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May 23,
2006
Written
by Bob Meyer, Editor of BarterNews
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From the desk of Bob
Meyer...
05/23/06
The World?s
Largest Private Currency Continues To Soar!
Airline frequent flier miles (FFM) are without doubt the
largest private currency in the world. Here?s a quick update
on the ever-evolving currency and some of their future
challenges ahead.
(For a look at other type of private currencies see our
Secondary Capital Section,
www.barternews.com/secondary_capital.htm.)
It was in May 1981, 25 years ago, that American Airlines
introduced the first frequent flier program?a program
designed to build loyalty among its passengers. No one
envisioned what would eventually result from such a
marketing idea.
Today more than 130 airlines issue FFM and 120 million
travelers worldwide have accumulated 14.2 trillion frequent
flier miles, according to editor and publisher of Inside
Flyer magazine Randy Peterson. That?s enough FFM for
568,000,000 flights.
According to the U.K.s Business Guardian publication,
a frequent flier mile has a value between 1-cent and 6-cents
each. At 3-cents each, the 14.2 trillion miles have a value
of $420 billion!
Frequent flier miles are major sources of revenue for the
airlines. In the U.S., carriers annually sell about $2
billion FFM to other businesses to use as customer rewards.
Thus, people who rarely fly have the ability to earn miles
when using credit cards, taking out a mortgage, eating in
restaurants, or buying flowers.
Interestingly?disconcerting if you really think about it?the
sale of FFM is the most-profitable part of many airlines.
Yet the actual cost of fulfilling these ?free? tickets is
minimal...less than $15 on average, according to an
article the April Harvard Business Review titled
?Your Loyalty Program is Betraying You.?
Joseph C. Nunes, associate professor of marketing at the
University of Southern California?s Marshall School of
Business and co-author of the Harvard Business Review
piece, says in the short term the frequent flier mile
programs are in good shape.
Longer term, however, could be a different story as credit
cards and/or mortgage companies may one day wake up and say,
?To heck with enticing customers with FFM. They?re costing
us too much and consumers aren?t as attracted to them as
they once were. We?re going to compete on price instead.?
(That?s what happened years ago to the
Green-Stamps-for-products redemption program.)
Additionally, fulfillment could become a major problem as
airline fleets are decreasing in size. The legacy carriers
of the world?such as United or American?had a combined fleet
that was 22% smaller at the end of 2005 than in mid-2001,
according to industry trade group Air Transport Association.
While there is little chance of fulfilling on 586 million
flights as long as the industry continues selling $2 billion
of FFM annually, the following story shows United is taking
a small step in the right direction.
?Choices? Air
Currency Launched By United
In an effort to make FFM more attractive, United Air Lines
has launched a separate new form of air currency it calls
Choices miles. The new program offers complete transparency
in that there is no waiting, no black-out dates, and no seat
restrictions or other conditions attached.
Choices can only be earned by using a Chase United Mileage
Plus credit card. Although the miles can be used for flights
on United, or hotel and car rentals, they must be booked
online at
www.united.com.
The Choice miles can also be used, at a penny-per-mile,
toward payment of a previously purchased flight made at
www.united.com. It?s only a matter of logging into the
web site and transferring Choice miles against the billed
airfare, i.e. the credit card balance is reduced when miles
are credited against it.
Example: A ticket is purchased using a Chase Mileage Plus
credit card via United?s web site for $299. When the bill
comes you log on to
united.com
and transfer 20,000 of your Choice miles to apply against
the $299, reducing your bill and ticket payment to $99.
(Unlike a regular award ticket, you also earn FFM on the
transaction.)
Best Wishes To Pili
As He Moves On
A friend of the barter industry, Pompiliu Verzariu, has
retired from his position as director of the Financial
Services and Countertrade Division at the International
Trade Administration.
A leading expert on countertrade and offset issues, Pili
spoke at several International Reciprocal Trade Association
(IRTA) functions. He authored numerous publications on
countertrade, offsets and joint ventures, and provided
BarterNews with several articles on his expertise.
Dr. Verzariu received his doctorate in physics in 1971 from
the American University in Washington (DC). He conducted
research on geophysical phenomena prior to joining the
Department of Commerce in 1973, publishing 12 scientific
papers while at the Applied Physics Laboratory of the Johns
Hopkins University. He is now an adjunct fellow for the
Center For Strategic and International Studies in
Washington.
(Please feel
free to forward our newsletter to your friends and
colleagues. We have a ?box? at the end of the
newsletter for your convenience.
See you next week. . .) |
Trade Exchange Owners...
Would You Like To Make 2006 Your Greatest Year Ever?
Then it?s time to
grab-a-hold of the most powerful marketing tool in the barter
industry! The Competitive Edge newsletter is a monthly, ready
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IMS
Revenues Up 53%, Operating Profits Advance 144%
International
Monetary Systems (OTCBB:INLM) announced that the quarter which ended
March 31, 2006, had a $1,742,338 gross revenue, a 53% increase
compared to $1,142,383 for the first quarter of 2005.
