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Loyalty Management For Nzsug
 

Loyalty Management For Nzsug

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  • Loyalty Management is about making sure that you do not find yourself in this situation: It is about knowing your customer and building relationships that are valuable and sustainable for both parties
  • Ultimately you want to be here: Your customers identify themselves with you and your brand – and proudly show this
  • Hybrid Model: Costco – just recently opened a store in Melbourne
  • Dialogue – Enroll the right customers Determine which customers the company wants to raise their hands to engage in your relationship strategy Highest-value customers to recognize and reward their value high-potential customers who currently split their purchases customers at the highest risk of churning Based on the customer groups a recognition and reward strategy that piques customers’ interestEngagement – Engage customer interest Involve customers via regular communication into a dialogue is critical in moving users through the relationship chain Communication has to answer the question: What’s in it for me? Design Communication with calls to action that will stimulate regular response. Customers who respond are exhibiting increased interest The first redemption is happeningIncrease Member value: Stimulate active participation by encouraging program use and customer engagement Key behaviours include any voluntary customer activity beyond standard transaction Relationship chain analytics are based on such activities as completing surveys, checking points balances online, responding to targeted offers, using kiosks, bidding on auction items, entering sweepstakes, ...Sustainable Retention – Trigger multiple redemptions: Customers who participate in loyalty strategies expect a payoff – the answer to the question “What’s in it for me?” Reward Redemption is both the answer to that question and the ultimate measure of customer value Redemption happens whenever a customer extracts value from a loyalty campaign Multiple redemption is the keySource: Colleen Becker: Forcing the Relationship Chain (http://directmag.com/roi/1119-customer-relationship-chain/ )
  • By comparing the behaviour of loyalty-marketing participators to the behaviour of established control groups, marketers can infer the financial impact of each customer stage by measuring success early in the chain.Proper analysis requires tracking and measurement of loyalty-marketing activity at both the individual customer and segment levels. Key metrics include: Enrollment: Which customers raised their hands to indicate initial interest in the campaign? Are they the right customers? Participation: How many non-participators, one-time participators, and multiple participators are responding to the dialogue efforts? What is the recency of participation by segment? Redemption: How many non-redeemers, onetime redeemers, and multiple redeemers are in the customer file? Is there a steady progression of one-timers to multiples? How recent are the redemptions? Segment mobility: Are you seeing a steady migration of customers from high-potential to high-value segments? How well does program activity correspond to this migration? Churn rates: How many customers are leaving the program? How many are leaving the brand? Is there a reduction in churn? If so, how does that reduction correspond to program activity? Annual average customer value: Is transaction value increasing? Are cross-sell and up-sell penetration rates rising? Customer lifetime value: Is the Net Present Value (NPV) of key segments improving due to increased lift and reduced churn? IncrementalityCustomer equityShare-of-walletIt is important to measure early in the chain to see if they are steering in the right direction. Marketers can examine the reasons behind the results and work to either solve or exploit them – steer right, steer left or hit the gas pedal.
  • Based on the gathered transactional data it is possible to cluster your customers in homogeneous-like segments, which you address with the appropriate marketing strategies and, thus, you make the most out of your marketing expenditures. The clustering could also happen without a point program in place. The sheer amount of transactional data combined with the customer entity should give you enough business insights to promote the right merchandise to the right customer.
