed besides those
suggested by the tables shown. For example, those skilled in the
art will understand that the number and/or content of the databases
can be different from those illustrated herein. Similarly, the
illustrated entries of the databases represent exemplary
information only; those skilled in the art will understand that the
number and/or content of the entries can be different from those
illustrated herein. Based on the present disclosure many other
arrangements of data will be readily understood by those of skill
in the art.
2. Databases
[0029] FIG. 3 illustrates an example of the contents of card holder
account table 300 in a representative tabular format. Those skilled
in the art will understand that the card holder account table 300
may include any number of entries or records. Each record of
representative account table 300 represents information pertaining
to a card holder account. This information may be considered an
account header in the art and includes the following six
information elements: account ID field 310; card holder name
element 312; address element 314; telephone number field 316;
credit line field 318; and available credit field 320.
[0030] Account ID field 310 stores a unique account identifier.
Account ID field 310 is assigned by the credit card issuer to
uniquely identify an account of a card holder. In some embodiments,
the unique account identifier will be a standard 16 digit credit
card account number.
[0031] Card holder name element 312 stores the name of a card
holder 112 who is responsible for the account described by the
account table record. Card holder name element may be a single
field, but will more likely be a combination of fields.
[0032] Address element 314 stores the mailing address of the card
holder. Although some embodiments may include only one address
element, or only one type of address, it may be useful to provide
multiple address elements and/or other types of addresses to
accommodate a home address, a billing address, an email address,
and/or a business address. Address element 314 may be a single
field, but will more likely be a combination of fields.
[0033] Telephone number field 316 stores the home telephone number
of the card holder 112 responsible for the account. Additional
telephone numbers, such as office and facsimile numbers, may also
be stored in account table 300.
[0034] Total credit line field 318 stores the maximum amount of
credit that the credit card issuer has provided to the card holder
responsible for the account. Available credit line field 320 stores
the amount of unused credit available to the credit card holder
responsible for the account. Although available credit line field
320 is stored in account table 300 in one or more embodiments, this
information could easily be calculated as necessary by subtracting
the outstanding balance from the contents of total credit line
field 318.
[0035] Some embodiments of the invention further include average
quarterly charge volume field 322, average quarterly outstanding
balance field 324 and average transactions per month field 326, all
containing data which describe various characteristics of an
account. These fields are populated by CCI 200 based on data
maintained in transaction table 500, and may be used as predictors
of future account activity. The contents of these fields are
self-explanatory and may be derived in a variety of well known
ways.
[0036] Other characteristics of an account (e.g., average balance
transfer, average principal payment amount, average finance charge
amount, a period of time the account has been active) will be known
to those of skill in the art.
[0037] Although six fields are depicted in FIG. 3, not all of the
fields depicted in FIG. 3 are required, and various substitutions,
deletions and other changes to the tabular representation will be
readily apparent to those of ordinary skill in the art. For
example, the average transactions per month is not needed in many
embodiments. The depicted fields, for example, the averages, are
for illustration only. Various other types of account data are
described herein and still others will be readily apparent to those
of skill in the art.
[0038] FIG. 4 illustrates an example of the contents of
target/reward table 400. Each record of representative
target/reward table 400 represents information pertaining to a
performance target and corresponding reward offered to a particular
card holder account. Those skilled in the art will understand that
the target/reward table 400 may include any number of entries or
records. This table allows a credit card issuer to set, track,
evaluate and reward the desired performance of a card holder and
includes the following seven information elements: account ID field
410; period element 412; target type field 414; target parameter
field 416; reward type field 418; reward terms element 420; and
status field 422. The fields of target/reward table 400 are
populated with values determined by the credit card issuer. The
steps for determining these values are described in more detail
with reference to FIG. 6.
[0039] Account ID field 410 stores a unique account identifier that
uniquely identifies an account of a card holder. Target period
element 412 identifies the period of time which a credit card
holder is provided to achieve a defined target. In the example
shown in FIG. 4, target period element 412 is based on calendar
quarters. In alternative embodiments, however, the target periods
could be months, years or based on specific start and end
dates.
[0040] Target type field 414 stores a code representing a type of
target assigned to an account identified by account ID field 410.
Although field 414 typically only contains a code, the contents of
field 414 illustrated in FIG. 4 show the logical representations of
the target type. The type of performance target applicable to a
card holder account is generally selected from a set of target
types defined by the credit card issuer. In the example shown in
FIG. 4, target type field 414 may store a code representing a
target quarterly charge volume, a target quarterly outstanding
balance, and a target number of transactions per month.
