Loyalty programs

Guest Retention & Loyalty Programs

Jeffrey Siebert Corporate Director of Communications & Sales

Definition Loyalty Program(s) Structured marketing efforts that reward and encourage preferred buying behavior which is beneficial to the issuing business entity.

Common Programs
Programs
Plastic Cards
Smart Cards
Thermal Cards
Magnetic Strips
Internet
Radio Frequency Identification (RFID)
Smart Phones

Common Programs
Programs
AAAAhhhhh which to use and what to do?

Research / Insight
According to Jupiter Research more than 75% of consumers have at least one loyalty card
1/3 of shoppers have two or more loyalty cards
U.S. Companies spend billions of dollars per year executing loyalty programs

Results “ But the majority of companies are still struggling to get it right!” “ Are we walking away from revenue by consumers that would use our services anyway?” “ Is this the best use of company resources?”

Results Wall Street Journal, Sept 28, 2008 “ The biggest problem with loyalty programs, we would argue, is that most retailers adopt a one-size-fits-all approach: They use monetary rewards to encourage repeat purchases. But product discounts won’t change buying behavior in the long run in shoppers who value things like personalized service, convenience or shopping pleasure more.

Results Wall Street Journal, Sept 28, 2008 (cont.) “ These types of consumers may change their behavior to access the price promotion, but they likely will revert back to their regular brands or buying habits shortly thereafter, resulting in, at best, a temporary change in sales and market share.”

How to Build Your Program Group customers according to purchase motivations To create customized loyalty programs, companies need to understand what drives various clients to make purchases. To get this information, they can survey shoppers on their purchase motivations, analyze the data customers provide on loyalty-program enrollment forms and review shoppers' transaction histories.

How to Build Your Program Group customers according to purchase motivations Who does this well?

Example

How to Build Your Program Determine if customers perceive a loyalty program's rewards to be valuable. Shoppers will change their buying behavior in response to a reward if they judge the value of that reward to be higher than its cost -- the obligation to make a future purchase or to give out an email address, for example. An important step in designing rewards, then, is to make sure customers perceive them as being valuable.

Example

How to Build Your Program Increase intrinsic rewards; decrease extrinsic ones Intrinsic rewards are those that match up with a consumer's natural purchase motivations; extrinsic rewards are those that sit apart from a person's normal shopping goals.

Example

How to Build Your Program Weigh other factors that may influence the effectiveness of reward types. Reward types can become more or less compelling, depending on the type of product or service being sold. Intangible rewards such as beauty advice and special services are more effective when the product or service being sold is expensive and requires some thought and effort to purchase -- luxury goods, cars, and cosmetics are good examples.

Example

How to Build Your Program Evaluate – Ask the tough questions When everything is unequal, will your customers put the purchase option on your product or brand, in spite of having a loyalty program? Take a hard look and evaluate .

Schlitterbahn Examples
Stay where you play
20% off park tickets
Early entry into the waterpark
Exclusive pools and hot tubs for resort guests

Season pass program
Best Value – Best Discount
First to ride new attractions / events
$300 value in-park discount coupon book

General Guests
Free parking
Bring your own picnics in to the parks
Free tubes & lifejackets
We open at 9:30 am and close at 8:00 pm

Questions? Thank you!!!

Loyalty programs

by Austin AMA on Jul 20, 2010

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Loyalty programs — Presentation Transcript