  • Retail RequirementsStrategic integration of channels Member profile / tier / interactions drive customer experience and offersOperational integration of channelsMember registration Profile maintenance Statements / Points Lost / damaged card Nominate new member Change programIntegration of core customer management processesSales operationsSales order processing for point redemptionMarketing OperationsCampaign PlanningCampaign DevelopmentCampaign OptimizationCampaign ExecutionCampaign MeasurementService OperationsService Ticket ProcessingComplaint managementService Interaction
  • Dialogue:Personalised communicationIdentifysigns of interest & engangementOffer recognition and rewardincentivesTrackcustomerbehaviourEngagement:Flawlessredemption-process incl. WOW! – factorLoyaltytacticsthatincent WOM behaviourDevelop and use WOM – metricsIncreased member value:Provide communication platformsOfferincentives to shareproduct informationDevelop social network toolsSustainableRetention:Help to build social capital by creating unique soft benefitsIdentify the champions throughbehavioural & additionalmeasurementsEngage in facilitated WOM activities
  • Loyalty Program Management enables set-up and maintenance of loyalty programs. Program maintenance includes information about program partners, program-related loyalty status levels, set-up and maintenance of point accounts, as well as program-specific attributes based on flights, nights of stay, dollars spent, frequency of purchases, and so on.Loyalty Reward Rule Management includes the set-up and maintenance of loyalty rules and conditions, campaigns for enrollment and registration, finally being processed by the loyalty engine. All points accrued and redeemed by members are recorded within the member‘s point account. Loyalty Membership represents the participation of an individual person to a specific loyalty program. Membership is opened by registration to the loyalty program, either paper-based, via Web self-service, or Interaction Center. It also includes member activities such as flights, hotel stays, or sales activities, finally being processed by the processing engine against the reward rules. The Loyalty Management Processing Engine is a highly scalable component to process member activities, tier transition evaluation, and point expiration. It is an integrated part of SAP CRM and the “heart” of the SAP CRM based Loyalty Management solution.Additional features in Loyalty Management are:CollaborationIntegrationLoyalty Management is a cross-industry offering and can be configured for different industries.
  • This slide gives you an overview of how the individual entities of the loyalty program connect to each other. One could distinguish between the set-up of the program, the corresponding master data, and the transactional data like sales order or POS transactions, which would invoke the infrastructure and the update of the master data objects. At its core the loyalty processing engine would be responsible for complying with all defined rules in order to post the right miles or points to the member accounts. The rule could be a basic rule applying to all standard transactions , but it could also be attached to a campaign, where the rule only applies to a certain target group. The Member is usually identified via card at the POS or via a member number in the Web shop and Interaction Center. Each transaction invokes the rule framework in SAP CRM, creates a member activity, and eventually updates the point account either as a redemption or accrual.And, of course, all interactions are integrated into the SAP CRM regular channels like the Web shop and Interaction Center, or via APIs also to SAP POS.
  • Loyalty Management is embedded in SAP CRM. It uses multiple channels to interact with the customer; mainly the SAP CRM Web shop, the Interaction Center, as well as the CRM UI.Its objects are Web service enabled to allow external applications to communicate with SAP CRM loyalty management. It has already been mentioned that loyalty management is a central component in seamlessly integrated into SAP CRM Marketing. Loyalty Management from a communication perspective is mainly about processing activities, member activities like flights, trips, ticket purchases, point redemption, or any other accrual activitiy, either sent by an external system, manually entered, or derived from SAP CRM sales processes. These activities will be processed against system-specific rules and will finally update to passenger tier levels, point accounts, or execute any other customer-specific functionality according to the settings and definitions which have been made for the loyalty program.
  • It has already been mentioned that loyalty management is based on the following four solid pillars:Program ManagementReward Rule ManagementMembership HandlingProcessing EngineEach area is directly addressing individual, loyalty-specific business processes and comes with rich functionality.In this presentation, we will take a look at each block in more detail.

Loyalty Management For Nzsug Loyalty Management For Nzsug Presentation Transcript

  • Nicole Wieberneit
    Thomas Wieberneit
    27.08.2009
    Loyalty Management
  • Loyalty?
  • Loyalty!
  • Thomas Wieberneit
    • 2008 – CRM Practice Manager ANZ
    • CIBER, ANZ
    • 2008 – Executive Consultant & Project Manager
    • CGI, Canada
    • 2005 – VP CRM Development
    • SAP, Germany & Canada
    • 2000 – Quality Manager then VP CRM Quality Management
    • SAP, Germany
    • 1997 – Development Manager CRM Technology & Mobile Solutions
    • SAP, Germany
    • 1995 – CRM Developer
    • Kiefer & Veittinger, Germany
  • Who are CIBER?
    A US$1 billion Global IT services company that builds, integrates and supports applications and infrastructures for business and government.
