Impact of loyalty programs in retailing business in India for creating long term relationships

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Impact of loyalty programs in retailing business in India for creating long term relationships. Various topic on sutomer loyalty and loyalty program has been covered.

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Impact of loyalty programs in retailing business in India for creating long term relationships

  1. 1. Impact of loyalty programs in retailing business in India for creating long term relationships - Lovekshitij Suryavanshi - Customer Relationship Management
  2. 2. Why Loyalty Programs? • Dynamic Competition • Good relationship with customer is must • Long term relationship • Target customer acquisition more accurately • To increase customer retaining rate • Acquiring data: e.g: Monthly spend • Move customers up the spend band • Loyalty impacts profitability
  3. 3. Loyalty Program Initiatives
  4. 4. Loyalty Program Initiatives • Focus on the best customers that you already have • Optimize the profit that can be made from customer • Increase the period in which they remain customers • Be able to produce measurable results of success
  5. 5. Factors which influence Loyalty Programme
  6. 6. Factors which influence Loyalty Programme • What proportion of turnover should a loyalty programme cost ? • How long should it take before it begins to pay back? • Product Range and Stock Selection • Promotional and Advertising cost • Geographical targeting • Ensuring success of loyalty programme
  7. 7. Goals of Loyalty Programme
  8. 8. Goals of Loyalty Programme • Customer Satisfaction: - Result of a subjective valuation whether consumption fulfill or exceed expectations - Customer satisfaction is a key issue - Assumption: Happens when expectation is matched to the actual result
  9. 9. Goals of Loyalty Programme • Customer Loyalty: - Prevents the switching of customers from the organizations to competitors - It is a notion to describe the end result of a relationship between the company and the customer - Acquire Customer Loyalty : company provide benefits
  10. 10. Goals of Loyalty Programme • Customer Retention: - Outcome of customer’s experience with firm and products - 3 factors: Customer satisfaction, Affective commitment and Calculative commitment
  11. 11. Types of Loyalty Programme
  12. 12. Types of Loyalty Programme • Rewards: Awards points for purchases • Rebate: Award a gift coupon redeemable for the next purchase • Appreciation: - Offer a rebate, not the cash - appreciation reward points can be redeem at same company - e.g: Airlines, Hotel, Mobile etc
  13. 13. Types of Loyalty Programme • Partnership: - Reward the consumer’s accumulated purchases with a partner’s products or services - e.g: Tata’s Westside, offer a discount if consumers make payment above Rs. 2500 with ICICI debit card • Affinity: - Value added benefits and bonuses and recognition as a valued consumer - e.g: Bank’s Debit cards, gold and silver debit cards
  14. 14. Benefits of Loyalty Programme
  15. 15. Benefits of Loyalty Programme • Increased Customer Spending • Reduced cost to serve customer • Increase customer spending on Higher Margin Products • Increase referrals from existing customers • Increase Customer Lifetime Value • Select Stock lines effectively
  16. 16. Loyalty Programmes in Retail
  17. 17. Loyalty Programmes in Retail • India’s Largest Loyalty Card: Payback India: 12 Million+ members • Hero’s Goodlife: 10 Million+ members • State Bank Group’s – World’s Largest: Freedom Rewardz : 110 Million+ members • Indian Oil’s XTRAPOWER + XTRAREWARDS: 3 Million+ Members

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