Power Dollars: How Phyllis Dunn hopes to give SMEs a fighting chance in the loyalty stakes
Wednesday, September 11, 2013/
For the better part of a decade, the major supermarkets have been offering customers money off their gas bills as a reward for their custom.
The ACCC is looking into whether this is anti-competitive. It’s concerned that it’s impossible for small businesses and independent gas companies to compete.
When it comes to small businesses, at least, one entrepreneur is looking to change that.
Phyllis Dunn is the founder of Power Dollars, an SME rewards program that helps customers save on their power bills.
Though Dunn says Power Dollars has been several years in the making, when SmartCompany spoke to her the longest any business had been offering rewards was 12 weeks.
“I’ve been thinking about it for a couple of years as power prices have continued to rise,” she says. “I had friends in the solar industry, and had quite a few discussions with them about the number of people keen to save money on their power bills. And it all progressed from there.”
Dunn says she was driven to make it a win-win proposition for small businesses and their customers.
“Small businesses employ over 60% of the workforce. I thought – if I can come up with something that drives traffic to them and works for consumers that would be great.”
To earn Power Dollars, consumers need to shop at participating small businesses. If they hit a certain purchase hurdle, they get given a coupon. They can then set up a Power Dollars account, which they update with their coupon number and power bill details. The small business who gave them the coupon then pays part of their power bill, with Power Dollars taking a cut.
It’s a way to encourage sales, Dunn says.
“The way it works is that small businesses give it as a reward. They’re the ones who are paying for it, but we have a formula where businesses set the minimum spend for the rewards higher than the average spend. So that way it drives sales up. We tailor it to the particular business.”
In early August, Channel 9’s A Current Affair ran a segment on Power Dollars, which was a shot in the arm to the company’s marketing efforts.
“After that story, we had 30,000 hits to our website,” Dunn says. “We had thousands of emails from customers coming in, asking if it’s in their area and for lists of participating businesses.
“There’s a real need in the market for something like this – that allows consumers to save money while helping small businesses compete with the big guys.”
Over 60 businesses have started offering Power Dollars, including butchers, grocers, takeaway shops, jewellery stores, sporting goods stores and beauty therapists, Dunn says.
She’s been able to get the word out to businesses partly through personal relationships. Before Power Dollars, Dunn spent years in the loyalty giveaway sector.
It’s a big industry – worth $4.9 billion a year, she says. She also cites Galaxy figures which showed 91% of Australians believe the availability of rewards programs impact on their shopping decisions.
“People do like and expect something for nothing when they shop with a business. The key thing is to give something of value.
“Around 60 businesses have started offering Power Dollars, but many others have signed up. Our ultimate aim is to give people the option of shopping at Power Dollars stores right across Australia.”
The business needs numbers to proper. Dunn says the aim is to have 2000-3000 businesses offering the loyalty scheme.
“Once we have that critical mass – we can start to get concessions from the power companies,” she says.
There’s a long way to go yet. But Dunn is hopeful.
“One of the great things we’ve found is people tell their friends and family about Power Dollars,” she says. “It’s a chance to save money on a hot-button issue.”