[0041] Of course, credit card issuers may define numerous
alternative target types including, but not limited to, target
monthly principal payments, target number and/or volume of
purchases at specific merchants (or types of merchants), target
balance transfer amounts from the card holder's account (e.g., a
maximum amount transferred from the card holder's account), target
balance transfer amounts from other accounts (e.g., a minimum
amount transferred to the card holder's account from other
accounts), and target period of time the account remains open or
active.
[0042] For example, in accordance with one or more embodiments of
the present invention, a performance target may define an amount of
funds to be transferred to the card holder's account from another
account (e.g., from an account maintained by a second card issuer).
The amount of transferred funds may qualify the account holder to
receive a reward such as a reduction in APR charged against the
card holder's account to which the funds were transferred. For
example, a reward offer may inform the card holder that he can
receive a 0.5% reduction in APR charged against his account
(including all of or a portion of any outstanding balances) in
exchange for each $1,000 transferred from other accounts (e.g.,
from other accounts maintained by the same credit card issuer, or
from accounts maintained by other issuers).
[0043] Target parameter field 416 stores the performance level at
which a card holder must perform during the period identified by
target period element 412 to achieve a reward. The data stored in
target parameter field 416 is used to determine whether a card
holder has achieved the target set by the credit card issuer.
[0044] Reward type field 418 stores a code representing a type of
reward offered to a card holder responsible for the account
identified by account ID field 410 for the target period 412. Like
target type field 414, reward type field 418 typically only
contains a code. The logical representations of the code of field
418 are illustrated in FIG. 4. As shown, the example reward types
illustrated in FIG. 4 include a cash rebate reward, a frequent
flyer mile reward and an APR reduction reward. Numerous alternative
reward types are possible, including without limitation magazine
subscriptions, free gifts and discount coupons.
[0045] Reward terms field 420 stores a code representing the terms
of the reward associated with the record. CCI 200 uses the data of
reward terms field 420 to provide rewards to a credit card account
in the event the performance target has been achieved. The meaning
of reward terms field 420 is interpreted based, in part, on the
value of reward type field 418.
[0046] In at least one embodiment of the invention, reward status
field 422 is included to store a code indicating whether the
performance target for the account has been satisfied.
[0047] Although seven fields are depicted in FIG. 4, not all of the
fields depicted in FIG. 4 are required, and various substitutions,
deletions and other changes to the tabular representation will be
readily apparent to those of ordinary skill in the art. For
example, the reward status field is not needed in many embodiments.
The depicted fields, for example, the target types, are for
illustration only. Various other types of targets are described
herein and still others will be readily apparent to those of skill
in the art.
[0048] Referring now to FIG. 5, there is illustrated an example the
contents of a representative transaction table 500. Each record of
representative transaction table 500 represents a transaction
between a credit card holder and a merchant. Those skilled in the
art will understand that the transaction table 500 may include any
number of entries or records. Transaction table 500 includes the
following seven fields: transaction ID field 508; account ID field
510; merchant ID field 512; transaction amount field 514; date
field 516; time field 518; transaction authorization number field
520; and credit card authorization number 522. Transaction table
500 may be used to analyze the account activity of each account
stored in card holder account table 300. Analysis of account
activity may be performed in any number ways well known by one of
ordinary skill in the credit card processing field.
[0049] Although seven fields are depicted in FIG. 5, not all of the
fields depicted in FIG. 5 are required, and various substitutions,
deletions and other changes to the tabular representation will be
readily apparent to those of ordinary skill in the art. For
example, the time field is not needed in many embodiments. The
depicted fields, for example, the merchant identifiers, are for
illustration only. Various other types of identifiers will be
readily apparent to those of skill in the art.
3. Processes
[0050] Having thus described the system architecture and components
of various embodiments, the operation of the system according to
various embodiments will now be described in greater detail with
reference to FIGS. 6-8, and continuing reference to FIGS. 1-5. It
is to be understood that the software instructions (not shown)
necessary to provide the functionality described herein are
preferably stored in ROM 216 or storage device 220 of CCI 200.
[0051] Referring now to FIG. 6, a process according to one or more
embodiments of the present invention will be described. As shown at
step 610, CCI 200 accesses data stored in card holder account table
300 for setting performance targets. The criteria referred to at
step 610 includes fields 322, 324 and 326. As previously indicated,
these fields are populated by CCI 200 based on an analysis of
records in transaction table 500. Although specific criteria are
identified in FIG. 6, the criteria may be any information that an
issuer believes to be indicative of particular card holder
behavior. The criteria forms the basis for determining performance
targets, reward terms or both.