    • Over 8,500 employees
    • NYSE: CBR - HQ in Denver
    • 85 Offices in 18 countries
    • 3 US-based Development Centers
    • 3 Offshore Development Centers
    • Growth and Profitability since 1974
    • ISO 9001 certified
    • 98% Customer Satisfaction Rating
    “CIBER is positioned as a solid alternative to the large ESPs; it is a smaller, more-nimble provider whose sweet spot is a more-flexible approach to client engagements.”
  • CIBER ANZ
    • Established in 2005
    • Subsidiary of CIBER, Inc. (NYSE: CBR)
    • Offices in Auckland, Sydney and Melbourne
    • 100+ CIBER full time employees (30+ in NZ)
    • ANZ SAP Support Centre based in Sydney & Auckland
  • H
    Agenda
    Loyalty Management in Retail
    The SAP Loyalty Management Solution
    Demo
  • Loyalty – What is it?
    Companies
    Consumers
    • Shopping at a single exclusive retailer in a particular category
    • Frequent shopping at a particular retailer
    • Loyalty is demonstrated by:
    Years with retailer
    Staff favourites
    Low price sensitivity
    Willingness to recommend
    (COLLOQUY Talk: The Loyalty Marketing Index, June 2008)
    • Loyalty Management is part of enhancing the customer experience. (SAP, 2009)
    • Loyalty Management is the actions a company undertakes to attract and retain profitable customers. (Memberson, 2009)
    • Loyalty is a feeling or attitude of devoted attachment and affection. This is mostly measured by behavioural KPIs like share of value, purchase frequency or retention rate
    • Loyalty Marketing is about creating customers who don’t need ongoing marketing investment and therefore are more profitable (BuildingBrands, 2009)
  • Successful Loyalty Programs
    • Improve the existing customer relationship by offering relevant rewards that reinforce the brand values
    • Identify, maintain, and increase the yield from best customers through long-term, interactive, value-added relationships
    • Performance is judged with a combination of behavioural and attitudinal measures
    COLLOQUY, 2006, BuildingBrands, 2009
  • Loyalty Management in Retail – Where are we now?
    • 3 distinctive models
    • Coalition
    • 2 main program types
    • Cashback
    • Points based
    • Loyalty technology
    • Smart Cards
    • E-Coupons (e.g. Safeway)
    • Active program participation rates are modest: ~40%
    • Signs of maturity and boredom
    • Process models
    • Personalization
    • Improved loyalty analytics
    • WOW! factor and soft benefits
  • Retail Market Environment: 3 Distinctive Models
    EDLP
    Loyalty Model
    Hybrid Model
    Relentless focus on lowest category prices that leads to
    • Low customer service
    • Low In-store experience
    • Unimportance of customer relationships
    Membership clubs with de facto retail loyalty program
    • Membership fees
    • Members only wholesale-pricing
    Focus on differentiated customer relationships via
    • Recognition and rewards
    • Identifying customers
    • Tracking their behaviour
    • Mining data for marketing insight
    Focusing solely on the lowest price in your sector is a pathway to disaster
    (If your are not the low-price leader ...
    ... and there can be only one!)
