Maxim mozgovoy. sberbank. crm

Strategic approach on loyalty and co-branding programs – Sberbank approach June 2010

Get instant reward at the partner
Short term & seasonal Promotions
Free merchandise or service
Discounts
Each time Banks have to negotiate with the partner (not efficient)
Get instant reward at variety of partners
Interest-free Installment
Each partner decides to change the promotion whenever they want
Very Flexible
Standard Cards
Collect Points & Get Your Gift
High Operational Costs
Limited options
Take too long to collect points
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

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

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

How does it work?
From all transaction in 28 million merchants around the world, cardholders earn 0.5% incentive of total transaction.
From transactions made at partner merchants, card holders earn different percentages of incentives financed by partners, varying from 1% to 15% of total transaction.
Cardholders can also earn additional incentives from campaigns or from offers made by bank for cross-sell purposes.
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.

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.

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

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%

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

Возможные стратегии по кросс-скорингу Доходность – Риск – Отклик Churn LOSS BEST Main Retention Cross-sell Wait Up-sell & Cross-sell

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
Approach characteristics :
Maximization of coverage and usage
ROI maximization
LTV maximization
New clients get into program quicker
Need time to analyze all transaction
More complex to implement
Approach characteristics :
Time-to-market – quick implementation
Lower costs
Initial return is quicker
Fragmentary coverage ( real needs will be less covered )
Lesser usage and frequency
More complex and costly, but more perspective and valuable Fragmentary, but cheap and quick

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

Forming a list of potential partners
Preferences of the clients are similar in some cases (Brand rings are frequently intersected)
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.

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 ! !! !! !! ! ! ? ? ?

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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Maxim mozgovoy. sberbank. crm

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