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  • 1. A sample of whats inThe Loyalty Guide 5 _______________________________ Tesco & Dunnhumby case study Licensed electronic document. Not for resale or unauthorised distribution. Copyright © 2012 Wise Research Ltd
  • 2. Whats in this sampler?This sample is intended simply to show you the level of detail andkind of materials covered in The Loyalty Guide 5.This sample is not made up of complete chapters, and it does notstart at the beginning of a chapter. It is a selected example of thecontents of the full report.To help you see what else is covered in the report, we have alsoincluded the reports complete Executive Summary and Table ofContents at the end of this document.For current pricing and to order your electronic (PDF) edition ofthis report now, visit: This entire document and all of its parts and accompanying materials are copyright 2000-2012 Wise Research Limited.
  • 3. ... the whole of customer loyalty, engagement & profitability Volume 5Written by Peter Clark and Robin Clark of Wise Research Limited,publishers of The Wise Marketer ( Edition PUBLISHERS NOTE ON CURRENCIES AND EXCHANGE RATES: All currency conversions in this report are approximate, and are intended for guidance only. All conversions were based on average exchange rates at the time of writing.COPYRIGHT WARNINGThis entire document is copyright © 2012 Wise Research Limited.The moral rights of the authors of this work have been asserted.This report is the product of extensive research work. It is protected underinternational copyright law. It may not be reproduced, archived, copied,transmitted, or stored, or made available, by any means or in any form withoutlicence and the prior written permission of Wise Research Limited.This publication has been designed to provide authoritative information inregard to the subject matter covered. While every effort has been taken toensure the accuracy of the information in this report, the publisher and authorsaccept no liability for the use or misuse of any information contained herein,regardless of its accuracy. Any forward-looking statements made are strictlyopinion, and should not be relied upon as fact. All company names andtrademarks are acknowledged. The report is sold with the understanding that thepublisher is not engaged in rendering legal, accounting, or other professionaladvice. We are normally willing to give permission for extracts, within reason, tobe quoted from our reports, provided that written permission is obtained inadvance and that both Wise Research Ltd and The Loyalty Guide are fully andclearly credited.You can contact Wise Research Ltd or its publication offices online at: Wise Research The Loyalty Guide The Wise Marketer: Or by e-mail: registered office: 1 Cornhill, Ilminster, Somerset TA19 0AD.UK courier/postal deliveries: 25 Shiremoor Hill, Merriott, Somerset TA16 5PH.UK company registration no. 5002062. UK VAT no. 827 0501 52
  • 4. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 1 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTFrom chapter 20 - Supermarket & Grocery Loyalty20.2 Case studies20.2.1.7 Case study: Tesco & Dunnhumby (Clubcard)Tesco [] launched its Clubcard nationally in 1995. It was the first major supermarket loyaltyprogramme in the UK, so it was a calculated risk. Up until the launch, Sainsburys had led Tesco in termsof UK market share. The month after the launch, Tesco passed Sainsburys, and has been ahead eversince. Tesco calculated that a sales uplift of 1.6% would cover the £10 million cost of launch and the costof issuing cards and reward vouchers. In fact, at first the uplift was more like 4%, settling at well over 2%.Some stores saw double-digit increases in like-for-like sales. So far, Tesco has handed out well over £1billion in Clubcard vouchers.In the book Scoring Points, the circumstances surrounding the inception, launch and later development ofthe Clubcard are discussed frankly and in detail. According to the books authors, the factors that led tothe success of the launch included: speed to market (the only option for competitors was to react); asimple uncomplicated message; trust in the team to act decisively; involvement of front-line staff; carefultesting; confidence; and commitment.A programme with some 16 million members generates a tremendous amount of data - enough tosignificantly slow down any useful analysis. Tesco overcame this by deciding not to try to answer everyquestion about every customer, but to answer some of the biggest questions about most customers.Marketing analysts, Dunnhumby [], who had worked with Tesco on the Clubcardproject since 1994, came up with some innovative ideas that significantly reduced the amount of data thathad to be processed in order to make valid, useful decisions. Some of these are detailed in the bookScoring Points. (In May 2003, the US-based retail grocery chain, Kroger, partnered with Dunnhumby forthe analysis of its customer data. This analysis offers Kroger new insight into its customers needs, andimproves their shopping experience.)Clubcard holders can collect points across the entire Tesco group (1 point for every £1 they spend in-store, on petrol, or online at, and they can also collect points from Tesco Telecoms andTesco Personal Finance as well as Clubcard partners such as E.ON, Avis, and National Tyres, andthrough bonus point coupons and various special offers. Points are collected and sent to customers withtheir quarterly loyalty statements, in the form of Clubcard Vouchers. Customers can redeem theirVouchers in store at face value or they can exchange them for Clubcard Deals Tokens and get up to fourtimes their face value. Clubcard has signed up over 300 Deals partners including Eurotunnel, selectedhotels, magazines and holiday companies.Every quarter (13 weeks) Tesco sends a magazine to each of its Clubcard members. This containscoupons to the value of the reward earned over the three months - these can be used to pay for goods atthe checkout, can be used to buy Air Miles, or can be redeemed at a range of partners too extensive tolist, but including theme parks and restaurants, museums and other attractions, hotels, holidays and travel,motoring organisations, magazines and beauty consultations, sport and leisure, and flights. The magazinealso contains product specific discount vouchers, selected for each customer on the basis of previouspurchases. When the magazine is posted each quarter it is said to account for some 6% of the totalvolume of mail handled by the Royal Mail at that time (see also 2.3.13).Tesco signed up with Air Miles [] in March 2002; previously Sainsburys customers couldredeem their Reward Points for them. At the time of the change, saw a surge of 450% insearches for store maps as customers looked online for their nearest Tesco store, and enquiries abouthome shopping rose by 300%. The Royal Bank of Scotland Group, Tescos partner in the Tesco Personal
  • 5. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 2 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTFinance arm was, at the time, already the biggest originator of Air Miles in the UK through its credit cardbusiness.In September 2002, after a trial in Wales, Tesco rolled out targeted electronic coupons at the checkout forits Clubcard members. At the time, a Tesco spokesman said that these coupons were not intended toreplace the mailings but to supplement them. The coupons are automatically printed by the tills at thetime of purchase. Unlike some similar systems, they are not triggered by the purchase of a specificproduct at the time but by the customers recent purchase history. One hundred different offers -changed every two weeks - are available at any one time. The system selects which of these offers aremost relevant to the customer in real time.In November 2002 Tesco added an "online Clubcard" - its online rewards scheme - to its web site, Tesco had been under pressure from rival supermarket Sainsburys since the launch of theNectar programme in September (of which Sainsburys is a founding partner). Industry analysts,Datamonitor, called the move "clever marketing and deft online touch".Customers earn reward points that are converted into e-coupons and vouchers, which can then beredeemed online. All of the then 10 million existing customers were being encouraged to requestvouchers and log on to the web site to redeem their new points.Essentially, the new e-coupons and vouchers extended the existing Clubcard scheme into the Tesco.comvirtual store, which by then was handling some 85,000 visitors each day.The company made good use of the customer data gleaned from its Clubcard programme, allowing it totarget customers based on their known spending and shopping habits, offering an array of customisedmailshots highlighting different offers and advantages to well-segmented groups of consumers.When the Nectar programme was launched in September 2002, Tesco countered with a short-termprogramme offering its customers the chance to win £1 million. However, the customers first had severalhurdles to overcome. Shoppers were given a game card for every £25 they spent. Each card contained amultiple choice question, with four possible answers. Any Clubcard customer who answered four of thesegame card questions correctly could enter the draw for one of 200 seats for an exclusive filming of aspecial episode of the hit television show, Who Wants To Be a Millionaire?. There, they were given theoption to compete in a fastest finger first contest, the winners of which were invited to answer fifteenquestions for a million pound prize. According to Tesco marketing director, Tim Mason, the multiple-stage game approach was chosen because customers had previously indicated that "they want addedexcitement for their shopping trips as autumn closes in, before the run-up to Christmas." Five othershoppers won one million Air Miles each and another five won one million Clubcard points each.In March 2003, Tesco, bought out the online womens community, iVillage [].Following the sale, iVillage became a wholly-owned subsidiary of Tesco, subject to a 20-year licensingagreement for content and intellectual property, including trademarks and copyrights.The deal followed Tescos launch of the MeTime womens reward category as part of its Clubcard loyaltyprogramme. Tescos MeTime programme is aimed at helping women to pamper themselves by usingClubcard points for luxury treats such as hair styling and make-overs.iVillage is an online community for women, with a variety of information and activities to take part in,including discussion groups, job seeking, health advice, and even a baby name chooser. The onlinecommunity focuses on issues that matter to women, and offers interactive services, expert advice, and asupport network.Other content channels include: diet and fitness, relationships, parenting, pregnancy, health, beauty, foodand drink, money, news and entertainment, work and careers, astrology, computers and the internet,shopping, games, and motoring.
  • 6. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 3 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTUnder the terms of the agreement, the iVillage online community will continue to operate under theiVillage UK name, and will continue to provide its 1.2 million visitors each month with information,articles, and offerings.The expansion of the relationship between the two companies also gives Tesco the ability to use iVillageto cross-market and interact with its other communication channels, including the internetservice provider (ISP) as well as its bricks-and-mortar stores.Although iVillage continues to operate under its own branding, the online entity is expected to receivesignificant marketing and promotional support from Tesco to help drive qualified traffic, and to promoteitself within the UK. The license agreement is structured so that the sites existing operator, iVillage UKLtd, receives either a set monthly fee or a percentage of gross revenue, whichever is greater.In March 2005, iVillage Inc. The Internet For Women, a womens media company and womens communityonline, announced that, through a subsidiary, the company has signed a definitive agreement to acquirethe website and certain related assets from a subsidiary of Tesco Stores Limited. iVillageexpected to close the deal in May.In September, 2003, Tesco launched its new Tesco Mobile telephone service offering, beginning with arange of pay as you go handsets. Users earn two Tesco Clubcard points for each £2.00 spent on airtimetop-ups in-store, or one point for each £2.00 when topping up elsewhere.In November 2004, retail technology supplier Conchango observed that creating value for customers inorder to earn their lifetime loyalty is a strategic vision for Tesco, and two important elements of thatvision are customer-centricity and reducing queue times (both at the checkout and at in-store foodcounters). So, when the time came to upgrade the ageing weighing scale infrastructure, Tescos serviceproductivity team recognised the potential benefit of introducing a more intelligent weighing scaleapplication that would improve the customer experience at in-store food counters like the delicatessen,butcher, fish counter, bakery and hot chicken counter.Using Microsofts .NET technology, Tesco and Conchango developed a counter scale application thatnot only makes shopping easier, but also automates routines at the point of service, simplifies pricingintegrity, centralises system support and provides real-time purchase information to other systems andtimely summarised data to headquarters.Within twelve weeks, Tesco, Conchango and Herbert Retail (the scale supplier) were preparing the systemfor an in-store trial. This successful trial led to an extended trial in 17 stores. The system was thendeployed to all UK stores. As a result, transaction speeds increased by 42% and staff are able to answer awide range of enquiries with greater confidence, including an items country of origin, whether it isorganic or not, and provide suggestions for cooking methods and recipes.In August 2004, the signing of an exclusive 3-year agreement ago saw car rental company Avis Europe[] establish itself as a Tesco Clubcard and Clubcard Deals partner. Clubcardcardholders earned points when renting a car with Avis and could pay for their Avis car rental byredeeming Clubcard vouchers at four times their face value.In February 2005, Tesco Ireland partnered with the points-based travel and leisure reward programmeBuy and Fly! to offer flights, travel and leisure rewards to its Clubcard loyalty programme members. Thepartnership extended only to Clubcard members in the Republic of Ireland, who could choose to havetheir Tesco Clubcard points automatically converted into Buy and Fly! points. These points were thenredeemable for a range of travel and leisure rewards including flights with eighteen airlines around theworld.At the same time, Tesco UK began its involvement with self-checkout technology, freeing up extra stafftime and improving customer satisfaction. Tesco installed 285 NCR [] FastLane self-servicecheckout units, which enable customers to scan, bag and pay for their purchases themselves, in 96 TescoMetro (High Street stores), Superstores and Extra stores (hypermarkets) in England, Wales, Scotland andNorthern Ireland. Customers could scan, bag and pay for their purchases themselves. According to
  • 7. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 4 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTTesco, shoppers of all ages took to the technology, scanning all sorts of goods ranging from food andclothes to pharmaceuticals and electronics. Self-checkout also enabled Tesco to free up more staff time tohelp other areas of the store or open more checkouts. According to NCR, Tescos experience with self-checkout was backed by research from IDC that showed that consumers see real value in the technology,and that UK consumers cited shorter queues (68%), faster check out times (68%), and having a choice ofhow to check out (66%) as the main benefits of self-checkout.By May 2005, an analysis of the UK supermarkets market share from TNS Superpanel [], revealed that a recovery in Sainsburys market was building (with its share lifting from 15.5%a year before to 15.9%, representing real turnover growth of 5%) - but the clear leader in the field was stillTesco, with an ever-widening lead. Indeed, Tesco had continued its recent run of double-digit turnovergrowth to post a share of 29.8% (up from 27.5% a year before). All told, the UK supermarket sharefigures from 2004 to 2005 showed that Tesco continued to build on its impressive market lead while itsclosest rivals, Asda and Sainsburys, continue to fight for second place. Against this competitivebackground, TNS said that Asda had suffered a small loss of share (from 16.6% to 16.5%), underliningthe fact that the EDLP supermarkets growth had slowed from the levels seen in 2004.But by the end of June 2005, Tesco reached its anticipated market share breakthrough, passing the 30%mark in the UK market, according to the June 2005 figures from TNS Superpanel. It had actually reachedan all-time UK record market share of 30.3% (up from 27.9% for the same period one year before). Thisrepresented annual growth of some 11%, continuing the supermarkets consistent double-digit growthnoted by TNS throughout 2005.According to the figures for the 12 weeks ending 19th June 2005, Sainsbury still held on to its share of15.9% (up from 15.6% one year before). Asda, which is part of the Wal-Mart family, remained flat with ashare of 16.4%, almost unchanged from the same time the year before. The combined Morrisons-Safewayshare, however, slipped to 11.7%, marking the groups first time below 12%. Somerfield continued itsstrong run with its share having increased from 3.5% one year before to 4.0% in June 2005. However thisshare gain is balanced by the loss at Kwik Save so that the combined Somerfield/Kwik Save share actuallyremained relatively unchanged. Waitrose enjoyed another period of strong year-on-year growth (up 20%),holding on to the share gains it made earlier in 2005.In August 2005, in the UK and Ireland, Tesco Diets [] implemented e-mail marketingtechnology from e-marketing technology firm e-Dialog [] to deliver customisedmessages to its community of subscribers. The e-Dialog Precision Central software platform helps TescoDiets to provide sound, relevant, and helpful advice to its members about maintaining a healthy weight.Among the platforms features that Tesco Diets is using are: custom publishing, live proofing, conversiontracking, management of unsubscribe templates, selection of audience lists from multiple sources, mailmetering management, spam reporting, and reporting and analytics.In February 2006, Tesco announced its intention to enter the US market through the development of anew convenience format, beginning with stores on the West Coast in 2007. The new C-store format wasdesigned for the American market, following extensive consumer research. The format was also modelledon Tescos existing Express concept which already operates in five countries (including the UK) with over800 stores serving around 8 million customers per week. Through the US operation, Tesco hoped tobuild up its position in the worlds largest markets. The expansion will bring the global population of thecompanys combined markets to some 2.1 billion people.The development of the business will be through organic growth, with initial planned capital expenditureof up to £250 million per year funded from existing resources. Break-even was expected by the end of thesecond full year of operation. Tesco then traded in 12 countries outside the UK (mainly in Asia andCentral Europe), and more than half of the companys selling space was outside the UK. But theannouncement of a US-based initiative represented a strategic move into a highly developed market,which followed the companys entry into the emerging Chinese market in July 2004.At the same time, Tesco announced that up to 49,000 of its UK staff would share in a multi-millionpound pay-out as two of its Save As You Earn (SAYE) share schemes matured. Under the SAYE scheme,
  • 8. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 5 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTstaff can set aside a fixed sum between £5 and £50 from their salary every month for a three or five yearperiod. When the scheme matures they have the option to buy Tesco shares at a price set when theyjoined the scheme. Top savers, including checkout assistants, internet shopping delivery drivers, and storemanagers, stood to gain some £5,300 (a 59% return on their initial investment in company shares).In June 2006, the Lean Enterprise Institute [] reported that one of the many keys to the successof Tescos Clubcard loyalty programme is the retailers lean provision system that efficiently deliversexactly what customers really want, when they want it, and where they want it. According to JamesWomack, chairman of the non-profit Lean Enterprise Institute, the retailers lean provision system allowsit to respond rapidly to the wealth of data collected from its 12 million+ Clubcard users, givingappropriate discounts to loyal (frequent) shoppers.Tescos lean provision system combines point-of-sale data, cross-dock distribution centres, and frequentdeliveries to many stores along milk-runs to stock the right items in a range of retail formats, includingTesco Express convenience stores, Tesco Metro (small supermarkets), traditional Tesco supermarkets,Tesco Extra stores (big box superstores), and the online shop. The range of retail formats thecompany has established, combined with detailed knowledge about specific consumers and the rapidreplenishment of each store, allows Tesco to offer households convenient variety at a low total cost. Thestrategy has worked brilliantly, allowing Tesco to establish the lowest cost position among British retailers(including the Wal-Mart owned Asda chain) while posting progressively higher margins and steadilyincreasing its share in every format.In August 2006, Tesco offered Clubcard members special Green loyalty points for not using carrier bags,and bringing their own with them to the store instead. Consumers earn points for each carrier bag theybring in and reuse at the checkout, whether they are Tesco bags or those of competing supermarkets.Checkout staff ask customers how many bags they are reusing and agree the number of points to beawarded. Larger re-usable trolley bags may earn more than one point. Staff have received training but alsouse their discretion when awarding points.According to Tesco CEO, Sir Terry Leahy, "We had a team looking at carrier bags, trialling different ideasin our stores and talking to customers about what we could do to encourage them to use fewer bags andto recycle the ones they do use." The aim of the programme, according to Tesco, was to rewardcustomers for using fewer new bags. The company said at the time that it aimed to cut the number ofnew bags given out by 25% over the following two years - a potential saving of 1 billion bags per year.Tesco also introduced bigger, thicker bags in many of its stores so that customers can fit their shoppinginto fewer bags. All Tesco carrier bags have been bio-degradable since October 2006. Another smartmove for Tesco Clubcard members is that the company has issued coupons entitling members to a freereusable Bag for Life, making it easier to reuse and reduce bag consumption. All of Tescos staff alsoreceived personal letters introducing them to the scheme, providing them with coupons for Bags for Life.At the same time, ComScore Networks [] reported that Tesco had become by far themost popular online grocery shopping web site in the UK, capturing some 66% of all online groceryorders nationwide. From January to July 2006, Tesco gathered an average of 30,000 orders per day,representing total online sales of some £2.5 million per day. Tesco.coms closest online competitor wasAsda, which captured 16% of all orders, followed by Sainsburys with 14%. Despite its third-placestanding in terms of order volume, Sainsburys customers actually spent the most when they ordered,averaging almost £90 compared to £80 for both Tesco and Asda. In addition, Asda and Sainsburyscustomers typically ordered more items, both averaging 69 units per order, compared to Tescos 58.ComScore also tracked the delivery costs charged by each, and found that Sainsburys online customersincurred the lowest delivery charges during the period (at just over £3 per delivery on average). Tescosonline customers paid over £4 per delivery, and Asdas online customers paid the most at nearly £5.50.In October 2006, Tesco launched a non-food direct retail operation called Tesco Direct, while at the sametime bringing order fulfilment in-house to improve customer service and supply chain control. TescoDirect is the retail web site that offers UK consumers a choice of over 8,000 non-food lines. Inconjunction with the existing food retail service, Tesco Direct means that customers can notonly do grocery shopping online but also buy a range of non-food goods such as furniture, kitchenware,gifts, toys and sporting goods. While the delivery of some lines was previously outsourced to logistics
  • 9. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 6 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTpartners, Tesco has brought all fulfilment in-house with the aim of providing an improved service for itscustomers.In February 2007, Tesco announced its plans for a new chain of supermarkets in the US market. Tescosaid that its new chain of grocery stores in the US would be called Fresh & Easy Neighborhood Market.Tesco veteran marketer Tim Mason (who joined the company in 1982) was named as the US operationsCEO. The company initially focused on the Greater Phoenix area, Las Vegas, Los Angeles and SanDiego, with the first stores opening in late 2007. Tesco chose the Greater Phoenix area for its highpopulation growth and the strong potential of its expanding market. Each of the stores are roughly10,000 square feet in size, intentionally smaller than the usual supermarket in order to give customers afaster, easier shopping experience.The Fresh & Easy Neighborhood Market format was a result of extensive customer research in local USmarkets combined with the learning from Tescos existing Express format which it operates in more than1,000 stores in seven countries, serving approximately 10 million customers every week. At the time, TimMason said that he thought that the Clubcard programme would follow Tesco around the world, but thatit was really a question of timing.At the same time, a new partnership between the UKs Open University (OU) and Tesco allowed Clubcardmembers to pay for all or part of their OU courses using Clubcard vouchers. The OU was the firstuniversity to add the Clubcard scheme to its marketing activities. Members can swap vouchers forClubcard Deals and receive up to four times their value, so for every £10 worth of Clubcard vouchersshoppers can generate up to £40 toward the OU course of their choice.And, following its earlier Green promotion in which customers were rewarded for reusing plastic carrierbags, Clubcard members were again rewarded (with double Clubcard points) when they bought productsfrom the supermarket chains popular green and organic ranges. Those purchasing products such asorganic fruit and vegetables, energy-efficient light bulbs, and environment-friendly brands earned doublethe number of Clubcard points for an eight-week period from 15th February 2007. According to Tescosmarketing director, Ian Crook, the previous bag reuse scheme had already helped save some 300 millioncarrier bags by changing consumer behaviour.At the time, the bag re-use scheme had put Tesco well on track to meet its goal of cutting carrier bagsissued by 25% by 2008, and that some 4 million customers had already collected Green Clubcard pointsthrough the programme.Members can also earn Green Clubcard points for recycling their old mobile phone handsets and inkjetprinter cartridges. Customers collect 500 points or £5 to charity for each working phone recycled, and100 points or £1 to charity for non-working phones. For recycled inkjet printer cartridges, customersreceive 100 Clubcard Points or £1 to charity. Freepost envelopes are available in store for this.In March 2007, TNS Global [] identified Tesco as the UKs favourite retailer. Some15,000 TNS Worldpanel consumer panellists were asked to nominate their favourite retailer in each keyretail sector as well as their overall favourite. A significant 16.7% of respondents voted for Tesco as theiroverall favourite retailer, with Asda and Marks & Spencer (M&S) coming second and third respectively.At the same time, Tesco Direct announced that it would be installing up to 200 desks in stores across thecountry during 2007, allowing customers to order and collect non-food products from a store of theirchoice. The move followed positive feedback from customers who had used the desks at the handful ofpilot stores since the in-store service launched in August 2006. Shoppers said that they liked theconvenience of being able to collect or order products at the same time as they do their weekly shopping.According to a report in Retail Week magazine, Tesco does indeed plan to launch the Clubcard in everycountry where the company operates. Being such a powerful tool for gathering customer insight,Clubcard has already been introduced to the Republic of Ireland and South Korea. But other countriesare expected to follow soon, including the US.
