Acxiom best in-class-digital_rewards_experiences

© 2014 Acxiom Corporation. All Rights Reserved. © 2014 Acxiom Corporation. All Rights Reserved.
Best-in-Class Benchmarks
(Digital Rewards Experiences)
Study sponsored by:
1

© 2014 Acxiom Corporation. All Rights Reserved.
Project Summary
MasterCard Advisors engaged ACXIOM to support a timely
project benchmarking loyalty stories for Santander
-  Engagement began June 16th, 2014 and concluded 31st July, 2014
-  9 companies were selected to be benchmarked
-  Geographic representation includes USA, Europe, Canada
-  Objective of the study was to benchmark best-in-class rewards/loyalty
programs across digital channels.
-  The study focused on smart things being done by companies to foster
loyalty that results in significantly impact on performance metrics
-  Each story showcases what the company did right with the consumer
experience and why it resulted in significant results and/or returns
impacting rewards
2

Benchmark methodology (6-steps)
3
Step 1 n  Identified target companies/programs for benchmarking Start date -
16/06/2014
Step 2 n  Confirm final list of companies/programs to be benchmarked
Step 3 n  Performed executive interviews and market research
Step 4 n  Drafted and validated preliminary template
Step 5 n  Reviewed and validated benchmarks
Step 6 n  Finalized benchmark presentation End date -
31/07/2014
8weekengagement

Acxiom Team
4
BARRY STAMOS
Global Practice Leader,
Strategy & Innovation
MARC TRUDEAU
Industry Strategy
CLÁUDIA LEITE
Senior Sales Executive
+ Acxiom’s Team to MasterCard Advisors with access to more than 6,200 experienced professionals.
Estratégia e Otimização Dados, Analytics e Tecnologia Operação e Relacionamento
JEFF PAIVA
Senior Strategist

Case Study #1 – Yelp
Online urban guide and business review site.

Yelp: online urban guide and business review site
§  Crowd Source Content – Users visit and
asses business
§  Peer-to-peer curation – Best, clearer and
objective reviews are upvoted
§  Authentic Ambassadors – Elite Yelpers are
recognized and respected by the community
§  Business Value Creation – The best
reviews a business gets on Yelp, the more
customers will be driven by the platform.
§  Online database of user-generated
reviews of local businesses
§  Reviews help vendors and partners
analyze their programs
§  Highly decentralized environment -
Daily operations and decision-making
responsibilities are made by different
levels of management.
§  Type: Reviews
§  Sector: Tourism
§  Card-based: No
§  Rewarding: Elite
Status, Perks, Parties
§  Issuer: Yelp, Inc
§  Country: US
§  Members: 74.000
§  Pageviews: 120 million
§  Launched: 2004
Key data
Key Insights Value Proposition

Yelp Elite leverages network effect to drive
engagement, social networking and innovation
Authentic Ambassadors
Social InfluencersInnovation
Active Engagement
§  Real people. Real reviews. Yelp Elite are
the best-of-the-best, having already won
the respect of the community using their
real name, real profile photo, and honest
opinions.
§  Elite Yelpers share prolific local reviews on
business, and services.
§  Active sharing of Events
§  Lists creation
§  Large use of the mobile app to write tips,
upload photos, and check-in regularly to
maintain their status
§  Elite are often the most popular and
connected Yelpers, with the greatest
number of followers.
§  Elite members vote (Useful, Funny, or
Cool) on their favorite reviews and send
compliments, instigating the community.
§  Strong role of welcoming new members
and watch out for the community.
§  Use of diplomacy and intelligent wit over
crassness and mean-spiritedness
§  Mobile App includes video, text and
image capability

Yelp Elite delivers a rewarding social interaction
within the consumer experience
Gets
recognized
and upvoted
Wins perks,
parties and
Elite Status
Writes Review

Elite Yelper: Exclusive rewards, parties and
recognizing from peers and business
Exclusive Party for Elite
Memebers
§  Elite way of life – and party: Recognizing the status and stimulating the process of
becoming an Elite Member makes even more desirable to Yelpers to be active on the
community and produce even more reviews
§  Exclusive rewards: Elite Yelpers benefit from being treated like VIP’s at local businesses
and receive exclusive discounts and are invited to glamorous Yelper celebrity parties with
free food, drinks and networking.
§  Desire to belong: Members of the Elite Squad are designated by a Elite badge on their
account profile, renewed every year. Seniority is represented by the repeated year badges
on the profile image.
§  Public recognition: The number of interactions (Tips, Updates, Fans of the Yelper) are also
important displays of the Elite status.

New mobile app allows to create multimedia
reviews on site with text, video and photo
Early Access to Innovation: Yelp has
unveiled a new video feature to its app that
let users upload short clips in the same way
that they would upload photos.
Video Reviews: The new feature helps
reviewers fully capture the atmosphere of a
restaurant, store, or other small business
Mobile Adoption: 1 in every 3 of all Yelp
searches come from mobile apps proving
real-time, on-demand access and
convenience for consumers anytime,
anywhere.

