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The power of coalition loyalty marketing

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The power of coalition loyalty marketing

  1. 1. The power of coalition loyalty marketingBy GABI KOOLCEO BalticMilesFor once the secret recipe is shared on how BalticMiles is buildingthe most beloved loyalty program in the Baltics region.August 26, 2011
  2. 2. In the next 20 minutes a quick review of:-1 The Loyalty Marketing landscape in the Baltics-2 The benefits of coalition loyalty marketing-3 BalticMiles: the secret recipe
  3. 3. In the next 20 minutes a quick review of:-1 The Loyalty Marketing landscape in the Baltics-2 The benefits of coalition loyalty marketing-3 BalticMiles: the secret recipe
  4. 4. The Loyalty Landscape in the Baltics...
  5. 5. In the next 20 minutes a quick review of:-1 The Loyalty Marketing landscape in the Baltics-2 The benefits of coalition loyalty marketing-3 BalticMiles: the secret recipe
  6. 6. Coalition programs – How do they operate? Customers  Partners  Manager  Suppliers   Sign up own customers at POS  Operate Program  Provide Manager with transactional data  Open & manage customer accounts  Issue Base Points  Manage rewards portfolio & redemption  all customers/ all POS/ all products  Manage the database  Issue Bonus Points  Recruit new Partners  as per business objectives  Manage retailers relationships  Promote the Program  Manage all communication channels  Every household spender gets a card linked to one account  Sell rewards to Manager  Collect Base Points = everyday shopping  Fulfill rewards to Customers  Receive Bonus points = when respond to retailers’ offers  Redeem Points for Rewards
  7. 7. Benefits of Coalition Loyalty Marketing- Partner Perspective
  8. 8. Benefits of Coalition Loyalty Marketing- Member perspective in Latvia: Larger Rewards Reward  Annual spend  money for  Spending category per HH CI% Pay out, % member Bank € 2 132 0,40% 0,24% € 5,12 Grocery € 2 765 1,50% 0,90% € 24,89 Fuel € 354 1,50% 0,90% € 3,19 Telecoms € 445 2,50% 1,50% € 6,67 Perfume ‐ Cosmetics € 157 3,50% 2,10% € 3,30 Pharmacy € 211 2,00% 1,20% € 2,53 Sports € 38 2,00% 1,20% € 0,45 Home and furniture € 186 3,00% 1,80% € 3,35 DIY € 319 2,00% 1,20% € 3,83 CE € 254 1,50% 0,90% € 2,29 Restaurants € 418 4,00% 2,40% € 10,04 Clothing € 413 4,00% 2,40% € 9,91 Footwear € 177 4,00% 2,40% € 4,26 Culture € 81 2,00% 1,20% € 0,97 Books € 29 3,00% 1,80% € 0,52 Car service € 121 3,00% 1,80% € 2,18 Toys € 19 3,00% 1,80% € 0,34 Travel ‐ (excl. Business travel) € 40 2,00% 1,20% € 0,48 Insurance € 78 3,00% 1,80% € 1,41 Transport services € 166 3,50% 2,10% € 3,49 OTHER € 1 932 0,00% 0,00% € 0,00 TOTAL € 8 404 1,77% 1,06% € 89,22
  9. 9. Benefits of Coalition Loyalty Marketing - Member perspective in Latvia: Faster Rewards SPENDING BEHAVIOURS POINTS EARNING POTENTIAL AVG. WEEKS TO REACH GOAL Avg  Likely to  Annual  Revenue  Avg. annual  Weighted  points  earn  Bonus  Annual  Avg  Potential  contribution,  spend /  average  earned  EVERY  Pts  Points  Point/  Award  Award  Award  Award  Award  Spending quintiles universe % Household Pay out per year Bonus Earned earned Week Level 1 Level 2 Level 3 Level 4 Level 5 90 750 6 000 15 000 25 000 1,06% 20% SONG CINEMA FLIGHT 2 FLIGHTS 4 FLIGHTSTop Range HH 174 293 34,0% € 14 278 € 151,57 25 261 75% 3 789 29 050 559 1 2 11 27 45High Range HH 174 293 21,6% € 9 082 € 96,41 16 069 55% 1 768 17 837 343 1 3 18 44 73Middle Range HH 174 293 17,9% € 7 523 € 79,86 13 310 25% 665 13 975 269 1 3 23 56 94Lower Range HH 174 293 15,3% € 6 422 € 68,17 11 362 10% 227 11 589 223 1 4 27 68 113Lowest Range HH 174 293 11,2% € 4 717 € 50,07 8 346 10% 167 8 513 164 1 5 37 92 153
  10. 10. Benefits of Coalition Loyalty Marketing- Member perspective: Relevant throughout life 0 1 2 3 4 5 6 7 Couple Couple Empty Young with with Nesters – Retired – Young Couple young teenage Pre Retired Living Youth Single w/o kids kids kids Retirement Couple Alone TELECOMMUNICATIONS Young persons tend to be heavy users, though there is an increasing trend of usage across all life stages
  11. 11. Benefits of Coalition Loyalty Marketing- Member perspective: Relevant throughout life 0 1 2 3 4 5 6 7 Couple Couple Empty Young with with Nesters – Retired – Young Couple young teenage Pre Retired Living Youth Single w/o kids kids kids Retirement Couple Alone PETROL Starts with young singles with strong Heavy usage was found amongst aspirations of owning couples with kids the 1st car
  12. 12. Benefits of Coalition Loyalty Marketing- Member perspective: Relevant throughout life 0 1 2 3 4 5 6 7 Couple Couple Empty Young with with Nesters – Retired – Young Couple young teenage Pre Retired Living Youth Single w/o kids kids kids Retirement Couple Alone GROCERIES Heavy usage was found amongst Starts with the couples with kids, especially teenage ownership of a kids household