  • 10. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 7 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTIn August 2007, marketing consultancy Dunnhumby announced the relaunch of Tesco TV, the in-storemedia system used in Tesco supermarkets, under the new name Tesco Screens. First installed in 2004,the network consists of 5,000 LCD and plasma screens spread throughout 100 Tesco Superstores andTesco Extra outlets. Advertising spots can be designed to fit within the stores own in-store promotionalformat or, for more product- and company-specific campaigns, brands can chose a new brand stingformat that uses Flash animations for eye-catching messages around the store. Tesco TV provedsuccessful at driving brand sales, with average sales uplift on new and promo campaigns of 5% to 8%,rising to 18% for seasonal activity. The new brand stings have already achieved sales increases of up to25%.In September 2007, Epsilon, the loyalty marketing arm of Alliance Data Systems [],signed a multi-year agreement to provide permission-based email marketing solutions and services, an online business of Tesco. deployed Epsilons proprietary e-mailcommunications and campaign management platform, and Epsilon is providing additional professionalservices to help develop more highly targeted e-mail campaigns to acquire and retaincustomers and generate increased sales through up-selling and cross-selling.In November 2007, the first of the long-awaited Fresh & Easy Neighborhood Market stores opened its doorsin the US. In addition to offering a range of national brand name products at low prices, Fresh & Easyhas gone to great lengths to ensure all its own brand products contain no added trans-fats, artificialcolours or flavours, and only use preservatives where absolutely necessary. The stores also offer a rangeof prepared meals (made fresh in the companys own kitchens at Riverside, California). Food is sourcedlocally wherever possible and deliveries are made daily to each store to ensure all products are as fresh aspossible. A team of researchers spent time in the homes of US consumers looking at shopping andcooking patterns. They discovered shoppers wanted fresh, wholesome foods that were affordable andavailable in their local area.According to US CEO, Tim Mason, "We literally went into their kitchens and looked in theirrefrigerators. Based on our research, we are confident our stores will be a hit in every neighbourhood weopen in." Around 50 Fresh & Easy Neighborhood Market stores were expected to be opened byFebruary 2008 in all kinds of neighbourhoods, including those traditionally underserved by modern foodstores. The first six stores in California were closely followed by five in and around Las Vegas, Nevada.San Diego and Phoenix were also included in the store openings schedule by the end of 2007.As part of Fresh & Easys promise to be a good neighbour and a responsible company, it intends to keepall stores and car parks clean and tidy, and deliveries are scheduled to minimise noise and disruption.Each store will also help support local charities and projects. In addition, the company has committed tobuild LEED (Leadership in Energy and Environmental Design) certified buildings, recycle or reuse allshipping and display materials and use environmentally friendly trailers to transport food.Including the US, Tesco then operated stores in 12 markets outside the UK. Tescos portfolio spans 13countries (11 in Europe and Asia) making it the third largest retailer in the world. More than half thecompanys retailing space is outside the UK, and Tesco has been cited as the market leader within theUK, Ireland, Poland, Hungary, Slovakia and Thailand. Tesco operates over 3,400 stores worldwide,including over 670 in Europe (in the Czech Republic, Ireland, Hungary, Poland, Slovakia and Turkey) andover 700 in Asia (in China, Malaysia, Korea, Japan, and Thailand).In January 2008, Tesco decided to expand its price checking programme to include 2,000 lines sold atdiscount outlets such as Aldi and Lidl, and to offer more than 400 food and non-food items at half pricethroughout the month of January. Tesco reports that it is now focusing on the growing discount retailsector in a bid to ensure that customers do not have to compromise on quality or service to enjoy thelowest prices.In June 2008, Tesco announced a voucher collection scheme that offers schools and clubs a range of freeproducts. By merging its two existing voucher schemes (Computers for Schools and Sport for Schoolsand Clubs) into one catalogue, the supermarket is offering schools and clubs a wider choice as well as thefreedom to decide where their priorities lie. To give schools and clubs longer to save up for big ticketitems, Tesco offered the vouchers in-store for an extended period of 15 weeks. All equipment was
  • 11. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 8 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTdelivered during the autumn term, getting the school year off to a good start. Computers for Schools waslaunched in 1992, and the supermarket gave 13,000 items to UK schools in that year alone. Sport forSchools and Clubs followed in 2005. By the end of 2009, Tesco had given away more than 3 million itemsof computing and sports equipment, with a value of over £150 million. Nearly 40,000 schools and clubstake part in these annual voucher collection schemes.In April 2009, Tesco announced the £150 million relaunch of the Clubcard programme in a bid tomaintain its leading market share. According to a press comment by chief executive Sir Terry Leahy, whileprice and value matter more to many customers in hard times, the company aimed to improve all aspectsof the shopping trip including service and product availability. Tesco Clubcard holders are now able todouble the value of their vouchers against a wide range of popular products in Tesco stores and online.Until then, customers could spend their Clubcard vouchers at face value in-store and online, or increasethe value by up to four times by trading them for a range of deals with Tesco Clubcard partners (rangingfrom restaurants and theme parks to Air Miles and driving lessons). New in-store features includeClubcard desks where customers can instantly exchange their vouchers for double the value inparticipating categories. The double-up vouchers must be spent in full in a single transaction in thechosen department, and they cant be exchanged in Tesco Express stores. Vouchers exchanged online aresent by post within five working days. Categories participating in the double up promotion include: · Clothing - including footwear, nightwear, underwear, accessories, and jewellery purchased in- store; · Baby and toddler - including nappies, wipes, clothing, nursery, feeding accessories, toys, food and baby toiletries, but excluding infant formula milk; · Toys - including all childrens toys, outdoor toys and childrens bikes, but excluding games consoles and software; · Cosmetics, skincare and fragrance - including skincare, sun cream, bath care, make-up and fragrances, but excluding all other toiletries; · Tesco Mobile network top ups - excluding other network top-ups; · Tesco instant travel and breakdown insurance; · Wine and Champagne - including wine, Champagne, and fortified wines (for a limited period only); · Flowers, plants and gardening - including fresh cut flowers, plants, gardening accessories, garden furniture and barbecue equipment.In May 2009, Tesco urged its customers to hunt through their wallets, bookshelves and kitchen drawersto dig out forgotten Clubcard vouchers because they were collectively missing out on £40 million everyyear. Each quarterly mailing provides vouchers worth approximately £100 million, and the companysdata showed that around 10% of this is never redeemed.In October 2009, Clubcard holders were offered double Clubcard points both in-store and online. Thisfollowed the successful Double Up promotion, which doubled the reward for customers on selectedcategories and which attracted almost half a million new Clubcard members in three months. In the sameperiod, more than 1.5 million customers doubled up their vouchers, with the most popular categoriesbeing clothing and wine.By January 2010, sales were increasing and the companys overseas businesses also saw continued growthover the Christmas and New Year period. Like-for-like sales in Asia, Europe and the US also continuedthe improving trend seen in Q3 2009. In the US, Fresh & Easy had a stronger Christmas and New Yearperiod in 2009 than in 2008, with a total sales growth of 35%. As a result of Double Clubcard Points andthe additional Clubcard voucher mailing in December, over the Christmas and New Year periodcustomers redeemed £34 million more Clubcard vouchers than in the same period in 2008.The statistics of the Clubcard programme are impressive, with 16 million members (at the end of 2009),and some £100 million being handed back to customers in vouchers every three months when around 9million different versions of the Clubcard quarterly statement are mailed out. Amazingly, 95% of the
  • 12. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 9 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTvouchers issued are actually redeemed. Similarly, 35% of coupons issued by Tesco are redeemed, and10,000 customers per week take the trouble to advise Tesco that they are moving house.Since its launch in 1995, Clubcard has returned approximately £3 billion pounds to loyal customers. Sisterschemes operate in several of Tescos markets outside Britain. The programme operates as Familycard inKorea (3.8 million members), Membercard in China (3+ million), and Clubcard/Biz Clubcard in Malaysia(1+ million). Tesco also has trial schemes operating in Thailand and Turkey. The schemes differ instructure and benefits from market to market. For example, the Korean scheme includes opportunitiesfor customers to collect points when they shop at the retail tenants of malls owned by Tesco, as well as aKids Club and Baby Club operated under the programme. In Malaysia, Tesco recently launched the BizClubcard to cater for the needs of the small business customer. Biz Clubcard holders enjoy additionalservices such as special counters for bulk purchase, pay & reserve and phone/fax ordering facilities. Theyare served by a special team in every Tesco Extra store in the country.In February 2010, Tesco celebrated the 15th birthday of Clubcard with over £120 million worth ofrewards sent out to more than 14 million customers. It also announced that it would continue to givedouble points instore and online. More than one million new customers had signed up to Clubcard sinceits relaunch the previous year. Tesco had recently launched an iPhone app that turns the phone into anelectronic Clubcard. As well as the vouchers, the mailing sent out also included a range of special birthdayoffers including: cut price deals at Hilton hotels; free entry into theme parks and other Merlin attractions;half price on popular magazine subscriptions; and hundreds of pounds off Virgin Holidays. And in adraw, five Clubcard customers became ‘Clubcard millionaires worth £10,000 in shopping or up to£40,000 if used for other rewards from holidays to restaurants.At the time, Clubcard had more than 400 partners. In 2009, Tesco issued vouchers worth £529 million tocustomers. To ensure that customers receive relevant rewards, there were 9 million variations of theClubcard statement. No three customers got the same statement. At the time, Tesco had national loyaltycard schemes based on Clubcard in Ireland, Poland, Malaysia, South Korea and China and pilot schemesin Slovakia, Thailand and Turkey.In early 2010, Tesco Mobile launched the iPhone with what it claimed to be the shortest and cheapesttariffs in the market. Customers could choose Pay as you go or Pay monthly with a £20 a month 12month contract or a £60 a month 24 month contract with a free iPhone. Tesco Mobile iPhone customersalso benefited from double Clubcard points on handset purchase and triple Clubcard points on top ups orwith their monthly bill. Three iPhone apps have been launched by Tesco: Tesco Finder uses GPS to helpcustomers find their nearest Tesco and can provide the exact aisle and shelf location of any product in agiven store. Tesco Wine Finder uses advanced technology to recognise the labels on bottles of wine.Customers can take a photo of a bottle, and if Tesco stock it, they will be provided with tasting notes andthe opportunity to buy it from Tesco online. The Clubcard App turns an iPhone into a Clubcard. Allmembers do is open the app, type in their Clubcard number, and the app generates their Clubcardsbarcode on the phone. This can then be scanned at the checkout.In September 2010, Just Food [ ] reported that Tesco was about to launch Clubcard inthe Czech Republic and expected to enrol some 1m households in the first year. In Poland and Slovakia,the Clubcard was launched the previous autumn and had 1.5m and 850,000 cardholders, respectively.In November 2010, Tesco announced a "double the value of your Clubcard vouchers", if they were spenton a range of non-food items in its supermarkets. The closing date for the exchange of vouchers into BigClubcard Vouchers was December 5th. Tesco expected that some £50 million in Clubcard voucherswould be doubled by shoppers into £100 million in value. Every £5 in Clubcard vouchers could beexchanged for a £10 rewards token to spend on toys; clothing; baby and toddler; opticians; selectedelectrical goods, beauty and fragrance; flowers and plants. Every £10 in Clubcard vouchers could beexchanged for a £20 rewards token to spend on: artificial Christmas trees and Christmas lights; Finestwine and Finest Champagne; beds, bedroom furniture and bedding; DIY; computers; phones andaccessories.However, in December 2010, This Is Money [] reported that thousands of peoplefaced long queues on the final day for conversion of Clubcard vouchers and both the Tesco website and
  • 13. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 10 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTthe telephone call centre were clogged. Tesco later said that it was "doing everything we can at ourcustomer service centres to help those customers affected."Also in December 2010, Tesco Direct announced the launch of its new mobile website, designed tofacilitate easy shopping for non-food and household items, directly from mobile phones. This launch wasthe first step in Tescos strategy to expand and develop mobile websites for core Tesco sites, with othersset to follow. It followed closely on the heels of the Tescos grocery app launch, featuring barcodescanning for iPhone - the first ever by a UK supermarket.Using the new site, Tesco Direct customers can search and buy everything from televisions to tables totoys using any smartphone. The initiative forms part of a wider commitment to make Tesco Directavailable to everyone, anywhere, at anytime - whether that be through the Tesco Direct catalogue, in-store, online, or by phone. Traffic to the Tesco Direct website via mobile telephones has grown steadily,with a 300% growth in mobile visitors between 2009 and 2010. At that stage, over half a million visitors amonth were using their mobile phones to search and shop on the website.In April 2011, according to an article in Computer Weekly [] Sir Terry Leahy tolddelegates at Teradatas user conference that collecting, analysing and acting on the insights revealed bycustomer behaviour, both at the till and online, allowed Tesco to find the truth. He said that customerswere the best guide. "They have no axe to grind. You have to follow the customers, but learn from thecompetition, preferably before they do." According to Leahy, businesses change slowly, but customerschange quickly. He said a better understanding of customer data helped Tesco to improve theproductivity of its promotional budget tenfold, and its budget for retaining wavering customers three-fold.In April 2011, online travel retailer,, began accepting Tesco Clubcard points, withthe result that households could simultaneously receive Clubcard discounts on their train tickets, and earnloyalty points from to put toward future travel. A return journey by train toLondon from Birmingham for a family of four could cost up to £203.50 if booked on the day of travel.But if booked in advance through for an advance fare, the cost could be 93% less.In May 2011, in the UK, power and gas company E.ON and Tesco began piloting an initiative that allowsE.ON customers to use Tesco Clubcard vouchers toward paying their energy bills. To reward customersfor being with E.ON and Tesco, 50% is added to the face value of any Tesco Clubcard vouchers used.(For every £10 worth of Clubcard vouchers exchanged, £15 is deducted from the customers energy bill).This follows a 13-year partnership between E.ON and Tesco Clubcard that already allowed eligible E.ONcustomers to earn Tesco Clubcard points for money spent on energy. The smallest amount redeemable is£5 worth of Clubcard vouchers which equates to £7.50 off an E.ON energy bill. The trial scheme was torun until 5 August.In June 2011, Tesco Clubcards web site began allowing members to exchange their Clubcard vouchersfor limited-time offers or limited-availability goods for up to three times the face-value. Tesco workedwith multi-channel firm IVIS Group, which built and implemented the technology running the new flashsales promotions, through which a simple count-down shows customers how long an offer has to run, orhow many products there are left to claim. Customers can see stock levels counting down in real-time asthe products are being sold. This helps to create a me too effect, with others rushing to take advantageof the special deals. At the time, Clubcard had some 32 million active Clubcard holders globally in ninemarkets, with over 16 million of those being in the UK itself. It has more than 600 reward partnersoffering deals on a range of days out, experiences and other essentials.Also in June 2011, the UKs The Financial Times [] reported that Tesco was to trial a loyaltycard called the Friends of Fresh & Easy card, based on the UKs Clubcard, at its 176 US Fresh & Easystores. According to Fresh & Easys CEO, Tim Mason, the card could replace the coupons that Fresh &Easy has been using to help drive sales. It will be able to personalise offers and distribute them cheaplyvia e-mail.In August 2011, Malaysian newspaper, The Star Online [] reported that Tescowas launching Clubcard in Malaysia. Dunnhumby Malaysia general manager, Michael Hawkins, says that
  • 14. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 11 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTthe average shopper spends about RM80 on a wide range of products on every visit - but there is nosuch thing as an average customer. All customers are unique in their own buying patterns, and Tescosmost loyal customers constitute about 6% of its local customer base but represent nearly 30-35% of itstotal sales combined. He says that one loyal customer is equal to 12 newly acquired customers. TescoMalaysia sends about a million cash vouchers and product coupons to its two million-strong membershipbase, of which 455,000 different unique combinations of coupons are used, with 55% of the customersgetting a completely unique set of rewards.In October 2011, following a successful trial of the Friends of Fresh & Easy card in the US, Tescodecided to roll it out nationwide. Membership of the pre-existing Friends of Fresh & Easy emailprogramme had more than doubled soon after the card was introduced. Friends of Fresh & Easy is adigital points-based programme through which customers can earn 1 point for every US$1 they spendwith Fresh & Easy. Members (Friends) can then exchange their points for cash-back rewards, and theyalso receive personalised bi-weekly emails containing targeted bonus point coupons and real-time updateson points earned so far.In January 2012, Tesco launched its online grocery shopping service for customers in Prague, the first inits Central European business. The service offers Czech customers over 20,000 lines of fresh and frozenfood and groceries, as well as non-food items such as toys, stationery and accessories. The launchfollowed a successful trial with customers and staff in November and is part of Tesco Group strategy tobe an outstanding international retailer in-store and online. Tesco had entered the Czech Republic in 1996through the purchase of K-Mart stores, and operates some 210 stores there. Case study: DunnhumbyDunnhumbys [] role in Tescos success is significant, as it carries out the dataprocessing and analysis for the entire group. In April 2006, Dunnhumby expanded its operations inIreland with the opening of a new office in central Dublin, aimed at better serving the Irish market.Dunnhumby has been working with a number of FMCG brands such as Colgate Palmolive, Unilever,P&G, Masterfoods and Coca Cola to help develop their brands in the Irish market. This work hasincluded customer insight and marketing programmes (including collaborative marketing with Tesco).The Dublin office is expected to expand to house thirty staff within two years. The Irish office will be ledby Carla Brooks (commercial director), who was initially based at Dunnhumbys head office in London.In August 2006, Dunnhumby announced that it was also taking responsibility for Tesco TV. At the sametime, Tesco and JC Decaux (which previously managed Tesco TV) said they were in full agreement overthe future of the in-store channel, and JC Decauxs existing ten-year partnership with Tesco remainsunaffected. Dunnhumby said it would provide information to advertisers about the effectiveness of in-store TV through detailed analysis of customer purchasing behaviour, with the ultimate aim of enhancingthe customer experience and using that information to help drive brand awareness. Tesco believes that itsin-store TV channel is a good way for brand owners to reach and influence shoppers at the point ofdecision, and that the partnership with Dunnhumby would allow the channel to "shift to a new level" aspart of its overall media offering.In June 2007, Dunnhumby USA [] established a new office in Atlanta, Georgia, toserve its retail and manufacturing clients in the region, and plans to further expand its client base there.Within weeks, a staff of 10 were based there and, by late summer, this grew into a team of 25 and officespace more than doubled. A number of employees relocated from the companys Cincinnati office toAtlanta, with remaining staff for the new office being newly recruited. In addition to the new hires for theAtlanta office, Dunnhumby USA planned to add 35 more staff at its Cincinnati headquarters during 2007,bringing the total there to 215. The company employs more than 700 people worldwide in nine countries.Dunnhumby USAs Atlanta and Southeast-based clients include The Home Depot, The Kroger Companyand Coca Cola.In April 2008, Tesco and Dunnhumby extended their customer insight and analysis to almost all of thecountries in which Tesco operates, including (in some areas) the Clubcard programmes data. Analystsfrom Dunnhumby now work locally with Tesco in South Korea, China, Turkey, Malaysia, Thailand,Slovakia, the Czech Republic, Poland and Hungary. Using data that customers voluntarily share with
  • 15. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 12 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTTesco about their shopping habits, or anonymous data gathered at the point of sale, Dunnhumbyprovides Tesco with insights to help it continue offering optimum product ranges, prices and services forlocal markets. Who is Dunnhumby?Editors note: This case study of Dunnhumbys development, operations and involvement with Tesco was specially preparedfor The Loyalty Guide by Dunnhumby. The authors of this report thank the team for providing so much insight.Dunnhumby is the global loyalty expert behind the Tesco Clubcard. Dunnhumby is now based in 24countries around the world impacting over 350 million customers worldwide. If you wondered where thename came from the company was started by Edwina Dunn and Clive Humby. We started working withTesco in 1995 just after the Clubcard was launched.When Clive and Edwina presented the first results to the Tesco board, the then chairman Sir (now Lord)Ian MacLaurin remarked that we had found out more about Tesco customers in 3 months than he haddiscovered in 30 years. Then we recognised how the data would be useful to suppliers and we partneredwith companies like P&G and Nestle.We then took our model to other international retailers like Kroger in the USA and Casino in France.Now as Tesco grows internationally we follow them everywhere they go, weve just announced that wewill support the Tesco Fresh & Easy business in America.Dunnhumby partners with several other leading retailers outside of the UK - including Kroger in theUSA, Casino in France and Brazil and Metro in Canada. Dunnhumby supports Tesco in every one of itsinternational markets and works with global manufacturers like Coca-Cola, Heinz, P&G, Unilever andKelloggs, using insight from the retail environment to better understand customer loyalty towards brands.It is, however, the work with Tesco that Dunnhumby is most famous for and this case study will explorethis special relationship a bit further. About TescoTesco is one of the worlds largest retailers with operations in 14 countries, employing over 492,000people and serving millions of customers every week. Since the company first used the trading name ofTesco, in the mid 1920s, the group has expanded into different markets, different formats and differentsectors. Jack Cohen opened the first Tesco store in 1929 in Burnt Oak North London. He was a retailinnovator, introducing ideas of central headquarters and distribution and own label products - the firstwas Tesco tea. Tesco floated on the Stock Exchange in 1947 and now has 5,380 stores worldwide, 2,715are in the UK.Back in Jacks day the shopping experience was a very personal one. No doubt he knew his regularcustomers by name, what they purchased and the preferences of their children and grandchildren. Thecustomer might try something new on Jacks recommendation, Jack might give them a discount on theirregular items.Cultivating this personal, intimate engagement with customers was something a good business would do.As supermarket chains have grown you could argue that this personalisation of the shopping experiencehas disappeared but actually this is where data can help. By starting with the data, large retailers andbrands are now able to look into their customers shopping baskets and understand what drives theirbehaviour.Data-driven insights are shifting how businesses see their future and therefore, how they understand andcommunicate with their customers. Knowing how, when and where to communicate with customers anddelivering a personalised experience is now a priority. To put it simply, smart businesses, empowered withgranular sophistication, are working their way back to the customer relationship of the corner store.
  • 16. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 13 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT20. About Tesco ClubcardTesco has been working with Dunnhumby since the launch of Clubcard in 1995. The two companieshave been collaborating to put the customer at the heart of the business enabling Tesco to create a strongbrand identity and fulfil its core purpose: To create value for customers to earn their lifetime loyalty.Clubcard is often referred to as the ‘original loyalty scheme and is now one of the biggest in the world.There are more Clubcard members internationally than in the UK. Since Clubcard launched, the schemehas centred around rewarding customers, every Clubcard statement offers rewards that reflect what eachindividual, as a customer, wants to buy. Clubcard is Tescos way of saying thank you to customers for theirloyalty,In 16 years, this core objective has not changed. Tesco is continually looking at improving the Clubcardscheme for customers. For example, in the UK Clubcard now offers more than 600 Clubcard Rewardsfor customers to choose from which have helped broaden the choice and appeal of the scheme. Personalisation - the value of customer insightClubcard data enables the folks at Dunnhumby to understand current customer trends, the products thatare most important to Tesco customers and products that may appeal to them. Using this insight we canmake judgements as to which products customers would like to see in store and the kind of promotionsthat are most likely to benefit them.Over the years, the more data we have gained from Clubcard, the stronger the picture we get ofcustomers, which means we are getting better and better at helping Tesco personalise offers to customers.For example, if a customer purchases nappies we know that they might be interested in a coupon forbaby food.Tesco sends out millions of variations of the Clubcard statement to ensure customers get extra rewardsthat are relevant to them.Together, Dunnhumby and Tesco are using this insightful data to put customers at the heart of all ourbusiness decisions, from new product development to how we manage stores, and most importantly, howwe serve customers.Ultimately, the more we can give customers what they want, the more they will choose to shop at Tesco.This makes good customer service and good business sense.Our knowledge of customers has also enabled Tesco to expand their business in other areas. Forexample, their online offering could not have been developed without the knowledge gained fromClubcard and the introduction of Tesco premium label Tesco Finest was based on customer insight.Similarly, Clubcard fuelled the growth of Tescos non-food sector by identifying possible customers andcommunicating the new product areas through Clubcard mailings.In addition, despite being the longest running loyalty scheme around, Clubcard is up to date with thelatest technology. In a UK first, Tesco launched a smartphone app in 2010 that turns a mobile phone intoa Clubcard. In 2011 Tesco launched My Clubcard Account , which enables customers to make changes totheir account online such as personal details and also view their used and unused vouchers. Customerslove this - its a good way to keep track of vouchers and offers.In the UK, Clubcard goes from strength to strength. It is by far the most rewarding loyalty scheme in themarket and the number one reason customers prefer to shop at Tesco.
  • 17. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 14 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT20. Tesco & Dunnhumby: the partnershipA greater understanding of customer behaviour enables Tesco to personalise the shopping experience andensures that Tesco can create a brand that consumers return to time and time again. In the currentclimate of shopping around for the best deals it is more important than ever that the customer believesTesco is worth a visit.The Dunnhumby strategy is similar to that at Tesco, assisting companies to put the customer at the centreof each business. In Figure 1.1 the additional layers that surround "customer" highlight how the businessmust change in order to accommodate for the consumer.In essence, Dunnhumby helps Tesco by analysing item-level data for over 15 million households in theUK. This helps Tesco to drive sales through specific promotions, save money through removingunnecessary advertising and identify trends in sales data. Both Dunnhumby and Tesco firmly believe thatby understanding the customer, the business can grow.Dunnhumby has four core beliefs and four core values depicted here. The four phrases in the central greyarea are Dunnhumbys core beliefs which form the foundation on which our work is based and underpinour ways of working with clients and retailers.. The coloured areas on the outside of the model depictour values which inform our approach to our work and our culture and make Dunnhumby a unique andgreat place to work! Values Curiosity: we have an endless appetite to understand, challenge, innovate and learn Passion: we are relentless in our positive enthusiasm Courage: we take the right route, not always the easy one Collaboration: we work best when we work together Beliefs Start with data: customers tell us the right thing to do through the data Our great people: great people are what sets us apart Genius of simplicity: true genius comes from making the complex simple Customer first: if youre loyal to customers, theyll be loyal to you20. Learning across bordersThrough working in partnership with major retailers around the world Dunnhumby is in the uniqueposition of being able to share learning and best practice to help grow the businesses of our major retailand manufacturer partners and to benefit customers everywhere.Following the success of the Loyal Customer Mailing (LCM) in the United States the principles of theLCM have been tested and now delivered to Tesco customers in the UK.
  • 18. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 15 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT20. The Loyal Customer MailingIn the United States Dunnhumby works with Kroger, a giant supermarket chain, who has for severalyears sent a Loyal Customer Mailing (LCM) to its most loyal and therefore valued customers. Kroger saysthank you to these special and valuable customers by giving them money-off coupons on products thatthey frequently buy. Customers in the United States love the LCM, they appreciate the value of thecoupons and that Kroger takes the time and invests the resource to understand what they buy. This hashad a measurable impact on sales with an increase of 64% since its introduction.Since beginning its relationship with Dunnhumby in 2003, Kroger has seen 31 consecutive quarters ofsame store sales increases. Dave Dillon, CEO of Kroger often describes Dunnhumby as his secret weapon!Well we may not be that secret anymore but what we do really can change a business.In the UK in December 2011 2.5 million customers received money-off coupons for products theyalready buy from Tesco, plus extra or double points coupons. This was based on the level and frequencyof spend over the previous eight weeks, and it proved very popular. So just before Christmas the mostloyal Tesco customers received special offers relevant to them. Every Little Helps!Mark Wilmot, head of UK Communications and Media at Dunnhumby worked very closely with Krogerin developing the LCM several years ago. Now bringing this learning to the UK he says: "As we have learntfrom Kroger, this targeted approach and providing relevant offers drives customer loyalty to the retailer and brands.Customers are similar the world over so there is no reason why it wont work in the UK." Innovating to better serve customersAs part of our commitment to deliver measurable value for a billion people Dunnhumby is dedicated toputting the insight at the heart of business decisions. We were challenged by Tesco to make insightavailable and affordable to all types and sizes of suppliers. This is to enable all kinds of businesses not justthe big manufacturers like Unilever and P&G to really put the customer at the heart of their decisionmaking.In response to this challenge we launched a new solution the Shopper KPI report which is deliveredquarterly. Following an initial trial at the end of September, feedback from suppliers has been reallypositive. Simon Day from Winterbotham Darby, a supplier of continental meats & pate said: "The solutionis simple to use and gave us a really good understanding of the category we work in. We felt we were at a real advantagewhen going into our meetings with Tesco as we were able to talk in their customer language."We are also innovating in the challenging area of digital measurement - helping brands understand the realvalue of online loyalty schemes by tracking the behaviour of loyal customers in store. We can nowmeasure the effectiveness of a digital campaign by comparing the shopping behaviour of Tesco Clubcardcustomers who use brands online loyalty campaigns and those who do not.This means we can quantify the effect of online loyalty campaigns on brand trial, loyalty, sales uplifts andreturn on investment so that brands can improve the relationship between online and offline activity.Danones Activia and Actimel brands, Reckitt Benckisers Air Wick brand and Pfizers SMA baby milkbrand have all used the application to shape digital and in-store marketing.