Yelp reviews drive local purchases and increase
small business revenue
Source: Nielsen Survey, June 2014

Integrate loyalty into the full experience: Consumers are recognized and rewarded for
powering the product experiences. Yelpers reviews are prolific due to perks like personal
recognition and rewards; all mobile and localized, making it more timely and relevant to others.
Elite members drive more business: A Harvard Business School study shows that Elite
Reviews drive almost double more business than regular Yelp reviews. In building a strong elite
program, Yelp wins with the winners. This member-get-member is beneficial for all of the players
in the chain: Yelp, customers and business reviewed.
Differentiation through innovation: Yelp offers consumers access to state-of-the-art
technology (was the first to offer video reviews) and elite Yelpers have access to new features
and special perks that drive more traffic and foster a feeling of belonging and fidelity.
Partner Participation: Brand and business reputation requires active participation with Yelp to
join and moderate the ongoing social conversation. Proactive engagement enables positive
outcomes whereas not often playing results in poor performance.
Transparency: Yelp polices with consumer alerts when they find businesses not playing by the
rules of engagement. This supports full transparency and accountability across their ecosystem.

Key Take Away

Case Study #2 – Amazon
Prime

Membership program offering free two-day shipping,
digital music stream and free content
§  Customer Data used to leverage
engagement and experience
§  Simplicity from using one single login to
shop
§  Solve real pain points: started as a
shipping scheme; evolved to include
exclusive content for rewards
§  Content destination: Single hub of
content with exclusive offerings and new
capabilities with Amazon devices
§  Annual fee: U$ 99
§  Free two-day shipping (on all Prime items)
§  Unlimited digital content (music, movies, tv)
§  Tiered membership plan with new Amazon
Devices (Kindle Fire)
§  Loan Library for Kindle Books
§  Support for suppliers who rely on Fulfillment By
Amazon (business service)
§  Merchant access to Prime elite customers
database
§  Type: Advantage Membership
§  Sector: Retail
§  Rewarding: Free-shipping,
content stream, special offers
§  Issuer: Amazon
§  Members: 20 million
§  Earnings: $19.74 billion (2014 Q1)
Key data
Source: Company/program reports; Web search; Internet search; Acxiom analysis

Prime’s success can be traced to key factors
§  Amazon Prime has been continually
expanding;
§  Long-term brand building and value
measured by market cap.
§  Increasing offer of benefits and perks;
§  New devices being included for content
delivery;
§  The Drone Delivery project, even if not
practical yet, contributed to the innovation
image of the program
Perceived Value
Continuous evolution Anticipating Consumer Needs
Relevant Content
§  Offering free shipping for customers with a
larger average spending translated to
recurring business
§  Digital content available for the same fee
increased the perceived value
§  Extra care on Customer Service (delivery)
§  Prime subscribers have access to a large
content library
§  Exclusive content being produced and
premiering first to Prime subscribers
§  Free e-book every month
§  Tailored offers: Data on customer habits
create a “memory” of what has been
ordered before;
§  “Subscribe and Save” program
automatically re-ships items on a regular
schedule
§  Strong customer service, with accurate
customer history and data.

Distribution of members within Amazon Prime
33% of Amazon buyers are Prime members and the membership has been growing fast in
the last two years.

Despite being a minory, Prime
members spend more and more often
Members spend $1,340 per year compared to $708 per year for non-Prime
members and make purchases more often
$-
$500.00
$1,000.00
$1,500.00
Spending YoY
Prime
Non-Prime
0
10
20
30
40
50
60
More than 1x
week
1x week Few Times a
Month
Once a Month Few Times a
Year
Once a Year
Prime
Non-Prime
How often subjects buy at Amazon

This and other innovation has helped an
aggressive growth in brand value – almost 1/3
Membership has helped Amazon achieve a 46% Brand Value growth in 2014

Amazon Prime Creates a Virtous Cycle by
Stimulated Acquisition:
•  1-Click Buy
•  Digital Content
•  Up-front fee to solve
pain Points
Increased Business Performance:
•  Higher Spending
•  More Frequent Purchases
•  More Visits
Leverage of Consumer Insight:
•  More transactions – More Data Points
•  Better Understanding of Consumer Habits
•  More Devices (Quantity and Quality)
Enhanced Consumer Experience:
•  Faster / Free Delivery
•  High Satisfaction
•  High Relevance in
Recommendations
•  Broader Content

Key Take Away
Innovation: Amazon took risks by building an entire ecosystem to provide an
unmatched experience for consumers with convenience at the heart of every
decision. It has paid off.
A virtuous cycle for customers between their activity, data analysis and
customer experience. The more you buy, the more Amazon knows about your
preferences, the more relevant offers they make, then higher customer
satisfaction and engagement and more purchases.
Partners and Vendors Quality Assurance: Only by meeting stern requirements
in service and deliveries can third-party partners and vendor have access to
Prime customers and data, ensuring a overall quality experience for members.