In the first
quarter of 2006, the Continental Trade Exchange (CTE) barter
business had a profit of $77,000, compared to $31,600 in the same
period of 2005, an increase of $45,400 or 144%. CTE processed
$12,109,943 in barter transactions (representing sales only), an
increase of 47% over the first quarter of 2005.
(The figures
for the first quarter of 2005 do not include the revenues and
expenses of the five companies acquired after March 31, 2005, which
increased the IMS client base over 45%.)
To read the
full report, refer to the Form 10-QSB that has been filed with the
U.S. Securities and Exchange Commission at
www.sec.gov.
Investrend Research Raises IMS
Target Valuation
An investment
service IMS is enrolled in, Investrend Research, which provides
analysts to smaller publicly-traded companies that otherwise have
little or no analyst coverage, has raised the company?s target
valuation from $0.80 to $1.60.
Investrend
analysts are paid in advance of initial reports, and neither the
analyst nor anyone associated with Investrend Research may own or
have trade in the stocks of a company under coverage.
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Florida Barter?s Bingman Crowned Broker Of The Year
Joyce Bingman, a Certified Trade Broker and travel broker for
Florida Barter in Winter Park, has been named the National
Association of Trade Exchanges? 2006 Broker of the Year. She will be
honored during an awards banquet in conjunction with NATE?s annual
convention, to be held in Toronto August 10-12.
?It is such a humbling honor to be recognized by one's peers,?
Bingman expressed. ?An award such as this makes the exacting clients
and challenging days seem insignificant. Working for Florida Barter,
and having (founder) Scott Whitmer as my mentor, has definitely
given me the edge in learning strong leadership, fair business
ethics, and the knowledge of bartering.?
Bingman, who has been with Florida Barter for nearly 12 years,
manages the travel department and handles all of the reciprocal
trading business. During her tenure there, the travel department has
regularly produced yearly record growth. Her presence has been
instrumental in helping the trade exchange consistently rank as a
top producer in the barter industry.
?Travel is not necessarily the most profitable side of bartering.
However, it spreads the most enjoyment and goodwill while building
memorable moments with clients,? Bingman said. ?We travel brokers
have all the best.?
Our Web Site Has Added A Search
Tool For You
Ever
wondered if a certain topic, person, or organization has been
written about on the Barternews.com web site? Now you can easily
find out, as we?ve added a search tool. It will quickly give you the
answer to your questions, in 3 easy steps that take about 12
seconds!
At the top
right of the page, just under where you sign up for the Tuesday
Report you will see a little Google box. It is where you can (1)
type in the name of a subject, company or person. Then (2) click the
button for www.barternews.com to search the site, followed by (3)
hitting the search button.
Arbitron Gets Seven-Year Pact With New Radio Rating System
CBS Radio has
announced that it would use a next-generation measuring system from
Arbitron, known as the People Meter. The announcement is an
important win for Arbitron, as their lock on radio ratings is facing
new competition.
Radio industry
executives have been searching for an alternative to the ineffective
paper-and-pencil diaries Arbitron presently uses. Several viable
alternatives, such as IQ Stat with global positioning system
technology, are competing to win over radio stations.
The seven year
agreement begins immediately, which means CBS will switch to
electronic rating as Arbitron launches the People Meter in the top
50 markets beginning this summer. The new system is a pager-like
device that can pick up inaudible codes from radio signals and
identify what station it is.
Editor?s
Note: Because radio is
one of the barter industry?s currencies, we?ve previously reported
on the changing technology for measuring audiences...see Tuesday
Report for December 23, 2003
and March 21, 2006.
Get
New Money-Making Ideas And Valuable Contacts!
You can obtain
useful, informative ideas and contacts in every available back-issue
of BarterNews.
Nation?s Largest Shopping Mall Owner To Create Broadcasts
Indianapolis-based Simon Property Group is teaming up with the
French firm Publicis Groupe to produce programming that will air on
nearly 2,000 big-screen televisions in 50 malls nationwide.
The broadcasts
will run in eight-minute loops with the content evenly distributed
between advertisements and original lifestyle programming. Shoppers
can check out the day?s deals on the plasma screens scattered
throughout the shopping center.
To make the
cut, retailers submit their best bargains and the top 10 are
advertised for free. These free promotions are sprinkled between
paid ads in a six-minute loop.
Nearly 2.2
billion customers visit Simon?s 300 malls each year.
The
Growth and Use of Secondary Capital (New Money) Creates
Unprecedented Wealth In Today?s New Age Of Possibility
There are many forms of secondary capital?which can
be defined as any financial instrument that measures and
communicates value in a common language. Would you like to see and
learn more about the many forms of secondary capital?
We have 75 free,
informative and inspiring, articles for you in our ?Secondary
Capital Section.? Check it out...
www.barternews.com/secondary_capital.htm.
Every
barter company in the world is listed on our web site,
click through to our Global List
of Barter Companies.
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A Gift To A Friend Or Associate. If you know someone
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