  • 19. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 16 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTHalla Ragi, Air Wicks senior brand manager, says the Dunnhumby data has been "invaluable" todeveloping its Air Wick Fresher Homes Club eCRM programme and optimising its targeting strategy todrive both online and offline loyalty to the brand. Where next for Clubcard?Since the launch of Clubcard, Tesco has evolved a customer contact strategy incorporating multi-channelsacross the various parts of the business as it has expanded. In addition to the core Clubcardcommunications of Statement and Loyal Customer Mailing, there are targeted customer mailings designedto drive sales and drive customers up the loyalty ladder at key trading periods through direct mail, e-mailand coupon at till in support of stores, online and Retail Services. Central to all activity is a consistentfocus on staying true to the brand and surprising and delighting customers through personalised offers.The focus of Clubcard remains the same - to reward customers. Tesco listens to customers about howthey are changing and looks at how their behaviours are changing so that it can give them what they want.The retailer will continue to bring more choice to customers and ensure that customers continue to find itexciting, rewarding and convenient.At a conference hosted for Tesco and manufacturers in 2011, Tescos UK CEO, Richard Brasher, endedon this note: "If you want to go fast go on your own. If you want to go far go together". Collaboration isat the heart of Dunnhumby and it is only when we work together with the retailer and the brands that canwe serve the customer best and, in doing so, be successful in the long term.NOTE:The Loyalty Guides numerous case studies are carefully constructed to provide fullbackground, history, and current-day detail, along with partnership developments, pointsstructures, redemption options, and the latest facts and figures concerning eachprogramme.For details and online ordering information, visit:
  • 20. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 17 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT1 Executive Summary1.1 IntroductionThe Loyalty Guide 5 [] is the worlds only complete, comprehensive reportcovering every aspect of customer loyalty marketing, customer engagement, customer acquisition,customer retention, best customer marketing, customer relationship management (CRM), social mediamarketing, customer data-driven business intelligence (BI), loyalty metrics, measurement, reporting andpredictive analytics.The report provides not only detailed case studies, best practices, marketing theory, and all the latestresearch, but also the kind of practical know-how, up to date facts and figures, market trends, forecasts,best practices, expert opinions, practical advice, and sheer hard data that are needed for well informedand forward-looking business decisions.This summary provides an overview of The Loyalty Guide 5, and aims to help you quickly identify theaspects of loyalty marketing that are most relevant to you right now. Each section summarises the essenceof a complete chapter of the guide, making it simple to navigate the reports 1,300+ pages and its wealthof illustrations, charts, tables and graphs. We, the authors, welcome you to what has built up over the pastten years to become the worlds fullest and most complete report on marketing techniques, practices,strategies, measurement, management, and accountability.1.2 The Business Case for LoyaltyThere are two basic points of view to be considered when discussing the business case for introducing -or keeping - a customer loyalty programme: Some industry observers have argued that a loyaltyprogramme is often unnecessary because its just a way of spending money rewarding customers whowould probably have been loyal anyway.Others, however, have recognised that the real benefit of a loyaltyprogramme is not necessarily felt first by the customer, and that it is themerchant that gains the necessary insight (from detailed analysis of itsloyalty programme and transactional data, for example) to be able toimprove the way it communicates with and deals with its customers. Thecustomer is actually the secondary (but still the most important) recipientof the benefits of a true loyalty programme.To say that a loyalty programme is not useful, or is a waste of marketing budget, is to have misunderstoodthe real purpose of the programme. Rather than offering a simplistic discount or rebate programme, a realloyalty programme offers the customer any number of incentives to allow the programme operator tocollect accurate and useful data about their lifestyle, purchase choices, motivations, interests,circumstances, and in many cases even about their household and immediate family.The reason for gathering this data is not - as a very small minority of consumers seem to fear - to createsome kind of Big Brother database of peoples personal habits, but to gain practical insights into ways inwhich the merchant could serve each customer more effectively, more easily, and more satisfyingly.The best reasons for having a customer loyalty strategy...In this chapter we explain in detail the different reasons, benefits, strategies and factors driving customer
  • 21. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 18 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTloyalty, including ideas about how to set up a new loyalty programme, what will be involved, and pointersfor the financial and operational implications of launching your own loyalty iniative, including: · The business benefits of a loyalty strategy · How customer loyalty pays back, both short term and long term · Factors affecting and driving customer loyalty · How a loyalty initiative grows and improves your customer base · Financial and operational aspects of a loyalty strategy · What you need to know to run a successful loyalty programme · Viable alternatives to traditional loyalty offerings1.3 Loyalty CoalitionsThere are two main types of multi-partner programmes: true coalition programmes, and single operatorprogrammes that include other partners.For example, Air Miles and Nectar are true coalition programmes. The programme management isindependent of any of the partners. The partners have contracts with the operators of the programme toissue and/or redeem the currency of the programme, and only have access to data harvested by theprogramme through its operator. Individual partners dont have direct access to other partners data heldin the programme, although the operators of the programme will usually market to other partnerscustomers on behalf of another member. For example, a supermarket member could ask for mailings tobe sent to the customers (or just certain segments of the customers) of a fuel retailer partner in an areawhere a new supermarket is being opened.Tescos Clubcard is an example of a single operator programme that involvesother partners. The programme is owned and run by Tesco. However,Clubcard holders can collect points when buying from various partners inthe programme, such as Alders, Beefeater, Marriott, and National Tyres.Vidal Sassoon is an example of a redemption partner.The best reasons for coalition-based loyalty initiatives...This chapter examines the many essential goals that any coalition programme must achieve if its going tosucceed, and why theyre so important. Examples of these goals include: 1. Rapid market penetration 2. Delivery of attractive rewards 3. Being the first in the market 4. Building communication channelsThe key benefits of joining a coalition programme...Supported by statistics, illustrations and expert opinions, the advantages, disadvantages and structuralneeds of coalition programmes (compared to, say, a non-partnered loyalty programme) are detailed,covering critical factors such as: · Greater interest in the programme · Lower costs of development · Members have fewer cards to carry · Database run by professionals · Members earn points more quickly · Sector exclusivity · A greater variety of rewards · Coalition marketing campaigns · Concentrated, coherent promotions · Higher penetration rates · Time saved in development · Real cost benefits of coalition
  • 22. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 19 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTDetailed case studies of major coalition programmes...This chapter also provides details and comprehensive case studies of the worlds major coalition loyaltyprogrammes, including: 1. Avios, UK (aka Air Miles) 9. Fly Buys, New Zealand 2. Air Miles, Canada 10. FlyBuys, Australia 3. Air Miles, Spain (aka Travel Club) 11. iPoints & Maximiles, UK & Europe 4. Air Miles, Netherlands 12. Malina, Russia 5. Air Miles, Middle East 13. Nectar & Nectar Business, UK 6. Aeroplan, Canada 14. Nectar Italia, Italy 7. BonusLink, Malaysia 15. PayBack, Germany & Poland 8. eBucks, South Africa 16. PayBack India (aka i-Mint)Other key topics covered in this chapter include: · Why a coalition? · The essentials of a coalition · The advantages of a coalition · The challenges of a coalition · Typical application areas · Expanding into a coalition1.4 Loyalty Rewards & IncentivesThe reward is a vital part of any loyalty programme. It is the bait on the end of the line: the bit thatactually convinces the customer to sign up. It is also a complex part of the programme and usuallypresents a delicate juggling act: it must be worth enough to be attractive to the customer but not costenough to make the programme unprofitable. It must appeal to consumers of the right profile and it mustcater for wide variations in taste and desires among those customers.All in all, the reward has many functions that we examine in detail in thischapter. We also examine the properties of a good reward, and which ofthese consumers think are the most important. We also look at the manytypes of reward that can be offered: Discounts (both targeted anduntargeted), points-driven programmes, hard and soft rewards. Which docustomers prefer, and why?We also look at how, in the eyes of an expert, one should go about planning a successful and appealingreward catalogue - quite often a component that lets a reward programme down. And finally, we examinesome recent research into what motivates consumers when they are faced with a choice of rewards.Reward drives behaviour. Experiments have revealed that, while a bigger reward reinforced the desiredbehaviour better than a small reward, when the rewards were discontinued, those who had received thebig rewards were more likely to return to the unwanted pattern of behaviour than the group who hadreceived the small reward. So the warning is there. Never let your best customers feel that you arewithdrawing privileges from them, and try to ensure that customers become loyal to the product orservice, and not simply to the reward.But, to have any effect at all, the reward must be desirable enough to actually stimulate a change inbehaviour among customers. It also has to be affordable, and balancing the two sides of thedesirability/affordability equation is tricky.
  • 23. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 20 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTStructuring your rewards for optimal redemptions and engagement...In this chapter we explain all the necessary attributes and practical planning of loyalty rewards, including: 1. The value of the rewards offered 2. The function of the rewards offered 3. The properties of an attractive loyalty reward 4. How to profit from reward redemptions 5. Lowering the fulfilment budget without risking loyalty 6. How to extract maximum value from your rewards 7. Setting reward levels and tiers 8. Using different rewards to change customer behaviours 9. Types of rewards (goods, discounts, experiences or other benefits?) 10. Timing of rewards (now, soon, or much later?) 11. Rewards that consumers actually want (and what they think they want) 12. Redemption strategies (i.e. internal or outsourced) 13. How to plan a compelling rewards catalogue 14. Strategies to drive both redemptions and engagement 15. Matching rewards with different point levels 16. Insights into loyalty rewards and their effectiveness 17. Using coupons and vouchers as rewards1.5 Customer Engagement and LoyaltyAs time passes and more loyalty programmes are launched, it is becoming increasingly difficult to actuallyengage the customer in the programme. Customers are now so used to handing over a card at the POSthat they feel little real involvement. If there is such a thing as a hot topic in loyalty, it is customerengagement. Handing over a card when transacting and receiving a quarterly statement within a pile ofother mail is not engagement. Engagement grows little by little, each time the customer has to activelythink about and make a decision about the programme.In fact, although nearly 90% of shoppers in the US participate in rewards programmes to earn points,discounts or prizes, loyalty programmes alone are not yet fostering the kind of emotional connection thatis needed to develop long term customer engagement. Engagement is something that can only be built upover time, and it usually stems from mutually beneficial relationships between customers and brands. Itcould be argued that engagement comes not a result of a marketing campaign but from the full range ofinteractions between the customer and the brand, as well as brand-related interactions between customersand their peers. The key to building a real sense of engagement is to provide the consumer withsomething of personal value that is timely, relevant, wanted, and preferably repeatable.Insights for true customer engagement...In this chapter we explain why customer engagement is now seen bymost marketing experts as the key to future survival, and how smartmarketers are already rethinking the idea of customer engagement.Among the key topics covered in detail: 1. Insights into consumer engagement and its benefits 2. How incentives can drive customer engagement 3. Customer engagement strategies 4. How to engage the individual customer (the new CRM) 5. Why engagement strategy goes way beyond CRM
  • 24. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 21 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT 6. How to drive engagement with loyalty rewards 7. Why loyalty without engagement is a dangerous trap 8. How to engage loyalty programme members for life 9. How social media is reshaping customer engagement 10. How to building customer engagement the social way 11. Gamifications effect on consumer/brand engagement 12. How e-mail can create customer engagement - or not 13. Ways to capture and engage online customers 14. How digital rewards can increase both engagement & loyalty 15. How mobile can drive cross-channel engagement 16. Recent innovations in customer engagement technique1.6 Social Media and LoyaltySocial media marketing is a relatively new field, driven by the widespread popularisation amongconsumers of social networking web sites and services such as Facebook, Google+, Twitter, Foursquareand others. These services dont only hold true to the original vision of sites such as Facebook (i.e.connecting people in a safe and personal way) but they now also include other services and technologiesthat augment that goal, such as location-based services which allow people to check in just aboutanywhere - whether it be a popular club, restaurant, or their own home, or any other venue - usuallythanks to the GPS thats built into their mobile phone handset. This allows people to be seen in all theright places but, more importantly, it has important implications for brands that they choose to associatewith in their social network.One of the most common misconceptions among marketers is that socialmarketing is as easy as putting up a page on Facebook, or setting up a Twitteraccount. Of course those are the basic building blocks, but theres a wholeworld of detail that needs to be considered first. As in any other marketing oradvertising discipline, you first need to identify and clarify a host of factors,such as the brand identity, brand message, brand values, target audiences,value proposition, referral and advocacy benefits, social gaming elements,social commerce and currency, messaging strategy, creative elements andimagery, and how it links up with your loyalty programme.Turning social media into a loyalty driver, rather than a publicity risk...Among the many topics examined in detail, and the down-to-earth practical advice found in this chapter: 1. Types of social media and their uses 2. Social customer loyalty & engagement best practices 3. Other social media marketing best practices 4. Does the marketer really have to lose control? 5. Planning and setting up a social marketing strategy 6. How social media can drive customer loyalty 7. How social media supports your loyalty strategy 8. The impact of social media on loyalty schemes 9. The impact of social media on brand reputation 10. Maximising social medias brand marketing value 11. The link between social media and customer engagement 12. Building customer engagement the social way 13. Gathering insights from social network profiles 14. Social media as a customer loyalty channel 15. Social media as a customer service channel ... continued
  • 25. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 22 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT 16. Integrating the social channel into the marketing mix 17. Social media as seen from the marketers side 18. Social media as seen from the consumers side 19. The adoption of social media into corporate strategy 20. How to find the true ROI of a social media initiative 21. Getting board level buy-in for social media marketing 22. Which markets & sectors lead in social media usage 23. How consumers use different social media platforms 24. How to turn social customers into social advocates 25. How social shopping has changed the retail landscape 26. How location-based marketing ties into customer loyalty 27. Bridging the real world/social media loyalty gap 28. Working with viral social marketing 29. The future of social & location-based marketing1.7 Loyalty & Marketing ToolsA customer loyalty programme, despite having all the right rewards and engagement strategies in place,can fail catastrophically if the tools and technologies that drive it are either insufficient for the task orinadequately integrated. How could a large coalition loyalty programme ever function if the rewardfulfilment function wasnt tightly integrated with the web site, or if the marketing team had to refer to anddeduplicate information from several siloed data sources? The technology, the tools, and every functionalback-end system must be not only scalable enough to cope with the future success of the loyaltyprogramme but also to be adapted to every market-driven change that affects the programmes goals anddirection.For example, the authors of this report conducted a survey of retail customer loyalty and commitmentstrategy, and found that while 93% of retailers run a loyalty programme for their web site, stores, orcatalogue customers, 74% reported partial to no tangible improvement in their programmes compared totheir competitors. This suggests a need to review current and future loyalty processes and solutions, andthat a wealth of very similar loyalty platforms may be the cause ofa degree of commoditisation of loyalty offerings.Another example of the more interesting - and potentially game-changing - technological developments has been that, in the US,the nationwide rollout of EMV smart chips on debit and creditcards has opened up a whole range of possibilities and opportunities for loyalty marketing via thepayment card platform. Particularly if combined with the mobile channel by means of smart phones andNFC technology, the possibilities for loyalty applications are endless.Independent advice about what matters most in a loyalty platform...This highly practical chapter provides details of loyalty tools, technologies and innovations currently inthe market, offering advice on the advantages and disadvantages of these approaches. Among thetechnologies and tools examined are: 1. Loyalty platforms & technologies 2. New loyalty card technologies & platforms 3. The potential for EMV-based loyalty 4. The rise of mobile & app-based loyalty technologies 5. Contactless loyalty technologies 6. The benefits of NFC & RFID technology 7. How mobile & NFC will impact loyalty strategy 8. Tools for loyalty metrics, analytics & insight 9. Loyalty platforms & technology innovations ... continued
  • 26. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 23 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT 10. Benefits of loyalty scheme-enabled self-checkouts 11. Augmenting Reality for greater engagement & loyalty 12. Linking loyalty points with prepaid cards 13. Linking loyalty points with mobile payments 14. Integrating loyalty into smartphones and apps 15. Cloud-based loyalty innovations & platforms 16. Benefits of a virtual loyalty currency 17. Data pattern-spotting for competitive advantage 18. Developments in Retail 3.0 and resulting consumer insights 19. The benefits of intelligence-based marketing 20. Differentiation using new retail technologies 21. Better customer service with kiosks & self-service 22. Case study: how changed the loyalty landscape1.8 Loyalty & Marketing OperationsThe theory of customer loyalty is quite plain: a business that retains its customers for longer usually makesmore money from them at lower cost than one that is constantly paying to acquire new customers.Actually doing that - the practice of customer loyalty - is not so straightforward. Its not a trick that can bequickly learned and performed; creating loyal customers depends fundamentally on following good andsound business and marketing practices right across the business all the time. Its a sad truth of businessthat customers are hard to win but easy to lose. A loyalty programme is not a quick fix that can simply bebolted on and produce measurable results immediately.That said, the principles are quite simple: know your customers, rewardthem for behaving in the way that you want, and dont reward them forbehaving in any other way. In order to know them, you need to collectdata and then use it intelligently to identify the valuable customers and toreward them for generating more profit. Of course, there are manyrefinements that can be made to this broadly stated principle. Enter theloyalty programme.But many of the so-called loyalty programmes in operation today are not really loyalty programmes at all.Perhaps frequent customer programme is a more accurate term. To be loyal to a business is one thing,but to use it frequently is another (for example, it could be a result of circumstances that there is simplyno other choice). Clearly, if another choice becomes available, then the distinction becomes critical. Thismeans that most prudent businesses aim to create loyal customers, not just frequent customers. Ofcourse, not all customers are potentially loyal customers, for a variety of reasons. So the ideal loyaltyprogramme would be one in which already loyal and potentially loyal customers benefited, but othercustomers didnt. This means that the customers have first to be sorted into groups, and differentapproaches have to be made to each group. Or, more likely, a programme has to be designed so that itwill appeal to the desired group more than to the other group.The 3 top reasons to have a loyalty programme...A good point at which to start is at the very beginning - when acquiring the customers. In many typicalbusinesses, as many as 45% of direct, new, one-off purchasers do not go on to purchase a second time. Inorder to grow and maintain a successful business, three simple rules should be followed: 1. Acquire customers that are likely to repurchase - even though this may be at the expense of initial raw response; 2. Recognise which customers are unlikely to repurchase and limit your marketing spend for this segment accordingly; 3. Focus the marketing budget on those who exhibit the same profile as existing repurchasers but have yet to buy a second time.
  • 27. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 24 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTThe main goals of a loyalty programme...In this chapter we detail the workings of an effective customer loyalty programme, and how to achieveseveral obvious goals: · Retaining existing customers · Acquiring new customers · Moving customers up the RFM segments · Deselecting or firing unprofitable customers · Win-back techniques (recovering lost customers) · Increasing CLV (customer lifetime value) · Best customer marketing (targeting the most worthwhile customers) · Building long-lasting customer relationships · Creating advocates from loyal customers · Adjusting pricing strategy for greater profitability · Responding to competitive challenges · Selecting stock lines more effectively · Planning merchandising optimally · Cutting promotional and advertising costs · Selecting new trading sites based on profitable customer profilesCritical success factors for a loyalty programme...We also go into depth on the 17 key factors that make a loyalty offering successful, both in the eyes of thecustomer and in terms of bottom line business results: 1. Loyalty programmes are never a quick fix 2. Targeting the right people at the right time 3. Gaining customer buy-in 4. Knowing your customers and gathering intelligence 5. Not rewarding the wrong behaviour 6. Rewarding versus recognising 7. Spotting defection patterns 8. Taking advantage of customer lifecycles and trends 9. Offering attainable & affordable rewards 10. Recovering the programmes cost 11. Keeping communications relevant and well-timed 12. Keeping it simple 13. Measuring the programmes results 14. Attracting new customers 15. Providing unique, hard-to-copy benefits 16. Empowering your customer-facing teams 17. Making things easier - for both you and the customerGuidance for running a profitable loyalty programme...Among the key topics covered in this chapter, we explain operational details including: · Critical capabilities for customer loyalty · Loyalty programme models & strategies · The many structures of loyalty marketing · Planning the grand design of customer loyalty · Forming the right customer loyalty strategy · Best practices for loyalty management · Research into the drivers of customer loyalty · Loyalty tokens & identifiers, and choosing the right ones ... continued
  • 28. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 25 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT · Examples of different loyalty tokens at work · Increasing your loyalty schemes personal relevance · Stealth loyalty programmes and real-time targeting · CRM and one-to-one marketing systems · Generalised, targeted and customer-specific pricing · Loyalty through stored value, prepaid & gift cards · Credit and debit card-based loyalty strategy · Turning ancillary revenue into customer loyalty · Designing and implementing your loyalty process · Shattering the myths of customer loyalty1.9 Customer Data StrategyWhether the data and back-end systems are managed locally or whether theyrehosted, and whether the operational systems are platform-dependent or use athin-client SaaS (software as a service) model, many of the benefits of creatingand operating a customer loyalty programme, or implementing a customerrelationship management (CRM) system, come from the collection, analysis,and use of data. The more data we can practically use, the better: customerdemographics, preferences, lifestyle and life stage, transaction history, returns,and even customer service event history.The loyalty programme gives us a way of identifying specific customers, and tying their demographicrecords to their transaction records in the back-end database (whether that be an in-house collection ofdatabases, an enterprise-wide CRM system, or some other data warehouse thats being updated, analysed,and used across the whole business).The uses of the resultant array of data, given all the technologies that are now available to analyse it andturn it into useful support for business decisions, are potentially endless. Everybody understands thatcustomers supermarket transaction data can be used to segment them for marketing campaigns later on,whether thats based on demographics, spend, or products purchased.How customer data turns into loyalty by providing new insights...Perhaps the most important lesson we teach in this chapter is that customer data - in almost any form -can be turned into insights, which drive continual business improvements, which translate into greatercustomer loyalty, satisfaction, and engagement. For example, some of the most important data-driventechniques and insights available to loyalty marketers include: 1. Customer behaviour profiling 2. Customer lifestyle & demographic profiling 3. Customer product preferences and repertoire 4. Product category relationships & cross-selling 5. Dynamic pricing strategies 6. Online shopping suggestions 7. Segmentation and customer tiering 8. Customer base analysis and trend predictions 9. Customer flow analysis 10. Share-of-wallet estimation 11. Market share estimation 12. Early defector detection and customer win-back opportunities 13. Lower cost competitive response ... continued
  • 29. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 26 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT 14. Customer targeting and differentiation 15. Advertising campaign targeting 16. Circular efficiency 17. Offer planning and promotion analysis 18. Differentiated marketing 19. Intelligent deselection of unprofitable customers 20. Green targeting to save costs (and the planet) 21. Planning and merchandising 22. Human resources planning 23. Geographical store site selection 24. Inventory rationalisation & selection 25. Planogram adjacencies & merchandising 26. Differentiation based on data analysis 27. Real-time data mining and the single customer view 28. Behaviour prediction based on past events 29. Affinity marketing strategies 30. Predictive modellingFactors involved in planning a customer loyalty database...This chapter also details the process of planning a customer loyalty programme database, providingadvice and guidance on usually thorny issues including: · Data processing · Data flow · Data warehouses and data marts · Data duplication · Data accuracy · Data cleansing · Data ethics · Data security and privacy · Data analysis to support business processes · Predictive analytics to help drive changeHow much data is needed, and where and how should you get it?Another common issue that we explain in detail is the question of how much data to collect, when,where, how, and how often it should be refreshed and cleansed. The most popular data collectionmethods for loyalty programme operators currently include: the loyalty programme sign-up, web site,direct mail responses, mobile apps and sites, transaction records, reward redemptions, promotionalresponses, customer feedback, customer services and call centres, social media and location-basedservices, third party data sources, programme partners, point-of-sale (POS) terminals, among others - allof which we explain and illustrate in detail.This chapter also examines all the best practices, strategies, legalities and theory that go into creating anoperational customer data model, such as: 1. The technologies behind customer data 2. The importance of loyalty data collection 3. Ways to gain business value from customer data 4. How loyalty data drives relevance and adds value 5. How loyalty data improves marketing effectiveness 6. How data ignorance damages both loyalty and the brand 7. Turning loyalty data into actionable insights 8. How customer data is harnessed to drive customer loyalty ... continued
  • 30. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 27 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT 9. How loyalty data is harnessed to drive engaged relationships 10. The customer-related benefits of using loyalty data 11. Database planning, data processing & data flow 12. Data analysis to support business processes 13. The how, where, when, why & how much of data collection 14. How long does customer data last? 15. Data duplication, accuracy, and cleansing 16. Predictive analytics & business intelligence 17. Benefits of data collection and analysis 18. Profiling customer behaviour, lifestyles & demographics 19. Intelligence from mystery shoppers & feedback systems 20. Why customer data has become the new oil 21. Segmentation of the customer base 22. Customer lifetime value (CLV), RFM & customer tiering 23. Customer base & flow analysis 24. Share-of-wallet & market share estimation 25. Best customers, defectors and win-back strategies 26. Customer targeting and differentiation 27. Intelligent deselection & differentiated marketing 28. Turning blind data into lifetime relationships 29. Using data for planning and merchandising 30. Using data for other business objectives 31. Data mining, OLAP, MOLAP, ROLAP and Magic Cubes 32. The practical application of business intelligence 33. Data ethics and privacy policies 34. Data security & privacy, and related consumer concerns 35. What happens when customer data is breached or lost 36. How digital security issues are affecting brands 37. Conclusions on the benefits of loyalty data1.10 Loyalty & Marketing CommunicationsThere are many more communication channels available today than there were before the rise of social,interactive and other electronic media. Even in the past two years since the publication of The LoyaltyGuide 4, marketers have found a growing number of innovative ways to reach consumers, whether athome, at work, or at play - especially through the rapidly growing social media phenomenon.Communication with consumers and other businesses can take place bymail, telephone, fax, text message (SMS), multimedia message (MMS),computer games, television, films, radio, mobile sales units, in-store teamsof brand representatives, focus groups, leaflets, newspapers, free-standinginserts, coupons, e-mail, instant messaging (IM), voice over IP (VoIP), webchat, web sites, bulletin boards, online communities, social networkingplatforms, and even other internet-based and mobile systems such as videoconferencing and meeting sharing systems.Clearly, each channel has different costs, social implications, complications, emotional connotations,privacy issues, and various perceived benefits and risks for the consumer. Each brings its own challengesin terms of finding the right frequency, message, tone, voice, relationship-based permission, and valueproposition.