Case Study #3 – AmEx
Membership Rewards

American Express Membership Rewards
innovative services and apps
§  Offers a best-in-class membership rewards
program, recognized as among the most innovative
offering in financial services to affluent consumers
and businesses.
§  Adherent to new technologies in order to reach the
younger demographic
§  First to include points that you could use to almost
anything and never expire.
§  Most value points for dollars – 1 to 1 in almost all
cases
§  Type: Rewards Membership
§  Sector: Credit Card
§  Card-based: yes
§  Rewarding: Points, special
offers, Airline offers
§  Issuer: American Express
§  Members: 20 million
§  Cards Issued: 107,2 million
§  Revenue: $33 billion (2014 Q1)
Key data
Key Insights Value Propositions
§  More rewards: Amex takes pricing power
from merchant side and reinvests the cash
into rewards
§  Higher level cards (Platinum and
Centurion), have special early access to
major events and concerts.
§  Partners with leading sites and social
media platforms to offer exclusive
rewards to younger consumers

Amex Membership Rewards bets heavily on new
technologies to remain relevant
§  Link, Like, Love: integrating the customer
presence on Facebook with real offers
from partners via F-commerce.
§  App allow American Express to create
customized savings and rewards,
based on customer likes and interests
on Facebook.
Browser deliver direct offers and discounts
Facebook Integration Mobile Adoption
§  Real-time reminders: InSite extension for
browsers (Chrome, Firefox) delivers
Membership Rewards bonus points,
discounts, free shipping.
§  inSite advised Cardmembers of offers when
they visited participating retail websites.
§  Sync With Twitter: Cardholders can sync
their account with Twitter, finding offers
from Brands and Retailers directly from
the platform and receiving savings as
statement credits
§  Cardholders can check spending
updates, instant purchases
confirmation, and a current balance for
their account from Passbook on
iPhones.
§  Amex is leveraging social proof (ratings
and reviews) to enable others to share the
story for credibility and influence.
§  Security: Introduced robust security
measures to offer customers a safe
environment for digital consumption
Innovation

Multi-channel presence provides great online
customer experience for a connected audience
Offer Pop-up
inside InSite
Points awarded
when using
Uber

Spend-centric business model: Fewer cardholders,
fewer merchants, higher merchant fees.
The model focuses on generating revenues primarily by driving spending on the cards
and secondarily by finance charges and fees. The average Amex customer spends 2-4
times as much as customers using competing cards
American Express sells its network to merchants by playing up their relatively wealthy
customer base.
Merchants are willing to pay the higher discount rates in order to get access to Amex’s
affluent cardholders.

Key Take Away
Innovation: Amex built a whole new ecosystem permeating social platforms and
reaching out for a new and younger demographic.
Multi-channel presence: Reaching new targets that develops improved
consumer habits, Amex provides great online customer experience for a
connected audience
Security: New platforms and new demographics means new and improved
security measures in order to maintain trust on online operations without getting
in the way of the purchase experience.

Case Study #4 – Disney
MagicBand

Disney MagicBand, ticketing system for Walt Disney
Parks and Resorts using waterproof plastic wristbands
•  Hotel Room key, for guests staying at on-
site Disney resorts

•  Theme and water park ticket: admission
and biometric validation

•  Food, Beverage, and Merchandise
Payment - linked credit card

•  FastPass+ distribution, redemption, and
exchanges

•  Connect Disney Memory Maker or
PhotoPass images
§  Solve pain points: Effortless reservation
access, no need to carry money or credit
card, privileged access to rides
§  Scheduling in Advance Allows for
More Efficient Management
§  Evolving Technology: The MagicBand
is the newest installment of a program
first introduced in 1999
§  Rubberized Band avoids problems with
aquatic activities on site
§  Type: Amusement park
§  Sector: Tourism
§  Rewarding: Preferred Access, Early
Planning, Digital Resources
§  Issuer: Walt Disney Parks & Resorts
§  Issued: 74.000
Key data

Disney MagicBand bring the Park experience to a new
level, almost hassle-free and digitally enhanced
§  The more connected tools allow an easier
digital sharing of the traveller memories,
with digital pictures downloadable from the
MemoryMaker app
§  Users are more likely to share their
experience in Social Networks with the
digital sharing tools embedded in the
app
Efficient Management
Social Influencers Innovation
Active Engagement
§  The MagicBands allow Disney to serve
guests special meals, manage lines and
direct employees to crowded areas.
§  Custom notifications about restaurant
changes or wait times for rides
§  Disney employees can address children
by name or wish them a happy birthday.
§  Customization and preferred service
allow guests to order in advance, avoid
long queues and be served in a faster
§  80 percent of positive comments on
social media about MyMagic+ with just 2
percent negative.
§  Evolution of an offline successful resource,
the FastPass+ went from a line-avoiding
pass to a complete digital appointment
tool
§  The digital environment around
MagicBand and MyMagic+ includes robust
web sites and scheduling tools, mobile apps
and electronic payments software
§  The bands can be reused and
reprogrammed in future visits, effectively
working as reminders of Disney Parks

From planning to the trip to sharing memories
Schedule the rides and
attractions at home, online

