Nine Laws on Loyalty Marketing


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Follow these nine rules when developing a loyalty programme and you cannot go wrong.

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Nine Laws on Loyalty Marketing

  1. 1. Nine Laws of Loyalty Marketing
  2. 2. According to a Survey by EIU, Customer Loyalty is One of the Top 10 Business Issues of Corporate CEOs
  3. 3. What Is Loyalty Marketing? According to Colloquy, loyalty marketing is the effort to identify, maintain and increase yield from best customers through long-term, interactive & value-added relationships
  4. 4. There Are Nine Cardinal Laws To Be Followed 5. Develop Offer 6. Build Dynamic 4. Build Relationships Programme Structure 7. Build Emotional 3. Calculate CLTV Bond 2. Targeted 8. Align Organisation Member Acquisition 1. Focus On Acquiring Data 9. Involve Sr. Mgmt.
  5. 5. Harrah’s Total Rewards 1. Focus on has developed a centralised acquiring data & award winning data warehousing system that allows them to better understand • Collect relevant info • Make better use of info their customers
  6. 6. 2. Target Member Harrah’s Total Rewards acquisition accurately Has built predictive tools that reveal which customers should be targeted for • loyalty incentive programmes • Establish best customer profiles • Go for quality over quantity
  7. 7. Tesco Clubcard has developed models that 3. Calculate & increase estimates the life time value customer LTV and profitability of each • customer. This allows them Estimate value of customers to target effectively and over years personalise communications -
  8. 8. Tesco 4. Build relationships has leveraged customer data based on relevance from its loyalty programme to move into offering banking • and financial services • Trust, excellent service • Design products around customer needs
  9. 9. 5. Develop an irrefutable core offer • • Plan for a differentiated offers • Conduct research at regular intervals
  10. 10. Hilton HHonours programme members earn 6. Build dynamic programme points for hotel stay and structure airline miles for hotel stay too. Members can choose to earn in either currencies Vary the programme or both. They call it benefits ‘Double Dipping’
  11. 11. Types of Loyalty Programme Structures Affinity Discount Programmes Programmes Bonus & Frequency Programmes Coalition User Programmes Communities
  12. 12. Affinity Programmes Characterised by recognition Strong emphasis on recognition & privileges
  13. 13. Bonus & Frequency Programmes Characterised by reward currencies viz. points Encourages repeat usage behaviour
  14. 14. Discount Programmes Characterised by discounts Encourages volume purchase behaviour
  15. 15. Coalition Programmes Characterised by organisations offering rewards under single banner Enables customers to collect rewards which otherwise may take longer time
  16. 16. User Communities Characterised by dialogue & information dissemination Enables customers to network and learn about new happenings
  17. 17. Via Rail of Canada 7. Build emotional is using loyalty data to decide bond with customers - which type of wine to be served on certain routes and cabins which routes needed stations -’ There should be greater stress on for nursing mothers ‘moments of truth experiences
  18. 18. 8. Align the organisation to create true loyalty Overly focus on profits and growth may destroy customer loyalty
  19. 19. 9. Involve senior mgmt. in understanding customer behaviour Understand relationship dynamics between acquisition, retention, penetration & cost to serve
  20. 20. These Nine Laws will decide the success of any loyalty marketing initiative
  21. 21. For further information please call: Rajeev at (6)012-6301137 or e-mail: rajeev@loyalty-