1. Customer Loyalty Systems
Customer Loyalty Systems
Increasing Customer Satisfaction and Frequency
Complete Points, Rewards Fulfillment & Profiling Software

2. 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

3. 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

4. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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%

10. 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%.

11. 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.

12. Customer Loyalty Systems 12
Return On Investment
 Dividends from annual profits.
 Stock buyback
 Acquisition
 Initial public offering