Receive the
personalized
MagicBands at home

Re-arrange rides and
appointments from
mobile or online

Receive pictures
and videos from the
cloud after the trip

Adoption of FastPass+ has increased 40% over the first 3 months of usage
on Disney Parks and Resorts
50,000 early sign-ups for a new ride opening on March in a single month,
increasing the success rate over the last ride opening before the launch of the
system
3.000 more guests accommodated every day at the various parks, due to
better planning and workers rotation.
US$ 1 billion invested since the start of the project
80 percent of the comments on social media about MyMagic+ have been
positive, and just 2 percent have been negative.
Key Take Away

Uber battles for the future of transportation and on-demand delivery
logistics by racing to recruit drivers and partners for fulfillment.
§  Business model: Uber is a platform play;
does not own cars or employ drivers
§  “Digital Mesh”– customer interface,
payment, fleet management, supply-and-
demand capabilities and partnerships
§  Financial services - Uber is now offering
insurance to riders and auto financing
discounts to drivers
§  Money: median income $90K/year/driver (NYC)
§  Riders: constant flood of leads for Uber drivers
§  Easy onboarding: one hour driver orientation
§  Giveaways: new iPhone that carries its car
dispatch app and gear to mount it to windshield
§  Special Perks: $1,000 singing bonuses to lure
drivers away from rivals to join Uber
§  Exclusivity: discount financing or leasing on
cars with GM & Toyota for Uber exclusivity
Key Insights Value Proposition for Business
§  Type: Rideshare
§  Sector: Travel
§  Rewarding: limited-time offers,
free rides and specialty vehicles
§  Issuer: Uber
§  Country: US (San Francisco)
§  Members: Estimated 500K active weekly
Launched: 2009
§  Valuation: $18.2 billion (2014 Q2)
Key data

Uber’s success can be traced to key factors
§  First mover: Uber’s fast and ruthless in
global expansion and has the support of
the biggest companies in Silicon Valley
§  Social proof: Consumers rate and review
and drivers are deactivated if ratings fall
§  Payment partnerships: Paypal and
Amex to enable automatic payments and
special offers and rewards
§  Smart technology: Proprietary algorithm
maximize rides, not revenue. It sets surge-
pricing based on supply and demand.
Perceived Value
Strategic Moves Anticipating Needs
On demand services
§  Innovative brand image and reputation
§  Best-in-class rider experience (VIP)
§  Status price-to-value balance exchange
§  Social proof (driver ratings and reviews)
§  Instant bookings for a private driver
§  Near-time delivery get ice cream to
Christmas trees with the tap of the button
anywhere in the world
§  Insurance protecting riders
§  Trends: More people are moving to big
cities and require private transportation
§  Competitive: cheaper than NYC taxi’s
§  Safety “drivers feel very safe, they have a
record of everyone who gets in my car
and everything that goes on.”
§  All-in-One: Uber’s intends to outgrow car-
service roots, and expand to provide
transportation and logistic services
§  Lobbying: city and state government with
local advocates (voice of the community)

Uber offers a best-in-class private driver experience
“No one under the age of 40
with a smartphone is going out
and getting a cab anymore…”
2. Open app to see arrival time
and click to book private driver
3. Uber riders see confirmed
drivers face with star ratings and
track movement until arrival
4. Simply ride and exit car –
no physical cash/card exchange.
Option: rate driver (1-5 stars)
Uber rider experience
1. Download free app, add profile
and scan to store credit card
Uber driver experience
2. Open app to see and accept
real-time leads of riders nearby
3. Uber drivers see riders face
with star ratings and location;
can call to confirm logistics.
4. Safely drive and get paid –
no physical cash/card exchange.
Option: rate rider (1-5 stars)
1. Get free iphone with app, set-
up account and easy onboarding
“Drivers feel very safe, they have a
record of everyone who gets in my
car and everything that goes on.”

Uber rewards riders with hassle-free payment experience
and now rewards
Auto-payment: Uber’s app and platform automatically charges
riders credit card on file associated with their account.
Payment Options: Last year Uber integrated PayPal as an
alternative payment option, especially to appeal to riders in
international markets.
Special Rewards: American Express has a new integration in
Uber’s iOS app allowing card members enrolled in AmEx’s
Membership Rewards program (USA only) to either (1) Earn 2x
points using their AmEx card to pay for the ride, or (2) Redeem
points for Uber rides.
“We are creating a living and breathing loyalty program,
unlike anything that exists to date,”
-  Leslie Berland, Senior Vice President, Digital
Partnerships and Development at American Express

Speciality Vehicles – Promoting Uber services
and attracting attention with the Delorean time
machine in San Francisco in joint promotion effort
with General Electric
Limitless Travel – Uber offered transportation by
boat and helicopter to make an impression that
they can get riders anywhere
Delivery Services – Users could select a “Kitten!”
delivery button to get a cat delivered for them to
play with for 15-minutes. Cost was $20 and
included a cupcake and t-shirt. Proceeds
benefited local animal shelters.
Uber’s local events and promotions lift brand awareness,
adoption and advocacy across popular cities worldwide

Uber aggressive rollout and distribution has results in
global coverage
“No one under the age of 40
with a smartphone is going out
and getting a cab anymore…”
- Ray Markovich (Uber Driver)
In just 4 years, Uber now
operates successfully in
144 cities, 38 countries
and 6 continents.
20,000 jobs created on the
Uber platform every month.