  13. 13. Benefits of Coalition Loyalty Marketing- Member perspective: Relevant throughout life 0 1 2 3 4 5 6 7 Couple Couple Empty Young with with Nesters – Retired – Young Couple young teenage Pre Retired Living Youth Single w/o kids kids kids Retirement Couple Alone BANKING Starts with youths – limited contact: mainly cash needs Heavy needs were found during the ‘Age of Commitment’ • Car, House, Credit Card needs/loan products • Savings, Investment • Children’s needs
  14. 14. Benefits of Coalition Loyalty Marketing- Member perspective: Relevant throughout life 0 1 2 3 4 5 6 7 Couple Couple Empty Young with with Nesters – Retired – Young Couple young teenage Pre Retired Living Youth Single w/o kids kids kids Retirement Couple Alone DEPARTMENT STORE Department Store Similar trend to the Telecommunications industry, but spending gets less when older
  15. 15. Benefits of Coalition Loyalty Marketing- Member perspective
  16. 16. Coalition Loyalty Marketing – global leaders
  17. 17. Coalition Loyalty Marketing: Criteria for Success 1. First to Market
  18. 18. Coalition Loyalty Marketing: Criteria for Success 2. Rapid Market penetration
  19. 19. Coalition Loyalty Marketing: Criteria for Success 3. An attractive partner portfolio that is dictated by the sectors in which consumers spend their money rather than any preconceived ideas of brand synergy
  20. 20. Coalition Loyalty Marketing: Criteria for Success 4. Strategic partners have to convince through their sheer market size and premium image
  21. 21. Coalition Loyalty Marketing: Criteria for Success 5. Very attractive rewards portfolio
  22. 22. Coalition Loyalty Marketing: Criteria for Success 6. Simplicity
  23. 23. Coalition Loyalty Marketing: Criteria for Success 7. Well balanced approach to branding of program and partner brands and educating the members on the concept of coalition loyalty
  24. 24. Coalition Loyalty Marketing: Criteria for Success 8. Targeted and Personalised offers, executed in highly creative ways
  25. 25. In the next 20 minutes a quick review of:-1 The Loyalty Marketing landscape in the Baltics-2 The benefits of coalition loyalty marketing-3 BalticMiles: the secret recipe
  26. 26. BalticMiles• Launched in October 2009• Vision: – To be the most successful loyalty company in North and Eastern Europe, supporting leading airlines, retailers and financial institutions• Mission: – To grow our coalition partner’s businesses by bringing  exceptional value to BalticMiles members by rewarding their loyalty
  27. 27. BalticMiles• First pan-Baltic coalition loyalty program with multiple partnerships in service and retail industries• Large and trusted brands participate into coalition• Most advanced loyalty rewards platform in Baltic market• Affordable and attractive airline rewards• Attractive communication platform for engaging new customers, retaining existing ones and increasing revenues 2 card swipes each minute across the Baltics
  28. 28. BalticMiles members 500 000 members Stable growth each month Represented in 40 countries
  29. 29. Partners  Members  BM web  Member service 
  30. 30. BalticMiles partnership strategyKey sectors ranking Consumers spending per sector – Baltics 2010BankingHyper/SupermarketPetrol stationsTelecomAirlineRestaurantsDepartment storeTextile and sportsPharmacyHome improvementPerf. & cosmetics 
  31. 31. BalticMiles partners (more than 10 000 POS) FINANCE RETAIL TRAVEL DINING HEALTH & BEAUTYHOSPITALITY
  32. 32. 43 Targets and 34 Projects............
  33. 33. Targets – Customer Perspective Member related: Easy to earn rewards Many places to earn points towards rewards Rich reward choices Relevance in all interactions Partner related: Partners receive great ROI Great partner business support Image / Brand  
  34. 34. Targets – Internal Perspective Business Development: Planning Prospecting Sales Partner launch management: Planning IT design IT implementation Project Management Account Management: Collaborative campaign management Reporting  
  35. 35. Targets – Internal Perspective Member operations Points processing Applications Customer service Fulfillment Member communications Rewards management Data richness, quality and insights Marketing Campaign management Member events PR Member acquisition
  36. 36. Targets – Resource Perspective Strategic Job families Skills Knowledge Values Strategic systems portfolio Data warehouse Transaction system Business Intelligence and Balanced Scorecard tools Website Organization Culture Leadership Teamwork Alignment
  37. 37. A sneak preview of a few of our projects......
  38. 38. Partner locator
  39. 39. Brand Positioning
  40. 40. Geo overlay / visualisation of data
  41. 41. Trigger Based Campaigns
  42. 42. Personalised coupons / My Offers

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