[0052] One method presently employed by credit card issuers to
predict and influence card holder behavior is determining a score
defined by a scoring system. Scoring systems are mathematical
models designed to provide probabilities of future performance
based on a creditor's actual historic performance. Models are
developed from past behavior and data relationships and are used to
identify predictive variables. Scoring systems can be used as
absolute decision tools or in combination with judgmental and
expert system rules.
[0053] Credit card issuers are currently using scores to determine:
who will respond to an offer; who will reliably repay credit; and
who will generate revenue for a lender. These scores are known as
response scores, risk scores and revenue scores, respectively.
Response Scores are used to determine how to modify solicitations
for maximum results and for areas of the country that have the
greatest growth potential for specifically designed card products
like insurance or investment cross-sells. Risk Scores are used to
predict delinquencies and bankruptcies. They are also used to
predict the extent and timing of monthly payments. Revenue scores
assign a ranking to individuals by the relative amount of revenue
they are likely to produce over a period of time following score
assignment. Revenue scores help issuers in account management by
identifying inactive accounts that ought to be targeted with an
appropriate offer and by identifying the most desirable prospects
for acquisition.
[0054] A score may also be classified as either a credit score or a
behavior score. A credit score is a statistical measure used by
creditors to determine whether to extend credit in the form of a
loan or as a credit line on a credit card. Credit scores takes into
account many factors, including: annual income, years at current
job, residence, debt payment history, current debt obligations and
long term debt obligations. Creditors may assign different weights
to these criteria to compute a credit score.
[0055] A behavior score is another statistical measure used by
issuers to better manage individual accounts to maximize profit per
account. The behavior score can include more than 50 different
characteristics, including: extent of monthly payments, promptness
of payment, use of card for purchases or cash advances, size and
type of purchases and types of spending categories among
others.
[0056] One way to select relevant criteria for setting performance
targets is illustrated at step 610, wherein CCI 200 accesses
account data derived from historic transaction data such as average
quarterly charge volume 322, average quarterly outstanding balance
324 and average number of monthly transactions 326. CCI 200 then
accesses rules for setting performance targets at step 612. These
rules may be stored in a database or otherwise implemented through
software. These rules are applied against the criteria determined
at step 610. Illustrative examples of rules for setting performance
targets are described with reference to Table I, below.
TABLE-US-00001 TABLE I Rules for setting performance targets Rule
Target Type Target Parameter If quarterly charge Quarterly charge
Target charge volume (x) is less than a volume volume = mx
predetermined minimum volume If quarterly outstanding Quarterly
Target quarterly balance (y) is less than a outstanding balance
outstanding predetermined percentage of balance = ny total credit
line If transactions per Transactions per Target transactions month
(z) is less than a month per month = pz predetermined minimum
number
[0057] To apply the first rule of Table I, CCI 200 must determine a
quarterly charge volume for a subject account as one of the
criteria determined at step 610. At step 612, the determined
quarterly charge volume is compared to a predetermined minimum
volume. If the determined volume is less than the minimum, a target
quarterly charge volume will be set for the account. The target
quarterly charge volume will be equal to the determined quarterly
charge volume of the account times a multiplier m. Application of
the remaining two rules is accomplished in a similar fashion, where
m, n and p are numbers greater than zero.
[0058] The quarterly charge volume, quarterly outstanding balance
and number of transactions per month are readily calculated by one
having ordinary skill in the art. Of course, the rules of Table I
are merely simple illustrative examples of the numerous rules which
could be implemented by a credit card issuer, depending on its
particular needs. It will also be understood that multipliers m, n
and p may vary for each account.
[0059] It should be recognized that multiple targets and rewards
could be determined for some or all card holder accounts. It should
also be recognized that credit card issuers are not limited to the
criteria defined herein. The criteria on which targets are
determined may be based on a credit card issuer's interpretation of
behavior and revenue scores for the account, on a combination of
scores and specific behavior indicators, such as those shown in
card holder account table 300, or on any other predictive
variable.
[0060] At step 614, CCI 200 accesses rules for setting reward
terms. Like the rules for setting performance targets, these rules
may be stored in a database or otherwise implemented through
software and are applied against the criteria determined at step
610. Illustrative examples of rules for setting reward terms are
described with reference to Table II, below.