Uber revenue in 2013 is estimated around $200 million. By
comparison, Twitter, a company worth $25 billion did $317
million in revenue last year.
Ubers charges 20% on all fares with active clients globally.

Uber platform generates an estimated $2.8 Billion per year
for only the USA economy alone and has become the
world’s most valuable start-up!
“Just four years ago we set out to
build a better option for people to
move around cities – to make
getting a ride safer, easier and
affordable. But Uber’s positive
impact goes further; hundreds of
thousands of entrepreneurs are
using the platform to build their own
small business, resulting in a huge
job growth engine for cities resulting
in billions of dollars being pumped
into the U.S. economy.”
– Travis Kalanick, Uber CEO

Uber is aggressive to achieve it’s short and longer term
goals. Recently changed tagline from “everyone’s private
driver” to “where lifestyle meets logistics”.
Battle to own the shared economy: Aggressively rolling out a foundation for
transportation and logistics to enable “near-time” delivery and fulfillment worldwide.
Medium-term: "death of
the ownership society.” As
Uber rides become
cheaper and cheaper,
there will be less need for
people to own their own
cars.
Short-term: short-
term objective for Uber:
to kill the taxi business,
and become the
cheapest, best way to
get around major cities
all over the world.
Long-term: almost
instant delivery service
to rival Amazon’s
drones. Self-driving
cars made by Google
(one of it’s investors)

Innovation: Uber offers the most innovate experience connecting riders and
drivers.
Connections: By offering a platform to connect and bridge silos online and
offline the company has created a competitive advantage with high barriers to
entry.
Recruiting: Aggressively recruiting competitive drivers as well as riders via local
promotions, Uber has amassed a large network of advocates in most major cities
worldwide.
Financial services – Uber is now insurance and an auto-financing program.
Uber lined up $2.5 billion in outside financing for low-interest car loans for UberX
drivers – that is, making it possible for up to 200,000 drivers to buy their own cars
at very low interest rates, under the condition that they use those cars on the
Uber network for the duration of the loan.
Key Take Away

AIR MILES Rewards Program, is a loyalty program
that is pervasive in Canada
§  Canada is one of the highest-penetrated
loyalty markets in the world (9.2 programs
vs. just 6.2 in U.S. - 2012)
§  AIR MILES is owned by LoyaltyOne, Inc. a
division of Alliance Data Systems -
expanded to UK & Spain as Avios, plus
Netherlands, and the Middle East
§  The program enrolled 2MM people in the
first 6 months after launch (7% of pop)
§  Foundation for Dotz in Brazil
§  Almost two-thirds of Canadian households
participate in AIR MILES, as do hundreds of
thousands of small businesses and almost all large
retailers
§  Each $20 in purchases earns 1 AIR MILE (approx.
redemption cash value 10 cents)
§  Merchants gain access to a very loyal customer
base plus access to purchase data
§  Extremely strong “network effect” maintains loyalty
over time
§  Type: Loyalty (points-based)
§  Card-based: Yes
§  Rewarding: Cash,
Merchandise, Travel
§  Issuer: AIR MILES
§  Country: Canada
§  Members: ~10 million
Key data

AIR MILES value lies in perception of consumers
getting something for nothing
§  AIR MILES began in 1992 as an in-store
loyalty program in which participants
present a card at 13 sponsor retailers’
POS to collect points on everyday
purchases based on transaction amount
§  Loyalty One provides data analytics and
creative services for merchants in the
partner network
Perceived Value
Continuous evolution Anticipating Needs
Relevant Offers
§  Participants collect 1 Air Mile for every $20
in purchases at most large retailers,
100Ks of SMEs and via credit card partner
§  Most redemption is for air travel which is
relatively expensive in Canada and
provides highest redemption value
§  Monthly, seasonal and regional special
offers across all merchant categories
§  Offers have been proven to drive
significant purchase behavior for avid
users and loyal customers
§  Redemption options started with air travel
and have expanded to merchandise, cash
rewards, charitable giving, etc.
§  Merchant network has expanded
tremendously across virtually all retailing,
T&E, telecoms/TV, …, categories

Consumer Value Proposition
Points Accumulation:
•  Transparent value with relevant special
offers (NOTE: no individual targeting or
personalization)
•  Most popular brands participate across all
retail categories
•  Online shopping portal aggregates
content (and includes Amazon.ca)
Redemption:
•  Immediate conversion to cash
•  Broad airline ticket redemption ability (few
restrictions)
•  Extensive merchandise options

Merchant Value Proposition
Capabilities:
•  Shared currency results in shared loyalty platform costs –
including investments required for marketing, rewards,
databases, analytics and program infrastructure
•  Access to data and analytics expertise shortens test & learn
cycle time
•  Access to loyalty and marketing expertise for SMEs
95% retention of
merchant partners
over past 2 decades!
Outcomes:
•  Attract new customers
•  Increase sales to existing customers
•  Increase retention of existing customers
•  Drive scale in promotional activity due to shared
marketing platform
•  Shared vendor portals increase consumer access
while minimizing costs
•  Immediate reach to millions of dedicated customers
that alter shopping activity based on AIR MILES
membership

