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Retail Loyalty Programmes
4/11/12
Contents
What is a loyalty programme?
Loyalty Success Factors
Introduction to Retail Loyalty Programmes
Loyalty Programme Structure Secrets
Loyalty Programme Promotions - Driving Sales
Summary
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What is a loyalty programme?
The systematic collection of customer data in return for rewards or
benefits, often used to give customer additional privileges or services
to best/loyal customers
Opportunities
• Understand customers
• Give discounts to best customers only
• Adjust real price for certain customers
• Use data to negotiate with partners
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Loyalty Programme Options
Points Ess Discount Jusc Rebate
o o
Smil
Earn points and redeem es Immediate discount for Reward spend over
for rewards presenting card time
Good Good Good Starb
-Offers control -Easy and instant -Easy to manage
ucks
-Customer understands - No liability Bad
-Lower cost Bad - Little control
Bad - Discount has to be large - Easy to copy e.g. stampcard
- Points cost are knowledge (+10%) - Little emotional connection
- Accrued liability - No control
Privilege Krisflyer
Cathay
Marco
Polo
Earn points and redeem for rewards plus tiers of privilege
Good Bad
-Privileges lead to loyalty - Low spend customer disillusion
-Offers control - Competitors can match
-Customer understands
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How does it work?
Nets & Credit
Ban
Data
k entry
Dat
Application
n
Form
N a
em
R
Ime
a
aC o
a
g bf i
e aill
m
e 1
i 2
l 2
y 1
Customer card 3
2
122132
Marketing
Planning &
Promotion tactics
Analysis
Custom services
Transaction ers
Database
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Considering a
programme?
Steps to launch
Planning
1. Feasibility audit
2. Customer research
3. Financial planning
4. Develop programme model
Implementation
1. Implementation – develop systems/communications
2. Launch
Management (operations)
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Loyalty Success Factors
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Critical Success Factors for Customer
Loyalty
Target Degree of Delivery Getting
Audience Participation Customers to
of join
rewards
Brand Choice of Liability Competitor
Positioning rewards Strength
risk
Customer Generosity Investme Sales
Loyalty
Drivers nt Focus
Cost
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How is it
successful?
Target Degree of Delivery of Getting
Audience Participation Rewards – Customers to
Regular High rebate Join
shoppers vouchers Easy – free
(cash membership
effectively)
Brand Choice of Liability Competitor
Positioning rewards Risk Strength
- for everyone Choose from High but also n/a
-Birthday treats whole store High
-Members only redemption
Customer Generosity Investment Sales
Loyalty Very generous Cost Focus
Drivers rebate up to High Very High
Use 20%
membership
To make offers
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Loyalty Program
Structure Secrets
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Loyalty Programme Structure
Secrets
Data Collection
FMCG Value
Partnerships Proposition
1
8 2
Brand Extension
7 3 Loyalty Programme
Mechanics
6 4
5
Investment
Clubs within
Ratio
programme
Sales Promotion
Integration
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Loyalty Programme
Promotions - Driving
Sales
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Promotions
1. Statements
2. Personal shopping lists
3. Geo-targeting
4. Events
5. Layered promotions
6. Regular communications
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Summary
Programmes offer opportunity to get to know
customer – that’s cost of knowledge that must be
recovered
Opportunity comes from using the data – to drive
more spend - personal shopping lists
Customers enjoy being part of programmes if
they get privileges of whatever value therefore
work hard to give them value
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