  • State of the Art Loyalty Relationship Chain(TM)
    ROI
    Redemption
    Dialogue
    Engage-ment
    Increase Member Value
    Sustain-able Retention
    COLLOQUY, 2009
  • How to Increase Loyalty Program Participation
    One Face to the Customer
    Brand Linkage
    Customer Service
    RelevantProducts
    WOM Champion
    TargetedOffers
    PersonalizedCommunication
    Social Networks
    CRM LoyaltyAnalytics
    WOW!-Factor – Attractiveness of Value Proposition
  • Building a Customer Strategy based on Segments
    Some market analysis demonstrates how crucial it is for a retail company to manage their loyalty program in an innovative and aggressive way
    Loyalty Customer Strategy
    • 80% of shoppers use their loyalty cards regularly
    • 20% of loyalty program members generate 80% of a retailer's profit
    • It costs 5-10 times more to acquire new customers than keeping existing ones
    • 5% - 20% of loyalty program costs can be saved through better prospect targeting
    • Increase of customer retention by 5% can increase profits by 20% to 40%
    Potential Business impact of Loyalty Management
    • Same storesales could rise two digits over trend after short time
    • Gross profit percentage could rise significantly
    • Two digit Sales and profit growth could be achieved
    • Significantly increased shopping basket size
    • Increased store count in double digit percentage range
    Small Town
    Executive Families
    High
    Customer
    Segments
    Segment B
    Segment C
    Segment A
    Segment D
    Elite Urban Singles & Couples
    Monetary Value
    Mobile Singles & Couples
    Empty Nesters
    Young Middle-ClassFamilies
    Young Mobile Singles
    Mid-Level
    Urban Couples
    Low
    Middle Income Young Singles
    Single-Parent Families
    Low
    High
    Frequency and Recency of purchase
    OlderSingles & Couples
    Older Families in Isolated Areas
    Older, Rural Couples
    Customers
    Given the profit contribution of loyalty card buyers , it is vital for retailers to continuously recruit new members into their loyalty program
  • How to Increase Loyalty Program Participation
    One Face to the Customer
    Brand Linkage
    Customer Service
    RelevantProducts
    WOM Champion
    TargetedOffers
    PersonalizedCommunication
    Social Networks
    CRM LoyaltyAnalytics
    WOW!-Factor – Attractiveness of Value Proposition
  • Retail Requirements for the Customer Strategy
    Customer Driven Experience
    Customers
    Retail Requirements
    Strategic integration of channels
    Memberregistration
    Member activitysales transaction
    Member activity service transaction
    Member activity campaign driven
    Member activity tier upgrade
    • Member profile / tier / interactions drive customer experience and offers
    Operational integration of channels
    Multi
    Channel
    Interaction
    Integration ofcore customer management processes
    Fax
    Phone
    Store
    IVR
    Letter
    Counter
    E-mail
    Messaging
    Kiosk
    Internet
    • Member registration
    • Profile maintenance
    • Statements / Points
    • Lost / damaged card
    • Nominate new member
    • Change program
    Customer Management
    • Sales operations
    • Sales order processing for point redemption
    • Marketing Operations
    • Campaign Planning
    • Campaign Development
    • Campaign Optimization
    • Campaign Execution
    • Campaign Measurement
    • Service Operations
    • Service Ticket Processing
    • Complaint management
    • Service Interaction
    Customer Loyalty Management
    SegmentC
    SegmentD
    Customer
    Segments
    Segment B
    Segment A
  • Retail Requirements for the Customer Strategy
    Customer Driven Experience
    Customers
    Memberregistration
    Member activitysales transaction
    Member activity service transaction
    Member activity campaign driven
    Member activity tier upgrade
    Multi
    Channel
    Interaction
    Fax
    Phone
    Store
    IVR
    Letter
    Counter
    E-mail
    Messaging
    Kiosk
    Internet
    Customer Management
    Customer Loyalty Management
    SegmentC
    SegmentD
    Customer
    Segments
    Segment B
    Segment A
  • How to Increase Loyalty Program Participation
    One Face to the Customer
    Brand Linkage
    Customer Service
    RelevantProducts
    WOM Champion
    TargetedOffers
    PersonalizedCommunication
    Social Networks
    CRM LoyaltyAnalytics
    WOW!-Factor – Attractiveness of Value Proposition
  • Word Of Mouth Marketing
    Engagement
    Dialogue
    Value Exchange
    Participation
    Identification
    WOM Acquisition
    WOM
    Increased Member Value
    Multiple Exchanges
