Customer Loyalty Systems

Customer Loyalty Systems

Increasing Customer Satisfaction and Frequency

Complete Points, Rewards Fulfillment & Profiling Software

Customer Loyalty Systems 2

Overview

Business description

Market conditions

Competitive landscape

Sales and marketing strategies

Financial summary and funds sought

Management team

Return on investment

Customer Loyalty Systems 3

Business Description

The company has developed and is licensing a turnkey customer loyalty software suite as a business growth tool.

Reward points management.

Online redemption for certificates or merchandise.

Email management tool to customers with privacy controls.

Customer product/service interest profiling.

Internal Audit System for accounting controls.

Targeting small and medium-sized businesses

Customer Loyalty Systems 4

Market Conditions

Most small to medium-sized business are missing out on

the benefits of customer retention/rewards systems.

Little budget or internal IT to manage complex loyalty systems.

No rewards for frequent or large purchases.

Loosing business to larger retailers who offer rewards incentives.

Existing loyalty programs have proven highly effective in

increasing customer retention and increasing sales.

HBR estimates that a 3% increase in customer loyalty translates to

a 20% increase in revenues.

CLS is priced for market and easily integrates.

Customer Loyalty Systems 5

Competitive Advantage

First to market an on-line rewards system to more than

13,000 health and fitness clubs.

Established contacts with leading national sports

associations and a number of strategic alliances.

Variable points transaction processing.

Competitively priced while requiring minimal technology

and personnel to implement.

Customer Loyalty Systems 6

3 Year Sales Objectives

Licensing to 3% of the 13,000 sport, health, and racquet

clubs.

Setup fee averaging $2,200.

Monthly subscription $200+ per club.

Licensing to .05% of the 130,000 specialty retailers.

Setup fee averaging $ 3,500.

Monthly subscription $400+ per store.

We envision licensing modules of the software to

established VARs and OEMs within our target markets.

Customer Loyalty Systems 7

Marketing Strategies

Primary means to reach our customers.

Industry trade shows.

Direct marketing.

Online web presentations.

Secondary means to reach our customers.

Face-to-face presentations.

Telephone Marketing and Web Seminars.

Industry speaking engagements and charity events.

We have a significant sales and marketing advantage through

Response Associates, a full-service direct marketing agency.

Customer Loyalty Systems 8

Market Competition

Competitors offering reward point software are priced

significantly higher and primarily target large companies.

Fitness industry major software vendors.

Member billing software – CheckFree RCM.

Membership retention – Members First.

Club scheduling – Bookings Plus.

Compatible competitors may be engaged as OEMs or VARs,

integrating our rewards system into their solutions.

Customer Loyalty Systems 9

Financial Summary

FY 04 FY 05 FY 06

Revenue $1,324,065 $2,894,800 $5,691,000

Fixed & Variable Costs $1,349,106 $2,572,886 $4,070,792

EBIT ($25,041) $321,914 $1,620,208

Margin -1.89% 11.12% 28.47%

Customer Loyalty Systems 10

Funds Sought

We are seeking to raise $1,500,000 through the sale of

preferred series A stock.

Use of proceeds.

Executive & sales salaries – 39%.

Technical and professional services – 18%.

Sales and marketing – 16%.

Operating and working capital – 27%.

Customer Loyalty Systems 11

Management Team

Mark Rollins, CTO.

Mr. Rollins has over 35 years of experience in software

development.

Paul Pedrazas, President.

Mr. Pedrazas has a proven track record with high technology and is

also the founder of Response Associates.

Mike Dombrowski, Founder, EVP.

Mr. Dombrowski has over 20 years experience working with

leading national sports organizations.

Larry Krieger, Director.

Mr. Krieger is a former president of the international health and

racquet sports association.

Customer Loyalty Systems 12

Return On Investment

Dividends from annual profits.

Stock buyback

Acquisition

Initial public offering