Financial Offers
•  Bank of Montreal was a founding member of the AIR MILES coalition
o  Primary value is to “double-dip” points as customer collect at POS and on
credit card as well as upfront miles rewards
o  BMO offers 5 CC/debit options with AIR MILES rewards
•  Amex is a more recent addition with 3 card offers targeted at AIR MILES
participants including a card aimed at small businesses to collect/manage AIR
MILES
•  Large insurance carrier Manulife also offers AIR MILES as it uses the network to
collect and aggregate leads

Fine-Tuning Offers – Consumer Tiers
To drive further engagement among its most loyal customers, AIR MILES now has
differentiated service levels
The Gold Life (1,000 miles/year)
•  Book flights with 40% fewer miles
•  Preferred pricing on certain travel offers
•  Redeem for merchandise with 50%
fewer miles
•  Redeem for dining and activities for
20% fewer miles
•  Access to special events and
promotions (festivals, trips, etc.)
The World of Onyx (6,000 miles/year)
•  All Gold benefits plus…
•  Greater access to airline seats
•  Priority call center services
•  Personal Shopper
•  Monthly giveaways and promotions

Fine-Tuning Offers – Partner Tiers
Promotional Sponsors – provides a loyalty option for service-based firms that cannot
leverage POS capabilities
Online Sponsors – merchants can join the AIR MILES online mall to tap into the loyal
customer base (100s of retailers have joined)
Rewards Sponsors – firms can provide redemption opportunities to broaden their reach to
Canadian consumers

Multi-Platform Extension
Desktop Toolbar - to optimize AIR MILES
collection for online shopping
Mobile – both smartphone and tablet apps
to manage collection
Twitter and other Social Media – push
special offers, help participants optimize
points collection, share redemption
offers, etc.
Facebook – share stories of how
members are using AIR MILES to
achieve dreams/goals

Key Take Away
Perceived value focused on a pain point for Canadians at launch –
expensive air travel due to airline duopoly, very large country and low
population density.
Customers literally get something (about 10 cents) for nothing (usage of
their transaction data (and most don’t even know this happens!)
Rapid expansion to all facets of consumer purchase drove rapid adoption
Ease of redemption and clear value keep customers engaged
Data access and network effects ensure merchant adoption and loyalty

Case Study #7 – Barclays
Loyalty Through Sports
Sponsorships

Barclays made significant gains by focusing on sports
sponsorship to drive awareness
§  Barclays has a long history of sponsoring
sporting events and leagues, going back to
The Football League in 1987
§  Barclays took over Premier League
sponsorship from Barclaycard in 2004
§  Sponsorships strongly align to Barclays
strategy of global expansion (given global
visibility of Premier League football)
§  Type: Sports sponsorship
§  Sector: Financial Services
§  Rewarding: various (events,
traditional card benefits, etc.)
§  Issuer: Barclay
§  Country: UK/Europe
§  Members: ~10 million
Key data
§  The primary value proposition for Barclays
in sports sponsorships is to increase
awareness
§  Sponsorships also tie the Barclays brand to
some of the most popular global sports
brands such as the Premier League and
ATP Tennis

Barclays drives awareness and engagement via
sports-related product development
§  Starting with sponsorship of Premier
League, Barclays has moved to co-
branding the world’s top football league
and tennis events
§  Digital strategy is now the focus as the
company links payments (especially
mobile) to social media to sports
sponsorships
Perceived Value
Relevant Offers
§  Barclays ties its brand to well-regarded
sporting events to increase awareness
among more affluent customers
§  Advantages customers receive priority
ticket purchases as well as tennis-related
offers
§  Barclays has moved quickly into the digital
realm (for a bank) by focusing its
marketing efforts on social media
channels
§  The firm has also linked its sports
sponsorship benefits to its payment
network – eg. contest dispensing tickets
through ATM

Linking Technology to Brand/Sponsorships
• Strategy Change: Strategy changed to a more digital approach with the increase
of presence of young demographics on Social platforms and advance of mobile
usage.
•  Embrace New
Technology: Barclays is
not afraid to try new
technologies and is
recognized as best-in-
class for development
and adoption of new
offers to its clients.

Pre-Printed Receipt coupon: Customers using ATM machines throughout the UK could
win instant tickets for matches of registered teams. Average one winner every 90 minutes
meant that almost 500 tickets were distributed every month.

• Contacless and Wearable Tech: Along with
Social Media activation, Barclays is investing
on contactless technology to be integrated in
wearable devices, following the successful
introduction of contactless cards since 2008.
The PayTag Wristband has been tested by
Barclayscard in selected events in 2014,
aiming for a 2015/2016 general release.
There are around 300.000 contactless
terminals in usage throughout UK that are
eligible to receive the wristband payments.

