How Loyalty marketing plays important role for Customer engagement and business improvements.

1. Definition
How to achieve
Goals
Benefits
Examples
LOYALTY
MARKETIN
G
- Naveen Korakoppa

2. Loyalty marketing is an approach to marketing, based
on strategic management, in which a company
focuses on growing and retaining existing customers
through incentives. Marketing efforts designed to
entice customers to make purchases again and again
from a specific company

3. The consumer should feel a connection with the
brand to want repeat purchase and portray
other brand loyalty behaviours such as positive
word of mouth.
“A loyalty program is an integrated system of
marketing actions that aims to make member
customers more loyal to a brand”

4. Loyalty Marketing Strategies :
Loyalty marketing strategies involve
rewarding recurring customers for
continually using a specific company’s
product or service.
Loyalty Programs :
A structured approach to rewarding
customer actions that includes giving
customers incentives for specific actions
that benefit the company like discounts,
rewards, free merchandise, or exclusive
access.

5.  Retaining more customers: Loyalty programs help increase retention rates which
are directly related to the happiness of your customers and the revenue of your
business.
 Acquiring Customer Data: Acquiring new customer data is another goal of loyalty
programs. Customer Data can be used to design even more targeted and
personalized loyalty programs.
 Increase The ‘Share of the Wallet”: The “Share of the Wallet” is the percentage of
disposable income spent on a business’ products or services. Loyalty programs
give customers incentives to spend their disposable income on your products or
services.

6. 1. Loyalty Programs Create A Competitive Advantage: A company using a loyalty program has a competitive
advantage over their competitor. The customer has an incentive to buy from the company offering some
sort of special promotion.
2. Loyalty Programs Save Money: Although loyalty programs often involve offering discounts and promotions,
loyalty programs help to retain existing customers, which has been proven to cost less than acquiring new
ones.
3. Loyalty Programs Improve Credibility: If a customer is having a fantastic experience with your loyalty
program and receiving lots of perks, then they are likely to tell their friends and family about it. This is a
great way to build the credibility of your company and prove that your loyalty programs actually bring
customers benefits.
4. Loyalty Programs Improve Customer Relationships: Loyalty programs help brands build stronger customer
relationships by making the customer feel like they matter to a business.

7. 1. Loyalty Programs Improve Customer Experience: By providing special offers and
promotions, free merchandise and other loyalty program perks, the customer will
feel as though they are having a great experience with interacting with your brand
2. Loyalty Programs Improve Metrics: Loyalty programs can help improve multiple
metrics
3. Loyalty Programs Increase Customer Lifetime Value: Customer Lifetime is quickly
being recognized as an important measure of value for a business. A high customer
lifetime value is proof that a campaign or program is working
4. Loyalty Programs Improve Customer Retention Rates: Loyalty programs give
customers a good reason to stay with a business to receive even more rewards

9. The beauty retailer Sephora has killed it with their Beauty
Insider Loyalty Program that lets customers choose their own
rewards.
How The Loyalty Program Works: For every $1 spent online or
in-store, the loyalty program member receives 1 point. These
points are redeemable for gift cards or exclusive benefits only
available to members.
These exclusive products include:
 Beauty Products
 In-store beauty tutorials
 Limited Edition Products
Results of The Loyalty Program: Not only is Sephora is one of
the most well-known makeup retailers in the world, but their
program has accumulated over 10 million members!

10. Starbucks’ “My Starbucks Reward” Loyalty Program is
innovative and user-friendly.
How The Loyalty Program Works: Starbucks personalizes
their benefits for each customer based on tracked data of
the members buying behaviour and purchasing habits.
Starbucks loyalty program is also innovative because it lets
users see their reward status and make payments right
from their mobile phone.
Results of The Loyalty Program: Starbucks Loyalty
Program grew nearly 2x in a year and a half. That is,
growing from 4.5 million members in 2012 to 9
million members in 2013. Starbucks claims to have seen
a 26% rise in their profit margins and 11% increase in total
revenue due to the program.

11. Amazon is claimed to be the “poster child of e-
Commerce loyalty programs.” Amazon created the
Amazon Prime program to decrease the number of
customers abandoning their shopping carts due to
unexpected high shipping rates.
How The Loyalty Program Works: Members pay a
premium to be guaranteed free 2-day shipping on
any purchase, no matter the amount. Furthermore,
each month members receive free downloadable
digital content.
Results of The Loyalty Program: Amazon saw that
members of Amazon Prime spend 4x the amount of
non-members.

12. CREATE A
COMPETITIVE
ADVANTAGE
SAVE MONEY IMPROVE
CREDIBILITY
IMPROVE
CUSTOMER
RELATIONSHIPS
IMPROVE
CUSTOMER
EXPERIENCE
IMPROVE
METRICS
INCREASE
CUSTOMER
LIFETIME VALUE
IMPROVE
CUSTOMER
RETENTION
RATES