    WOM Facilitated
    Champions
    Profitable Long-Term Relationship
    Sustainable Retention
    COLLOQUY talk: The New Champion Customers, January 2009
  • WOM enhanced Loyalty Relationship Chain
    Higher ROI
    Cost
    Revenue
    Increase Member Value
    Dialogue
    Engage-ment
    Sustain-able Retention
    COLLOQUY, 2009
  • H
    Agenda
    Loyalty Management in Retail
    The SAP Loyalty Management Solution
    Demo
  • Loyalty Management – A Complete Solution
  • Loyalty Management – Overview
    • Independent Affiliates
    • 3PL
    • Service stations
    • Other B2C business
    Loyalty
    Program
    Loyalty
    Campaign
    Point
    Types
    Point
    Account
    Tier
    Groups
    Program
    Partner
    Tier
    Level
    Rule
    Group
    MemberActivity
    Loyalty Processing Engine
    Rule
    Card
    Membership
    Member
    • Transactional Data
    • Master Data
  • Communication
    Customer
    Segments
    External Applications/POS system
    Customers
    Multi
    Channel
    Interaction
    Fax
    Phone
    IVR
    Letter
    E-mail
    Internet
    Back-Office
    Counter
    Web Shop
    Interaction Center
    CRM UI
    Web-Services
    Membership Handling
    Points / Bonus
    Determination by Rule Engine
    Member
    Activities
    Point
    Accruals
    Loyalty
    Management
    CRM Marketing
    Reward Rule Management
    Processing Engine
    Point Account
    Point
    Redemption
    Point
    Expiration
    Program Management
  • Functional Overview
    Reward Rules
    Management
    Membership
    Handling
    Processing
    Engine
    Program
    Management
    Tier Management
    Scalable Engine Component
    Membership Types and Registration
    Robust Rule Modeling
    Points Management
    Online Member Activity Processing
    Member Tier Management
    Version Management
    Tier based Point Expiration
    Batch Member Activity Processing
    Member Activities
    Template & Expert mode maintenance
    Program Creation
    Tier Evaluation Processing
    Member Profile Maintenance
    Rule Scheduling
    Program Partners Management
    Point Expiration Processing
    Point Account Management
    Partner Sponsorship
    Dynamic Attributes
    Simulation of Rule Processing
    Basic Membership Card Handling
    Campaign Integration
    Integrate / Analyze / Collaborate
    Sales Order Integration
    IC Integration
    Loyalty API Connectivity
    Web Channel Integration
  • Key Take Aways
  • H
    Agenda
    Loyalty Management in Retail
    The SAP Loyalty Management Solution
    Demo
  • Retail Loyalty Dashboard Overview
    Champaign Analysis by Product Category
    Multi-Channel Analysis
    Analysis by Tier and Region
  • Dashboard – Loyalty Campaign Details
    Campaign Analysis Overview
    Detail Analysis by Tier and Campaign
  • Loyalty Program Overview
    Loyalty Program Hierarchy
    Loyalty Program General Data
    Several Component:
    Events – Loyalty Campaigns
    Reward Rule Groups – e.g. for campaigns, sales orders, tiers
    Reward Rules – How many Points
  • Membership in Loyalty Program I
    Membership Overview
    Tier Changes
  • Membership in Loyalty Program II
    Member Activities:
    Tier Change, Accrual, Redemption, …
    Point Balance – Several Point Types per Program Possible
    Multiple Members and Cards to a Membership Possible
  • Loyalty Campaign
    Loyalty Campaign – General Data
    With or Without Enrollment
    Enrollment by all Members or Target Group Based
    Reward Rule
  • Reward Rule Details
    Easy Maintenance of Reward Rules via the Formula Builder
  • Web Channel – My Account
    Consumer – Account Area with several Options
    View of all Loyalty Campaigns
  • Browse Catalogue and Earn Some Extra Points
    Browsing in the Product Catalogue
    Extra Points if Buying Long Chairs
  • Web Shop – My Loyalty - Transactions
    Points are Added to the Balance
    Earn 3x Points by Buying the Chair:
    • Standard Points (Qualifying)
    • 2 Loyalty Campaigns
  • Web Shop – Redeem Points
    Costs in Points Shown
    Shopping Basket View
    Redemption Product Catalogue
  • My Transactions after Redemption
    All Member Activities are Happening in Real-Time
  • Call Centre Support Specialist Overview
    Mr. Baker calls in
    Confirmation of Account and Membership Details
  • CIC – Membership Overview
    Donation and Transferring of Points
    Membership General Data
    Activities Visible: Sale and Redemption from Web Shop
  • Donate or Transfer Points
    Selection of Destination Membership
    Number of Points
  • Manual Up- or Downgrade
    Possibility to Up- and Downgrade a Membership from the Membership Overview