Strategic approach on loyalty and co-branding programs – Sberbank approach June 2010
<ul><ul><li>Get instant reward at the partner </li></ul></ul><ul><ul><li>Short term & seasonal Promotions  </li></ul></ul>...
What is multi merchant program? Everything you do with private label cards... Everything you do with co-branded cards (dua...
What is multi merchant program? Issuer Infrastructure Customers Merchants Strong Brand Data Mining Marketing & Campaign Ma...
How does it work? <ul><li>From all transaction in 28 million merchants around the world, cardholders earn  0.5%  incentive...
What are the current programs (examples)? AEROFLOT-Bonus card Clients are getting bonuses (miles), for spending money on e...
What are the current programs (examples)? “ Podari zhizn’ ” (Give a life) card Affinity cards, with a strong point on char...
Efficiency – Bonus vs. Ordinary cards? Average transaction number increase: Aeroflot Bonus: Visa Classic = 1,9  Aeroflot B...
Example of Data Segmentation on Value There are 4 potential profiles of estimated net worth value per quarter on every gro...
Возможные стратегии по кросс-скорингу  Доходность – Риск – Отклик Churn LOSS BEST Main Retention Cross-sell Wait Up-sell &...
How partners are selected? Approaches on creating a  partners pool for different segments By transactional analysis  and c...
Transactional analysis Using the transactional data on cards for every client from the targeted segment, a list of mostly ...
Forming a list of potential partners <ul><li>Preferences of the clients are similar in some cases (Brand rings are frequen...
Формирование единого списка потенциальных партнёров (индикативно) Transaction  frequency Level of  penetration  into the s...
Различные модели зонтичной системы - Единая программа лояльности для Банка Sberbank BONUS Single ring for most clients in ...
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Maxim mozgovoy. sberbank. crm

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  • So how does the reward scheme work: Anlat Onus
  • Maxim mozgovoy. sberbank. crm

    1. 1. Strategic approach on loyalty and co-branding programs – Sberbank approach June 2010
    2. 2. <ul><ul><li>Get instant reward at the partner </li></ul></ul><ul><ul><li>Short term & seasonal Promotions </li></ul></ul><ul><ul><li>Free merchandise or service </li></ul></ul><ul><ul><li>Discounts </li></ul></ul><ul><ul><li>Each time Banks have to negotiate with the partner (not efficient) </li></ul></ul><ul><li>Get instant reward at variety of partners </li></ul><ul><li>Interest-free Installment </li></ul><ul><li>Each partner decides to change the promotion whenever they want </li></ul><ul><li>Very Flexible </li></ul><ul><li>Standard Cards </li></ul><ul><li>Collect Points & Get Your Gift </li></ul><ul><li>High Operational Costs </li></ul><ul><li>Limited options </li></ul><ul><li>Take too long to collect points </li></ul>Gift Catalogues Co-Branded cards with one partner Multi Merchant Co-Branded cards Evolution of Loyalty Tools Around The Globe 1980 - 1990 1990 - 2000 2000 - Future
    3. 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. 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
    5. 5. How does it work? <ul><li>From all transaction in 28 million merchants around the world, cardholders earn 0.5% incentive of total transaction. </li></ul><ul><li>From transactions made at partner merchants, card holders earn different percentages of incentives financed by partners, varying from 1% to 15% of total transaction. </li></ul><ul><li>Cardholders can also earn additional incentives from campaigns or from offers made by bank for cross-sell purposes. </li></ul>Regular Shopping Regular Shopping 0.5% incentive from all transactions at MC merchants around the world 1% to 15% incentive from transactions made at partner merchants.
    6. 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. 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. 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. 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. 10. Возможные стратегии по кросс-скорингу Доходность – Риск – Отклик Churn LOSS BEST Main Retention Cross-sell Wait Up-sell & Cross-sell
    11. 11. How partners are selected? Approaches on creating a partners pool for different segments By transactional analysis and clients usage profile By experts opinion and estimation of needs for every segment <ul><li>Approach characteristics : </li></ul><ul><li>Maximization of coverage and usage </li></ul><ul><li>ROI maximization </li></ul><ul><li>LTV maximization </li></ul><ul><li>New clients get into program quicker </li></ul><ul><li>Need time to analyze all transaction </li></ul><ul><li>More complex to implement </li></ul><ul><li>Approach characteristics : </li></ul><ul><li>Time-to-market – quick implementation </li></ul><ul><li>Lower costs </li></ul><ul><li>Initial return is quicker </li></ul><ul><li>Fragmentary coverage ( real needs will be less covered ) </li></ul><ul><li>Lesser usage and frequency </li></ul>More complex and costly, but more perspective and valuable Fragmentary, but cheap and quick
    12. 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
    13. 13. Forming a list of potential partners <ul><li>Preferences of the clients are similar in some cases (Brand rings are frequently intersected) </li></ul><ul><li>The main goal is to find the brands, that will have maximal value and impact on ROI of the program, and have a high level of penetration into the segment, and coverage of the client’s preferences. </li></ul>
    14. 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. 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
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