Key Take Away
Strongly ties Barclays brand to world’s leading sports brands – consumer
around the world associate Barclays with the Premier League whether they
can actually access the Barclays brand or not
Digital strategy links sponsorships to core operations – social media and
payments network are used to promote sports sponsorships, thereby
leveraging existing infrastructure to extend the brand and increase transactions

Case Study #8 – Macy’s Star
Rewards

Macy’s Star Rewards is one of the largest retail
rewards programs in the United States
§  A very traditional retail rewards program that
provides tiered discounts and offers based
on level of spend to Macy’s store card and
co-brand Amex customers
§  Benefits focused on disproportionate benefit
to higher tiers (eg. discounts up to 40% on
sales)
§  Program has morphed from a non-card
program to a card-exclusive program
§  Type: Loyalty (points-based)
§  Card-based: Yes
§  Rewarding: Cash vouchers,
discounts, free services
§  Issuer: Macy’s Inc.
§  Country: United States
§  Members: 50-60 million ( appox.
1/3 card customers)
§  Launched: 2005 as a non-card
based program
Key data
§  Star Rewards is easy to join (instantly at
POS with credit card application) and points
accrue automatically
§  Value for Macy’s is to identify, track and
target its most loyal customers with offers to
generate incremental profitability (NOTE:
focus is on profitability, NOT sales)

Ease of use drives activation and relevant offers
increase ongoing spend
§  Program started as a conversion of their
14MM store card and co-branded Visa
accounts
§  Program extended to non-card holders to
increase membership but has now
reverted to being CC-only
§  Exposure across media channels (TV,
social, display, .com) continuously
reinforces value of Star Rewards
membership
Perceived Value
Relevant Offers
§  New account customers get 15% discount
on the first purchase
§  Participants begin collecting points with
their first purchase – and accumulate with
every in-store purchase
§  Basic tier members collect 1.5% of
purchases toward certificates that can be
used in-store against any merchandise
§  Higher tier levels include coupons,
specially events and sale notifications
§  Points redemption is automatic as
$10/$25 certificates are delivered when
points threshold is met
§  Certificates are included as a coupon in
the CC statement and can only be used
for in-store purchases and expire usually
after 6 months (thus limiting potential
value to loyalty members by increasing
breakage)

Points Accumulation:
•  Elite customers get 1-1.5% rewards on purchases at Macy’s - Premiere Elite
members receive 3%
•  Elite and Premier Elite customers get 1% rewards on purchases outside Macy’s (on
Amex co-brand card)
•  Macy’s send special offers to customers based on tiers to further increase spend –
eg. surprise savings offers, Star Pass Mailings, Happy Birthday Offer, shipping
discounts
Redemption:
•  Rewards are automatically
converted to cash vouchers
that can be used at Macy’s
physical locations
•  Elite members receive
vouchers when the $10
threshold is reached, while
Premier Elite customers
receive $25 vouchers

Financial Offers
•  Macy’s offers a store card as well as an American Express – both include
automatic access to Star Rewards
•  Tier spend levels apply to both card offers to achieve Star Rewards benefits but
Amex co-brand has incremental benefits for higher tiers such as birthday
offers, priority 1-800 number and access to Macy’s special events

Online - Macy’s has an extensive online store,
with full purchase functionality as well as a new
‘purchase online/pick up in-store’ offer that
integrates inventory across channels
Social - Macy’s has invested heavily in it’s
social media presence, generating over 14MM
Facebook likes and has an active fashion blog
Mobile – New mobile functionality integrates
all aspects of the consumer shopping
experience from research, product reviews,
price comparisons, loyalty tracking and
payments/CC management

Key Take Away
Intense focus on aligning tiers to customer value – Macy’s has developed
their 3 card-based tiers based on the value that loyalty customers bring to
Macy’s
Benefits drive results – 10 years of loyalty analytics has enabled Macy’s to
focus loyalty offers so that they drive profit-increasing behavioral and activity
changes
Omni-channel media support – increases awareness to non-customers but
also reinforces value to existing customers

Gilt is the largest flash-sale shopping site in North
America ($550MM in 2012) with high-value customers
§  First Mover: first big name in flash sales in
the U.S, building something of a cult
following around time-sensitive sales that it
sent out in emails at noon every day.
§  High Value Shoppers: Gilt’s member-base
is comprised of one of the most desirable
demographics in retail: Urban Sophisticates
§  Brand Association: Gilt was featured in
the new commercial for the Samsung’s
Galaxy S 5 phone.
§  Type: Flash Sales
§  Sector: Online Shopping
§  Rewarding: Gilt insider members
get exclusive discounts and rewards
§  Issuer: Gilt Groupe
§  Country: USA (NYC)
§  Members: N/A
Key data
§  Member only: Gilt provides instant insider access
to top designer labels, at up to 60% off retail.
§  Time-Sensitive: Early access to preview
upcoming flash sales showcasing limited
inventory available; ‘first come, first serve’.
§  Royalty perks: Gilt Insider allows members to
earn and redeem points to shop their favorite
sales early, earn access to discounts, free
shipping, and attend exclusive events and more.