  • 31. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 28 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTAnd with each comes a unique set of challenges: as a rule, consumers dont like junk mail, or spam(unsolicited commercial messages), or unsolicited sales calls. They complain about their mobile phonebeing invaded by irrelevant advertising messages, and they dont want companies "muscling in" on theirprivate social networks without permission. They dont want to waste bandwidth by receiving unwantedvideos and sound clips by e-mail, and they dont want their instant messenger services popping upunwelcome advances from companies theyve never heard of or dealt with. The list goes on.But the good news is that there are still ways, means, laws, and ethical practices that cut through thecommunication barrier for all of these channels, allowing you to communicate and build relationshipswith existing customers and sales prospects alike.Benefits and pitfalls of all the key communication channels...In this chapter we explain the advantages, disadvantages, strengths, weaknesses, opportunities and threatsinvolved in communicating with your most valuable asset: your customer base, with specific guidance andbest practices for each of the major channels and communication strategies, including: 1. Forecast of consumer communication trends 2. A new focus on thinking psychologically 3. Loyalty and the mobile channel 4. Code of conduct for mobile marketing 5. Loyalty and the e-mail channel 6. Driving greater customer loyalty through e-mail 7. Opt-in and opt-out: a practical guide 8. Getting the right timing for e-mail marketing 9. How e-mail marketing can become more social 10. Loyalty and the web channel 11. Web marketing depends on content & personalisation 12. How the cookie laws affect marketers 13. Loyalty and the social media channel 14. How social communications boost customer retention 15. Loyalty and word-of-mouth (WOM) 16. Word-of-mouths impact on customer loyalty 17. Why loyalty schemes create more WOM champions 18. The effect of legislative clamp-downs on WOM 19. Loyalty and the the direct mail channel 20. Loyalty and the multi-channel approach 21. How loyalty depends on multi-channel integration 22. Integrated channels give the best marketing ROI 23. Loyalty and the self-service/kiosk channel 24. Loyalty and the call centre channel 25. How contact centres drive customer satisfaction & loyalty 26. Loyalty and the advertising channel 27. Why advertisings long-term value is being rediscovered1.11 The Human Aspect of LoyaltyIts easy to get so involved in the intricacies and technicalities of loyalty programmes that the mostimportant part - the human aspect - gets neglected. The technology involved is a marvellous tool -without it, loyalty programmes as we know them would not be possible. But we must remember thatloyalty (and its opposite, the desire to simply walk away) are both intensely human emotions. And unlessthe programme generates the right feeling in people, it wont work. We must also remember that humansarent as predictable as technology. Actions that might make one person loyal could well turn off
  • 32. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 29 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTsomeone else. It gets even more complicated: something that could engender loyalty in someone on oneday might do the opposite on another day.Customers are human, and loyalty is a strong emotional link...After all, who is more qualified than customers to tell us what customers want, and what they dont want?For this reason, much of the research presented here looks at the customer/supplier relationship fromtheir side.But one thing is certain: the building of loyalty will not get any easier. While advances in technology havemade loyalty programmes more effective, accurate and appealing to customers, these same advances havemade it much easier for customers to switch suppliers. Comparisons of stock, prices, trading policies anddelivery times and costs are now only a mouse click away from many customers. And if the item is to besent to them, need they care from where it comes? Many suppliers are apparently equally trustworthy andreputable. It is important to have some unique property that makes you stand out from the crowd. Allother things being equal, a good loyalty programme can do just that.Because all customers are not the same, we have looked at the different ways that different groups ofcustomers respond to marketing, at the psychology of loyalty, and the influence that different rewardshave. In addition, factors such as age, gender, race, wealth, pricing policy, general satisfaction, level ofservice, the internet and the new green marketing all come into planning a programme for a targetmarket. All of these are examined separately.Practical ways to keep your customers engaged and loyal...The customer-related human insights we explain and demonstrate in this chapter include: 1. The human side of customer loyalty 2. The psychology of customer loyalty 3. How consumers interpret and choose loyalty rewards 4. Why customers wont go out without a loyalty card 5. Trends and changes in consumer behaviour 6. The role of trust in consumer relationships 7. The role of the customer experience 8. Why good customer experiences are more profitable 9. Why bad customer experiences travel fastest 10. Major enhancers of the customer experience 11. How product recalls can actually increase customer loyalty 12. Why customer intimacy is the next loyalty frontierEmployees are also human, and they bond emotionally with the customers...At the same time, there is no question in any executives mind about the significant role that youremployees play in both generating and maintaining the loyalty of your customers. Without polite,courteous, knowledgeable, efficient and empowered staff to help the customer, what chance is there of acustomer wanting to repeat their experience with your company or brand? With very few exceptions (i.e.products or services with no differentiating factors and with extremely high utility value), no company canafford to be rude or unhelpful to even a single customer. After all, reports of bad experiences travel farmore quickly among consumers than reports of good experiences, and they tend to live longer in peoplesmemories. A helpful employee represents a chance to acquire new customers by word of mouth - andthats a free advertising campaign.In order to keep your employees on board with corporate goals such as customer loyalty and serviceexcellence, you have to keep them happy, give them all the right tools, and empower them to use them.Furthermore you have to be seen to be listening to what your frontline staff say about problems andpotential improvements, and actively seek their feedback and ideas. And you have to reward them fortheir observations and desirable behaviours above and beyond the call of duty.With all of this in mind, we have pulled together much of the relevant research that has been done on thesubject over the past couple of years, and have extracted the salient points. We have also reported some
  • 33. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 30 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTof the knowledge that experience has brought. There is a comforting correlation in most of the findings,but there are also some differences of opinion and experience.Practical ways to keep employees engaged, and customers happier...The employee-related human insights we explain and demonstrate in this chapter include: 1. Employee loyalty insights & research 2. Customer experiences linked with employee engagement 3. How employee engagement affects the bottom line 4. Why good customer service trumps call centre efficiency 5. Why employees should be segmented, not just customers 6. Why employee loyalty is not just about the money 7. Best practices for rewarding employees 8. Ways to keep good employees engaged and loyal 9. How travel incentives boost employee performance 10. How top retailers build greater employee engagement1.12 Loyalty & Marketing Best PracticesOver the past few years there have been many innovations in the field of customer loyalty marketing, andmany of these have come about through the earnest implementation of established best practices. Forexample, the idea of giving customers exactly what they expect and engaging them in a meaningful two-way dialogue is not something new - but it is the foundation of the current trend toward greater customerengagement and satisfaction.In this chapter we detail the best practices that need to be observed whenbuilding customer loyalty, and to make sure your loyalty initiative doesntstumble or fail, whether its online, offline, or both. We also examine the bestpractices behind successful customer loyalty management techniques, andhighlight the main traps and pitfalls that catch so many new programmeoperators.In addition, we cover best practices for e-mail marketing - including details of the strategies that haveworked best, and the strategies that didnt work at all - as well as customer management, customerretention, customer relationship management (CRM), digital marketing, and a number of other moregeneral marketing best practices and guidelines, including green marketing and how to keep it real andavoid consumer backlash over greenwashing issues.This chapter explains the latest best practices for customer loyalty management, including: 1. Best practices for increasing customer loyalty 2. Top ten ways to improve a loyalty scheme 3. The key attitudes of successful loyalty marketers 4. Principles that create highly loyal customers 5. Voice of the Customer (VOC) best practices 6. Best practices to stop a loyalty scheme stalling 7. Best practices for online customer loyalty 8. The six Ps of customer loyalty marketing 9. Creating loyalty with surprise and delight 10. Building loyalty through customer service 11. Loyalty management best practices 12. A relationship model that predicts customer loyalty 13. Safely lowering the cost of a loyalty scheme 14. Recession-proofing a loyalty programme
  • 34. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 31 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTThis chapter also explores in detail the latest thinking and best practices behind customer retention andcustomer relationship marketing, including: · Customer relationship best practices · Customer management best practices · Best practices for successful CRM · Essential rules for retaining your best customers · Growing customer loyalty in a recession · Best customer management strategies · Forming a customer-centric marketing strategyWe also detail a wide array of other marketing best practices that are essential in todays fast-pacedelectronic market, including email, web, social, cause-related and green marketing: 1. The new focus on marketing performance management 2. Best practices for mobile marketing 3. Best practices for social media marketing 4. Digital marketing best practices 5. E-marketing strategies that didnt work 6. E-marketing strategies that did work 7. Best practices for digital customer engagement 8. How cause-related marketing increases sales 9. Green marketing best practices 10. Who consumers trust most when going green 11. Why plant a tree is actually a loyalty strategy 12. Consumer responses to green marketing 13. The strength of green customer relationships1.13 Loyalty Metrics & AccountabilityThe business case for any loyalty programme needs to be well supported and justified, not only in theplanning stages but on a continuing basis after implementation, and during development. The applicationof solid mathematics, statistics, and scientific measurement is the only way to prove the effect theprogramme is likely to have on profitability and the customer base. And the application of regular andmeaningful management reporting is the only way to monitor all the factors involved both before andafter implementation of the programme.Every aspect of the creation of a loyalty marketing initiative - or of anydifferentiated marketing initiative - must be evaluated at all stages, anduseful metrics must be implemented with proper processes and controls tohelp determine the success, failure, progress or stagnation using presetstandards. In this chapter we examine the detail and practical workings ofthe necessary formulae, calculations, metrics, and management reportingtools that every marketer needs during the process of evaluating new andongoing loyalty marketing initiatives.A loyalty programmes results are often nebulous - hard to see accurately, usually being viewed incombination with the results of other marketing initiatives, seasonal variations in the market, and otherdisguising factors that make it hard to measure how successful (or not) the programme really is. Beingable to monitor, measure, track, and analyse the level of customer loyalty before, during, and even afterthe programme, is of central importance to the financial justification of a loyalty programme. So, althoughthe psychology and implementation of your programme may be something of an art, the only way totrack its performance is through the combined sciences of logic and mathematics.
  • 35. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 32 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTCustomer loyalty itself is difficult - if not impossible - to measure accurately. Loyaltymeans different things to different people - there are many aspects of it and each couldvary in importance depending on the viewpoint of the observer. In addition, loyaltyinvolves emotion, and thats notoriously difficult to measure meaningfully. However,over time the necessity of measuring results has led to the development of someformulae that have become as close to standard as you get. Three of these are thepatronage ratio, the switching ratio, and the budget ratio. Added to these, to complete thepicture, are a range of other composite measures, such as the Enis-Paul Index andcustomer retention measurements.Its probably true to say that the ultimate measure - the one that the board of directors will be interestedin - is the effect on the bottom-line profit. But in order to see how well aspects of the programme arefunctioning, and to be able to make adjustments to it and see what difference they will make, these morespecific formulae are needed.Step-by-step calculations for loyalty, retention, profitability, and segmentation...In this chapter we provide not only the exact formulae needed to measure and calculate customer loyaltyand all its sub-parts, but this reports readers-only web site provides working versions of all of them, bothonline and as a downloadable Excel spreadsheet. This chapter takes you step-by-step through thecalculation and interpretation of dozens of business-critical metrics and analyses, including: 1. The budget ratio (share of wallet) 2. Retention rates & customer churn 3. Customer lifetime value (CLV/CLTV) 4. Customer retention, attrition and lifetime 5. Potential, existing, and defected customers 6. The patronage ratio 7. The switching ratio 8. The Enis-Paul Index 9. Customer profitability 10. Drivers of loyalty and profitability 11. Loyalty and profitability models 12. The loyalty and profitability chain 13. Past, actual, and future profitability 14. RFM segmentation 15. Net Promoter Score (NPS) 16. Attitudinal equity 17. Customer-centric metrics 18. New digital marketing metrics 19. Examining individual customers and customer groups 20. Statistical primer: the mean, median, mode, variance & standard deviation1.14 Reporting & SegmentationMarketing departments are in ever-greater need of both tools and techniques to help them prove to theboard of directors and shareholders that they are performing as well as they should, given the budget theyhave been given. Moreover, marketing is a fast-developing science combined with a human art thatrequires constant development, innovation, fine-tuning, and new technologies if the company is to stayone step ahead of the competition. This requires not only more money in the budget to cover the costs ofdeveloping new techniques but also a certain amount of money that will be at risk without any certainROI (return on investment).While most forward-thinking FDs (finance directors) and CFOs (chief financial officers) accept thatdevelopment is an ongoing and unavoidable cost of business, most will also demand that the marketing
  • 36. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 33 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTfunction can pay for itself in other ways - with an increasing ROI, for example. As a result, the days ofanalysis and reporting for the sake of simply monitoring the success (or otherwise) of individualmarketing campaigns are over, and marketers must now show not only their smaller successes but alsotheir overall contribution to the bottom line, brand equity, and corporate well being. The importance ofstatistical analysis and proper management reporting cannot be understated.How to prove the loyalty programmes ROI and bottom-line impact...In this chapter we demonstrate and explain - by way of practical examples,calculations, tables and charts - the most important management reports andtools in the loyalty marketers portfolio. These calculations, comparisons andreports make the process of proving and justifying the loyalty programmescontribution to the bottom line not only easier but also more timely andaccurate. Reports that we detail include: 1. The Bathtub report 2. The Decile report (RFM/RFS) 3. The Quo Vadis Retention report 4. The New Member Frequency Report 5. The Cardholders Summary Report 6. Traditional RFM segmentation (125 cells) 7. Reduced RFM segmentation (27 cells) 8. Flexible RFM segmentation (8 cells)1.15 Brand Marketing & LoyaltyThere would be no point in spending marketing dollars building brand awareness if customers dont buythe brand again after theyve tried it the first time. Todays brand marketers all have the same aim: toencourage brand loyalty - the situation where consumers choose a brand over its competitors and privatelabel equivalents because they want to.In this chapter we focus on the successes and techniques seen most recently,and also the problems facing brand marketers and how they can beovercome. We look at the key drivers of brand loyalty, how to form a moreeffective brand strategy, and how to predict the impact of brand loyalty. Wealso detail ways to build and boost a brand, both offline and online, alongwith an examination of common brand threats and nationally successfulbrand strategies.A good definition of brand loyalty is that given by Jan Hofmeyr and Butch Rice, in their bookCommitment-Led Marketing: "Brand loyalty is the tendency of someone to buy a brand again and again because they prefer it over others."Hofmeyr and Rice developed a brand marketing tool called The Conversion Model, which enables themarketer to segment users of a brand in a market by their commitment to staying with the brand, andnon-users by their openness to adopting the brand. Research shows that the brand loyalty of customershas fallen steadily over the past two or three decades. Results vary, but its probably fair to say that todaysaverage consumer is only 75% - 85% as loyal as the consumer of the 1970s or 1980s. So why did thishappen? There are several reasons: 1. There is much more choice today: the number of products within categories has increased. 2. Many "me too" products have been launched, some looking very similar to the original. 3. The number of advertisements seen by consumers daily has increased enormously, especially since new channels like the internet, email and SMS have come on the scene.
  • 37. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 34 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT 4. Modern consumers are more sophisticated and more likely to think for themselves and to try new products. 5. There is more comparative information available, on web sites and in consumer magazines and the national press. 6. The standard of service (and of products) has in many cases improved to the stage where there is not much difference between brands. 7. Price competition has increased.It must never be forgotten that brands exist in the minds of consumers. A brand is not a finite thing like abuilding, that will remain unchanged no matter what people think of it. As public perceptions change,brands change with them. A brand can change without the brand owner making any changes simplybecause, for some reason, public perception of it has changed. Thats why much of this chapter is devotedto the consumers perception of brands.Brand development and brand marketing are inextricably tied to brand loyalty. And companies that tiebrand development to top level corporate goals deliver better shareholder value and build strongerbrands.Strategies and best practices to create value through brand loyalty...In this chapter we clearly explain the linkage between customer loyalty attributes and brand loyalty, andprovide you with the necessary strategies and insights to increase your customers loyalty to your brand.Key strategies and insights covered include: 1. Creating & updating a brand loyalty strategy 2. Drivers of post-recession brand loyalty 3. Factors that break brand loyalty 4. Brand positionings role in customer loyalty 5. Why consumers want more emotional ties with brands 6. Mobile brand interactions must be more personal 7. The role of trust in brand loyalty 8. The role of word-of-mouth (WOM) in brand loyalty 9. The role of digital channels in brand loyalty 10. The role of new technologies in brand loyalty 11. Drivers of CPG brand loyalty & defection 12. Brand marketing & loyalty strategies 13. Premium & luxury brand marketing strategies 14. Brand building in the low-carbon economy 15. Top brands worldwide and their reputations 16. Top brands according to social media data1.16 Business-to-Business (B2B) LoyaltyBusiness to business loyalty programmes and incentive schemes seem, on first consideration, to be a greatidea: a way of encouraging one business to continue doing business with another. But they also come withtheir own pitfalls that dont occur in consumer-based loyalty programmes. For example: 1. Is it ethical to reward a clients employees to make decisions based on personal gain? 2. Who should be rewarded: the business owner, management, employees, the business itself, or all? 3. Is the person who gets the benefits always the one who makes the actual purchase decisions?The list of problems grows or shrinks depending on the industry sector involved, and on how well therelationship between supplier and client is defined and controlled. For example, there is little point in a
  • 38. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 35 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTCPG manufacturer rewarding the product buying clerks at a supermarkets head office when the decisionson product range, quantity, and shelf space allocation are taken by others (such as marketing andmerchandising managers). This represents a tightly controlled buying environment in which directrewards for employees are fruitless.However, in a more flexible (and typically smaller) business environment,buyers often have authority over stock control, product range, quantities,and even merchandising arrangements. In these cases, a B2B loyaltyprogramme that rewards the buyer would probably work - even if itstands on unsteady ethical ground.There is another situation where B2B loyalty schemes work very well: channel sales partner programmes.These are where a manufacturer directly rewards the sales staff of companies that resell its products. Thiskind of selling incentive is very constructive because it benefits both businesses equally, in terms ofgreater sales and profit.By generating strong engagement between channel partners sales people and the products themselves,the resultant increase in product knowledge and familiarity means that a more authoritative line can betaken in the sales process when dealing with end users. A fine example of this kind of programmessuccess is the Indian networking specialist Nortel, which achieved 40% growth in channel sales after oneyear of running such a programme.Four main B2B loyalty strategies...This chapter explains several different B2B loyalty strategies and describes the situations andcircumstances under which each should be used, along with practical ideas on which job roles can bemost effectively targeted within the client company. The main B2B loyalty marketing strategies are: 1. The two-link chain 2. The three-link chain 3. The four-link chain 4. Targeting the SME owner-managerFive attitudes of the most successful B2B marketers...We also explain, step-by-step, the five key attitudes that make a B2B client loyalty initiative successful: · Understand the clients. Learn about them, and make good use of what you learn. · Deliver flawless results. Always fulfil every benefit and promise made. · Just let the customer buy. Dont put any unnecessary obstacles in their way. · Develop a proactive plan, then execute it thoroughly and completely. · Dont assume the client is loyal, and dont give up when they seem to stray.We also detail the key drivers of B2B loyalty, strategies for channel loyalty and reward schemes, a newchannel engagement strategy, the major factors that drive channel partner loyalty, the link betweenbusiness intelligence (BI) and successful channel marketing, and how word-of-mouth travels betweenbusinesses.Case studies of successful B2B loyalty programmes...The detailed case studies in this chapter drill down into some of the worlds best B2B loyalty successstories, what they did, how they did it, and what the results were, including: 1. Nectar Business (UK) 2. Argos Business Solutions (UK) 3. Nortel (India) 4. ARBL (India)
  • 39. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 36 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT1.17 Market Sizing & ValuationIn this chapter we explore, on a country-by-country basis, global consumermarket sizes and statistics, providing breakdowns of population structure,numbers of households, household income distributions, consumer agegroups, gender bias, and other commercially useful facts and figures. The2010 global data has been researched through and gathered from a numberof trustworthy sources including various annual consumer-oriented andmarketing fact books and tables. The result is an overall snapshot of eachcountrys key marketing statistics, up to date as of January 2012.Figures & forecasts for loyalty schemes, worldwide...Among the up-to-date facts, figures and market forecasting tools provided in this chapter: · How to estimate a loyalty schemes market size and future penetration rates, year-on-year · Factors governing a loyalty schemes participation rate and penetration rate · Current loyalty market sizes, values, demographics, and developments for major loyalty markets, including the USA, Canada, United Kingdom, Australia, South Africa and China. · Key demographic data about each of the worlds 54 biggest countries, plus aggregated totals and averages for North America, Europe, the Middle East, and the Whole World, including: 1. Consumer age breakdowns 2. Consumer gender breakdowns 3. Household sizes, population count, and number of households 4. Household income share breakdowns (highest and lowest earners)1.18 Forecasts & TrendsThe times, they are a-changing, as Bob Dylan said. But what Bob neglected to tell us was how fast. Interms of customer loyalty marketing, the most significant trends that seem to be surfacing include thosesurrounding social media, gamification (adding fun and value by providing subject-relevant games),consumer communities, the mobile channel (including apps, web sites, coupons, NFC-based contactlesspayments, and location-based services), emotional and personal relevance to the customer, cause-relatedinitiatives, more insightful analysis and usage of customer data, and customer advocacy and engagement.When it comes to consumer behaviour, there are several ongoing changes that are likely to be with us foryears to come. The global recession has had a significant effect on consumer attitudes to money - andmore specifically value for money - even at the highest ranks of the wealthy and the elite. Shoppers havebecome increasingly promiscuous when it comes to everyday purchases, but they still value quality andvalue above simple price.The pace of change is increasing, thanks to the smartphone...Mobile marketing is about to see a number of significant developments and changes in thinking, the nextfew years are likely to see not only an increase in marketing spend on mobile search and a widespreadimprovement in both speed and usability where mobile web sites are concerned, but also a growing battlebetween SMS, mobile sites, and the ubiquitous mobile app, thanks to a range of factors includingmarketing costs, user convenience, security concerns, and mobile platform technology considerations.And the meteoric rise of the smartphone (in the guise of the Apple iPhone, Blackberry, Android-basedhandsets and numerous others) has changed the way consumers think about product research: whenconsidering a retail purchase of any significant value, most consumers will now reach for theirsmartphone to find out about the item, read reviews written by people like me, compare prices, and evendetermine product availability.Social networks have also changed the way consumers interact, not only with each other but also withbrands; there is now a sense that anything short of an immediate response to a question or complaint
  • 40. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 37 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTposted via social media should be a public relations disaster. Consumers are changing far more quicklythan marketers, and its a full time job keeping up.Customers arent as predictable as they used to be. Theres a whole new way of thinking...Consumers are also crystalizing into distinct behavioural groups that can help marketers segment themmore easily, even when nothing else is known about them. For example, the art of examining web sitevisitor behaviour and drawing meaningful conclusions about their possible purchase intentions is nolonger an art: its a very precise science. As more and more data is collected about customers and the waythey interact digitally with their chosen suppliers, increasingly refined models can be built to help predictthe intentions of other unknown consumers when they make first contact with a brand, regardless ofwhich channel they choose to use. As a result, those parts of the organisation that collect, handle, process,analyse and use data are becoming more instrumental in the success of loyalty and marketing initiatives,turning from back-room IT geeks into modern front-line heroes.Brands are doing battle with unexpected challenges from every side...Finally, brand marketing is no exception to the rule, seeing changes in approach not only from theconsumers side but also from the way in which brands are tackling a host of complicating factors, such asthe recession, new technologies, changing legislation and government guidelines, evolving consumerneeds and the different wants and desires of different age groups. For example, brands will increasinglybecome a surrogate for the concept of value, and what makes goods and services valuable willincreasingly be associated with the brand itself and what consumers believe the brand stands for.For this reason, brands will need to make as much as possible out of green and ethical issues, eco-friendlyproducts and services, emotional engagement and every other aspect of consumers everyday lives thatbears an emotional tie. The challenge, however, will be to find out which issues are most important to thebrands target audience, and how to address those issues in a sincere and relevant way that makesconsumers feel good about the brand.Find out whats really happening out there, and get practical advice on how to deal with it...In this chapter we examine the latest trends and forecasts involving customer loyalty (from both astrategy-driven and a consumer-driven perspective), consumer behaviour and preferences, social mediamarketing and social loyalty strategies, digital marketing (including web-based, email, digitalcommunications and augmented reality), mobile marketing and mobile media, multichannel marketingand commerce anywhere strategy, brand loyalty and affluent customer loyalty, traditional marketing andmailing, voice-of-the-customer initiatives, green marketing, and experiential loyalty rewards. Our detailedexplanations and analysis of trends and forecasts include: 1. Strategy-driven customer loyalty trends 2. Key loyalty marketing trends for 2012-2016 3. Coming trends for retail loyalty marketing 4. Trends for the future of loyalty in the UK 5. Loyalty 2.0 - and what comes next 6. Consumer-driven customer loyalty trends 7. Coming trends in travel loyalty schemes 8. Customer engagement and behaviour trends 9. Customer behaviour change forecast 2012-2020 10. Social & mobile consumer behaviour 2012-2015 11. Customer communication trends 2012-2016 12. Social marketing trends & forecasts 13. Mobile & social strategies to become a priority 14. Digital marketing trends & forecasts 15. Email marketing trends for 2012-2015 16. Online marketing trends for 2012-2015 17. Mobile marketing trends 2012-2016 18. Mobile media trends forecast 2012-2016 ... continued
  • 41. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 38 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT 19. Multichannel marketing trends & forecasts 20. Key brand marketing trends 2012-2016 21. Brand power and brand strength forecasts 22. Traditional marketing trends 2012-2015 23. Voice of the Customer (VOC) trends 2012-20151.19 What The Experts SayIf you could have a hour-long personal interview with the worlds leading experts on customer loyalty,retention marketing, customer win-back, retail operations, and marketing operations management, whatwould you ask them?Weve done exactly that, and asked a selection of thought leaders from around the world to share with ustheir thoughts on customer loyalty marketing. They were given the freedom to comment and expoundupon any subject that they think matters most today, and their honest opinions, advice, answers, practicalguidance, predictions, and solutions are detailed for you in this chapter.We hear from more than thirty world experts on customer loyalty, including: · Loyalty Around The World, according to the regional branches of ICLP · Don Peppers and Martha Rogers from Peppers & Rogers Group · Bryan Pearson from LoyaltyOne · Tim Keiningham et al from Ipsos Loyalty · Brian Woolf from the Retail Strategy Center · Terry Vavra et al from Customer Experience Partners · Andrea Burchett from The Mileage Company · Jolande Duvenage from eBucks · Kelly Hlavinka from Colloquy · Gary Hawkins from Hawkins Strategic · Robert Passikoff from Brand Keys · Cheryle Frenzel from Maritz Motivation · Janet Titterton from Collinson Latitude · Dominic Hofer from Loylogic · Mike Capizzi et al from Marketing Strategists · Mike Atkin from the Customer Strategy Network · Peter Wray from Loyalty Matters · Bill Hanifin from Hanifin Loyalty · Carlos Dunlap from Kobie Marketing · Jill Griffin from Griffin Group ... among many others.1.20 Supermarket & Grocery LoyaltyWith consumers becoming ever smarter about prices and product options, countries of origin, foodmiles (i.e. how far an item actually travels before reaching the shelf), green and organic foods, and healthylifestyle options, it is no surprise that supermarkets are finding it more difficult to satisfy all of thecustomers all of the time. But the problem is worse still, with competition having really opened up on theinternet over the past two years, and even greater price pressure being applied by discount supermarkets
  • 42. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 39 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTsuch as Wal-Mart in the US and Asda in the UK. No consumer market is safe from this intensivelycompetitive atmosphere, it seems.When Sir John Cohen, founder of the UK-based Tesco empire, brought the idea back to the UK from theUS soon after World War II, the model for supermarkets was to "pile it high and sell it cheap". Many ofthe original supermarkets were like glorified market stalls. Then came the concept of self service, and thedistant ancestor of the modern supermarket was born. But today, the leading supermarkets (such asTesco) are among the most sophisticated retailers in the world. They lead every other sector in terms ofcustomer data collection and analysis, stock management, customer service, and pure retail innovation.Metro Group [] in Germany continues to push forward with new automationtechnologies (such as RFID-based tracking of goods throughout the supply chain, self-checkouts, andintelligent shopping carts), and is steadily marching forward with its Future Store []initiative.And as supermarket groups and traditional grocery retailers diversify rapidly into other markets andsectors, they are strengthening not only their hold on the consumers monthly household budget but alsoon insurance, communications, banking, loans, credit cards, household maintenance, car maintenance,travel and holidays, health and well being, and a vast array of other aspects of daily life. This, of course,means that their loyalty card programmes can now collect even more valuable data, gaining a much widerand more general view of each households lifestyles and life stages. These mega retailers are now theleaders in customer segmentation based on purchases in multiple categories and sectors, and are the onesto watch to find out how to target both meaningful and appropriate offers at specific customers.With respect to customer retention strategies, supermarkets can be broadly divided into three groups: 1. Those that rely on every-day low prices (EDLP) to keep their customers; 2. Those that rely on loyalty programmes for best customer marketing; 3. Those that rely on excellent service and ranges of products.Of course, there are many shades in this spectrum and some supermarketchains adopt all three methods to varying degrees.Just as there is no such thing as an average customer, there are no definitelyright or wrong approaches to customer retention. EDLP will appeal to onegroup of consumers, better service and choice will appeal to another, andloyalty programmes will appeal to another.It is important to choose the method that will appeal to the chosen market sector: if the culture of thebusiness revolves around quality (up-market premises, exclusive ranges of premium goods and a superiorshopping experience) then EDLP is probably not the way to go. However, for an enterprise gearedtoward attracting and retaining the bulk of the population as customers, EDLP may be the answer. Oncethe decision is made, it has to be whole-heartedly applied. All decisions should be made with the cultureof the business in mind.Key insights into the success of supermarket loyalty schemes...This chapter explains why supermarket loyalty programmes usually succeed where other retailers loyaltyprogrammes risk stalling, as well as other insights such as: · Why supermarkets are usually the best at understanding their customers · What drives grocery shoppers choices · What grocery shoppers need and want from their favoured supermarketsCase studies showing how the best loyalty schemes work, and why...In this chapter we have researched, explored, detailed, summarised and explained every aspect of what webelieve are some of the worlds most exemplary supermarket loyalty programmes, and we present details
  • 43. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 40 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTof the programme and rewards structure, the programme operator, and programme developments overthe past few years, along with membership counts and redemption figures wherever possible, including:Case studies of UK supermarkets: 1. Asda (EDLP) 2. Co-op (Dividend Card) 3. Iceland (Bonus Card) 4. Sainsburys (Nectar) 5. Tesco (Clubcard) 6. Dunnhumby (the story behind Tescos analytics)Case studies of US supermarkets: 1. Big Y (Express Rewards) 2. Giant Foods (BonusCard) 3. Kroger (Kroger Plus) 4. Meijer (EDLP) 5. Price Chopper (AdvantEdge Card) 6. Safeway US (Club Card) 7. Safeway Canada (Club Card) 8. Wal-Mart (EDLP)Case studies of other supermarkets around the world: 1. Coles/Wesfarmers, Australia (FlyBuys) 2. Countdown, NZ (OneCard) 3. PicknPay, S. Africa (Smart Shopper)We also highlight some of the most recent and innovative developments in customer loyalty from othersupermarkets including: Giant Eagle (USA), Winn-Dixie (USA), Stop & Shop (USA), Market Street(USA), ShopSavvy & Grocery Server (USA), Metro (Canada) and Carrefour (France).1.21 General Retail LoyaltyIn general retail, todays key need is to focus on what drives loyalty programmes, what customers actuallyprefer, and what the future is likely to bring. Most retailers accept that they need to know more abouttheir customers, and that the knowledge should be centrally recorded so that it is available to employeeswhen they need it.In this chapter we examine what makes consumers shop the way they do, what makes them choose oneretailer over another, and illuminate the dynamics and challenges of loyalty programmes in the generalretail sector, looking in detail at some of the leading programmes, operators, and developments in thefield.Most retailers accept that they need to know more about theircustomers, and that the knowledge should be centrally recorded so thatit is available to employees when they need it. The days when it wasenough for Mary in Haberdashery to know all about which lace sellsand which one doesnt, or who the best customers are and what theylike, have long gone.
