Retail Loyalty Programmes

8/2/2019 Retail Loyalty Programmes

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Retail Loyalty Programmes


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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 servicesto 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 Discount Rebate

Earn points and redeemfor rewardsGood-Offers control-Customer understands-

Lower costBad- Points cost are knowledge- Accrued liability

Immediate discount forpresenting cardGood-Easy and instant- No liability

Bad- Discount has to be large(+10%)- No control

Reward spend overtimeGood-Easy to manageBad

- Little control- Easy to copy e.g. stampcard- Little emotional connection

EssoSmiles

Jusco

Starbucks

Krisflyer

Privilege

Earn points and redeem for rewards plus tiers of privilegeGood-Privileges lead to loyalty-Offers control-Customer understands

Bad- Low spend customer disillusion- Competitors can match

CathayMarcoPolo


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How does it work?

Nets & Credit

Bank

Data

122132

Transaction

Database

Custom

ers

Analysisservices

MarketingPlanning &Promo

tion tactics

Dataentry

122132

nameemail

mobile

Application

Form

agefamily

NRIC

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nameemail

mobile

agefamily

NRIC

Customer card


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Considering aprogramme?Steps to launch

Planning

1. Feasibility audit

2. Customer research3. Financial planning

4. Develop programme model

Implementation1. Implementation develop systems/communications

2. Launch

Management (operations)


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Loyalty Success Factors


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Critical Success Factors for CustomerLoyalty

TargetAudience

BrandPositioning

Customer

LoyaltyDrivers

Degree ofParticipation

Choice ofrewards

Generosity

Deliveryof

rewards

Liabilityrisk

InvestmentCost

GettingCustomers to

join

CompetitorStrength

SalesFocus


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How is itsuccessful?

TargetAudienceRegular

shoppers

Brand

Positioning- for everyone

-Birthday treats-Members only

CustomerLoyalty

DriversUse

membershipTo make offers

Degree ofParticipation

High

Choice of

rewardsChoose fromwhole store

GenerosityVery generous

rebate up to20%

Delivery ofRewards

rebatevouchers

(casheffectively)

Liability

RiskHigh but also

Highredemption

InvestmentCost

High

GettingCustomers to

JoinEasy free

membership

Competitor

Strengthn/a

SalesFocus

Very High


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Loyalty Program

Structure Secrets


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Loyalty Programme StructureSecrets

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5

46

1

37

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Data Collection

Sales PromotionIntegration

Loyalty ProgrammeMechanics

Brand Extension

Clubs withinprogramme

FMCGPartnerships

ValueProposition

InvestmentRatio


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Loyalty ProgrammePromotions - DrivingSales


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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 knowcustomer thats cost of knowledge that must berecovered

Opportunity comes from using the data to drivemore spend - personal shopping lists

Customers enjoy being part of programmes ifthey get privileges of whatever value thereforework hard to give them value


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Documents

Retail Loyalty Programmes