Loyalty Programmes, A Brief Introduction

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  • 1. Loyalty programmes –a brief introductionMads Fuhr Frederiksen – Digital AdvisorDecember 8th,, 2011
  • 2. Loyalty programmes “It’s always easier to start a loyalty programme, than to end one”
  • 3. What is it?A  loyalty  programme  is  unique  in  rela2on  to  the  individual  industry  it  resides  in  –  it  should  be  consider  a  part  of  the  companys  overall  business  strategy.    We  work  with  3  mayor  segments:    1.  Customer  2.  Employee  3.  Provider      Consis4ng  of:    1.  Hard  benefits   •  Discounts,  special  deals,  bonus  deals,  milage  etc.      2.  SoG  benefits   •  VIP  membership  status,  events  etc.           “A  loyalty  programme  should  be  consider  and  implemented  as  a  long-­‐term  strategy  for  the  company.   The  trust  will  not  come  overnight  as  with  any  other  rela<onship  IRL.”  
  • 4. 4 types of programmes1.  Open  programmes  (wide  public)  2.  Closed  programmes  (focused  on  customer  reten2on)  3.  Emo2onal  2es  to  the  company/products  4.  High  or  low-­‐engagement  category  
  • 5. 4 types of programmes•  Hard  benefits   •  Discounts   •  Special  offers   •  Bonus  programs     Long-­‐term  •  So;  benefits   strategy   •  VIP  membership  status   •  Events   •  Exclusiveness   •  Unique  advantages  
  • 6. Communication approach•  Targeted  communica2on  •  Highly  relevant  communica2on  •  Exclusive  communica2on/dialogue  •  Ac2on-­‐driven  CTA  dialogue  •  Sense-­‐of-­‐urgency  methods  
  • 7. One question to ask: What’s the purpose?•  What  is  the  purpose?  •  What  do  we  want  to  achieve?  •  What  can  the  customers  expect?  •  What  are  the  KPI’s?       ”  A  loyalty  programme  is  a  strategic  add-­‐on  to  the  overall  marke<ng  plan  and  if  one  does  not   es<mate  increased  profitability  based  on  the  such  a  programme,  don’t  bother  ini<ate  one.”  
  • 8. KPI/Goals•  Overall  goal:  Profit   The  clubs  should  not  be  seen  as  a  way  to  make   the  customers  more  loyal  as  much  as  a  way  to  •  Build  loyalty   make  the  company  more  profitable.      •  Brand  awareness  •  Advocacy  effect  •  Repurchase/Addi2onal  sales  •  Gain  knowledge  from  customer  input/feedback  •  Customer  reten2on  and  durability  •  Re-­‐ac2va2on  of  passive  customers/leads  •  Life2me  value  (contribu2on  margin/total  revenue  per  customer)  •  Build  and  develop  the  rela2onship  between  company  and  customer  
  • 9. Company value?•  Increased  profit  over  2me  •  Great  influence  on  the  company  cost-­‐effec2veness  •  Increased  brand  awareness/equity  •  Increased  compe22ve  posi2on  •  Future  market  posi2ons  •  Market  propaga2on/spread  •  Systema2c  collec2on  of  customer  data  •  Mapping  of  customer  behaviour  •  Enriched  data  segmenta2on  (micro  variables)     ”only  through  targeted  and  relevant  communica<on,  can  you  create  genuine  and  long-­‐term  loyalty”  
  • 10. Getting started•  Brand  it,  Name  it!  •  Iden2fy  cri2cal  customer-­‐touch  points  •  Create  overview  of  customer  journey  •  Define  your  segments  •  Build  your  subscrip2on  database  over  2me  •  What’s  in  it  for  me?   •  Develop  improved  customer  experiences   •  Make  it  easy  to  love   •  Make  it  hard  to  leave  •  Define  financial  poten2al  
  • 11. Industries with loyalty programmes•  Tele  companies  (3Bonus,  Telia  EliteMoblist)  •  Travel  agencies  (SAS  Eurobonus)  •  Detail  (COOP+)  •  Insurance  (Tryg  Forsikrings  ”Helkunder”)  •  Mortgage  credit  companies  (Nordea  Fordel+)  •  Banks  (Capital  One  Rewards  Program)  •  Apparel  (Bestseller)  •  Electronics  (HIFI-­‐klubbens  Kundeklub)  •  Car  companies  (BMW,  Audi)  •  TV-­‐sta2ons  (Klub  Lorry)  •  Unions  (Forbrugerforeningen)  •  Toys  retailers  (LEGO  Club,  Fæger  BR)  •  Newspapers/Publishing  (Poli2ken  Plus,  Børsens  Execu2ve  Club)  •  Rental  companies  (Hertz  no.1  Gold  Club,  AVIS  Preferred)  •  Music  services  (iTunes,  Spo2fy,  YouSee  Play,  PLAY)  •  Gas  sta2ons  (Statoil  Premium  Club)  •  Hotel  chains  (Marriot,  Ritz-­‐Carlton)  •  Entertainment  industry  (Tivoli  Klubben)  •  Bookstores  (Gyldendals  Bogklub,  Bog&Idé  Flip)  •  Personal  care  (Club  Matas)  
  • 12. Thanks!playgrounds.dktwitter.com/madsfuhrlinkedin.com/in/madsfuhrscribd.com/mads_frederiksen