  • 44. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 41 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTLoyalty programmes enable that information to be recorded and so are an essential part of retail. Theretailer judges the usefulness of a loyalty programme by how it can help run the store more efficiently andprofitably. But customers have a different view of loyalty programmes. To the customers, the programmeexists solely to reward them for their custom. If they think that they would prefer to be rewarded in someother way, they dismiss the programme as being unnecessary. The people on opposite sides of thecounter assess the usefulness of loyalty programmes in totally different ways. With that in mind, its notsurprising that many customers, when given the choice, opt for simple discounts instead of a loyaltyprogramme - they are not taking into account the hidden benefits that a programme provides for them -the more effective stock control, the better merchandising and the greater personal relevance ofmarketing messages.However, its what the customer thinks of the programme that really matters. Thats why its important tolisten to their views and to do whatever is possible to correct their misapprehensions. It must also beunderstood that loyalty cards are not a substitute for getting the basics right, even though they do addvalue to the retail proposition.Strategies and insights for a successful retail loyalty scheme...In this chapter we detail all the latest insights, strategies, and pain points affecting retail customer loyalty,including: · Retail loyalty strategies · The arguments for retail loyalty schemes · Latest US retail loyalty programme membership figures · Insights into the retail customer · The effect of the increasingly anonymous customer · The effect of the retail customer experience · Consumers enthusiasm for new retail technologies · How loyalty has saved retailers from the recession · The business benefits of cross-channel retail systemsCase studies showing how the top retail loyalty schemes have succeeded...For this chapter we researched, summarised and explained every aspect of what we believe are among theworlds finest retail customer loyalty programmes, and we present details of the programme and rewardsstructure, the programme operator, and programme developments over the past few years, along withmembership counts and redemption figures wherever possible, including:Retail case studies from the UK: 1. Boots (Advantage Card) 2. LG (brand loyalty) 3. Pigsback (retail rebates) 4. Superdrug (Beautycard)Retail case studies from the USA: 1. Best Buy (Reward Zone) 2. CVS/Pharmacy (Extra Bucks) 3. eBay (eBay Bucks) 4. Neiman Marcus (InCircle) 5. Nordstrom (Fashion Rewards) 6. Rite Aid (Wellness+) 7. Sears/Kmart (Shop Your Way Rewards) 8. Staples (Staples Rewards)
  • 45. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 42 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTRetail case studies from other countries: 1. Hbc, Canada (Hbc Rewards) 2. Canadian Tire (Canadian Tire Money) 3. Home Ideas, Australia (AdvantageCard) 4. Jet, South Africa (Jet Club) 5. SPC Card, Canada (Student Price Card)We also highlight some of the latest innovations and developments in customer loyalty from otherretailers around the world, including: (USA), Bluewater Mall (UK), (USA), CitizyNFC Project (France), DubLi (Spain), Green Stamp (Japan), HMV (Canada), Holland & Barrett (UK),House of Fraser (UK), (India), JCPenney (USA), Jewel-Osco (USA), Macys (USA),National Gift Card (USA), Sams Club (USA), Sears (Canada), Shoppers Drug Mart (Canada), ToysRUs(USA), Zazzle (USA), and Zed Tema (Russia).1.22 Financial Services LoyaltyCustomer acquisition and retention costs a lot in the financial services sector, and that calls for deeperrelationships to help keep customers loyal over time. With a growing ease of switching, relying on inertiais no longer an option to keep customers tied in, so financial service institutions in every country haveidentified the need to adjust their customer loyalty strategy to suit todays highly competitive marketplace.Its often said that it can cost up to seven times more to acquire one new customer than to retain anexisting one. But in the financial industry, the costs reach a whole new level: acquiring one new customercan exceed US$350. As a rule, of these 20% will be very profitable, 20% will cost money to retain, and themiddle 60% will pay for themselves while generating marginal revenue, according to Harvard BusinessReview []. With statistics like these, a customer engagement and retention plan based onextensive data collection and analysis is imperative for the long-term health of companies in the financialindustry.Financial institutions must therefore find a way to retain profitable customers, make marginallyunprofitable customers into profitable ones, and reduce the marketing budget spent on the most costlycustomers. To do that, and to increase customer loyalty, financial industry firms need to constantlymonitor their customer portfolio and actively manage their marketing efforts based on the changingbehaviour of their customers.Best practices and insights to grow financial customer loyalty...In this chapter, we examine not only the latest thinking on how to do so, but also the many customerretention, loyalty and CRM initiatives that have been launched during the past two years. Among thepractical insights and best practices detailed in this chapter for financial service providers: · Drivers of financial loyalty and churn · Building loyalty to banks · How credit unions can boost loyalty · Barriers to banking loyalty · How banks can earn younger customer loyalty · Co-branded payment card initiatives · Debit & credit card loyalty strategies · How customers choose their preferred payment method · The potential for debit card loyalty · The potential for credit card loyalty · Factors driving insurance provider loyalty · How car insurance providers are earning new levels of loyalty
  • 46. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 43 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTThis chapter contains detailed case studies and programme summaries of major financial institutionsaround the world and their loyalty offerings, including: 1. American Express (Global) 12. MasterCard (Global) 2. Bank of America (USA) 13. MBNA (Global) 3. Barclaycard (Global) 14. MoneyGram (US, Canada & Europe) 4. Barclays Lifes Rewards (UK) 15. PayPal (Global) 5. BMO (Canada) 16. RBC (Canada) 6. Capital One (USA) 17. Scotiabank (Canada/USA) 7. Chase (USA) 18. TD Bank (Canada) 8. Citi (Global) 19. US Bank (USA) 9. Discover (USA) 20. Visa (Global) 10. HSBC (Global) 21. Wells Fargo (USA) 11. Lloyds TSB (UK) 22. Zions Bank (USA)We also detail some of the latest developments and innovations from other brands and companies usingfinancial products to engender greater loyalty, including: Qantas, Priority Club Rewards, QuickTripRewards, NFL, Delta Air Lines, Hyatt, Kroger, AAA, AviancaTaca LifeMiles,, and GulfBank Kuwait, among others.1.23 Airlines, FFPs & Airport LoyaltyThe traditional long-haul and domestic airlines and their frequent flyer programmes have faced increasingcompetition over the past few years, not only from each other but also from a vast array of smaller start-ups and low cost, budget carriers. An increasing number of business class only airline operators hasadded extra pressure to a market that relies heavily on business and first class fares to subsidiseoperations. And business growth has been made even harder to achieve by increasing numbers andcomplexities of security checks and updated airport procedures, all of which have conspired against thehumble passenger and caused many people to seriously re-think any plans they have for air travel.The simultaneous rise of internet-based phone calls (such as Skype), online meeting and presentationservices, and of course video conferencing has provided many business people - who would previouslyhave had to travel by air - with an alternative way of conducting business without the cost orinconvenience of leaving the office.These factors have combined to spur airlines across the board into ever-more clever and innovativefrequent flyer programme developments. Some of the new features focus on the airport and its associatedservices, while others focus on the flight itself. Almost all focus on passenger comfort and convenience,with almost all higher tiers (the so-called elite frequent flyers) being offered faster ways of gettingthrough check-ins, security checks, baggage collection, and transfers. There has also been a mass moveamong the larger airlines into online loyalty malls and new mileage redemption options that start at lowerlevels than the traditional 25,000 or 35,000 miles-per-seat award ticket.The higher classes of travel (business class, premium class, first class, and half a dozen other namesdescribing non-economy classes) are clearly the focus of airlines attention. This reports authors predictthat this trend will continue to grow, driving a significant wedge between airlines that carry economypassengers (for whom personal service can be expected to decline in line with decreasing prices) andthose that carry business and luxury passengers (for whom personal service will increase thanks to thelower financial and staffing overheads caused by the loss of economy class).But otherwise-loyal passengers face a growing problem...There is, however, a consumer-facing problem that is common to many of todays airline loyaltyprogrammes: excessive complexity. While airlines are complex enterprises with many hundreds ofvariations of tickets, seats, classes, routes, destinations, customers, and even baggage and security rules,
  • 47. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 44 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTthe customer should not have to understand and negotiate all of these complexities in order to work outwhat reward they can get for flying from Point A to Point B next month.Most frequent flyer programmes offer different tiers or status levels (which are clearly necessary todifferentiate between high-end benefits for profitable customers and low-end rewards for occasionalpassengers), but programme members are understandably confused by a wealth of tier points, elite statusqualifying miles, qualifying segments, qualifying miles, partner points exchange rates, redemptionmechanisms, vouchers, class upgrade options, and so on. Now compare this situation to a supermarketretailers "points means rewards" loyalty card programme, in which shoppers understand that every US$1they spend earns them 1 loyalty point, which equals US$0.01 in rewards, and in which redemption is assimple as walking up to a checkout counter.New ideas to support differentiation in the commoditized air travel market...If frequent flyer programmes are really aiming to differentiate their respective airlines in the mind of thetime-pressured traveller, airlines must surely take a step back and re-examine their loyalty offerings with aview to simplifying them and making them more predictable and comparable.Among the hundreds of facts, figures, insights and consumer research detailed in this chapter: · Why FFPs are still vital to airlines future growth · Strategies to reinforce the value of FFP miles · Key factors for building stronger FFP relationships · Value that airlines can extract from their loyalty data · How even low-cost airlines can benefit from loyalty · Why FFPs represent a Panacea for airport loyalty · The benefits of an FFP in times of recession · How FFPs can generate significant increases in income · How passengers really feel about airlines and airportsCase studies of 26 major FFPs and their strategies, structures and development...In this chapter we present detailed case studies and programme summaries for 26 major airlines, withprogramme developments and membership figures in all cases, including: 1. Air Canada (Aeroplan) 14. Jet Airways (JetPrivilege) 2. Air France/KLM (Flying Blue) 15. JetBlue Airways (TrueBlue) 3. Air New Zealand (Airpoints) 16. Lufthansa (Miles&More) 4. Alaska Airlines (Mileage Plan) 17. Malaysia Airlines (Enrich) 5. American Airlines (AAdvantage) 18. Northwest Airlines (merged with Delta) 6. British Airways (Executive Club) 19. Qatar Airways (Qmiles) 7. Brussels Airlines (Miles&More) 20. South African Airways (Voyager) 8. China Southern (Sky Pearl Club) 21. Southwest Airlines (Rapid Rewards) 9. Continental Airlines (MileagePlus) 22. United & Continental (Mileage Plus) 10. Delta Air Lines (SkyMiles) 23. US Airways (Dividend Miles) 11. Emirates (Skywards) 24. Virgin America (Elevate) 12. Etihad (Etihad Guest) 25. Virgin Atlantic (Flying Club) 13. Frontier (Early Returns) 26. Virgin Blue (Velocity Rewards)We also chart the latest developments and loyalty initiatives of several other airlines from around theworld, including: Aeromexico (Club Premier), Air China (Companion), AirTran (A+ Rewards), BahrainAir (Loyalty Rewards), bmi (Diamond Club), Flybe (low cost flights), Hawaiian Airlines (HawaiianMiles),Kulula (Jetsetter Club), Qantas (Frequent Flyer), and TAM Brazil (Multiplus Fidelidade).
  • 48. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 45 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT1.24 Hotel & Resort LoyaltyIn todays competitive hospitality market, many hotel operators are adding frequent guest loyaltyprogrammes to foster customer relationships, attract new customers, and encourage longer stays, whichsuggests that rewards programmes are seen as being more effective in creating loyalty to hotel brandsthan simple discount-based promotions and incentives.In the past two years, hotel and resort operators have also made significant efforts to expand thepampering and luxury options available to their most frequent guests. Many hotel groups have alsofound value in providing extras and perks for every guest, regardless of membership of a frequent guestprogramme. But by far the most valuable rewards offered to travellers who frequent the same hotels timeafter time are the personal touches that provide a feeling of consistency, familiarity, and home-likecomfort - such as having their preferred newspaper delivered each morning, having their preferred typeof pillows and bedding, or having the hotel staff know their preferences in advance. While there is still alot of progress that can be made in this respect - for example, with the use of technologies such as RFID,NFC, and even biometrics - many upscale hotels have already taken active steps to get this aspect of theirservice right.Case studies, programme summaries, and up-to-date membership figures...In this chapter we provide not only the latest membership figures of each of the major hotel frequentguest programmes around the world, but also complete case studies and programme summaries for eachof the following: 1. Accor (A-Club) 7. IHG (Priority Club Rewards) 2. Best Western (Best Western Rewards) 8. Marriott (Marriott Rewards) 3. Carlson Hotels (Club Carlson) 9. Ritz-Carlton (Ritz-Carlton Rewards) 4. Choice Hotels (Choice Privileges) 10. Starwood Hotels (Preferred Guest) 5. Hilton (Hilton HHonors) 11. Wyndham (Wyndham Rewards) 6. Hyatt (Gold Passport)Case studies charting the rise of the independent hotel alliance...Another growing trend that has appeared in the hotel industry over the past few years is the rise of hotelalliances - such as Voila - which seek to unite smaller hotel groups and independent hotels under onemarketing umbrella, and usually under a single loyalty programme offering. In this chapter we providedetailed case studies and breakdowns of each of four major alliances: 1. GHA Discovery (Global) 2. sQuidcard (UK) 3. Stash Hotel Rewards (USA) 4. Voila Hotel Rewards (Global)1.25 General Travel & Tourism LoyaltyThis chapter looks into recent developments and innovations in the general travel and tourism sector thatare not directly associated with airlines, frequent flyer programmes, hotels, holiday resorts, and frequentguest programmes. It includes loyalty and customer satisfaction-related developments throughout thesector, worldwide, and the findings of surveys and research concerning cruises, travel sellers, travelincentives and loyalty schemes, rail operators, regional and national tourism initiatives, and car rentals.Clearly, the loyalty market has reached a state of maturity in the airline, hotel and car rental industries,with very few such loyalty programmes today being able to claim genuine competitive differentiation.Simply matching the proposition offered by the competition is not enough to create lasting customerloyalty. When all programmes within a sector are basically the same (e.g. they all have online enrolment,
  • 49. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 46 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTan award chart, a welcome bonus, double miles promotions, and so on), customers tend to react withindifference. With this in mind, true differentiation is the best way (and arguably the only way) tomaintain interest and increase consumer awareness, for the simple reason that customers tend to noticenew products and services that stand out from the crowd.So how can travel-related loyalty programmes differentiate? To gain that competitive advantage, themarketing team responsible for the loyalty programme must: 1. Use their member data to garner true customer insights; 2. Use all their market know-how to enable better market positioning on a strategic level.Only by using this knowledge - and using it before the competition does - can a travel sector loyaltyprogramme create a sustainable, differentiated proposition.Indeed, loyalty schemes cannot afford to stand by and watch new schemes and approaches developamong their competitors. Along with some methods for measuring differentiation, some best practices,and some future trends, this chapter demonstrates that: · Despite significant competition in the travel sector, there is still plenty of room for differentiation; · Smart positioning and innovative techniques can make the difference between successful differentiation and being "just another travel programme".Loyalty programmes are adding much needed value for travel customers. It is true that there are still manyopportunities for travel loyalty programmes to lead the way, but having the next great idea is just part ofthe success equation: putting them into action before the competition does (and creating a barrier to entrywherever possible) is what completes the equation.Case studies and summaries of the major car rental loyalty schemes...In this chapter we provide detailed case studies and programme summaries of car rental companiesloyalty programmes and incentive schemes, including: 1. Avis (Avis First) 5. Europcar (Privilege) 2. Budget Rent A Car (RapidRez) 6. Hertz (Gold Plus Rewards) 3. Dollar Rent A Car (Dollar Express) 7. National Car Rental (Emerald Club) 4. Enterprise (Enterprise Plus) 8. Thrifty (Blue Chip Rewards)Insights for a deeper understanding of what travellers want from loyalty schemes...This chapter also examines a number of other travel and tourism-related customer loyalty insights,including: · Why the travel industry needs to re-ignite customer loyalty · Why value is the key driver of travel loyalty and engagement · How travel loyalty schemes need to go the extra mile · Why travel loyalty schemes should offer lifestyle bundles · Why theres little brand loyalty among online travel bookersWe also detail a number of the latest innovations and developments in travel-related loyalty programmesaround the world, including: Club Yogi Rewards (USA), Raiffeisen-Tours-Kooperation (Germany),Seawings (UAE), Affinion & Connexions (USA), Amtrak Guest Rewards (USA), Sabre Red (Global),Travelex & Air Miles (UK), Royal Caribbean Crown & Anchor Society (USA), Club Med & Carlson(USA), SuperAgency SuperCa$h (USA), RBC Rewards & Travelocity (Canada), Marriott Rewards(Global), Latitudes Rewards (Norway), Sixt & PayBack (Germany), Eurostar Plus (Europe), ExpediaRewards (USA), Ticketmunky (UK) and Merseytravel Walrus Card (UK).
  • 50. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 47 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT1.26 Food, Drink & Entertainments LoyaltyFood and drink providers - whether they are diners, quick service restaurants, pizzerias, snack bars, or fullservice restaurants - have all had a hard time differentiating their offerings during the past few years. Theover-abundance of these establishments in every town in almost every country has had a profound effecton customer loyalty, with many consumers now viewing the task of choosing a place to eat or drink asbeing insignificant and irrelevant. The nearest place is often the first choice.But there have been many innovative efforts to combat this undifferentiated and often lack-lustre market,including the use of new technologies such as mobile phone loyalty programmes, new and moreconvenient payment methods, programmes to drive greater emotional engagement, internet-based andmobile phone-based coupons and vouchers, and a host of partnerships between food service providersand major brands in other sectors.Other recreational sectors have also seen great strides in terms of customer loyalty innovation over thepast few years, with new programmes, rewards, and engagement tactics appearing in familyentertainments, film and video, sports (of just about every kind), and of course the ever-popular casinosand gaming markets.Eating...In this chapter we examine the best of the best among these initiatives, and explore how theirmechanisms work, and what effect they have had on customer loyalty, repeat business, and overallcustomer retention and engagement, along with studies and insights including: · Factors that influence diners restaurant choices · Proof that loyalty schemes work for restaurants · Evidence that restaurants leak 30% of their customersWe also examine the latest developments in food-service customer loyalty, including initiatives at CAPizza Kitchen, Panera Bread, Carls Jr. & Hardees,, Dunkin Donuts, Red Robin, andUltraONE.Drinking...Loyalty to beverage suppliers is also a hot topic, and we examine and highlight recent changes andinnovations in the drinks loyalty market, including Starbucks, Guinness, Coca-Cola and Baristas Coffeeamong others.And being merry...At the same time, in the field of entertainments, movie theatres have also been very active in nurturingnot only repeat business but perks and benefits-based customer loyalty. In this chapter we examine thecream of these programmes from the US, including AMC Theatres, Audience Rewards, Red CarpetRewards Club, Regal Crown Club, and Star Rewards.1.27 Mobile, Fixed Line & ISP LoyaltyTelecoms operators across the world have tried a number of different techniques to nurture customerloyalty and reduce the inevitable churn produced by number portability and mobile handset subsidies.Some operators have paired up with existing loyalty programmes while others have set up their ownschemes. Yet others have chosen to run shorter-term promotions in their bids to both acquire and retaincustomers.As has been the case for at least the past three years, much of the sectors loyalty-related activity has comefrom the mobile telecoms sector, while fixed line providers - particularly in the USA - seem to have beenconcentrating more on the bundling of services, internet and cable broadband services, VoIP (voice overinternet), and improvements in both customer service and satisfaction.
  • 51. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 48 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTIn particular, the mobile phone has become increasingly associated with customer loyalty, not onlybecause mobile network operators and handset manufacturers are desperate to find ways of lockingcustomers in to their brands but also because the mobile phone itself has become a worthy target for allkinds of new loyalty-enabling concepts and technologies. For example, loyalty marketers are now - as wepredicted in The Loyalty Guide 4 - looking at the consumers mobile phone as not only a potentialreplacement for plastic loyalty cards, but also as a replacement for payment cards and as a mechanism fordirect, personalised, one-to-one marketing communications.And with the addition of contactless technology and integrated social networking to many mobile phones,our next prediction is that personalised, opt-in, event-based and location-based marketing will increasinglytake place through contactless consumer interactions with anything from POS systems and smart postersto social networks and mobile apps.In this chapter we examine customer loyalty to both mobile telecoms providers and fixed line telecomsproviders, charting the telecommunications industrys progress in terms of earning greater loyalty andreducing the churn levels that have for so long characterised the market.Mobile network customer loyalty explained...This chapters coverage of developments and insights into mobile customer loyalty include: 1. Mobile loyalty insights and research 2. Why loyalty is the top priority for mobile networks 3. Mobile network rewards programmes drive satisfaction 4. Why smartphone users are more loyal to their networks 5. How smartphone loyalty cant be forced 6. Drivers of mobile network loyalty and churn 7. The key drivers of smartphone user churn 8. A bright future for mobile loyalty schemes 9. Why loyalty to European mobile networks is high 10. How unsuitable CRM systems ruin mobile relationships 11. Which customers arent loyal to their mobile service, and why 12. Loyalty offerings from mobile network operators around the worldFixed line telecoms customer loyalty in a nutshell...And our coverage of developments and insights into fixed line customer loyalty include: · Consumers surprising loyalty to fixed line telcos · Customer loyaltys critical role in telco growth · Why telecoms customers dont really want discounts · The primary driver of telco customer defections · Why broadband churn has become an epidemic1.28 Automotive & Fuel LoyaltyThere are two key areas involving customer loyalty in the automotive sector: automotive sales, and fuelsales. In this chapter we examine both areas, showing how each is being handled by manufacturers andsuppliers.Cars are now almost a commodity, and car manufacturers have a problem. It might almost be fair to saythat the most noticeable point of differentiation between competing, similar marques is the dealer whosells the car. Certainly, that seems to be the area where most can go wrong, and most complaints arise. Somuch depends on the way the car is sold and particularly the way that the after sales contacts and serviceare carried out. Its quite possible that its for this reason that research shows less loyalty to dealers than tomanufacturers.
  • 52. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 49 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTTo build loyalty to the marque, the manufacturer has to produce an attractive, desirable, reliable vehicle atthe right price. Most of them would seem to be very good at doing that. It is essential that dealers - thepotential weak link in the chain - are single pointed, focusing on finding out what their customers want,why they want it, and work out ways of meeting these needs as closely as possible. And, while new carswith very lengthy service intervals may be very convenient for the customer, they make it even less likelythat the dealer and customer will have many opportunities to build a relationship. Every contact - rare asthey are becoming - must be treated with great care and delicacy if any loyalty is to be built.And the fuel retail market (that is, petrol to the Briton or gasoline to the American) was one of the firstto become involved in loyalty programmes. In fact, in the early 1990s, many people equated loyaltyprogrammes with forecourt programmes. Many of the initial programmes were quite rudimentary andcollected no useful customer data. Some gave a gift when a certain amount was spent on fuel - forexample, a free drinking glass for each £5 spent. Not even the customers name was collected. Othersissued stamps or coupons for each purchase. And when these were redeemed, the customer was onlysometimes identified. Another problem with forecourt loyalty programmes is that they tend to eat intoalready-slim profit margins, and usually contribute very little to lucrative non-fuel sales in forecourt shops.However, the market has changed significantly over the past few years, and fuel companies have beenquick to change their tactics accordingly. Loyalty card and token-based initiatives on the fuel forecourthave become far less common. Today, the most common types of reward seen on fuel forecourts areundoubtedly the cents off per litre discount offers tied to various minimum supermarket spend levels,reward points-per-litre that are redeemable for fuel discounts and convenience store vouchers, and fuelretailer branded credit cards that offer rebates against future fuel purchases.Factors driving vehicle buyer loyalty, and how the market has responded...This chapter details all the latest customer loyalty research, insights and developments in the automotivefield, including: 1. Automotive loyalty insights 2. Why car buyers seem to prefer imported vehicle brands 3. Who leads and lags behind in car owner loyalty 4. Factors that drive loyalty to vehicles and marques 5. Details of loyalty-boosting ideas from Belle Tire, Pit-Stop, AAA, Ford and Tata Motors.How rewards and incentives are being used to drive vehicle sales...We also provide case studies and programme summaries of the major vehicle purchasing loyalty initiatives(while most are in fact incentive-based offerings), including: · Chrysler Group (USA) · Kia (Canada) · Kenworth Trucks (USA) · Mercedes-Benz (USA) · Kia (USA) · Toyota (Canada)How fuel retailers keep motorists coming back to their pumps, again and again...In addition to detailing the latest loyalty and reward programme developments in the fuel retail market,this chapter provides detailed case studies and programme summaries of 11 major fuel retailer loyaltyprogrammes around the world, including: 1. BP (UK) 7. Petro-Canada (Canada) 2. Coles Express (Australia) 8. Shell (UK) 3. Esso (Canada) 9. Shell (USA) 4. Esso/Exxon Mobil (Singapore) 10. Shell (other countries) 5. FuelPerks! & Fuel Rewards (USA) 11. Texaco (UK) 6. Indian Oil (India)
  • 53. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 50 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NT1.29 Media & Publishing LoyaltyMany media publishers and channels (particularly magazines and radio stations) have recently found that,with an increasing number of non-traditional entertainment options (such as internet video and radio, andonline daily journals and blogs), the battle for the loyalty of listeners, viewers and readers has becomemore intense than ever before.Many forward-thinking newspapers and magazines have begun rewarding subscribers and re-subscriberswith luxury or aspirational rewards and services.Radio stations are increasingly using web sites and the mobile channel to encourage listeners to engagewith them and earn rewards. Marketers have also come to realise that todays youngsters are tomorrowsmature consumers, and a number of youth loyalty initiatives have also been implemented to make brandadvocates out of students.And, with the rise of online booksellers (for both new and second hand books), a number of bricks-and-mortar book retailers have implemented loyalty programmes to help them keep customers coming intotheir stores.What booksellers have been doing to keep customers loyal...In addition to examining newspaper & magazine loyalty, radio & television loyalty, and other mediapublishing loyalty initiatives, this chapter provides detailed case studies and programme summaries offour major bookseller loyalty programmes (including the one that got away): 1. Angus & Robertson (A&R Rewards) 2. Barnes & Noble (B&N Member) 3. Borders Rewards (now closed down) 4. Indigo Books & Music (Plum Rewards)1.30 Loyalty in Other SectorsOrganisations in a wide variety of market sectors - other than the most familiar ones such as travel, retail,and grocery - have begun to experiment with customer loyalty, behavioural rewards and incentives. Andthere are yet more sectors that are increasingly becoming involved in loyalty and relationship managementinitiatives, despite not having "customers" in the usual sense of the word.For example, charities and non-profit organisations (NPOs) around the world are increasingly turningtheir attention to donor relationship management to either stabilise or increase their flow of donations.During the past two years, many NPOs have discovered what they believe to be flaws in traditionalcharity marketing strategies and have set about creating new strategies, often employing the latestcustomer loyalty ideas and technologies.At the same time, a number of everyday retail and coalition loyalty programmes have found favour withconsumers by offering charitable donation facilities among their other redemption options. Manyconsumers appear to feel that, while their loyalty points do not accumulate quickly enough to providethem with worthwhile personal rewards, their loyalty points could be better used by donating them (ortheir cash value) to deserving charities or local community non-profit initiatives.Governments have also become far more involved in rewards programmes to drive citizen behaviourchanges, including the use of emerging technologies and complex rewards platforms to encourage, forexample, waste recycling efforts.