TABLE-US-00002 TABLE II Rules for setting reward terms Rule Reward
Type Reward Offer If current cash rebate Cash rebate Reward offer =
qj is j percent If frequent flyer mile Frequent flyer Reward offer
= 1.5 level equals 1 mile per dollar miles miles per dollar charged
charged If current APR equals Reduced APR Reward offer = 18% 19%
APR
[0061] To apply the first rule of Table II, CCI 200 must determine
the current cash rebate percentage corresponding to a subject
account as one of the criteria determined during step 610. The
determined cash rebate percentage may be a global parameter that
applies to all accounts; it may be a parameter that is customized
for each account; or it may be otherwise calculated. At step 612,
the determined cash rebate percentage is multiplied by a variable q
to set the reward terms where j and q are numbers greater than
zero. Application of the remaining two rules is accomplished in a
similar fashion.
[0062] While the rules of Table II are provided as simple
illustrative examples of rules for setting reward terms, numerous
other rules could be implemented by a credit card issuer, depending
on its particular needs. For example, the credit card issuer could
use card holder input to select and set reward terms. One way of
collecting card holder input is by providing a card holder a menu
of reward options from which to select preferences. In addition, it
should be recognized that a mechanism for selecting between rules
could be easily implemented by a credit card issuer, and could be
based on issuer preferences, mutual exclusivity of rules or any
other selection mechanism.
[0063] At step 616, CCI 200 updates target/reward table 400 to
reflect the target and reward terms. Specifically, CCI 200 adds a
new record to target/reward table 400 and populates field 410 with
the subject account ID; element 412 with data indicating the period
of the target and reward offer; fields 414 and 416 with the target
type and target parameter determined at step 612; and fields 418
and 420 with the reward type and reward terms determined at step
614.
[0064] As shown, at step 618, CCI 200 outputs a periodic account
statement to inform card holder 112 of the reward offer. The
periodic account statement includes the performance target, the
target period and the reward terms to induce card holder 112 to
behave in a manner prescribed by the credit card issuer and achieve
the communicated performance target during the target period.
Although the periodic statement of some embodiments is a written
communication between the issuer and the card holder, the
communication could take any number of forms including updating a
database accessible by the card holder (e.g., accessible via a
website) or transmitting an electronic or facsimile representation
(e.g., via an email) of a periodic statement.
[0065] In some embodiments, CCI 200 informs card holder 112 of the
reward offer without outputting a periodic (or non-periodic)
account statement. For example, the reward offer may be
communicated to the card holder in various ways, including without
limitation, updating a database accessible by the card holder
(e.g., accessible via a website), or transmitting an electronic or
facsimile representation (e.g., via an email) of the reward offer,
without also providing an account statement.
[0066] As previously described with reference to FIG. 1, throughout
the target period CCI 200 stores transaction data relating to the
account of card holder 112. The transaction data is received from
various merchants. At step 620, CCI 200 stores the received data in
transaction table 500, and updates status field 422 based on a
comparison of the aggregate transaction data to the performance
target data stored in performance target table 400. Prior to the
end of the target period, CCI 200 determines a second set of target
and reward data based on the received transaction data in
transaction table 500, the current period performance target and
reward offer data in target/reward table 400. An example of the
specific steps executed at step 622 are more fully described with
reference to FIG. 8.
[0067] Finally, at the end of the current target period, CCI 200
determines whether a card holder has achieved the performance
targets determined at step 612. A example of the specific steps
executed at step 624 are more fully described with reference to
FIG. 7. If the card holder has failed to achieve the performance
targets determined at step 612, no rewards are awarded, as shown by
step 628. If, however, the performance targets determined at step
612 have been achieved, CCI 200 updates the appropriate account
data to reward card holder 112 for exhibiting the desired behavior,
as shown by step 626.
[0068] In one or more embodiments, the credit card issuer also
informs a card holder if the performance target has been achieved
and/or if a reward has been applied. For example, the card holder
may be informed via an account statement, by updating a database
accessible by the card holder (e.g., accessible via a website), or
by transmitting an electronic signal (e.g., via an email)
indicating that the reward has been earned and/or a target has been
achieved.
[0069] Referring now to FIG. 7, there is illustrated a specific
example of the processing steps executed during steps 624 and 626
of FIG. 6. The specific example relates to the card holder account
associated with record 350 of card holder account table 300 and
record 450 of target/reward table 400. As shown by record 450, the
card holder responsible for account having account ID
2222-3333-4444-5555 was offered a cash rebate reward of two percent
of charges transacted during the first quarter of 1997 which exceed
$1,500.00. At step 624, CCI 200 determines whether the quarterly
charge volume for account 2222-3333-4444-5555 is equal to or
greater than $1,500.00. This is preferably accomplished by
examining status field 422 of record 450. As shown, the performance
target defined by record 450 has been met.
