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Loyalty is dead. What’s next?
Ghent,
December 3, 2014
Presentation1
#thomster
2
Definition Customer Loyalty
Presentation1
#thomster
Definition Customer Loyalty
3
What is Customer Loyalty?
Difference Retention Management and Loyalty Management
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#thomster
4
Behavioral loyalty
Attitudinal loyalty
A customer who stays (repeat purchase, renew contract,…) is
often seen as a loyal customer
Commitment to continue using a product or service, despite
situational influences and marketing efforts of competitors,
is true loyalty.
Watch out: This does not mean that these customers are loyal, because they
might leave once the situation changes…
Source: Klantenloyaliteit, Marnix Bügel
Customer loyalty is a behavioral and attitudinal tendency
to favor one brand over all others
Presentation1
#thomster
Definition Customer Loyalty
5
What is Customer Loyalty?
Difference Retention Management and Loyalty Management
Presentation1
#thomster
In contrast to retention management, loyalty management
aims to increase both behavioral and attitudinal loyalty
6
Get! Grow! Keep! Get (again)!
Acquisition Development Win-backRetention
Loyalty
Margin
Time
Source: THoM analysis
Presentation1
#thomster
Loyalty management is often confused with retention
in terms of objective, tactic and customer group
7
Loyalty management
• Increasing involvement
> Increasing behavioral
& attitudinal loyalty
• Long term
• Focus on customers with high
potential (customer lifetime
value)
• Aims at retaining and
increasing customer value
• Through building sustainable
relationships
Retention management
• Focus on switching barriers,
involvement is a secondary
objective > Increasing
behavioral loyalty
• Avoid churn on short term
• Focus on customers with
high churn risk
• Aims at reducing and
preventing churn
• Through fixing the basics
KEEP
GROW
GET
High
Low
Low High
Involvement
Switching barriers
Source: THoM analysis
Presentation1
#thomster
8
Loyalty should be a mindset
Presentation1
#thomster
Loyalty appears when customer experience matches at
least expectations and loyalty drivers are met correctly
Each individual will have specific expectations and drivers
influencing attitudinal loyalty
9
LOYALTY
DRIVERS
Source: Klantenloyaliteit, Marnix Bügel
Trust
Satisfaction
Quality of
competitive
alternatives
Investment in
relation
+
+
+
-
Expectations
Experiences
LOYALTY
Presentation1
#thomster
Customer experiences can be divided into 4 types
10
Relational
Relationships
Transformational
Actualizations
Aspirations
Transactional
Products
Services
Information
Experiential
Senses
Environment
Moments
Emotional
Emotions
Feelings
Source: Qblog - A series on customer experience: Types of customer experience
Presentation1
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11
Loyalty tools & tactics
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Customer
experience
12
Savings programs are often seen as good loyalty initiatives,
though these are only a small part in the loyalty chain
Customer data
Loyalty savings
program
Loyalty
X
Presentation1
#thomster
Loyalty initiatives can be ranked on 3 axes: reward
moment, required counteraction & customer initiative
13
Immediate Postponed
Transaction based Not transaction
based
No initiative
Initiative
Contest
Participation Events Customer Adv.
Program
Savings ProgramDirect Advantage
Offering
Relationship
Building
Customer
initiative
Counteraction
Reward-moment
2
1
3
Presentation1
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14
REWARDS
PERSONALIZATION
& TARGETING
AWARENESS/WOM
RULES
MEDIA CHANNELS
Evolve from rewards easy to translate to
monetary value towards rewards with a
higher perceived value
To develop a valuable loyalty initiative you need to use a
number of building blocks
Presentation1
#thomster
15
REWARDS
PERSONALIZATION
& TARGETING
AWARENESS/WOM
RULES
MEDIA CHANNELS
• Evolve from one-size-fits-all towards
personalization
• Do smart targeting
To develop a valuable loyalty initiative you need to use a
number of building blocks
Presentation1
#thomster
16
REWARDS
PERSONALIZATION
& TARGETING
AWARENESS/WOM
RULES
MEDIA CHANNELS
Evolve from functional value proposition with
little user adoption towards high awareness
and adoption among general public
To develop a valuable loyalty initiative you need to use a
number of building blocks
Presentation1
#thomster
17
REWARDS
PERSONALIZATION
& TARGETING
AWARENESS/WOM
RULES
MEDIA CHANNELS
Keep it simple. Many rules, no glory!
To develop a valuable loyalty initiative you need to use a
number of building blocks
Presentation1
#thomster
18
REWARDS
PERSONALIZATION
& TARGETING
AWARENESS/WOM
RULES
MEDIA CHANNELS
Evolve from traditional media channels
towards interactive and cross-channel media
To develop a valuable loyalty initiative you need to use a
number of building blocks
Thank you for your attention!
(and now it’s time for a drink...)

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THoM'STER Class- 'Loyalty'