Download ppt - The Loyalty Program: A Recipe for Success

Copyright 2008, First Data Corporation. All Rights Reserved.

The Loyalty Program:A Recipe for Success

Stuart Kiefer

Vice President, Loyalty Solutions

First Data Corporation

2Copyright 2008, First Data Corporation. All Rights Reserved.

What we’re going to talk about today

Market / Business / Practices / Innovations / Programs


Loyalty programs help you better understand customer preferences and spending habits, while monitoring, reinforcing and rewarding desired behaviors.


The loyalty market todayThe Loyalty Program: A Recipe for Success


Loyalty memberships are growing

1.3 billionloyalty membershipsin the United States in 2006

2000973 million

20061,139 million

Source: Colloquy®talk™ Censustalk April 2007, pp. 3-6


Loyalty memberships are growing

85% households participate in at least one reward program*

12loyalty programs per household on average**

40%participation in active loyalty programs**

Sources:* Loyalty & Rewards: A Market Overview, Aite Group,

January 2007** Colloquy®talk™ Censustalk, April 2007, pp. 3-6


Restaurant loyalty is a sliver of the pie



Loyalty is growing in many industries



Loyalty is growing in many different verticals so you are competing for share of customer mind across all verticals.


How a loyalty program helps your businessThe Loyalty Program: A Recipe for Success


Loyalty programs……move you beyond transactions, enabling you to monitor, reinforce and reward consumer behavior.

…help you build program campaigns and promotions that resonate with each customer.

…help increase revenue potential by building customer relationships through targeted, valuable and relevant promotions and rewards.


Loyalty programs……provide a return on the capital investment of your POS

system.

…build visibility and advocacy for your brand.

…differentiate you from your competition.


Where do your loyalty needs fall?

•Electronic punch card



•Single promotion•Single message at POS



•Multiple targeted promotions•Product specific offers•Customized, multi-channel messaging•Web site registration



•Multi-purse, targeted promotions•Analytics/modeling•Segmentation•Customized messaging•Additional Web site data capture •Payment-enabled phone•Tied to gift card


Loyalty helps grow your business

Retain Customers

Target Marketing Comms.

Increase Spend &

Frequency

Build Brand Loyalty

Build Customer

Relationship

Differentiate vs.

Competition

Acquire New Customers

Gain Customer

Insight

Increased Revenue


Increase……visits per customer

…spend per visit

…number of purchases


Growth……in the number of loyalty members

…in the number of new customers


Lift……product specific sales

…sales during slow periods


Following loyalty best practices can help deliver more than 15% in annual improvement in return on gross revenues, customer retention rates and marketing investment.

Source: Clark, Robin and Clark, Peter. The Loyalty Guide, The Wise Marketer, Wise Research 2006, p. 26


Effective & relevant offers

Recognition as a valued

customer

Perceived value of

membership

Immediate gratification

Ongoing communication

Value to customers


Best practices in loyaltyThe Loyalty Program: A Recipe for Success


Five key elements for success1. Target your offerings

2. Offer the right mix of rewards

3. Understand your customers

4. Communicate effectively

5. Measure the results


Loyalty program offers

• Recency, frequency, monetary, day part, pointsVelocity programs

• POS receipt, e-mail/SMS, Web siteMessaging programs

• SKU-basedProduct-based programs

• Exclusive campaignsSpecial promotions


Best practice: Member engagementIncrease customer frequency

Retain existing customers

Attract new customers


Best practice: Program goalsEstablish defined program objectives and metrics to measure success

Make the program part of the corporate strategy

Give front line employees the skills to perform — they are your program advocates


Best practice: Loyalty programLoyalty program rules should be easy to understand

Always be relevant – understand how your customers define ‘value’


Best practice: Customer knowledgeTreat different customers differently: deliver value the way customers want it delivered

Understand the needs of your target audience, then deliver simple, effective offers

Pay attention to your most profitable customers but don’t neglect the rest


Best practice: Effective communicationBe responsive to your customers; let them tell you what they want

Know what is or isn’t working, change as needed

Use multiple touch-points – e-mail, Web site, etc.

Provide relevant and concise follow-up communication


Best practice: Data analysisCreating value and loyalty success depends on how effectively customer data is managed and implemented.

There is intelligence in every transaction.


Innovations in loyalty programsThe Loyalty Program: A Recipe for Success


Innovations in restaurant loyalty

Form Factors Payment Customer

Service Employees Supply Chain


Innovation in form factorsTechnology can enable real-time rewards, offers and messaging

More convenient forms like contactlessGo-Tags can increase visits


Innovation in paymentsTie your loyalty program to multiple forms of payment

Credit/debit, prepaid cards, ACH


Innovation in customer serviceUse data from loyalty program to drive excellent service

Tie in customer service with your loyalty program


Innovation in employee programsRewards programs are not just for your customers

Increase acquisition and retention

Deepen relationships with employees

Increase customer value

Reduce costs


Innovation in the supply chainIncrease opportunities for inventory management

Understanding customer purchasing behaviorhelps you make decisions that can reduceinventory costs

Reward and manage SKUs better


Components of an industry-leadingloyalty program

The Loyalty Program: A Recipe for Success


Industry-leading solutions

Real-time Tender-neutral

Any loyalty identifier

Targeted

comm.

CRMTargeted offers & rewards

All program types

Flexible reporting

Web-based pgm mgmt

Back office capability


Case Study: Compass Group Zipthru Rewards

The Loyalty Program: A Recipe for Success


Zipthru Rewards innovationsTechnology: Contactless key fob tapped at POS

Real-time: Receipt is printed with total points or a coupon

Program types: Time of day and frequency rules

Rewards: free meals, discounts, event tickets

Communications: Promo and reward notifications by e-mail

Web site: View account balance, points earned and rewards redeemed


Zipthru Rewards transactions

75,000 loyalty transactions

3,000 loyalty redemptions

2+ visits per day on average


Zipthru Rewards results so far

82%all day participation

29%higher average check than all day average

26%café transactions from loyalty rewards

34%café revenues from loyalty transactions


Wrapping upThe Loyalty Program: A Recipe for Success


Five key elements for success1. Target your offerings

2. Offer the right mix of rewards

3. Understand your customers

4. Communicate effectively

5. Measure the results


Loyalty programs help you better understand customer preferences and spending habits, while monitoring, reinforcing and rewarding desired behaviors.


Innovative loyalty programs are tied in to payment, marketing, customer services, supply chain and employees.


There is an opportunity for restaurants to develop profitable loyalty programs.


The Loyalty Program:A Recipe for Success

Stuart KieferVice President, Loyalty SolutionsFirst Data [email protected]