Loyalty Based Merchant To Customer Platform - Qhat
The Next Big Thing A Loyalty Based Online Merchant To Customer PlatformBy Ahmed Elasra20th of April 2012
Agenda• Overview• Online Customer Platforms – Today• Loyalty Based Platforms• Loyalty Based Platforms – Process Flow• Process Flow – Details• What do we have?• Wrap up
OverviewMerchants have 4 basic needs Problem is Identify different customer segments. do not engage Reach customers online (web/mobile). online with Get customers feedback & customer insights. Because they don’t See a real Send targeted promotions.
Online Customer Platforms- TodayMerchants use social platforms (human to human interaction) that engage fans & followers. Value proposition Content/updates Engagement rate Low or average Audience Fans & followers Most local merchants do not care much about creating a real value to their customers through social mediaMerchants use daily deals websites that attract deal hunters. Value proposition Huge Discount Engagement rate High - impulsive Daily deals Audience Deal hunters
Loyalty Based PlatformsFOUND IT!!! A LOYALTY BASED PLATFORM IT IS… Value proposition Rewards & discounts Engagement rate High - ongoing Online Loyalty Audience Real customers Is That All?.....NOWhat does a successful loyalty based online platform look like?To answer this question, we must understand the process flow
A Loyalty Based Platform Process Flow 1 Awareness 4 Sending Data Customer becomes aware of Customer-purchase data is the program. sent to the back-end. Enrollment 5 Offering Rewards 2 Customer enrolls and become Merchants offer rewards to a member in the program. customers who have enough balance. 3 Customer – Purchase Association 6 Validating Redemption While/after buying something, Customers redeem their points the customer data is associated for real rewards through a with the purchase data. redemption process.
Process Flow - Awareness 1 Awareness Customer becomes aware of the program. How will customers become aware of the program? How much money does the merchant need to pay to market the program? Does the program advertise itself (self-serve)?A successful loyalty based platform is a self-serve platform that starts marketing for itself and anything elsethat the merchant or the loyalty operator (if it is managed by a third party) does is considered an extraeffort.If the platform is owned by a third party (an operator )it must be self-serve that starts advertising for itselfinside the store if the operator wants to break the geographical boundaries and go global.
Process Flow - Enrollment 2 Enrollment Customer enrolls and become a member in the program. What are the steps that customers will pass through to enroll in the program? Will an average customer feel that it is a complex process to enroll and give it up? How big is the customer segment that is eligible to enroll?A successful loyalty based platform is easy for an average customer to enroll into, it does not requiremultiple steps, it takes a very short time to complete the enrollment and it is all done at once.
Process Flow – Customer – Purchase Association (1 of 2) Customer – Purchase Association 3 While/after buying something, the customer data is associated with the purchase data. Who makes the first move – the waiter/cashier or the customer? Is the program transactional, based on location based check-ins or QR code check-ins? Is mobile payment or credit card payment a must to use the program? Does it require the customer to have a smartphone?A successful loyalty based platform does not depend on customers to make the first move once theybecome members, customers are naturally shy to break the ice.The customer-purchase association must not require the customer to pay with credit card or use a mobilepayment app in order to cover a large customer segment.A successful loyalty based platform is able to distinguish between customers based on their purchases &visits and it can calculate the customer lifetime value (CLTV). Counting visits only using location based or QRcode check-ins is useless, it should take into consideration each transaction’s time, value and location (incase the merchant has multiple branches).
Process Flow – Customer – Purchase Association (2 of 2) Customer – Purchase Association 3 While/after buying something, the customer data is associated with the purchase data. What are the security measures in place that guarantee a fraud-free operations? How much manual effort is involved? How much delay will it cause in the queue? How complex is the technical activity required from the cashier/waiter and the customer?A successful loyalty based platform must be secure and guarantees that customers will not be able todefraud the system whether by claiming rewards they don’t deserve or earning fake points (Hello locationbased check-ins!).A successful loyalty based platform must not involve a lot of manual or technical efforts when the customeror the cashier/waiter is in the process of associating the customer and purchase data, it will either keep along queue of customers waiting or will alienate customers from using it.
Process Flow – Sending Data 4 Sending Data Customer-purchase data is sent to the back-end. When customer-purchase data is associated, does it instantly reflect in the back-end or the data is delayed and sent in bulks? Does the merchant need to have an internet connection in the store? Who is in charge of sending this data to the back-end? The cashier or the customer?Customers do not like to wait until they receive points for their purchase, they might want to redeem theirpoints instantly once they get them. A successful loyalty based platform sends the customer-purchase datainstantly to the back-end once associated.A successful loyalty based platform must not depend on having internet at the store in order to send thecustomer-purchase data to the back-end, in some parts of the world having in-store internet is not as easyas it seems to be (if you are in a modern country and not planning to go global you can ignore this point).When the cashier is responsible for sending the data to the back-end, it saves time for the customer but itmay delay the queue for a while and when customers are responsible for that, they get the chance to seetheir balance instantly which is kind of engagement itself but it might be boring for some customers, sothere is no right or wrong here although I personally prefer the second option.
Process Flow – Offering Rewards 5 Offering Rewards Merchants offer rewards to customers who have enough balance. Is it a coalition or a merchant-specific program? Does it create loyalty to the program or to the brand (merchant)? What is the value proposition in the customers mind? who is in charge of setting the rewards/coupons? Is it personalized to the customer needs or generic to everyone? Does the customer feel that getting a reward is feasible or it is too far to collect points for?Yes in coalition loyalty there are variety of rewards and customers have fun but it builds loyalty towards theprogram – the loyalty operator (a third party) not towards the merchant (the brand), do you want programloyalty or brand loyalty? Period.In a successful loyalty based platform, rewards are managed by the merchant or an account manager fromthe operator who is always aligned with the merchant’s business and the rewards are typically discounts anditems from the same merchant to increase the perceptional value in the customer’s mind.Customers should be given a wide range of rewards to match their different tastes and most importantlycustomers should never get the feeling that it is too hard to get a reward otherwise the program will fail.
Process Flow – Validating Redemption 6 Validating Redemption Customers redeem their rewards through a redemption process. When a customer claims a reward, how can merchants validate that this customer is eligible? showing an app screen (Hello Fraud!)? handing the cashier a reward/coupon code? If it is a code, is it secure? is it possible that customers use it multiple times or in multiple branches?To avoid the hustle of validating redemption, most loyalty based platforms use the online store model forredemption where customers can claim their rewards online and the reward is sent to their address, butwhat if a merchant would like to reward their customers with a special treat and a warm welcome alongwith a free cup of coffee? That cannot be delivered!, hence, in a successful loyalty based platformvalidating redemption must also be doable in-store as well.You may ask how could it be validated in-store if there is no internet at the store , well… there are ways! ,see the next slides.
What do we have?Once we have a successful loyalty based platform Merchants will be able to: Segment their customer base Reach customers online Get their feedback Send them targeted promotion And much more! Demographics Purchase data Customer’s Qhat profile Age Gender Location
Wrap upSo which loyalty based online merchant to customer platform has it all? No credit No No internet Self-serve Transactional card smartphone at the store In-store No queue Easy to use Brand loyalty Secure redemption delay validationAnd merchants can install at their stores & use instantly in any part of the world? SCALABLE Say Hello to ….
If you’d like to try Qhat Go to beta.Qhat.net and login with email firstname.lastname@example.org and password TestQhatPasswordBy Ahmed Elasra www.Qhat.net20th of April 2012 WeCare@Qhat.net Qhat Rewards QhatRewards