[0070] If the card holder performance had failed to meet the
performance target, the card holder would not be eligible for a
reward, as shown at step 712. Since the card holder performance
exceeds the performance target, CCI 200 executes the steps
generally referred to by reference numeral 626 in FIG. 6. At step
714, CCI 200 accesses and retrieves the reward offer criteria from
fields 418 and 420 of record 450. Based on fields 414 and 416 of
record 450, CCI 200 determines the actual quarterly charge volume
of the account at step 716. This may be performed in any number of
well-known ways including, without limitation, accessing a defined
field in an account header or calculating the amount using account
record 350 and related records of transaction table 500.
[0071] At step 718, CCI determines the amount of quarterly charge
volume exceeding the performance target by subtracting the actual
quarterly charge volume determined at step 716 from $1,500.00,
target parameter 416 of record 450. Finally, at step 720, CCI 200
applies the reward terms of two percent to the difference
determined at step 718, and CCI 200 updates transaction table 400
to distribute the cash rebate.
[0072] Referring now to FIG. 8, there is a flow chart illustrating
specific steps which may be executed to determine a second set of
target and reward data. The steps depicted in FIG. 8 are merely
illustrative of one specific implementation and are not intended to
limit the scope of the present invention. Other embodiments which
are within the scope of the present invention will be readily
apparent to one of ordinary skill.
[0073] At step 810, CCI 200 retrieves first target type 414 and
first target parameter 416 from target/reward table 400. Based on
first target type 414, as shown at step 812, CCI 200 determines a
card holder performance value representing the card holder's
performance during the target period. The card holder performance
value may be calculated based on historical transaction data in
transaction table 500 or may be retrieved from card holder account
table 300, such as from fields 322, 324 and 326. At step 814, CCI
200 compares the card holder performance value to first target
parameter 416.
[0074] If the card holder performance value is less than or equal
to the first target parameter 416, the card holder has not yet
achieved the first performance target. In that case, CCI 200
processes step 816 and determines whether the card holder
performance value is within 90% of the first target parameter 416.
If the card holder performance value is less than or equal to 90%
of the first target parameter 416, CCI 200 determines the second
target parameter by multiplying the first target parameter by 0.9,
and sets the second reward terms equal to the first reward terms,
as shown at steps 818 and 820. This is intended to reduce the
target to enable the cardholder to achieve it.
[0075] If the card holder performance value is greater than 90% of
the first performance target, CCI 200 sets the second target
parameter equal to 110% of the first target parameter and sets the
second reward terms equal to 110% of the first reward terms, as
shown at steps 822 and 824. This is intended to encourage the card
holder to marginally exceed the original target and earn
proportionally greater rewards.
[0076] Referring back to step 814, if the card holder performance
value is greater than the first performance target, the card holder
has achieved the first performance target. At step 826, CCI 200
determines whether the card holder performance value is more than
125% of the first performance target. If the card holder
performance value is less than or equal to 125% of the first
performance target, the card holder has only marginally exceeded
the first performance target. In which case, CCI 200 sets the
second target parameter at 1.25 times the first target parameter
and sets the second reward terms at 1.1 times the first reward
terms, as shown by steps 828 and 830. The second target and reward
values are set to incent the card holder to exceed his present
performance in the second period.
[0077] If the card holder performance value exceeds 125% of the
first performance target, the card holder performance is considered
exceptional. Accordingly, the second target parameter is set equal
to 125% of the card holder performance value and the second reward
terms are set equal to 125% of the first reward terms. By
determining the second performance target based on the card
holder's actual performance value, the exceptionally performing
card holder is incented to step up his performance even more during
the second period. As shown at step 836, a record is added to
target/reward table 500 containing the second performance target
and the second reward terms.
[0078] One or more embodiments of the present invention provide a
method and system to define, manage and evaluate reward offers
which are customized based on account criteria. Accordingly,
account holders may be induced to exhibit behavior desired by an
account issuer.
[0079] A method according to some embodiments of the present
invention is provided for providing and managing a customized
reward offer to a holder of a financial account. The method
includes the step of accessing historical account data associated
with the financial account. The method further includes the step of
determining a first performance target associated with the
financial account. The method also includes the steps of selecting
a reward offer having an associated reward description and
transmitting the first performance target and the reward
description to the account holder. The method further includes
collecting transaction data associated with the financial account
and evaluating the collected transaction data to determine a second
performance target associated with the financial account.
