The document discusses Sberbank's strategic approach to loyalty and co-branding programs in Russia. It describes Sberbank's multi-merchant co-branded card program called BONUS, which allows cardholders to earn points from everyday purchases that can be redeemed with partner merchants. Examples of current BONUS partners include Aeroflot for airline miles and MTS for mobile minutes. The document also outlines Sberbank's methods for selecting partners, including transaction analysis and targeting high-ROI brands that are commonly used by cardholders.

1. Strategic approach on loyalty and co-branding programs – Sberbank approach June 2010

3. What is multi merchant program? Everything you do with private label cards... Everything you do with co-branded cards (dual cards)... Everything you do with “instant credit” at point of sale...(retail sales financing) White Goods Food Retailers Super Markets Automotive & Gas Electronic Goods Travel Clothing Education & many more .... Bonus card

4. What is multi merchant program? Issuer Infrastructure Customers Merchants Strong Brand Data Mining Marketing & Campaign Management Merchant Relations & Acquisition Risk & Fraud Management Products Service & Fulfillment Points from merchants Loyalty Pool Points from Issuer Bonus card Bonus card Bonus card Bonus card

6. What are the current programs (examples)? AEROFLOT-Bonus card Clients are getting bonuses (miles), for spending money on everyday needs using the card. After that miles can be redeemed for a flight ticket. MTS-Bonus card Clients are getting bonus points from MTS - leading cell provider for spending money on everyday needs using the card. After that bonus points can be redeemed for a additional minutes, SMS or content.

7. What are the current programs (examples)? “ Podari zhizn’ ” (Give a life) card Affinity cards, with a strong point on charity funding. Certain share of all spending on the card is transferred to the charity fund for children medical help. Sochi 2014 credit card Credit cards, made especially for the Sochi 2014 Winter Olympic Games – affinity program for the sport fans and Sochi 2014 supporters

8. Efficiency – Bonus vs. Ordinary cards? Average transaction number increase: Aeroflot Bonus: Visa Classic = 1,9 Aeroflot Bonus: Visa Gold = 1,7 Average amount increase: Aeroflot Bonus: Visa Classic = 16% Aeroflot Bonus: Visa Gold = 7%

9. Example of Data Segmentation on Value There are 4 potential profiles of estimated net worth value per quarter on every group, and its share. Quarterly income per client, rub . PROJECTED LOSS CHURN MAIN SEGMENT BEST CLIENTS 26% 1 5 % 47% 12% +590 руб. -337 руб. +2170 руб. +11046 RUB

10. Возможные стратегии по кросс-скорингу Доходность – Риск – Отклик Churn LOSS BEST Main Retention Cross-sell Wait Up-sell & Cross-sell

12. Transactional analysis Using the transactional data on cards for every client from the targeted segment, a list of mostly valued and preferable partner brands is extracted for this client. So-called “Brand-ring” is formed

14. Формирование единого списка потенциальных партнёров (индикативно) Transaction frequency Level of penetration into the segment Transaction income Groups of the brands, that are used together ( indicative ) ROI = max Group 2 Group 3 Group 1 ROI = med ROI = min ROI impact ROI = med ! !! !! !! ! ! ? ? ?

15. Различные модели зонтичной системы - Единая программа лояльности для Банка Sberbank BONUS Single ring for most clients in all segments VIP Youth Mass Single ring for every segment 2010 -2011 year Segmented offerings –201 2 … SBERBANK BONUS