10 TIPS TO IMPROVE YOUR

LOYALTY MARKETING PROGRAM…

PLUS 5 REASONS TO KILL IT

Jay Weinberg, President, The JAY Group

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Total Number Loyalty Program Accounts in the U.S. is Over…

2,100,000,000

The Average Household is Signed up for…

18.4

The Average Household is Active in…

8.4

Source: 2011 Colloquy Loyalty Census

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Your Loyalty Program Needs to Work Hard!

10 Tips to Improve Your Loyalty Program

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1 2 3 4 5 6 7 8 9 10

Understand where you are on the

Earn/Redeem spectrum

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High

potential

Low

potential

High value

EARN

RE

DE

EM

Airlines

Gas

Retail (high Freq)

Retail (low Freq)

Hotel

Car Rental

Casino

Drug Store

Dept Store Credit Cards

Low value

Ensure Everyone Knows About the

Program and Understands It• Front-line service personnel are most important

• If they do not understand the benefits and features of the program, customers will reject it

• Issues are often tied to extent employees are expected to deliver benefits

• Instances where many front-line people never heard of the program• High turnover, low training establishments

• Less control over messaging

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He’s a Rewards

Club Member.

What Rewards

Club?

Determine Whether You Need Points

• Soft benefits only may make sense

• Special discounts are easier to manage

• Experiential rewards provide high perceived value

• Points are good for enabling flexibility of choice

• Points make sense for high frequency transaction industries (5-10+ per year)

• Points create opaqueness

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POINTS DISCOUNTS EXPERIENCES

Determine Whether You Need Points

• Examples of programs that focus on discounts and

special treatment

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Make Rewards Meaningful

• High perceived value

• Attainable

• Available

• Redeemed for good value

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10

Make Rewards Meaningful

$1,042 $599

Going Mobile? Understand the Difference

Between Visits and Transactions

• POS integration ties rewards to customer value

• Gain the benefits of customer information

• Segmentation!

• Less prone to fraud

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• Easy to integrate

• Many third-party options

• Relevant for stores that

are not necessity-based

Accrual scheme should be designed around the customer lifecycle

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Going Mobile? Understand the Difference

Between Visits and Transactions

VISIT TRANSACTION

Be Unique

• You’re not an airline. Don’t copy their program

• Think about the added value you can bring to customers

• What unique, meaningful experiences can you provide?

• Are there private, exclusive communities you can create?

• Access creates demand and trumps discounts

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Be Unique

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COST

PE

RC

EIV

ED

VA

LU

E

High

Low High

Transparent (cash)

THE BERMUDA TRIANGLEOF LOYALTY

GOOD

GOOD

BETTER

BETTERBEST

Be Unique

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Be Unique

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Use Data to Drive Incremental Sales

• Focus on the back end of the program as much as the

front end

• Segment messaging and offers

• At least based on RFM

• Win back profitable defectors

• Implement an at risk (defection) model

• Deselect unprofitable customers

• Use data to improve merchandising and site selection

• Become a customer centric organization

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Gamify

• Include gamification elements to increase engagement

and interest

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Gamify

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Treat Customers Better than Prospects

• Do not give better deals to new customers than existing

customers

• At least not blatantly

• People understand sign-up bonuses

• If they didn’t get one, give it to them later

• Surprise and delight current customers

• Not a special offer that requires a purchase

• Make it a real gift

• OK to require a visit, but not a purchase

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Keep it Simple

• From a business standpoint, do the cost/benefit analysis

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INCREMENTAL

REVENUE

- Acquisition

- Retention

- Share of wallet

- Cross/up sell

>TOTAL COST

- Rewards

- Delivery & execution

Recap

Understand Where You Are on the Earn/Redeem Spectrum

Ensure Everyone Knows About the Program and Understands It

Determine Whether You Need Points

Make Rewards Meaningful

Going Mobile? Understand the Difference Between Visits and Transactions

Be Unique

Use Data to Drive Incremental Sales

Gamify

Treat Customers Better than Prospects

Keep it Simple

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5 Reasons to KILL It

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It’s the Agency’s

fault!

You’re Under Water

• Cost of the delivering benefits is greater than the

incremental return

• Negative ROMI

• Decreasing benefits or increasing promotions have not been

effective

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It’s Unnecessary

• There are more cost-effective ways to differentiate from

your competition

• Loyalty programs are best used as a tie-breaker

• “Real” loyalty strategies are always preferred

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Tracking Purchases is the Only Reason

• If there is no compelling value proposition for the

customer, it will not work

• The program, first and foremost, must be about providing

value to the customer

• That’s the path to incremental value

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Overcome Service or Product

Deficiencies• No marketing program, rewards or otherwise, will

overcome product deficiencies or poor customer service

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To Dissuade Deal-of-the-Day Shoppers

• They are likely looking for deeper discounts that you can

provide

• If they like your product or service, they’ll come back

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Thanks for listening!312-447-0414 x1

Skype: jayweinberg

jay@thejaygroup.com

www.thejaygroup.com

Jay Weinberg

The JAY Group

444 N Wells St. Ste 304

Chicago, IL 60654