[0080] In some embodiments, the collected transaction data further
is compared to the first performance target. If the collected
transaction data exceeds the first performance target, the
financial account is updated to reflect the reward.
[0081] A system according to one or more embodiments of the present
invention is also provided for implementing one or more of the
process embodiments described herein.
[0082] Some embodiments of the present invention provide the
benefit of promoting the use of a financial account by enabling a
credit card issuer to tailor targets and rewards based on
characteristics of an individual financial account, or of one or
more financial accounts. Other features and advantages of the
various embodiments described herein will be readily apparent from
the detailed description and from the accompanying drawings.
4. Additional Embodiments
[0083] In addition to various reward types described herein, other
reward types may include discounts on products and/or services
offered by the credit card issuer. For example, many credit card
issuers offer services including, without limitation, insurance
programs (e.g., credit insurance, travel insurance), and travel
agency programs, and typically charge account holders a fee or
premium (e.g., an annual fee, or a per-use cost) for providing the
service. Other programs, products and/or services offered by credit
card issuers to card holders will be known to those having skill in
the art. As a reward, a credit card issuer may reduce or waive fees
for such programs. In another example, some credit card issuers
charge account holders various types of account fees (e.g., an
annual account fee). As a reward, a credit card issuer may reduce
or waive such fees.
[0084] Other reward types may include providing and/or extending
warranties for goods purchased using the credit card account. For
example, an account holder could be rewarded with a one-year
extension of the warranties of all goods costing over $200. Of
course, any particular warranty terms and target parameters could
be set as desired by the credit card issuer. In some embodiments,
the target parameter and/or the terms of an awarded warranty is
based on account and/or transaction data associated with the
account holder. For example, an account holder could be rewarded
with a ninety day warranty of one or more purchased products for
meeting a quarterly charge volume target of $1200.
[0085] In some embodiments, the rewards may be applied to a credit
card account. In other embodiments, as discussed herein, rewards
may be distributed to the account holder. For example, gifts and
discount coupons may be distributed via a computer network, via
email or by postal mail.
[0086] In some alternative embodiments, one or more rewards may be
provided to the account holder or applied to an account before a
target parameter is met (or even determined). For example, in some
embodiments, a reward offer may inform the card holder that the
credit card issuer has reduced (or will soon reduce) the card
holder's annual percentage rate. In some other embodiments, in
order to maintain the reward and/or avoid a penalty (e.g., in order
to maintain a reduced annual percentage rate), the card holder must
meet the performance target specified in the reward offer within
the target period. If the card holder fails to meet the performance
target within the target period, for example, the annual percentage
may be raised or even restored to its prior level. Similarly, cash
rebates and other types of rewards could be provided before a
target is met and, if the card holder fails to meet the terms of
the reward offer, the credit card issuer could void the rewards
and/or require that rewards be returned (e.g., gifts or coupons
would be returned or voided, an account balance would be adjusted
to indicate the voiding of a rebate or credit). In some
embodiments, the card holder may be penalized in excess of the
value of the reward provided, for failing to meet the target
associated with a previously-provided reward. For example, an
account balance credited with a rebate of $15 may be charged $20 if
the account holder fails to meet a performance target within the
target period.
[0087] Evaluations of account data and/or transaction data related
to charge volume, outstanding balance, and number of transactions
within a given period are described herein. In some alternative
embodiments, criteria may be established by the credit card issuer
for determining whether a particular transaction indicated by
account data and/or transaction data is eligible to be included in
one or more measures or evaluations of the account and/or
transaction data. To be qualified, a transaction may have to be,
for example, greater than a threshold dollar amount, or associated
with a specific merchant or type of merchant. Of course, various
other criteria may be used, as deemed appropriate by the credit
card issuer. In one example, in determining an average monthly
number of transactions for an account holder, the credit card
issuer may require that a transaction be for at least $10 in order
to be included in the average. Similarly, in some embodiments, when
determining target parameters and/or when transactions are compared
to target parameters to determine whether a card holder is eligible
for a reward, only those transactions meeting certain criteria
(e.g., a threshold purchase amount, at a particular merchant) may
be used in making the determinations.
[0088] Those familiar with the art to which the invention relates
will recognize various alternative designs and embodiments for
practicing the present invention. These alternative embodiments are
within the scope of the present invention. Accordingly, the scope
of the present invention embodies the scope of the claims appended
hereto.
* * * * *