Companies try frequent-buyer benefits

Succeeding in small business

May 18, 1992|By Jane Applegate | Jane Applegate,Los Angeles Times Syndicate

In these days of cost-cutting and discount pricing, you might think Bernie Weiss has a lot of nerve charging full price for USA Optical's fashion eye wear. But the company's 5,000 customers don't seem to mind.

Every dollar they spend on frames accumulates points, the same way travelers collect frequent-flier miles. Collect enough points and you are invited to join Weiss on a luxurious vacation. In the last seven years, this creative business owner has spent about $2 million taking about 1,000 happy customers to exotic places.

"Everyone in my business thinks I'm wacky," said Weiss, who founded Inglewood, Calif.-based USA Optical about nine years ago. Last year, the firm's 45 employees generated about $9 million in sales, up from about $8 million the year before.

While large companies have traditionally used employee and customer incentives to boost their business, smaller companies are testing the concept, according to travel professionals who plan and book business-related trips.

"Big companies spend millions of dollars a year on trips and incentives," said Deborah Jarvis, president of Creative Travel Unlimited in Pacific Palisades, Calif., and vice president of Elan Events & Incentives. "One company we are working with spent almost $1 million to take 100 people to Ireland."

Although Elan specializes in creating dream-come-true meetings and vacations for big clients, Jarvis recently arranged a one-week trip to Hawaii for a small chimney-sweeping firm.

But small-business owners are advised to ensure that any trips offered to customers be well organized so they take place without a hitch. If not, they can hurt -- rather than help -- your business. Be sure you check with your tax accountant to determine whether such trips are taxable to participants. (Trips organized for employees are often considered taxable income.)

And remember, travel incentives work only if your customers are happy with your products and services. The greatest trip in the world won't make up for late shipments or defective merchandise. Dr. David Simon, an optometrist with 34 years' experience, recently bought $3,000 worth of frames from USA Optical. In recent years, he has been Bernie Weiss' guest on vacations in Kauai and Maui, Hawaii, and Cancun, Mexico.

Although the trips are great, Simon said he wouldn't buy from the company unless he was pleased with its products and service.

"I guarantee we can afford to take ourselves to Hawaii," said Simon, an optometrist at the South Suburban Eyecare Center in Chicago Heights, Ill.

Treating his customers to lavish vacations is not the only way Weiss tries to set himself apart from his competitors. Instead of face-to-face sales, Weiss relies on a network of telemarketers to call on customers across the country.

"Through telemarketing, we sell a fashion item sight unseen at full price," Weiss said. Generally, customers have little say over the colors or styles they receive. They trust the sales representatives to ship the most fashionable frames, usually designed by top fashion designers, including Perry Ellis and Liz Claiborne. "Because we send them the styles we suggest, I totally control the inventory," Weiss said.

His travel program also provides another key benefit: People tend to pay their bills on time because they cannot collect their prize points until the bill is paid.

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