  • 54. ORDER & DOWNLOAD AT WWW.THELOYALTYGUIDE.COM 51 5 YOU MA Y NO T COPY OR REPRODUCE THIS LI CENSED DOCUME NTHow loyalty is changing in diverse and niche markets...In this chapter we examine all the other sectors in which customer loyalty has - in one way or another -helped to change the way people think and behave, whether thats toward brands, charities, services,education, authorities, lifestyles, or even other people. Among the topics and insights examined: 1. Community, town and city loyalty schemes 2. Government/citizen reward schemes 3. Charitable and cause-related loyalty schemes 4. Education-related loyalty schemes 5. Health & lifestyle loyalty schemes 6. Green, eco-friendly & recycling loyalty schemes 7. Energy utility loyalty schemes 8. Sports loyalty schemes 9. Gaming loyalty schemes 10. Gambling loyalty schemes 11. Niche market loyalty initiatives1.31 Global loyalty suppliersThis appendix provides a detailed, categorised directory of customer loyalty related businesses and serviceproviders, created to provide a quick reference and access to market-leading suppliers, whether they arepotential suppliers, clients or strategic partners. Each company is listed along with contact details,company background (where available), a summary of its usual activities, service provision categories (asdetermined by the company itself), and a list of countries or territories in which the company usuallyoperates.The appendix is split into two sections. The first section lists the 17 service provision categories (eachcompany is associated with up to five such categories). For each category the relevant suppliers are listedin groups according to their country of origin. The service provision categories are: · Customer loyalty systems · CRM/BI systems · Customer experience management · Call centres · Developers & integrators · Application hosting · Loyalty scheme operators · Point of Sale (POS) technology · Data warehousing & data mining · Consultancy & advice · Couponing · Gift certificates & incentives · Internet marketing · Direct marketing · Research and analysis · Public relations/media/events · Industry associationsThe second section includes a complete listing of all 208 customer loyalty and service suppliers in strictalphabetical order.
  • 55. Table of Contents Volume 51 Executive Summary 2 The Business Case for Loyalty1.1 Introduction 2.1 Introduction1.2 The business case for loyalty 2.2 Business benefits1.3 Loyalty coalitions 2.2.1 Benefits of a good loyalty strategy1.4 Loyalty rewards & incentives 2.2.2 Thriving in a rapidly changing market1.5 Customer engagement and loyalty 2.2.3 Loyalty programmes drive advocacy1.6 Social media and loyalty 2.2.4 Retail choices are swayed by loyalty schemes1.7 Loyalty & marketing tools 2.2.5 Consumers will spend more for valued rewards1.8 Loyalty & marketing operations 2.2.6 Loyalty scheme members simply respond better1.9 Customer data strategy 2.2.7 Loyalty is the key to the young and wealthy1.10 Loyalty & marketing communications 2.2.8 Loyalty schemes drive customer advocacy1.11 The human aspect of loyalty 2.2.9 Benefits of Business-to-Business (B2B) loyalty1.12 Loyalty & marketing best practices 2.3 Factors influencing loyalty1.13 Loyalty metrics & accountability 2.3.1 Core offering1.14 Reporting & segmentation 2.3.2 Satisfaction1.15 Brand marketing & loyalty 2.3.3 Elasticity level 2.3.4 The marketplace1.16 Business-to-business (B2B) loyalty 2.3.5 Demographics1.17 Market sizing & valuation 2.3.6 Share of wallet1.18 Forecasts & trends 2.3.7 Other factors affecting loyalty1.19 What the experts say1.20 Supermarket & grocery loyalty 2.4 Financial aspects1.21 General retail loyalty 2.5 How loyalty programmes pay back1.22 Financial services loyalty 2.6 BCM: an alternative strategy1.23 Airlines, FFPs & airport loyalty 2.6.1 Introduction1.24 Hotel & resort loyalty 2.6.2 Long term or short term?1.25 General travel & tourism loyalty 2.6.3 The case for Best customer marketing1.26 Food, drink & entertainments loyalty Rediscovering and reinventing an old concept The introduction of loyalty programmes1.27 Mobile, fixed line & ISP loyalty How many customers are really profitable?1.28 Automotive & fuel loyalty Customer-focused marketing: the long term view1.29 Media & publishing loyalty 2.6.4 The properties of Best Customers1.30 Loyalty in other sectors What are Best Customers?1.31 Loyalty suppliers directory What makes a Best Customer? 2.6.5 Customer segmentation What segmentation involves Methods of segmentation RFM Deciles or quintiles Thresholds Demographics 2.6.6 The direct approach to BCM Introduction TCC: the retail marketers best kept secret
  • 56. 3 Loyalty Coalitions 4 Loyalty Rewards & Incentives3.1 Introduction 4.1 Introduction 4.2 The value of rewards3.2 Coalition programmes 4.3 The function of the reward3.2.1 Why a coalition programme? 4.4 The properties of a loyalty reward3.2.2 Essentials 4.5 Getting value from the reward 4.5.1 Lowering the loyalty budget without risking loyalty3.2.2.1 Rapid market penetration 4.5.2 The level of the reward3.2.2.2 Ability to deliver attractive rewards 4.5.3 Leveraging the reward3.2.2.3 Need to be the first 4.6 Types of reward3.2.2.4 Build reliable communication channels 4.6.1 Discounts Untargeted discounts3.2.3 Advantages of coalitions Targeted discounts3.2.4 Challenges of a coalition programme Discount programme insights3.2.4.1 What about the grocer? Price-led adverts have become brand killers3.2.4.2 Who owns the data? Prestige brand discounts have paid off3.2.4.3 Loyal to programme or partner? 4.6.2 Points-driven programmes 4.6.3 Soft rewards3.2.4.4 Reputation 4.7 Timing of rewards: instant or later? Difficult to pilot 4.8 What rewards do consumers really want?3.2.5 Typical application areas 4.8.1 What consumers think they want 4.8.2 What consumers actually want3.2.6 Making a single programme a coalition 4.8.3 Consumers now seek security before rewards3.2.6.1 Taking it to the next level 4.8.4 Consumers want redemption with cash options3.2.6.2 Prerequisites of expanding the programme 4.8.5 Rebates drive retail responses3.3 Coalition programme case studies 4.8.6 Rebates increasingly popular with US consumers 4.9 Redemption strategies3.3.1 Case study: Air Miles (worldwide) 4.9.1 External redemption3.3.1.1 Air Miles (UK) - (now known as Avios) 4.9.2 Internal redemption3.3.1.2 Air Miles (Canada) 4.9.3 Networked rewards3.3.1.3 Air Miles (Spain) - aka Travel Club 4.10 How to plan a rewards catalogue3.3.1.4 Air Miles (Netherlands) 4.10.1 Strategy to drive redemptions and engagement3.3.1.5 Air Miles (Middle East) 4.10.2 Major factors for high attraction rewards 4.10.3 Matching the rewards with various point levels3.3.2 Case study: Aeroplan (Canada) 4.11 Loyalty reward insights3.3.3 Case study: BonusLink (Malaysia) 4.11.1 Loyalty rewards: what works and what doesnt3.3.4 Case study: eBucks (South Africa) 4.11.2 Instant redemptions cited as best incentive3.3.5 Case study: Fly Buys (New Zealand) 4.11.3 Consumers use loyalty points to stretch budgets3.3.6 Case study: FlyBuys (Australia) 4.11.4 Payment methods chosen for best rewards 4.11.5 Loyalty rewards drive online shopping trend3.3.7 Case study: PayBack India (previously i-Mint) 4.11.6 Loyalty rewards are still too distant3.3.8 Case study: iPoints/Maximiles (UK/Europe) 4.11.7 33% of US loyalty rewards still unredeemed3.3.9 Case study: Malina (Russia) 4.11.8 Consumers using loyalty rewards for travel3.3.10 Case study: Nectar (UK) 4.12 Coupon rewards3.3.10.1 Nectars database and IT systems 4.12.1 Insights into coupon rewards3.3.10.2 Milestones in Nectars development Wealthy consumers use more coupons Mothers spurn social and mobile coupons3.3.10.3 Nectar Business US coupon redemption increasing slowly3.3.10.4 Changes to the company structure M-coupons segment iPhone & Android users3.3.10.5 The Moorhead interview Coupons more popular in US than Canada3.3.10.6 Nectars online portal: Nectar eStores E-coupon growth outpaces newspaper coupons3.3.10.7 Nectar rewards and redemptions at-a-glance E-coupon sites preferred by deal-seekers Myths about coupon marketing strategy3. Nectar earning opportunities for consumers US coupon usage exceeded US$2bn in 20113. Nectar redemption options for consumers Coupon usage up as consumers save cash3. Nectar earning opportunities for businesses 4.12.2 Couponing initiatives3. Nectar redemption options for businesses UK fair trade snack firm starts couponing3. Nectars special interest clubs Digital coupons saved to credit cards Cellit enables Android m-coupon redemptions3. Latest membership and redemption figures PayBack launches German couponing platform3.3.11 Case study: Nectar Italia (Italy) Smartphones get new loyalty coupon app3.3.12 Case study: PayBack (Germany/Poland/India) ShopText & AOL Shortcuts loyalty m-coupons launches consumer Savings Club
  • 57. 5 Customer Engagement and Loyalty 6 Social Media and Loyalty5.1 Introduction 6.1 Introduction5.2 Customer engagement insights 6.1.1 Social marketing is more than a fan page5.2.1 Customer engagement begins at home 6.1.2 The push & pull of social media marketing 6.1.3 Viral social marketing5.2.2 Trigger marketing keeps customers engaged 6.1.4 Do brands really lose control?5.2.3 CMOs need to understand customer engagement 6.1.5 Types of social media5.2.4 Incentives can drive retail customer engagement 6.1.6 The impact of social media on customer loyalty5.2.5 Engaging the individual customer 6.2 Benefits of social loyalty marketing5.2.6 Gladvertising leads to deeper engagement 6.2.1 Social media supports customer loyalty strategy5.2.7 How to engage loyalty scheme members for life 6.2.2 A need for more social customer experiences5.2.8 Card marketers focus on mobile & engagement 6.2.3 Social media reshapes customer engagement5.2.9 Customer engagement seen as key to survival 6.2.4 Social network profiles help explain brand choices5.2.10 Loyalty without engagement is a dangerous trap 6.2.5 Social media could be the New CRM5.2 Customer engagement strategy 6.3 Social marketing insights5.2.1 Engagement strategy goes far beyond CRM 6.3.1 Social media as a loyalty channel5.2.2 How to engage consumers the Web 2.0 way Social brand relationships: good, bad, or ugly?5.2.3 Driving engagement with loyalty rewards Why the social channel is not stand-alone5.3 Social engagement & gamification Social media drives customer engagement5.3.1 Social media reshapes customer engagement Social media drives customer loyalty5.3.2 Building engagement the social way Going beyond social experimentation5.3.3 How social media drives engagement The social channel has become a must have5.3.4 Building brand engagement via Facebook 6.3.2 Social media from the marketers side Sales from social networks still a challenge5.3.5 Loyalty Gamification: let the fun begin! Social media belongs in corporate strategies5.3.6 Priority Club Rewards tests online gaming Marketers target better social media ROI5.3.7 Gamification insinuates brands into peoples lives Understanding the social buzz5.4 Digital & online customer engagement Social tribes stronger than social networks5.4.1 Six ways to look at digital customer engagement Social commerce is key to e-retails future5.4.2 How e-mail can boost customer engagement Executives must grasp social medias impact5.4.3 Targeted emails lead to 13% more engagement Social marketing strategy seen as essential5.4.4 Digital production aids customer engagement Social media ROI can be hard to measure5.4.5 How to capture and engage online customers Tarnished social media still strong for marketing5.4.6 Remote video attendants engage customers Social medias brand marketing value revealed5.4.7 How e-retail customer engagement is at risk Emerging markets ahead in social media usage5.4.8 Apps trump content for digital engagement Facebook & Twitter dominate customer service5.4.9 Mobile drives cross-channel engagement 6.3.3 Social media from the consumers side5.4.10 Digital rewards increase engagement & loyalty Social networks hold the key to customer insight5.4.11 Online retailers face email disengagement danger Brands failing to work with social media advocates Consumers reveal brand preferences on Facebook5.5 Customer engagement developments The social shopping trend is spreading5.5.1 Maritz challenges stakeholder engagement ideas Brand break-ups surfacing in social media5.5.2 Alterian & Experian team up for engagement The age of social shopping is here5.5.3 Virtual events: a new engagement channel Brand choices follow the social crowd5.5.4 Enterprise Engagement Institute offers certification Social media fatigue may be setting in Tweeted complaints not being taken seriously Social customer service: a new digital divide 6.4 Social marketing best practices 6.4.1 Social loyalty/engagement best practices Using social media to deepen customer loyalty Building customer engagement the social way Bridging the real world/social media loyalty gap Building brand engagement using Facebook Advocacy 2.0: start listening to the voices S-commerce is more about Engage than Like
  • 58. 7 Loyalty & Marketing Tools6.4.2 Social media marketing best practices 7.1 Introduction6.4.2.1 Best practices for social media marketing 7.2 Loyalty platforms & technologies6.4.2.2 Keys to sustainable social media marketing 7.2.1 Card-based loyalty technologies6.4.2.3 Ways to improve social media targeting EMV heralds smart card loyalty in the US6.4.2.4 Setting up a Facebook marketing strategy Card connects EMV to LCD display Self-programmable mag-stripe card launched6.4.3 Social media strategy best practices6.4.3.1 How to strategize for social media marketing Carlsons recycled plastic loyalty card Vivotech and Taggo simplify loyalty enrolment6.4.3.2 How retailers can improve social media marketing 7.2.2 Mobile & app-based loyalty technologies6.4.3.3 Marketers must embrace Twitter, not fear it Carlson Marketings mobile Instant Rewards6.4.3.4 Email and social networks compete for attention iPhone app replaces plastic loyalty cards6.4.3.5 How email marketing can be truly social Cardmobilis mobile loyalty platform6.4.3.6 Email marketing helps social media strategy Mobile app uses sound as loyalty identifier6.5 The role of location-based marketing 7.2.3 Contactless loyalty technologies6.5.1 Real-time location marketing: the loyalty technique Contactless smartcard loyalty schemes6.5.2 How location-based marketing ties into loyalty Mobile NFC impacts loyalty strategies6.5.3 Mobile app makes loyalty cards location-aware Terminals for personalised NFC mobile loyalty6.5.4 The future of location-based marketing DeviceFidelitys contactless loyalty solution6.6 Social loyalty & marketing initiatives NFC loyalty platform for Irish merchants6.6.1 Social loyalty scheme rewards brand ambassadors The retail benefits of RFID technology6.6.2 Choice Privilege rewards tweeters and sharers Key lessons learned from retail RFID trials 7.3 Loyalty metrics, analytics & insights6.6.3 RFID mobile tool rewards experience sharers 7.3.1 Mall Networks enhanced shopper analytics6.6.4 Walkabout loyalty scheme goes social 7.3.2 CSNs loyalty scheme performance tool6.6.5 TrueBlue members rewarded through Facebook 7.3.3 Analytical tool segments ethical customers6.6.6 Facebook Deals launches across Europe 7.3.4 Satmetrixs NPS Go! and NPS Go+ tools6.6.7 New social brand recommendation platform 7.4 Loyalty technology innovations6.6.8 Social check-ins added to Beanstalk POS 7.4.1 Twenty years worth of loyalty innovations6.6.9 Air Miles UKs daily deal Facebook app 7.4.2 Loyalty rewards from bus shelter posters6.6.10 Amex helps SMEs with social engagement 7.4.3 Retailers move loyalty toward NFC6.6.11 Ceasars resorts & Topguest reward social users 7.4.4 Loyalty-enabled self-checkouts6.6.12 Best Westerns rewards for social check-ins 7.4.5 Augmented Reality (AR)6.6.13 Marriott drives engagement with Facebook game 7.5 Other loyalty tool developments6.6.14 Chinese banks social loyalty credit card 7.5.1 NGCs prepaid American Express reward cards6.6.15 Big Ys social shopping loyalty card 7.5.2 Mobiles scan loyalty cards for points balance6.6.16 Wolfes social media-linked reward card 7.5.3 Consumers value self-checkout above all else6.6.17 Estonian Airs social loyalty & advocacy scheme 7.5.4 QuintLoyaltys online loyalty platform6.6.18 Neolanes personalised Facebook offers 7.5.5 Satmetrixs cloud-based franchise loyalty platform 7.5.6 Cloud-based loyalty platform for local merchants6.7 Other social marketing developments 7.5.7 M-payment & loyalty platform for pharmacies6.7.1 Consumers tap into Facebook recommender app 7.6 The changing loyalty landscape6.7.2 LoyaltyMatchs social loyalty rewards platform 7.6.1 Virtual currencies create a whole new economy6.7.3 Social marketing turns a good profit in the UK 7.6.2 Pattern-spotting provides a competitive advantage6.7.4 Smart Buttons social loyalty platform 7.7 Retail 3.0 customer intelligence 7.7.1 Retail 3.0: what it is, and what it means to loyalty 7.7.2 Retail 3.0 redefines retail customer intelligence 7.7.3 Intelligence-based marketing born from Retail 3.0 7.7.4 Differentiating using smarter retail technology 7.8 Kiosks and self-service tools 7.8.1 Loyalty kiosks improve customer relationships 7.8.2 Price and time drive consumers to self-service 7.8.3 Case study: (self-service rewards portal)
  • 59. 8 Loyalty & Marketing Operations8.1 Introduction 8.7 Loyalty with prepaid cards8.2 How a loyalty programme works 8.7.1 Building loyalty with prepaid cards8.2.1 Keep your customers 8.7.2 How to set up a prepaid card programme8.2.2 Get new customers 8.7.3 Successful users of prepaid programmes8.2.3 Move customers up-segment 8.7.4 Arguments for combined prepaid/loyalty cards8.2.4 Deselect unprofitable customers Gift cards offer a way ahead for retailers8.2.5 Recover defected customers UK gift card offerings to grow rapidly8.2.6 Increase Customer Lifetime Value Outsourcing as a retail opportunity8.2.7 Best customer marketing Gift cards are popular with consumers8.2.8 Build relationships Consumer gift card usage increasing8.2.9 Create advocates Gift cards favoured during hard times8.2.10 Adjust pricing levels 8.7.5 Prepaid card suppliers and platforms8.2.11 Respond to competitive challenges 8.8 Pricing strategies8.2.12 Select stock lines effectively 8.8.1 Hi-Lo pricing8.2.13 Plan merchandising optimally 8.8.2 Everyday low prices (EDLP)8.2.14 Reduce promotional and advertising costs 8.8.3 Profit-up-front pricing (PUF)8.2.15 Select new trading sites 8.8.4 Access Pricing8.3 Secrets of a successful loyalty initiative How Access Pricing works8.3.1 Loyalty programmes are not a quick fix Forced, intense interaction8.3.2 Accurate targeting Minimise price gap perception8.3.3 Gain consumer buy-in Golden handcuffs8.3.4 Know your customers Favour regular customers8.3.5 Dont reward the wrong behaviour Meaningful rewards8.3.6 Reward or recognise? Differentiator8.3.7 Spotting defection patterns The future of Access Pricing8.3.8 Customer lifecycles Will Access Pricing continue to work?8.3.9 Rewards must be seen to be attainable & affordable Which sectors could use Access Pricing?8.3.10 Cost of programme must be recoverable 8.9 Loyalty management insights8.3.11 Good communications 8.9.1 Ten ways to improve your loyalty scheme8.3.12 Keep it simple 8.9.2 Planning the grand design of customer loyalty8.3.13 Results must be measurable 8.9.3 Forming the right customer loyalty strategy8.3.14 It should attract new customers 8.9.4 Drive retail loyalty with real-time interactions8.3.15 It should provide unique, hard-to-copy benefits 8.9.5 Drivers of different levels of customer loyalty8.3.16 Empower the team 8.9.6 Web site features that drive e-retail loyalty8.3.17 It should make life easy 8.9.7 Top service performers report 91% retention8.4 Critical capabilities for customer loyalty 8.9.8 The seven habits of effective marketers8.4.1 Develop and deliver a branded experience 8.9.9 Customer retention efforts falling behind8.4.2 Create and shape demand 8.9.10 Turn ancillary revenue into customer loyalty8.4.3 Harness talent and technology 8.10 Shattering the myths of customer loyalty8.4.4 Translate foresight & insight into marketing goals 8.10.1 In the beginning8.4.5 Drive marketing to meet performance objectives 8.10.2 Know the value of each customer8.5 The structure of loyalty marketing 8.10.3 Shattering the myths8.5.1 Best customer marketing Myth #18.5.2 Access Pricing Increasing retention by 5% boosts profits 25%-80%8.5.3 Multi-partner programmes Myth #28.5.4 Turnkey programmes Most databases are adequate for building loyalty8.5.5 Bespoke programmes Myth #38.5.6 CRM and One-to-One Loyal customers grow a business by positive WoM8.5.7 Credit and debit card-based programmes Myth #48.5.8 Stored value, prepaid and gift cards Loyalty programmes solve attrition problems8.5.9 Stealth programmes Myth #58.5.10 Real-time targeting Greater loyalty leads to higher market share8.5.11 Personal Relevance marketing (PRM) Myth #6 Satisfied employees create loyal customers8.6 The loyalty token 8.10.4 The truth is rarely pure and never simple8.6.1 How to choose the right loyalty token 8.10.5 Three essential Loyalty Truths8.6.2 Questions for choosing a loyalty token Truth #18.6.3 Examples of different loyalty tokens at work Manage for selection first, then for retention8.6.4 Current options for loyalty tokens Truth # No token programmes Focus on customers share of wallet8.6.4.2 Stamps Truth # Vouchers Learn the specific response patterns8.6.4.4 Coupons 8.10.6 Building a loyalty process8.6.4.5 Card-based programmes 8.10.7 Implementing the loyalty process8.6.4.6 Smart cards (chip cards) 8.10.8 Setting the record straight8.6.4.7 Mobile phone-based loyalty 8.10.9 The pursuit of loyalty can be highly profitable
  • 60. 9 Customer Data Strategy9.1 The technology behind customer data 9.3.3 Segmentation and the customer base9.1.1 The importance of loyalty data collection Segmentation by various attributes9.1.1.1 How proper data usage benefits the business Customer lifetime value (CLV) 7 ways to gain value from customer data Recency, Frequency, Monetary value (RFM) Customer data is more than just a marketing tool Customer tiering9. Loyalty data drives the most relevant offers Customer base analysis and prediction9. How loyalty data translates into better marketing Customer flow analysis9.1.1.2 How data ignorance harms the business Share-of-wallet estimation Market share estimation9. Companies failing to unlock the value of their data Examples of how airlines benefit from FFP data9. Marketers still flying blind with customer data Commoditised airlines see value from loyalty data9. Most consumers will defect over banking data loss How airlines can use FFP data to increase loyalty9. High-tech firms still dont know their customers9. Too many companies ignore customer insights 9.3.4 Data analysis eliminates marketing waste9.1.2 Database planning 9.3.5 Retail loyalty datas clustered insights9.1.3 Data processing and data flow 9.3.6 Best customers, defectors and win-back9.1.4 Data analysis to support business processes Early defector detection9.1.5 Predictive analytics to drive change Win-back opportunities9.1.6 Data warehouses Lower cost competitive response9.1.7 Data marts 9.3.7 Customer targeting and differentiation Advertising campaign targeting9.2 Data collection: how, where, when & why? Circular efficiency9.2.1 What data can or should be gathered? Offer planning and promotion analysis9.2.2 How much data, and where to collect it Differentiated marketing9.2.2.1 The application form Intelligent deselection9.2.2.2 The web site Green targeting to save costs & the planet9.2.2.3 Social sources Loyalty based on insights from customer data9.2.2.4 Mobile devices Consumer data is the new oil of customer loyalty9.2.2.5 Third party sources Customer data is vital to cross-channel loyalty9.2.2.6 Mystery shoppers & feedback systems Loyalty data saved retailers from recession9.2.2.7 The EPOS terminal Customer data underpins next gen marketing9.2.2.8 Customer services Customer win-back born from the single view9.2.2.9 Repair/replacement centres Transform blind data into lifetime relationships9.2.3 How long does data last? Consumers not benefiting from their own data9.2.4 Data duplication, accuracy, and cleansing 9.3.8 Planning and merchandising9.2.5 Data security and privacy Human resources planning9.2.5.1 The impact of customer data loss Geographical store site selection9.2.5.2 The impact of handling data incorrectly Inventory rationalisation & selection9.2.5.3 How digital security issues affect brands Planogram adjacencies & merchandising9.2.6 Data ethics policies 9.3.9 Business intelligence from raw data9.3 Benefits of data collection and analysis Differentiation based on the use of data9.3.1 How does data turn into loyalty? Data mining software9.3.1.1 Customer data is the driver of positive change Counting on the internet clickstream Real-time data mining9.3.1.2 Loyalty data builds lasting relationships OLAP, MOLAP, ROLAP and Magic Cubes9.3.2 Customer-related benefits Prediction based on past behaviour9.3.2.1 Customer behaviour profiling Data mining and analysis tools9.3.2.2 Customer lifestyle & demographic profiling Practical application of business intelligence9.3.2.3 Customer product preferences and repertoire High ROI from good business intelligence9.3.2.4 Product category relationships & cross-selling Affinity marketing9.3.2.5 Pricing Predictive modelling9.3.2.6 Online shopping suggestions 9.3.10 Conclusion on the benefits of loyalty data