Gilt has disrupted high-end designer shopping
with innovative digital capabilities and rewards
§  Focus on core business: Selling
discounted high-end apparel and
accessories and now expanding to include
travel, many at insider prices.
§  Business services: Gilt is now managing
warehousing and shipping logistics for a
select number of e-commerce brands.
§  Funding the Future: Goldman Sachs is
also an investor in Gilt and will likely take
them public (IPO) in Q3 of 2014.
Perceived Value
Relevant Offers
§  Dress for Less: Gilt sources the most
coveted high-end designer brands and
products, including fashion for women,
men, and children; home decor; artisanal
ingredients; hotels and travel experiences
on every continent.
§  Relationships: Gilt goes beyond daily
deals by sending individualized offers
through email and mobile app notifications
to actually build customer mindshare and
communicate personality (tone of updates
and images from team).
§  Status Climbers: As members earn Insider
points, they achieve status in one of three
program tiers: Select, Premier and Noir. As
members advance to higher tiers they gain
added perks like waitlist priority and a
dedicated customer service line.
§  Mobile Matters: Gilt derives 30% or more
of revenues (depending on the day) from
mobile/tablet channels. Order values are
typically 30% higher on the iPad than their
website or iPhone application.

Gilt grows exponentially based on brand reputation
and world-of-mouth referrals for honest business
“This is a business that has
grown predominantly through
word-of-mouth marketing.
Seventy-five percent of our
membership has come from
the suggestion of a friend,
using our onsite ‘Invite Friends’
feature [in exchange for a $25
credit.] That’s how we
launched. We sent invites to a
list of about 15,000 people—
friends, former colleagues and
classmates, dating back to
grade school!”
• Strong Customer Referrals: Gilt has built it’s community predominately through
friend get friend incentives and social sharing. Gilt earns and retains customer trust by
building relationships by never over-promising or under-delivering.

Gilt’s member experience is frictionless
• Consistent: Gilt’s excels
with a responsive design user
interface to provide a coherent
and reliable experience
regardless of device, entry
path, and time of visit.
• Customer-Centric: Gilt’s shopping experience highlights what’s truly important to
customers - eligible discounts, special offers and rewards. The company champions the
user and their best interests by merging Product, Design and Business needs.

Gilt applies data to drive more intelligent, personal
invitations and smarter shopping experiences
•  Relevancy: Gilt mines extensive customer data to personalize emails - 3,000
different messages depending on shoppers expressed interests. The messaging
system was built by data scientists (algorithm) and creative teams (imagery and
language) that appeal to various customer segments.

•  Personal:
Gilt makes
shopping
easier by
remembering
shoppers
sizes and
auto filtering
product
listings with a
simple tap of
a button.
•  Preferences:
Gilt’s iPhone
and iPad apps
now allow
customers to
quickly share
their sizes for
more relevant
shopping of
available
inventory.

Gilt insider membership offers exclusive rewards for
supporting the success of the business
•  Pavlov's Law: Members score Insider points when engaging with Gilt in multiple
ways including purchasing, referring friends, or simply visiting a sale on Gilt.com.
Early access and other perks cost points. Members get one point every time the site,
five points for every dollar spent, 25 points for referring friends, 35 points for “liking”
the brand on Facebook, and 100 points if they sign-in five weekdays in a row.
•  Gamification: Select members
(often top spenders) get upgraded
to “Gilt Noir” status providing
exclusive access, such as a
heads start to each day’s flash
sale before the general public has
a chance to purchase goods.
"Gilt Insider perks are a collection of our
member's most requested asks – from
having early sale access to a brand they
love, to deeper discounts, to the
opportunity to attend exclusive events.
The rewards program is designed to
provide Gilt members with a platform to
pick and choose from the rewards they
love the most.”
- - Elizabeth Francis, Chief Marketing
Officer, Gilt.com.

Gilt’s financial growth is largely attributed to
acquiring and monetizing high value customers
•  In November
2007, Gilt
launched
with 15,000
members
and had 5
million by
Q4 2011.
•  Monetization
of members
grew from
$25MM in
2008 to
$420MM by
2010.

Key Take Away
Build community of high-value customers – dramatically reshaped the online retail market
for fashion by building a community of high value consumers through friends of friends referrals
sharing the secret of limited-time, members-only “privates sales” for designer apparel at steeply
discounted prices.
Incredibly innovative demand generation platform – Gilt provided a transformative, efficient,
and brand-sensitive way to effectively liquidate a brand’s invetory position. Ultimately,
capitalizing on the massive inventory supply glut following the onset of the recession.
Imposing time restraints to reward fast action from customers - imposing timing & supply
constraints to compel immediate action (an estimated 50% of all revenue from Gilt sales come
in less than 1 hour after the sales start online).
Invest in personal levels of customer service – Gilt provides shoppers with even more
meticulous care then most globally renown retailers (like Nordstroms).
Always keep things changing for the better: Gilt is vying to become known for the most
exciting online shopping destination; Always look to innovate above-and-beyond the norms of
our industry

Acxiom best in-class-digital_rewards_experiences

Acxiom best in-class-digital_rewards_experiences

Recommended

More Related Content

Recently uploaded

Recently uploaded(20)

Featured

Featured(20)

Acxiom best in-class-digital_rewards_experiences