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Loyalty programs


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Loyalty programs

  1. 1. 2012 Brand Loyalty Survey
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  9. 9. According to Inc., it costs a business about 5-10 timesmore to acquire a new customer than it does to sell to anexisting one -- and on average those current customers ofyours spend 67% more than a new one.
  10. 10. 1. Use a Simple Points System
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  12. 12. Every $50 spent earns the customer a free item. Doesn’tmatter if they choose a super jumbo burrito or an extra smallsmoothie - it’s free after $50. This is an example of acompany simplifying points with an accessible customerreward system.
  13. 13. 2. Use a Tier System to Reward Initial Loyaltyand Encourage More Purchases.
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  15. 15. Virgin Airlines’ Flying Club inducts members at the Club Redtier, then bumps them up through Club Silver and Club Gold.Club Red members earn miles on flights and get discountson rental cars and hotels. Club Silver members earn 50%more points on flights, expedited check-in, and prioritystand-by seating. Club Gold members get double miles,priority boarding, and access to exclusive clubhouses wherethey can grab a drink or get a massage before their flight.The key is to offer benefits in the early stages to hook thecustomer into coming back. Once they do, they’ll realize that"gold" status isn’t unattainable, and offers really coolbenefits.
  16. 16. 3. Charge an Upfront Fee for VIP Benefits
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  18. 18. In 2011, eCommerce shopping cart abandonment hit arecord high of 72%, and is still rising. This abandonment isoften caused by "sticker shock" after tax and shipping priceshave been applied. ECommerce giant Amazon found a wayto combat this issue in their loyalty program called Prime.For $79 annually, Prime users get free 2-day shipping onmillions of products with no minimum purchase, amongother benefits.
  19. 19. 4. Structure Non-Monetary Programs AroundYour Customers Values
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  21. 21. Patagonia, an eco-friendly outdoor apparel company,realized that their customer needed more than just pointsand discounts from a loyalty program. Late last year, thecompany implemented its Common Threads Initiative. In it,they partnered with eBay to help customers to resell theirhighly-durable Patagonia clothing online through thecompany website.
  22. 22. 5. Partner With Another Company to ProvideAll-Inclusive Offers
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  24. 24. American Express has a huge partner base with companiesacross the country. Their recent Twitter Synccampaign rewards customers for tweeting about them bysyncing discounts and deals with Twitter #hashtags.According to, cardholders have redeemed over$2,000,000 in rewards. Participating companies that arebenefitting from their coalition with Amex include WholeFoods, Staples, and Zappos.
  25. 25. 5. Make a Game Out of It
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  27. 27. GrubHub, an online food ordering and delivery website,started Yummy Rummy late last year. Once customersplace three unique orders through GrubHub, regardless ofprice, they get to play a game for a chance of winning freestuff. Players choose one of four cards and have a 25%chance of winning a free dessert, drink, gift card or othercool stuff.
  28. 28. 5. Scratch the Program Completely
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  30. 30. This minimalist approach works best for companies whoseproducts or services are unlike any other. That doesntnecessarily mean that you offer the lowest price, or the bestquality, or most convenience -- I’m talking about redefining acategory. If, like Apple, your company is pioneering a newproduct or service, a loyalty program may not be necessary.Customers will be loyal because there are few other optionsas spectacular as you, and you have communicated thatvalue from your first interaction.
  31. 31. Comparisons of Leading LoyaltyPrograms
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  37. 37. Measuring the Effectiveness ofYour Loyalty Program
  38. 38. 1. Customer Retention Rate.2. Negative Churn.3. Net Promoter Score.4. Customer Effort Score.