2. What is Customer Loyalty?
• Attracting the right customer
• Encouraging customers to buy, buy often, buy in higher
quantities and bring you even more customers
• Providing excellent customer service
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3. Customer loyalty programs
• E-mail newsletters with specials message
• Buy 1, get 1 free
• Discounts
• Bundles
• Incentive to pay on-time
• Special customer contests
• Special events for loyalty club members
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4. Other ways to build loyalty…
• Personal thank you cards
• Personal bill messages
• Taking advantage of the latest tools available to you to gather
customer information.
• Showing that you care and remembering what they like and
don’t like.
• Ask your customers how you’re doing – and take it to heart!
• Treat your team well so they treat your customers well.
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5. Customer Loyalty Programmes
• 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
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7. Step 1: Loyalty Situation Analysis
• What is my company’s long-term vision?
• What are our business goals and objectives?
• How do we conduct business (operationally) and how do we
generate profits?
• How do we capture customer data, and what data do we currently
capture?
• What are the market conditions that could affect my loyalty program,
including industry and competitor-related issues?
• How much brand recognition do we have in the market, and what
type of brand positioning do we promote?
• How many lines of businesses do I have, and how do they vary in
regards to business model, offerings, programs, and target
customers?
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8. Step 2: Data Gathering & Gap Analysis
• Data capture will include:
• Customer demographics, purchasing/activity levels
• How you segment customers and/or score their activities
• How you analyse profits, and any recency, frequency, and
monetary value models you have built along various lines of
business.
• It may include communication channels, product profit
margins, channels of purchase
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9. Step 3: Earnings Overview
• Identifying customers and lines of business that show greater
promise to generate the best profits
• An earnings model would likely include:
• Recency of purchases
• Number of purchases
• The overall margin/$ of specific products purchased
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10. Step 4: Potential Program Impact
• Identify potential cross-sell/up-sell, segment migration,
retention, and customer acquisition opportunities
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11. Step 5: Loyalty Program Design
• Design a program that will include the structure, pay-out levels,
and reward recommendations that will drive the desired
behaviours of your best customer
• Essential loyalty reward program characteristics
• quality offering,
• cash value,
• perceived value,
• aspirational value,
• redemption choice,
• convenience,
• relevance,
• unique,
• communication
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12. Step 6: Estimate Your Program
Investment
• Costs of research and strategy development, setup, operations,
project management, systems, support services,
communication, mailings, fulfilment, and rewards
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13. Step 7: ROI Model
• Measuring ROI should be an ongoing process, to ensure your
loyalty program is rewarding profitable behaviour
• Projected incremental profit generated by the recommended
program
• Profit by line of business
• Profit detail by segment
• Your financial liability, with breakage (points never redeemed
by customer)
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14. Step 8: Test the program
• Test it with a select number of existing customers and/or focus
groups
• Test phase allows to test your introduction method, reward
mix, pay-out structure, and communication schedule and
vehicles
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18. Plastic Reward Cards vs Mobile Phones
• Most loyalty programs require the business to print thousands
of plastic loyalty cards. This means the business must spend
hundreds or even thousands of dollars in upfront cost to launch
their loyalty program.
• Check-in based loyalty programs utilize guests’ mobile phones
as their loyalty cards, enabling guests to “check-in” anytime
they’re at your venue. Because you are utilizing your patrons’
phones as their loyalty card, the start-up cost to launch a
loyalty program is dramatically reduced.
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19. POS vs Online Dashboard
• Most traditional, card-based loyalty programs are connected to
a point-of-sale system installed at each store. These POS
systems enable each business to track customers’ rewards
points. However, these POS systems cost thousands of dollars
to buy and maintain, further increasing the cost of operating a
loyalty program.
• Most check-in based loyalty programs are packaged with an
online dashboard that your business can access to update its
loyalty program and view reports on customer visits and
rewards. These dashboards are typically provided for free or
for a minimal cost for more advanced programs.
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20. Printable Coupons vs Mobile Coupons
• Oftentimes, traditional loyalty programs deliver coupons and
rewards via a mailed coupon or through an email that the guest
must print out. These rewards require the guest to remember
to save the coupon and bring it with them when they next visit
your store.