  • 61. 10 Loyalty/Marketing Communications10.1 Introduction 10.6 Social media10.2 Communicating loyalty 10.6.1 Social communications boost customer retention10.2.1 Forecast of consumer communication trends 10.7 Word-of-mouth10.2.2 Loyalty scheme messages not engaging enough 10.7.1 Loyalty schemes likely to breed WOM champions10.2.3 Consumers talk more about the bad experiences 10.7.2 Word-of-mouths impact on customer loyalty10.2.4 Marketers encouraged to think psychologically 10.7.3 UK clamps down on WoM; USA set to follow10.3 Mobile 10.7.4 Most customer reviews found to be positive10.3.1 Mobile insights 10.8 Direct mail marketing10.3.1.1 Short-termist mobile marketing spells trouble 10.8.1 Digital drives the comeback of offline marketing10.3.1.2 Retail marketers not making enough of mobile 10.8.2 Direct Mail promising despite economic woes10.3.1.3 Combine SMS, mobile ads & traditional marketing 10.8.3 Direct mail drives digital marketing success10.3.1.4 SMS still essential to mobile marketing strategy 10.8.4 DM timing more important than personalisation10.3.1.5 E-consumers prefer mobiles to PCs10.3.1.6 Mobile marketing success depends on rewards 10.8.5 Online response is critical to direct marketing10.3.1.7 Code of conduct for mobile marketing 10.9 Multi-channel10.3.2 Other mobile developments 10.9.1 Big brands fail their multi-channel customers10.3.2.1 Bluetooth-based mobile marketing guidelines 10.9.2 Retail loyalty subject to cross-channel strategy10.3.2.2 MMA supports mobile affiliate marketers 10.9.3 Categories shape consumers channel choices10.3.2.3 Germanys own Mobile Marketing Association 10.9.4 Euro retailers embrace more digital channels10.4 E-mail 10.9.5 Combined channels provide best marketing results10.4.1 E-mail marketing 10.10 Kiosks & self-service10.4.1.1 Driving greater customer loyalty through e-mail 10.10.1 Web chat and self service improve e-tail experiences10.4.1.2 Opt-in and opt-out: a practical guide 10.10.2 Brands test in-store digital marketing tools10.4.1.3 Permission-based e-mail boosts retail loyalty 10.11 Call centres10.4.1.4 Permission-based email builds CPG loyalty 10.11.1 Contact centres drive customer satisfaction10.4.1.5 Getting the right timing for e-mail marketing 10.11.2 Focus on inbound customer contact points10.4.1.6 Email battles social networks for peoples attention10.4.1.7 How e-mail marketing can become truly social 10.12 Advertising10.4.1.8 How video can send ordinary marketing viral 10.12.1 Advertisings long-term value rediscovered10.4.2 E-mail insights10.4.2.1 Brands have more to gain from e-marketing10.4.2.2 E-marketing links customer desires and behaviours10.4.2.3 Untargeted e-marketing loses most customers10.4.3 E-mail developments10.4.3.1 Loyalty scheme members respond more to email10.4.3.2 Most email marketing is still badly targeted10.4.3.3 Marketing emails still lack the personal touch10.4.3.4 Consumer email dips as new e-channels rise10.4.3.5 Suggested e-mail marketing guidelines10.5 Web sites10.5.1 Web site insights10.5.1.1 Consumers seek better product detail online10.5.1.2 E-marketing hangs on content & personalisation10.5.1.3 How the EU cookie law affects marketers10.5.1.4 Web cart abandonment must be addressed10.5.1.5 Factors that drive online consumer reviews10.5.1.6 Web 2.0 helps to boost branding & engagement10.5.1.7 Banks could gain from Web 2.0, if its done well10.5.2 Web site developments10.5.2.1 E-retailers investing more in web interactions10.5.2.2 E-tail spending impacted by web stress10.5.2.3 Digital diseases damage e-retailers10.5.2.4 Digital inserts set to provide value both ways
  • 62. 11 The Human Aspect of Loyalty11.1 Introduction 11.2.5 Customer loyalty developments11.2 The human side of customer loyalty Consumer brand loyalty still in decline11.2.1 The psychology of customer loyalty Women business owners ignore loyalty11.2.1.1 How consumers interpret loyalty rewards Bad customer experiences cause churn epidemic11.2.1.2 Loyalty mirrors human relationships Youth is more receptive to direct mail11.2.1.3 The role of trust in consumer relationships Most Americans will churn for a good cause11.2.1.4 Consumers are less loyal & more rational E-retailers benefit from stay home consumers11.2.1.5 Purchase decisions are increasingly complex Half of UK shoppers defect after bad service11.2.1.6 Study cites keys to consumers retail choices Product recalls increase customer loyalty11.2.1.7 Theres nothing like a Mothers loyalty Customer service counts for nervous shoppers11.2.2 The customer experience Men use one loyalty card but women shop around11.2.2.1 Consumers want greater value and service Customers churn thanks to poor experiences11.2.2.2 Consumers feel customer service has declined Mobile wallets cause consumer caution11.2.2.3 Bad customer experiences leave a trail online Shoppers lose 33% of loyalty rewards11.2.2.4 Customer experiences must be rewarding 11.3 The human side of employee loyalty11.2.2.5 Good customer experiences are more profitable11.2.2.6 A customer is for life, not just for Christmas 11.3.1 Employee loyalty insights11.2.2.7 Bad customer experiences travel fastest Staff engagement tied to customer experiences11.2.2.8 UK customer satisfaction benchmarks Customer service trumps call centre efficiency11.2.2.9 What are the top 100 customer experiences? Why employees should also be segmented11.2.2.10 Five enhancers of the customer experience Employee loyalty is not all about money11.2.2.11 How to manage future customer experiences Best practices for rewarding employees11.2.3 Consumer behaviour trends 11.3.2 Employee loyalty developments11.2.3.1 Retail loyalty doesnt always depend on a card Travel incentives boost staff performance11.2.3.2 Shoppers want to channel hop as they shop Airline pays staff for better customer loyalty11.2.3.3 25m Britons loyal to same shops for 20 years How Macys builds employee engagement11.2.3.4 Most UK consumers prefer multi-channel retailers Pricelock launches employee fuel incentives11.2.3.5 What women want when theyre shopping11.2.3.6 Top reasons for using mobile shopping11.2.3.7 Customers wont go out without a loyalty card11.2.4 Customer loyalty insights11.2.4.1 Customer intimacy is the next loyalty frontier11.2.4.2 Loyalty in Latin America, USA & Canada11.2.4.3 Satisfaction still drives customer loyalty11.2.4.4 Boosting Hispanic loyalty scheme participation11.2.4.5 Service is the key factor in affluent loyalty11.2.4.6 Consumers explain how marketing should work11.2.4.7 Consumers dislike vague eco-marketing11.2.4.8 Study segments multichannel consumers11.2.4.9 British shoppers still prefer the High Street11.2.4.10 Offline WoM most influential among parents11.2.4.11 Youth cards offer marketing opportunities11.2.4.12 Generation Y will reshape customer loyalty11.2.4.13 Millennial life stage marketing strategy11.2.4.14 Mobile payments feel safer than cards
  • 63. 12 Loyalty & Marketing Best Practices12.1 Introduction 12.7 Marketing best practices12.2 Loyalty best practices 12.7.1 Seven ways to halt marketing wastage12.2.1 Top ten ways to improve a loyalty scheme 12.7.2 Recession-led focus on acquisition, not retention12.2.2 Ways to increase customer loyalty 12.7.3 Key to customer-centricity strategy12.2.3 Key attitudes of successful loyalty marketers 12.7.4 Assessing marketing channel profitability12.2.4 Principles that create highly loyal customers 12.7.5 How retail promotions can build more loyalty12.2.5 Best practices to increase customer loyalty 12.7.6 A new level of marketing subtlety: north or south?12.2.6 Voice of the Customer (VOC) best practices 12.7.7 Cause-related marketing increases sales12.2.7 Customer satisfaction surveys are essential 12.7.8 Retailers embrace affiliate marketing strategy12.2.8 Best practices to stop a loyalty scheme from stalling 12.8 E-marketing best practices12.2.9 Best practices for online customer loyalty 12.8.1 E-marketing strategies that didnt work12.2.10 The six Ps of customer loyalty marketing UK retailers miss the mark with e-marketing12.2.11 Create loyalty through surprise and delight12.2.12 Ten ways to win loyalty through customer service Email marketers fail to follow best practices12.2.13 Its loyalty, but not from the customers viewpoint Travel firms lose customers through bad email12.2.14 Value-adds build more customer loyalty Retailers must improve e-marketing ROI12.3 Loyalty management best practices Critical insights lost through no-reply emails12.3.1 Customer loyaltys future lies in trustability 12.8.2 E-marketing strategies that did work12.3.2 Focus on marketing performance management Five tips for email marketing and engagement12.3.3 Better marketing metrics are still needed Best practices for digital customer engagement12.3.4 Investor loyalty depends on marketing relevance Digital marketing best practices12.3.5 Attitudinal targeting is highly effective E-marketing links customer desires & behaviours12.3.6 Relationship model to predict customer loyalty Technology can help fulfil shoppers real needs12.3.7 E-retail loyalty depends on smarter testing E-marketing relevance driven by DDM12.3.8 How to lower the cost of your loyalty scheme E-commerces new role in the customer experience12.3.9 Loyalty programmes can easily be recession-proofed 12.9 Green marketing best practices12.4 Customer retention best practices 12.9.1 Green marketing strategy12.4.1 Three steps for a successful CRM strategy 12.9.2 Green marketing in practice12.4.2 Customer win-back Putting your primary green benefits first12.4.3 The top 11 rules for keeping existing customers Alternatives to eco-label marketing12.4.4 How to grow customer loyalty in a recession Green marketing drives more campaigns online12.4.5 Relating customer experiences to retention Who consumers trust most when going green12.4.6 Customer experience makes or breaks loyalty Plant a tree is actually a loyalty strategy12.4.7 E-retail survival depends on customer retention 12.9.3 Consumer response to green marketing12.5 Customer relationship best practices Consumers balance green with convenience12.5.1 How to strengthen customer relationships in a crisis The strength of Green customer relationships12.5.2 How well-executed CRM increases sales Consumers overly-cynical thanks to greenwashing12.5.3 Consumer involvement is a retail opportunity12.5.4 Keys to building stronger FFP relationships12.5.5 What are the latest CRM best practices12.6 Customer management best practices12.6.1 How to manage the multi-channel surfer12.6.2 Best customer management strategy12.6.3 Loyalty 2.0 actually links loyalty with customers12.6.4 Best practices for effective mobile marketing12.6.5 Best practices for social media marketing12.6.6 Factors driving shopping mall purchasing & loyalty12.6.7 Customer experience offers competitive advantage12.6.8 Four recession-driven consumer segments identified12.6.9 Recession proofing: clone your loyal customers12.6.10 Differentiating loyalty schemes by customer needs
  • 64. 13 Loyalty Metrics & Accountability13.1 The calculation of customer loyalty 13.8 CLV models & systems (marketing ROI)13.1.1 How to measure customer loyalty successfully 13.9 How to get started with CLV13.1.2 The importance of customer-centric metrics 13.9.1 Can any organisation use CLV?13.2 Measuring loyalty - the metrics 13.9.2 The objectives of calculating CLV13.2.1 Patronage ratio 13.9.3 The ten steps13.2.2 Switching ratio 13.10 Loyalty & profitability in theory & practice13.2.3 Budget ratio (share of wallet) 13.10.1 Alternatives to an investment in customer loyalty13.2.4 Enis-Paul Index 13.10.2 Loyalty and profitability: a hypothesis13.2.5 Retention rate & churn 13.10.3 Are generally accepted hypotheses always reliable?13.2.6 Customer Lifetime 13.10.4 Different loyalty and profitability models: examples13.2.7 Net Promoter Score (NPS) 13.10.5 Segmentation (defining loyal/profitable customers)13.2.8 Attitudinal equity: a powerful brand loyalty metric 13.10.6 The loyalty & profitability chain13.3 Customer Lifetime Value 13.10.7 Customer retention, attrition & customer lifetime13.4 Practical statistics 13.11 Drivers of loyalty & profitability13.4.1 The mean 13.11.1 Drivers of loyalty and profitability13.4.2 The median 13.11.2 Examples of correlations13.4.3 The mode 13.11.3 Real loyalty, customer lifetime, and profitability13.4.4 Variance 13.12 Net Promoter Score (NPS)13.4.5 Standard deviation 13.12.1 How the Net Promoter Score works13.5 Customer Lifetime Value (CLV/CLTV) Four key elements of the Net Promoter discipline13.5.1 CLV is vital for strong customer relationships NPS versus customer loyalty: the ongoing debate13.5.1.1 Calculating the cost of keeping the customer 13.12.2 The NPS process13.5.1.2 Four ways of improving customer profitability NPS book explains the process practically13.6 How to calculate customer profitability Multi-industry NPS benchmarks13.6.1 Individual customers and customer groups Business-to-Business (B2B) NPS benchmarks13.6.2 Potential, existing, and defected customers 13.13 Marketing metrics and accountability13.6.3 Past, actual, and future profitability 13.13.1 Moving from metrics to performance management13.6.4 The RFM method 13.13.2 Competitors have become a key loyalty metric13.6.5 The CLV method 13.13.3 Marketers not yet accountable for revenue growth13.7 Calculation of CLV 13.13.4 US adopts new loyalty liability accounting principles13.7.1 The history of CLV 13.13.5 Weak marketing metrics remain a business issue13.7.2 Definition of CLV 13.13.6 Marketers face tougher metrics & accountability13.7.3 The formula for CLV 13.13.7 ROI metrics linked to strong corporate growth13.7.4 General concept of CLV13.7.5 Understanding the concept of CLV13.7.6 Examples of calculation of CLV13.7.7 First CLV and Second CLV13.7.8 CLV on a customer loyalty and satisfaction13.7.9 The Historic CLV method13.7.10 Predictive CLV method13.7.11 CLV as basis of strategy decisions13.7.12 Market strategy and CLV13.7.13 Case: Danish insurance company
  • 65. 14 Reporting & Segmentation 15 Brand Marketing & Loyalty14.1 Introduction 15.1 Introduction14.2 Management reports and tools 15.2 Brand loyalty strategy14.2.1 The Bathtub report 15.2.1 Brand loyalty drivers & strategies14.2.2 The Decile report (RFM/RFS) 15.2.2 Consumers want emotional ties with brands14.2.3 The Quo Vadis Retention report 15.2.3 Warmth & competence create brand loyalty14.2.4 The New Member Frequency Report 15.2.4 CMOs not yet ready to build brand loyalty14.2.5 The Cardholders Summary Report 15.2.5 Brand loyalty evaporates with out-of-stocks 15.2.6 Brand positionings role in customer loyalty14.3 RFM segmentation 15.2.7 Mobile brand interactions become more personal14.3.1 Traditional: 125 cells 15.3 Brand loyalty insights14.3.2 Reduced: 27 cells 15.3.1 Trust drives up to 44% of brand loyalty14.3.3 Flexible: 8 cells 15.3.2 The rich love to spread the word about brands 15.3.3 Factors behind post-recession brand loyalty 15.3.4 Customers must be given an online voice 15.3.5 Heavy web users show volatile brand loyalty 15.3.6 Fewer women show retail or brand loyalty 15.3.7 UK shoppers not so loyal to fair trade brands 15.4 Brand marketing strategy 15.4.1 How to compete with a dominant brand 15.4.2 Prestige brand discounts have paid off 15.4.3 Brand building in the low-carbon economy 15.4.4 Promotional merchandise adds lasting brand value 15.4.5 CPG brand marketing strategy Drivers of CPG brand loyalty erosion Why CPGs should go direct-to-consumer TV ad responses linked to CPG purchases 15.5 Brand marketing insights 15.5.1 Few companies earned true loyalty in 2010 15.5.2 Only 20% of shoppers are brand loyal 15.5.3 Brand break-ups surface in social media 15.5.4 Brands more comfortable talking to consumers 15.5.5 Luxury brands embrace augmented reality (AR) 15.6 Brands and their reputations 15.6.1 Top US brands, by customer loyalty score 15.6.2 Brand power improving, and Coke is king 15.6.3 Loyalty awards honour FedEx, Sears & Coca-Cola 15.6.4 NPS benchmark reveals brand loyalty leaders 15.6.5 NPS reveals UKs most recommended brands 15.6.6 Top brands according to social media
  • 66. 16 Business-to-Business (B2B) Loyalty 17 Market Sizing & Valuation16.1 Introduction 17.1 Introduction16.2 Five strategies to build B2B loyalty 17.1.1 National loyalty market sizes and values Size of the USAs loyalty market16.3 The structure of B2B loyalty16.3.1 The two-link chain Size of the UKs loyalty market Size of Canadas loyalty market16.3.2 The three-link chain16.3.3 The four-link chain Size of Australias loyalty market Size of Chinas loyalty market16.3.4 Targeting the SME owner-manager16.3.5 The purposes of B2B loyalty Size of South Africas loyalty market16.4 B2B loyalty programme case studies 17.2 Household/population data16.4.1 Case study: Nectar Business (UK) 17.3 Loyalty market size estimation16.4.2 Case study: Argos Business Solutions (UK) 17.3.1 Factors involved in market size estimation16.4.3 Case study: Nortel (India) 17.3.2 Loyalty programme market size estimations16.4.4 Case study: ARBL (India) 17.4 Household income share analysis16.5 B2B loyalty strategy 17.5 Consumer age analysis16.5.1 Four key factors for channel partner loyalty16.5.2 Strategies for channel loyalty and reward schemes 17.6 Consumer gender analysis16.5.3 A new channel engagement strategy 17.7 Standard region groupings16.6 B2B loyalty insights16.6.1 The key drivers of B2B loyalty16.6.2 Channel marketing requires real intelligence16.6.3 Channel choice begins the customer loyalty chain16.6.4 Dedicated account managers boost B2B satisfaction16.6.5 40% of happy B2B clients make referrals16.7 B2B loyalty developments16.7.1 PTC extends B2B loyalty with HP partnership16.7.2 GiftCards.coms corporate rewards unit16.7.3 Hawkeyes ChannelRewards loyalty platform16.7.4 Hitachi Power Tools channel sales scheme16.7.5 Tonnex relaunches Reseller Rewards scheme16.7.6 Delta, Air France, KLM & Alitalia reward SMEs16.7.7 Virgin Americas SME loyalty scheme16.7.8 Big Trains B2B loyalty scheme16.7.9 Amex Blue for Business rewards SMEs
  • 67. 18 Forecasts & Trends18.1 Introduction 18.6 Mobile marketing trends & forecasts18.2 Customer loyalty trends & forecasts 18.6.1 Mobile marketing trends 2012-2016 18.6.2 Mobile shopping trends must not be ignored18.2.1 Strategy-driven customer loyalty trends 18.6.3 In-store mobile apps are a coming trend18.2.1.1 26 loyalty marketing trends for 2012-2016 18.6.4 Mobile media trends forecast 2012-201618.2.1.2 Coming trends for retail loyalty marketing 18.6.5 New mobile customer segments identified18.2.1.3 Trends for the future of loyalty in the UK 18.6.6 Consumers respond to mobile interactions18.2.1.4 Brands still not doing enough for loyalty18.2.1.5 Canadian loyalty fell prey to pricing 18.7 Multichannel marketing trends & forecasts18.2.1.6 Loyalty 2.0 - and what comes next 18.7.1 Marketers must walk the multichannel walk 18.7.2 What Commerce Anywhere means for retailers18.2.2 Consumer-driven customer loyalty trends 18.7.3 Sales & marketing fusion fuels sales growth18.2.2.1 Groceries still key to loyalty scheme success 18.7.4 Customers who web-chat tend to buy more18.2.2.2 Brands not using their loyal advocates 18.7.5 High street retail faces online-hybrid future18.2.2.3 New transactional customer loyalty trend18.2.2.4 Loyalty marketing to fickle teens & tweens 18.8 Brand loyalty trends & forecasts18.2.2.5 Price is a loyalty driver for US retailers 18.8.1 23 key brand marketing trends 2012-201618.2.2.6 Smart shoppers have redefined their loyalty 18.8.2 Brand power and brand strength forecasts18.2.2.7 Coming trends in travel loyalty schemes 18.8.3 Affluent customers demand more value18.3 Consumer behaviour trends & forecasts 18.9 Other marketing trends & forecasts18.3.1 Customer engagement and behaviour trends 18.9.1 Traditional marketing trends 2012-201518.3.2 Post-recession shopping behaviour shift 18.9.2 Voice of the Customer (VOC) trends 2012-201518.3.3 Customer behaviour change forecast 2012-2020 18.9.3 Green issues return with economic recovery18.3.4 Consumers widen mobile shopping behaviour 18.9.4 The role of experiential rewards in loyalty18.3.5 Social & mobile consumer behaviour 2012-201518.3.6 Customer communication trends 2012-201618.3.7 Well-off consumers tend to use more coupons18.3.8 Shoppers return with an upbeat economy18.3.9 Five global types of shopper identified18.3.10 Value for money is more important than price18.3.11 Shoppers driven by price, quality & service18.3.12 Customers heading for a less cash society18.3.13 New global consumer mindset evolves18.4 Social marketing trends & forecasts18.4.1 Email & social marketing are now main priorities18.4.2 Social channel to incorporate customer service18.4.3 Mobile & social strategies become a priority18.5 Digital marketing trends & forecasts18.5.1 Key digital marketing challenges18.5.2 Factors driving digital marketing success18.5.3 Digital data budgets doubled in 2 years18.5.4 Six email marketing trends for 2012-201518.5.5 Ten online marketing trends for 2012-201518.5.6 Marketers head toward Augmented Reality18.5.7 Customers recommend the higher-tech retailers18.5.8 Online consumers reluctant to share data
  • 68. 19 What The Experts Say 20 Supermarket & Grocery Loyalty19.1 Introduction 20.1 Introduction19.2 What the experts say 20.1.1 What customers want from grocery retailers19.2.1 Richard Cramer, Achievement Awards Group 20.1.2 Loyal grocery shoppers still want deals Is your loyalty programme The One? 20.2 Case studies19.2.2 Steve Schroeder, AmeriCardGold Cause marketings best practices & key benefits 20.2.1 UK supermarket case studies19.2.3 Robert Passikoff, Brand Keys UK grocery market shares Loyally occupying the digital world Consumers swap supermarkets for better discounts19.2.4 Janet Titterton, Collinson Latitude Making your loyalty currency irresistibly valuable Case study: Asda (EDLP)19.2.5 Kelly Hlavinka, Colloquy Using EDLP instead of a loyalty initiative Three loyalty trends that will shape the next 20 years Asdas customer retention strategy19.2.6 Mike Atkin, Customer Strategy Network Case study: Co-op (Dividend Card) Is the importance of technology being recognised at last? Case study: Iceland (Bonus Card)19.2.7 Vavra & Pruden, Customer Experience Partners Case study: Sainsburys (Nectar) Using word of mouth to strengthen customer loyalty19.2.8 N Ramasubramani, Direxions Case study: Tesco & Dunnhumby (Clubcard) Loyalty marketing: Full speed ahead! Case study: Dunnhumby19.2.9 Jolande Duvenage, eBucks Who is Dunnhumby? The keys: Tangible benefits, versatility & convenience About Tesco19.2.10 Jill Griffin, Griffin Group About Tesco Clubcard How to ace your buyers worth-it test Personalisation - the value of customer insight19.2.11 Bill Hanifin, Hanifin Loyalty Customer loyalty driven by three not-so-little words Tesco & Dunnhumby: the partnership19.2.12 Gary Hawkins, Hawkins Strategic Learning across borders Customer marketing in the Age of i The Loyal Customer Mailing19.2.13 Carlos Dunlap, Kobie Marketing Innovating to better serve customers The evolution of loyalty marketing Where next for Clubcard?19.2.14 Keiningham/Aksoy/Buoye/Cooil/Williams, IPSOS Loyalty goes to W.A.R. (the Wallet Allocation Rule) 20.2.2 US supermarket case studies19.2.15 Sanjai Velayudhan, ITC Infotech India Case study: Big Y (Express Rewards) Stretching the loyalty buck with airports as FFP partners Case study: Giant Foods (BonusCard)19.2.16 Jim Lenskold, Lenskold Group The five top sources of social media marketing ROI Case study: Kroger (Kroger Plus)19.2.17 Bryan Pearson, LoyaltyOne Case study: Meijer (EDLP) Four steps to making the leap to customer intimacy Case study: Price Chopper (AdvantEdge Card)19.2.18 Dominic Hofer, Loylogic Safeway US & Canada Points and miles, follow me! Case study: Safeway US (Club Card)19.2.19 Peter Wray, Loyalty Matters The impact of the global recession on customer loyalty Case study: Safeway Canada (Club Card)19.2.20 Frenzel, Luckey & Eichwald, Maritz Motivation Case study: Wal-Mart (EDLP) A people-focused global rewards strategy 20.2.3 Other supermarket case studies19.2.21 M.Capizzi & T.Gaughan, Marketing Strategists The intersection of loyalty and the mobile channel Case study: Coles/Wesfarmers, Australia (FlyBuys)19.2.22 Andrea Burchett, The Mileage Company Case study: Countdown, NZ (OneCard) The importance of travel in loyalty Case Study: PicknPay, S. Africa (Smart Shopper)19.2.23 D.Peppers & M.Rogers, Peppers & Rogers Group Loyalty in the age of the empowered customer 20.3 Other supermarket loyalty developments19.2.24 Neil Raphel, Raphel Marketing 20.3.1 Carrefour, France Customer experience advances loyalty marketing 20.3.2 Metro, Canada19.2.25 Brian Woolf, Retail Strategy Center 20.3.3 Giant Eagle, USA Isnt our budgeting backwards? 20.3.4 Winn-Dixie, USA19.2.26 Gordon Cooper, TCC USA 20.3.5 Stop & Shop, USA Changing shopper behaviour to boost sales profitability 20.3.6 Market Street, USA19.2.27 Tim Crank, Young America Retail loyalty: Less is becoming more 20.3.7 ShopSavvy & Grocery Server, USA19.3 The Global State of Loyalty, by ICLP19.3.1 The state of loyalty in the UK (David Langton)19.3.2 The state of loyalty in Europe (Judith Raymakers)19.3.3 The state of loyalty in the US (Phil Seward)19.3.4 The state of loyalty in the Middle East (Dion Maritz)19.3.5 The state of loyalty in India (Krishna Iyer)19.3.6 The state of loyalty in China (Kevin Yeow)19.3.7 The state of loyalty in Asia-Pacific (Stephen Hay)
