Searching For High Fidelity
By Rob Wright, VARBusiness
1:45 PM EST Thurs., Dec. 21, 2000
When Netcentives was hired by Nortel Networks earlier
this year, the solution provider wasn't asked to create a
new e-business strategy or build an e-commerce
infrastructure. The mission at hand was to help Nortel
fight employee turnover.
Thus, Netcentives embarked on its largest project to date
by implementing its Employee Reward System for Nortel's
PRIDE Program, which recognizes and compensates
members of the company's 70,000-employee base. The
three-year deal with Nortel gave Netcentives a boost in
the third quarter,the $11.9 million in revenue represented
nearly a 500 percent increase from 1999's third quarter, and
the company's net loss beat Wall Street's prediction by
$0.14,and further pushed the loyalty solutions market into
the limelight.
With today's increasing competition, consolidation and
uncertain market conditions, companies are struggling
with employee retention and building loyal relationships
with customers and partners. Loyalty solution providers
have rushed to the rescue.
"Companies are now looking for different technology and
services to help deepen and maximize relationships with
their stakeholders," says Netcentives CEO and chairman
West Shell. "Up until now, the only choices companies
had [for loyalty solutions] were paper-based systems or
very expensive legacy systems. Companies know they
need to [build loyalty systems] but they don't know how
to go about executing it."
In Nortel's case, it came up with the initial PRIDE Program
and then brought in Netcentives to install the proper
infrastructure and manage the program's
award-nomination and fulfillment systems. Netcentives
grabbed a number of marquee clients in 2000, including Microsoft, 3M, America Online, and
American Airlines.
Incentive Systems is another solution provider that's gained traction in the loyalty-building
field. The Bedford, Mass.%96based company calls itself an enterprise incentive
management (EIM) solution provider,fitting in somewhere between ERP and CRM,that helps
customers motivate and align their employees more effectively. Mike Byers, CEO and
president of Incentive Systems, believes the market for loyalty solutions is deep because
employee, reseller and partner concerns are universal.
"Everyone has these problems. People have been begging us for these solutions because
they're in so much pain," Byers says.
The company tries to alleviate the pain, for instance, by using the EIM software to create
Web-based access to sales information for resellers and instilling more communication and
credibility. "We act like a beacon," he says. "We model a strategy, automate the plan with
the software, and point [customers] in the right direction.
Incentive Systems is also involved with Nortel; the company's EIM software will be
delivered with Nortel's Clarify eFrontOffice as part of a new global alliance announced
Monday. Network Associates and Telcordia Technologies are some of Incentive Systems'
newest customers.
Other loyalty solution providers are prepping for primetime as well. Entigo, founded in 1995,
found its niche in the channel-management market, providing B2B sell-side e-commerce
solutions. Entigo, too, has begun building out its solutions offerings. On Monday the
company released its newest application, Entigo Warranty!, which manages the entire
warranty and claims process for large enterprises to improve customer service. Entigo has
also racked up some big names, including Honeywell, GE Information Services, and General
Nutrition Centers.
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