• Check-in based programs, which are typically tied to a guest’s
mobile phone, deliver coupons and rewards directly to your
guests phones. This provides guests with a 24/7 link to your
business and enables them to redeem their rewards whenever
they have their phone.
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21. Social Media Integration
• Traditional loyalty programs are stuck in a silo. Only your
business knows when a guest earns a reward or visits your
business.
• Check-in programs are social by nature. When your guests
check-in, they tell all of their friends they are visiting your
business and provide an inherent recommendation. This is a
huge benefit to businesses looking to expand their reach to new
customers. Check-ins on social networks like Foursquare and
Facebook Places increase your social media presence and help
new customers discover your business.
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22. Golden rules of loyalty program
• Identify type of benefits
• Design programmes based on customer needs and aspirations
• Keep programmes fresh and updated
• Use technology to personalize benefits
• Seek constant feedback
• Reinvest regularly in refinement
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24. Opt-in Programs
• Customers provide information about their preferences, likes,
dislikes, demographics, etc. and in return receive permission
based targeted and relevant messages of promotions/ deals/
events.
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25. Loyalty Rewards
• Opt-in loyalty programs gives customers access to the best
offers/deals on products that interest them via mobile.
• Retailers can proactively send offers/incentives to the
customer’s mobile device - thus eliminating the need for
membership cards.
• Mobilizing the physical card means - retailers can add location
based offers, customized coupons and a quick check-out
experience.
• A loyalty reward mobile program can alert a customer to any
special offers when he checks-in
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26. Mobile Coupons
• Mobile coupons add interactivity, location and real-time
attributes to the traditional coupon. So companies use mobile
coupons in different ways.
• Real-time redemption at the point of sale where a customer
gets a future coupon in real-time.
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27. Cross selling - Cross-company
programs
• Cross-selling is the action or practice of selling among or
between established clients, markets, traders, etc. or the action
or practice of selling an additional product or service to an
existing customer
• Unlike the acquiring of new business, cross-selling involves an
element of risk that existing relationships with the client could
be disrupted
• For that reason, it is important to ensure that the additional
product or service being sold to the client or clients enhances
the value the client or clients get from the organization
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28. Upselling
• Upselling is a sales technique whereby a seller induces the
customer to purchase more expensive items, upgrades, or other
add-ons in an attempt to make a more profitable sale.
• Upselling usually involves marketing more profitable services
or products but can also be simply exposing the customer to
other options that were perhaps not considered previously.
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29. Co-creation Programmes
• Co-creation is the practice of product or service development
that is collaboratively executed by developers and stakeholders
together
• Starbucks has received over 67,500 responses for their co-
creation programme
• Food and Beverage ideas – new product and product
improvement
• Experience ideas – ordering and store atmosphere
• Involvement ideas – community and social responsibility
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30. Brand Communities
• Group of individuals united through the consumption of your
products
• Harley-Davidson’s “HOGs”
• Club Med’s “Gracious Members”
• Characteristics
• Communality – help and expect help from others
• Brand fests are used to share history
• Keep consuming to stay connected
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31. Building a Community
• Community
• Use a newsletter to share news about customers
• Develop an online forum for customers to stay in touch
• Organize annual events “by invitation” for VIP customers
• Facilitate picture / story sharing
• Help customers help each other
• Give a name to the community
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34. Four Ways to Turn CRM into Customer
Loyalty
• Satisfaction does not equal Loyalty
• if you are thirsty and I give you a Diet Pepsi, while it may “satisfy” your
thirst, your true loyalty may still be to Diet Coke
• Know your Best Customers
• system of scoring customers based on both current profitability and
future growth potential
• Treat Different Customers Differently
• grow those with the greatest future potential
• Understand and Use Marketing ROI
• focus on clear, highly targeted and measurable solutions that clearly show
the returns that they produce
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42. Enterprise approach to Loyalty
1st : Have a clear articulated Customer Loyalty Strategy
2nd : Must be in sync with Business Objectives
3rd : Business Process to be customer centric
4th : Design Customer centric & Profitable Loyalty programs
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43. ???
• The big question will be whether consumers are willing to
simply hand over their identity to every business for added
benefits and rewards – and if so, what this says about the real
stance as consumers about personal privacy?
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