  • 69. 21 General Retail Loyalty21.1 Introduction 21.5 Case studies from other countries21.2 Retail customer loyalty 21.5.1 Case study: Hbc, Canada (Hbc Rewards) 21.5.2 Case study: Canadian Tire (Canadian Tire Money)21.2.1 The case for retail loyalty schemes 21.5.3 Case study: Home Ideas, Australia (AdvantageCard) 90% of best-in-class retailers have loyalty schemes 21.5.4 Case study: Jet, South Africa (Jet Club) US loyalty memberships exceed 2 billion 21.5.5 Case study: SPC Card, Canada (Student Price Card) Top retail customer loyalty pressures 21.6 Other retail loyalty developments21.2.2 Retail customer loyalty insights 21.6.1 & Discover, USA21.2.2.1 Loyalty data saved retailers from recession 21.6.2 Bluewater Mall, UK21.2.2.2 Retailers get highest loyalty ratings 21.6.3, USA21.2.2.3 Retailers lag behind consumer technologies 21.6.4 Citizy NFC Project, France21.2.2.4 Cross-channel retail systems show benefits 21.6.5 DubLi, Spain21.2.2.5 UK retailers forced to fight based on price 21.6.6 Green Stamp, Japan21.2.2.6 Retailers must work on the mobile channel 21.6.7 HMV, Canada21.2.2.7 Retailers at risk from the anonymous customer 21.6.8 Holland & Barrett, UK21.2.3 Other retail loyalty scheme launches 21.6.9 House of Fraser, UK21.2.3.1 Denmans Electrical Wholesalers, UK 21.6.10, India21.2.3.2 Christopher & Banks, USA 21.6.11 JCPenney, USA21.2.3.3 BMR Le Groupe, Canada 21.6.12 Jewel-Osco, USA21.2.4 Retail customer experiences 21.6.13 Macys, USA21.2.4.1 Consumers enthusiastic about new technologies 21.6.14 National Gift Card, USA21.2.4.2 Retailers still need better brand communication 21.6.15 Sams Club, USA 21.6.16 Sears, Canada21.3 Case studies from the UK 21.6.17 Shoppers Drug Mart, Canada21.3.1 Case study: Boots (Advantage Card) 21.6.18 ToysRUs, USA21.3.2 Case study: LG (brand loyalty) 21.6.19 Zazzle, USA21.3.3 Case study: Pigsback (retail rebates) 21.6.20 Zed Tema, Russia21.3.4 Case study: Superdrug (Beautycard)21.4 Case studies from the USA21.4.1 Case study: Best Buy (Reward Zone)21.4.2 Case study: CVS/Pharmacy (Extra Bucks)21.4.3 Case study: eBay (eBay Bucks)21.4.4 Case study: Neiman Marcus (InCircle)21.4.5 Case study: Nordstrom (Fashion Rewards)21.4.6 Case study: Rite Aid (Wellness+)21.4.7 Case study: Sears/Kmart (Shop Your Way Rewards)21.4.8 Case study: Staples (Staples Rewards)
  • 70. 22 Financial Services Loyalty22.1 Introduction 22.3.11 Case study: MasterCard (Global)22.2 Insights and developments 22.3.12 Case study: MBNA (Global) 22.3.13 Case study: MoneyGram (US, Canada & Europe)22.2.1 Financial loyalty insights 22.3.14 Case study: PayPal (Global) Drivers of financial loyalty and churn 22.3.15 Case study: RBC (Canada) Bank customers more loyal if known in branch 22.3.16 Case study: Scotiabank (Canada/USA) What makes customers switch payment methods 22.3.17 Case study: TD Bank (Canada) Banks expect customers to shop around more 22.3.18 Case study: US Bank (USA) Financial loyalty driven by consumer trust 22.3.19 Case study: Visa (Global) What makes financial service customers churn 22.3.20 Case study: Wells Fargo (USA) Financial services e-mail can improve brand loyalty 22.3.21 Case study: Zions Bank (USA) Building loyalty to banks 22.3.22 Co-branded card developments22. Creating the ideal banking relationship Qantas launches rewards credit card22. UK banks profit-driven image stalls loyalty Priority Club Rewards card designed by members22. UK consumers miss out on bank rewards QuickTrip Rewards adds affinity debit card22. How credit unions can boost loyalty NFLs Extra Points credit card22. Australians trapped by their banks Deltas debit card with discounts & benefits22. Australian banks lack confidence in loyalty insight Hyatts Visa card carries extra rewards22. Bank customer loyalty tied to customer service Krogers rewarding payment cards22. Barriers to banking loyalty UFLs rewarding payment card22. How banks can earn younger customer loyalty Ukraine airlines FFP credit card22.2.1.3 Debit & credit card loyalty AAA Visa card offers triple reward points22. EMV heralds smart loyalty in the USA AviancaTaca revamps LifeMiles with credit cards22. Loyalty credit cards: fees, or no fees? Chinese banks social rewards credit card22. Credit card reward caps are unpopular Discover & Amazon partner up22. Payment methods chosen for best rewards Gulf Bank Kuwaits loyalty credit card22. Massive potential for debit card loyalty 22.3.23 Other developments22.2.2 Debit & credit card loyalty insights Travelex offers bonus BA Miles for ForEx22.2.2.1 Debit card loyalty points largely unredeemed Digital coupons saved to credit cards22.2.2.2 Time to focus on mobile & engagement SME satisfaction with banks declines22.2.2.3 Credit card reward redemption rate rises Fiserv Relationship Rewards adds loyalty points22.2.3 Loyalty to other financial services Credit card rewards usage barometer begins22.2.3.1 Highly satisfying claims boost insurance loyalty US payment networks support Isis platform22.2.3.2 Health insurers not profiting from satisfaction Santanders cashback rewards card22.2.3.3 South African insurer rewards good drivers Priceless loyalty scheme issues 60,000th card22.2.3.4 Grid Miles scheme rewards safer drivers Banco do Brasil rolls out Dotz loyalty scheme Bulgarian banks contactless loyalty card22.3 Case studies and developments Nationwides UK loyalty scheme22.3.1 Case study: American Express (Global) Navy Federals rewarding Member Mall22.3.2 Case study: Bank of America (USA) North Shore Banks Relationship Rewards22.3.3 Case study: Barclaycard & Barclays (Global) Case study: Barclays Lifes Rewards (UK)22.3.4 Case study: BMO (Canada)22.3.5 Case study: Capital One (USA)22.3.6 Case study: Chase (USA)22.3.7 Case study: Citi (Global)22.3.8 Case study: Discover (USA)22.3.9 Case study: HSBC (Global)22.3.10 Case study: Lloyds TSB (UK)
  • 71. 23 Airlines, FFPs & Airport Loyalty 24 Hotel & Resort Loyalty23.1 Introduction 24.1 Introduction23.1.1 Air travel loyalty insights 24.2 Hotel loyalty scheme case studies23.1.1.1 FFPs play vital role in airlines future growth 24.2.1 Case study: Accor (A-Club) Airlines must learn from FFP loyalty data 24.2.2 Case study: Best Western (Best Western Rewards) Low-cost airlines to benefit from loyalty 24.2.3 Case study: Carlson Hotels (Club Carlson) FFPs are a Panacea for airport loyalty 24.2.4 Case study: Choice Hotels (Choice Privileges) Benefits of an FFP in times of recession 24.2.5 Case study: Hilton (Hilton HHonors) How FFPs can generate serious income 24.2.6 Case study: Hyatt (Gold Passport) Faster flight updates boost airline loyalty 24.2.7 Case study: IHG (Priority Club Rewards) What passengers dont like about airlines 24.2.8 Case study: Marriott (Marriott Rewards)23.1.2 Air travel loyalty best practices 24.2.9 Case study: Ritz-Carlton (Ritz-Carlton Rewards) Strategies to reinforce the value of FFP miles 24.2.10 Case study: Starwood Hotels (Preferred Guest) Key factors for building strong FFP relationships 24.2.11 Case study: Wyndham (Wyndham Rewards) Commoditised FFPs can still find value in data23.1.3 Air travel loyalty developments 24.3 Hotel loyalty alliance case studies23.1.3.1 AirBaltic launches online rewards shop 24.3.1 Case study: GHA Discovery (Global) Webloyalty signs Wizz Air partnership 24.3.2 Case study: sQuidcard (UK) Aegean Airlines wider loyalty footprint 24.3.3 Case study: Stash Hotel Rewards (USA) Capital One matches existing cards FFP miles 24.3.4 Case study: Voila Hotel Rewards (Global) Middle East Airlines joins Sky Team Alliance 24.3 Hotel loyalty insights23.1.3.6 Nectar and easyJet sign partnership deal 24.3.1 European hotel satisfaction due to lower prices23.1.3.7 NBAD Star Points partners with FlyDubai 24.3.2 Study reveals changing drivers of hotel loyalty23.1.3.8 Estonian Airs social loyalty rewards 24.4 Other hotel loyalty developments23.2 Airline loyalty case studies 24.4.1 launches Welcome Rewards in the UK23.2.1 Case study: Air Canada (Aeroplan) 24.4.2 Aeroplan miles for Fairmont hotel redemptions23.2.2 Case study: Air France/KLM (Flying Blue) 24.4.3 Premier Inns budget hotel stay rewards23.2.3 Case study: Air New Zealand (Airpoints) 24.4.4 La Quintas loyalty deal with Avis & Budget23.2.4 Case study: Alaska Airlines (Mileage Plan) 24.4.5 Las Vegas resorts & Topguest reward social users23.2.5 Case study: American Airlines (AAdvantage)23.2.6 Case study: British Airways (Executive Club)23.2.7 Case study: Brussels Airlines (Miles&More)23.2.8 Case study: China Southern (Sky Pearl Club)23.2.9 Case study: Continental Airlines (MileagePlus)23.2.10 Case study: Delta Air Lines (SkyMiles)23.2.11 Case study: Emirates (Skywards)23.2.12 Case study: Etihad (Etihad Guest)23.2.13 Case study: Frontier (Early Returns)23.2.14 Case study: Jet Airways (JetPrivilege)23.2.15 Case study: JetBlue Airways (TrueBlue)23.2.16 Case study: Lufthansa (Miles&More)23.2.17 Case study: Malaysia Airlines (Enrich)23.2.18 Case study: Northwest Airlines (merged with Delta)23.2.19 Case study: Qatar Airways (Qmiles)23.2.20 Case study: South African Airways (Voyager)23.2.21 Case study: Southwest Airlines (Rapid Rewards)23.2.22 Case study: United & Continental (Mileage Plus)23.2.23 Case study: US Airways (Dividend Miles)23.2.24 Case study: Virgin America (Elevate)23.2.25 Case study: Virgin Atlantic (Flying Club)23.2.26 Case study: Virgin Blue (Velocity Rewards)23.3 Other airlines & FFP developments23.3.1 Aeromexico (Club Premier)23.3.2 Air China (Companion)23.3.3 AirTran (A+ Rewards)23.3.4 Bahrain Air (Loyalty Rewards)23.3.5 bmi (Diamond Club)23.3.6 Flybe (low cost flights)23.3.7 Hawaiian Airlines (HawaiianMiles)23.3.8 Kulula (Jetsetter Club)23.3.9 Qantas (Frequent Flyer)23.3.10 TAM Brazil (Multiplus Fidelidade)
  • 72. 25 General Travel & Tourism Loyalty 26 Food/Drink/Entertainment Loyalty25.1 Introduction 26.1 Introduction25.2 Car rental loyalty case studies 26.2 Food loyalty25.2.1 Case study: Avis (Avis First) 26.2.1 Restaurant loyalty insights25.2.2 Case study: Budget Rent A Car (RapidRez) Factors that influence restaurant choice25.2.3 Case study: Dollar Rent A Car (Dollar Express) Restaurants find loyalty schemes do help25.2.4 Case study: Enterprise (Enterprise Plus) Restaurants leak 30% of customers25.2.5 Case study: Europcar (Privilege) 26.2.2 Food-related loyalty developments25.2.6 Case study: Hertz (Gold Plus Rewards) CA Pizza Kitchens loyalty rewards25.2.7 Case study: National Car Rental (Emerald Club) Panera Breads loyalty scheme25.2.8 Case study: Thrifty (Blue Chip Rewards) Carls Jr. & Hardees mobile rewards25.3 Travel and tourism loyalty Eat24Hours.coms loyalty scheme Dunkin Donuts loyalty scheme25.3.1 Travel and tourism loyalty insights Restaurant advocacy via WOW incentives25.3.1.1 Travel industry must re-ignite customer loyalty Red Robins diner loyalty scheme25.3.1.2 Value drives travel loyalty & engagement UltraONEs loyalty scheme25.3.1.3 Travel loyalty must go the extra mile25.3.1.4 Travel loyalty aided by lifestyle bundles 26.3 Drinks loyalty25.3.1.5 E-travel customers show little brand loyalty 26.3.1 Starbucks loyalty scheme 26.3.2 Case study: Guinness (Hong Kong)25.3.2 Travel and tourism loyalty developments 26.3.3 Drink-related loyalty developments25.3.2.1 Club Yogi Rewards (USA) Tuborg beers mobile loyalty scheme25.3.2.2 Raiffeisen-Tours-Kooperation (Germany) Coca-Colas online loyalty scheme25.3.2.3 Seawings (UAE) Baristas Coffees prepaid loyalty card25.3.2.4 Affinion & Connexions (USA) Coffee drinkers not as loyal as you think25.3.2.5 Amtrak Guest Rewards (USA) Sabre Red (Global) 26.4 Recreational loyalty25.3.2.7 Travelex & Air Miles (UK) 26.4.1 AMC Theatres (USA) Royal Caribbean Crown & Anchor Society (USA) 26.4.2 Audience Rewards (USA) Club Med & Carlson (USA) 26.4.3 Red Carpet Rewards Club (USA) SuperAgency SuperCa$h (USA) 26.4.4 Regal Crown Club (USA) RBC Rewards & Travelocity (Canada) 26.4.5 Star Rewards (USA) Marriott Rewards (Global) Latitudes Rewards (Norway) Sixt & PayBack (Germany) Eurostar Plus (Europe) Expedia Rewards (USA) Ticketmunky (UK) Merseytravel Walrus Card (UK)
  • 73. 27 Mobile, Fixed Line & ISP Loyalty 28 Automotive & Fuel Loyalty27.1 Introduction 28.1 Introduction27.2 Mobile telecoms loyalty 28.2 Automotive loyalty and rewards27.2.1 Mobile loyalty insights 28.2.1 Automotive loyalty insights27.2.1.1 Loyalty is top priority for mobile networks Americans happier with imported vehicle brands27.2.1.2 Smartphone users loyal to their networks Toyota still leads in US car loyalty27.2.1.3 Smartphone loyalty cant be forced US online car shoppers loyal to Chevrolet27.2.1.4 40% of smartphone users churn each year Fun driving experience vital to vehicle loyalty27.2.1.5 App users work on recommendations 28.2.2 Automotive loyalty case studies27.2.1.6 Mobile loyalty schemes set to take off Case study: Chrysler Group (USA) Case study: Kenworth Trucks (USA)27.2.2 Loyalty to mobile providers Case study: Kia (USA) Relationships rule the wireless roost Case study: Kia (Canada) Mobile operators lose 25% of retail sales Case study: Mercedes-Benz (USA) Unsuitable CRM systems ruin mobile relationships Case study: Toyota (Canada)27.2.3 Mobile consumer loyalty 28.2.3 Automotive loyalty developments27.2.3.1 Drivers of mobile network loyalty and churn Belle Tires mobile loyalty scheme27.2.3.2 Whos not loyal to their mobile service, and why Pit-Stop workshops offers PayBack points27.2.3.3 Mobile networks rewards drive satisfaction Card-free loyalty platform for car dealers27.2.3.4 Loyalty to European mobile operators is high AAA Visa cards loyalty bonus27.2.4 Other mobile loyalty developments PayBack & Fords new car bonuses27.2.4.1 Sprints enhanced loyalty scheme Tata Motors loyalty scheme in Odisha27.2.4.2 Buongiornos expanded mobile loyalty platform 28.3 Fuel retailer loyalty and rewards27.2.4.3 Sundrops cardless mobile loyalty platform 28.3.1 Fuel retailer loyalty insights27.2.4.4 US Cellulars loyalty initiatives 28.3.2 Fuel retailer loyalty case studies27.2.4.5 Russian mobile/retail loyalty club Case study: BP (UK) Oranges contactless prepaid loyalty card Case study: Coles Express (Australia) Vodafone UKs prepaid loyalty scheme Case study: Esso (Canada)27.3 Fixed line telecoms loyalty Case study: Esso / Exxon Mobil (Singapore)27.3.1 Telecoms customers want love, not discounts Case study: FuelPerks! & Fuel Rewards (USA)27.3.2 Customer loyalty is critical to growth Case study: Indian Oil (India)27.3.3 Most broadband customers have churned Case study: Petro-Canada (Canada)27.3.4 Consumers surprisingly loyal to telcos Case study: Shell (Global)27.3.5 Etisalats online bill payment rewards Shell in the UK27.3.6 Billing makes 10% of telecom customers defect Shell in the USA Shell in other countries Case study: Texaco (UK) 28.3.3 Fuel retailer loyalty developments Giant Eagles food-and-fuel perks QuickTrip Rewards affinity debit card ConocoPhillips joins Kickback loyalty coalition Murphy and Wal-Marts fuel rewards South African fuel market warms to loyalty
  • 74. 29 Media & Publishing Loyalty 30 Loyalty in Other Sectors29.1 Introduction 30.1 Introduction29.2 Book store loyalty 30.2 Community & government loyalty 30.2.1 BeanSaver community rewards29.2.1 Case Study: Angus & Robertson (A&R Rewards) 30.2.2 Yorkshire town loyalty card a success29.2.2 Case study: Barnes & Noble (B&N Member) 30.2.3 Irish town offers local loyalty card29.2.3 Case study: Borders Rewards (now closed down) 30.2.4 Northampton offers town loyalty card29.2.4 Case Study: Indigo Books & Music (Plum Rewards) 30.2.5 Mobile app rewards locally loyal shoppers29.2.5 Other book store loyalty developments 30.2.6 Bolton offers market loyalty smartcard29.2.5.1 eCampus tiered textbook rewards 30.3 Non-profit & cause-related loyalty29.2.5.2 First Clubs e-book & audio book rewards 30.3.1 Medical charity offers affinity debit card29.2.5.3 Irish bookseller launches loyalty scheme 30.3.2 Consumers embrace cause marketing29.3 Newspaper & magazine loyalty 30.3.3 Causes are critical to loyalty, if they fit29.3.1 News website loyalty tied to satisfaction 30.3.4 Kula Causes turns points into donations 30.3.5 British Red Cross offers local loyalty card29.3.2 UKs Daily Mail launches loyalty scheme29.3.3 Sanoma trials contactless payment & loyalty 30.4 Education loyalty 30.4.1 Campus Dough helps university students29.4 Radio & television loyalty 30.4.2 Prepaid cards reward better teachers29.4.1 Conde Nasts revamped e-shopping rewards 30.4.3 Teacher Rewards amount to US$4.5m29.4.2 Jetcast rewards internet radio listeners 30.4.4 Mint offers school fundraising loyalty card29.4.3 USA Network rewards loyal viewers 30.5 Health & lifestyle loyalty29.5 Other publishing loyalty initiatives 30.5.1 Fitness Firsts trainer loyalty scheme29.5.1 Flowds music frequent fans scheme 30.5.2 Canadians rewarded for good health 30.5.3 offers loyalty scheme29.5.2 e-Miles 1 billionth ad-based reward 30.5.4 Customer trust creates healthy rewards29.5.3 PosterRevolutions loyalty scheme 30.6 Eco-friendly & green loyalty 30.6.1 RecycleBank, USA 30.6.2 Office Depot offers 100% Green rewards 30.6.3 Rewards scheme promotes green ethics 30.6.4 British Gas relaunches Green school rewards 30.6.5 ICE rewards sustainable living 30.7 Energy utility loyalty 30.7.1 NPowers Barclaycard Freedom incentives 30.7.2 TXU Energy doubles loyalty rewards 30.7.3 How smart meters affect energy consumers loyalty 30.8 Sports loyalty 30.8.1 National Football League (USA) 30.8.2 Major League Baseball (USA) 30.8.3 Jockey Club (UK) 30.9 Gaming loyalty 30.9.1 Game Points reward currency starts well 30.9.2 Gamestops PowerUp Rewards 30.10 Gambling loyalty 30.10.1 Caesars rewards guests for social exposure 30.10.2 Paddy Power Bingos loyalty card 30.10.3 City Bingo rewards player loyalty 30.11 Other loyalty initiatives 30.11.1 Meeting Rewards expands into Latin America 30.11.2 Igo-Posts long-term loyalty scheme 30.11.3 Aeropostales multi-channel loyalty scheme 30.11.4 Transit Treasure rewards public transport users 30.11.5 Groupons payment card loyalty scheme 30.11.6 Re/Maxs affiliate-driven loyalty scheme 30.11.7 CouponCabins loyalty scheme 30.11.8 Good Sam Club members save on fuel
  • 75. Appendix A - Loyalty supplier directory Reference of Loyalty Case Studies Coalition loyalty case studiesA.1 Suppliers listed by category & country Air Miles, UK (Avios) Customer loyalty systems Air Miles, Canada Air Miles, Spain (Travel Club) CRM/BI systems Air Miles, Netherlands Air Miles, Middle East Customer experience management 3.3.2 Aeroplan, Canada Call centres 3.3.3 BonusLink, Malaysia 3.3.4 eBucks, South Africa Developers & integrators 3.3.5 Fly Buys, New Zealand Application hosting 3.3.6 FlyBuys, Australia 3.3.7 PayBack India, previously i-Mint Loyalty scheme operators 3.3.8 iPoints/Maximiles, UK/Europe 3.3.9 Malina, Russia POS technology 3.3.10 Nectar, UK Data warehousing & data mining 3.3.11 Nectar Italia, Italy 3.3.12 PayBack, Germany & Poland Coupons/gift certificates/incentives B2B loyalty case studies Internet marketing 16.4.1 Nectar Business, UK Direct marketing 16.4.2 Argos Business Solutions, UK 16.4.3 Nortel, India Research and analysis 16.4.4 ARBL, India Public relations/media/events Supermarket loyalty case studies Industry associations Asda, UK, EDLP Co-op, UK, Dividend CardA.2 Supplier details (208 companies) Iceland, UK, Bonus Card Sainsburys, UK, Nectar Tesco, UK, Clubcard Dunnhumby, UK, Tescos analytics Big Y, USA, Express Rewards Giant Foods, USA, BonusCard Kroger, USA, Kroger Plus Meijer, USA, EDLP Price Chopper, USA, AdvantEdge Card Safeway, USA, Club Card Safeway, Canada, Club Card Wal-Mart, USA, EDLP Coles/Wesfarmers, Australia, FlyBuys & discounts Countdown, NZ, OneCard PicknPay, South Africa, Smart Shopper General retail loyalty case studies 21.3.1 Boots, UK (Advantage Card) 21.3.2 LG, UK (brand loyalty) 21.3.3 Pigsback, UK (retail rebates) 21.3.4 Superdrug, UK (Beautycard) 21.4.1 Best Buy, USA (Reward Zone) 21.4.2 CVS/Pharmacy, USA (Extra Bucks) 21.4.3 eBay, USA (eBay Bucks) 21.4.4 Neiman Marcus, USA (InCircle) 21.4.5 Nordstrom, USA (Fashion Rewards) 21.4.6 Rite Aid, USA (Wellness+) 21.4.7 Sears/Kmart, USA (Shop Your Way Rewards) 21.4.8 Staples, USA (Staples Rewards) 21.5.1 Hbc, Canada (Hbc Rewards) 21.5.2 Canadian Tire (Canadian Tire Money) 21.5.3 Home Ideas Centre, Australia (AdvantageCard) 21.5.4 Jet, South Africa (Jet Club) 21.5.5 SPC Card, Canada (Student Price Card)
  • 76. Financial services loyalty case studies Car rental loyalty case studies22.3.1 American Express (global) 25.2.1 Avis (Avis First)22.3.2 Bank of America, USA 25.2.2 Budget Rent A Car (RapidRez)22.3.3 Barclaycard (global) 25.2.3 Dollar Rent A Car (Dollar Express) Barclays Lifes Rewards, UK 25.2.4 Enterprise (Enterprise Plus)22.3.4 BMO, Canada 25.2.5 Europcar (Privilege)22.3.5 Capital One, USA22.3.6 Chase, USA 25.2.6 Hertz (Gold Plus Rewards)22.3.7 Citi (global) 25.2.7 National Car Rental (Emerald Club)22.3.8 Discover, USA 25.2.8 Thrifty (Blue Chip Rewards)22.3.9 HSBC (global)22.3.10 Lloyds TSB, UK22.3.11 MasterCard (global) Automotive loyalty case studies22.3.12 MBNA (global) Chrysler Group (USA)22.3.13 MoneyGram, US/Canada/Europe Kenworth Trucks (USA)22.3.14 PayPal (global) Kia (USA)22.3.15 RBC, Canada Kia (Canada)22.3.16 Scotiabank, Canada/USA Mercedes-Benz (USA)22.3.17 TD Bank, Canada Toyota (Canada)22.3.18 US Bank, USA22.3.19 Visa (global)22.3.20 Wells Fargo, USA Fuel retailer loyalty case studies22.3.21 Zions Bank, USA BP, UK Coles Express, AustraliaAirline & FFP loyalty case studies Esso, Canada23.2.1 Air Canada (Aeroplan) Esso/Exxon Mobil, Singapore23.2.2 Air France/KLM (Flying Blue)23.2.3 Air New Zealand (Airpoints) FuelPerks! & Fuel Rewards, USA23.2.4 Alaska Airlines (Mileage Plan) Indian Oil23.2.5 American Airlines (AAdvantage) Petro-Canada23.2.6 British Airways (Executive Club) Shell, UK23.2.7 Brussels Airlines (Miles&More) Shell, USA23.2.8 China Southern Airlines (Sky Pearl Club) Shell (other countries)23.2.9 Continental Airlines (MileagePlus) Texaco, UK23.2.10 Delta Air Lines (SkyMiles)23.2.11 Emirates (Skywards)23.2.12 Etihad (Etihad Guest) Book store loyalty cases studies23.2.13 Frontier (Early Returns) 29.2.1 Angus & Robertson (A&R Rewards)23.2.14 Jet Airways (JetPrivilege) 29.2.2 Barnes & Noble (B&N Member)23.2.15 JetBlue Airways (TrueBlue) 29.2.3 Borders Rewards (now closed down)23.2.16 Lufthansa (Miles&More) 29.2.4 Indigo Books & Music (Plum Rewards)23.2.17 Malaysia Airlines (Enrich)23.2.18 Northwest Airlines (merged with Delta)23.2.19 Qatar Airways (Qmiles) Other loyalty marketing case studies23.2.20 South African Airways (Voyager) 7.8.3 (global)23.2.21 Southwest Airlines (Rapid Rewards) 26.3.2 Guinness (Hong Kong)23.2.22 United Airlines & Continental (Mileage Plus)23.2.23 US Airways (Dividend Miles)23.2.24 Virgin America (Elevate)23.2.25 Virgin Atlantic (Flying Club)23.2.26 Virgin Blue (Velocity Rewards)Hotel & frequent guest loyalty case studies24.2.1 Accor (A-Club)24.2.2 Best Western (Best Western Rewards)24.2.3 Carlson Hotels (Club Carlson)24.2.4 Choice Hotels (Choice Privileges)24.2.5 Hilton (Hilton HHonors)24.2.6 Hyatt (Gold Passport)24.2.7 InterContinental Hotels (Priority Club Rewards)24.2.8 Marriott (Marriott Rewards)24.2.9 Ritz-Carlton (Ritz-Carlton Rewards)24.2.10 Starwood Hotels (Preferred Guest)24.2.11 Wyndham (Wyndham Rewards)Hotel loyalty alliance case studies24.3.1 GHA Discovery (global)24.3.2 sQuidcard, UK24.3.3 Stash Hotel Rewards, USA24.3.4 Voila Hotel Rewards (global)
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