April 30, 2002, 12:00 AM

Who’ll bid three French fries?

Burger King’s eBay-based loyalty program has been a hit with customers who like the interactive nature of the promotion.

The most successful loyalty programs are those that engage customers: Give them something fun to do with their loyalty rewards and they’re more likely to want to participate. Early returns are showing that a Burger King Corp. program with eBay that rewards customers with points they can spend on auction items may have the ingredients for just such a successful loyalty program.

In a test of an incentive program at Burger King restaurants in Erie, Pa., diners could earn up to 250 eBay-enabled loyalty points when they bought French fries. Within the first 10 days of the program’s launch, 1,000 users had bid more than 30,000 points for auction items at the Burger King section of eBay, says FairMarket Inc., an auction management company which operates the program for Burger King. Burger King is now expanding the program to Albany, N.Y., and expects to roll it out nationally by July.

While the program is not radically different from catalog loyalty programs that give consumers a choice of items to redeem their points on, the auction element creates excitement and interaction with customers, says Jim Okamura, a partner in J.C. Williams retail consulting firm. “The auction element is an interesting twist on passive loyalty programs,” he says. “Using the points as bidding currency makes it that much more interesting to the customers.”

Furthermore, an auction-oriented loyalty programs keeps the Burger King brand in front of participants, says Mark Sutton, marketing director at FairMarket. Through the bidding process, customers interact with the Burger King brand because they receive e-mails reminding them of bids, updating bids and finalizing winning bids, he says.

Burger King is promoting the program in its restaurants, on local TV and radio and in print advertising. FairMarket says the national rollout will be featured on eBay, which has a database of 43 million active users.

Customers can use their loyalty points to bid on a range of products from Palm Pilots and Austin Powers videos to ski and spa vacations, cases of soda, videos, clothing, books and CDs.

The program does not benefit just Burger King, Okamura says. “It’s a very valid way to bring new people into eBay,” he says.

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