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Acxiom best in-class-digital_rewards_experiences

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Consulting deliverable for Mastercard Brazil, analyzing loyalty programs across the Globe. 2014

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Acxiom best in-class-digital_rewards_experiences

  1. 1. © 2014 Acxiom Corporation. All Rights Reserved. © 2014 Acxiom Corporation. All Rights Reserved. Best-in-Class Benchmarks (Digital Rewards Experiences) Study sponsored by: 1
  2. 2. © 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
  3. 3. © 2014 Acxiom Corporation. All Rights Reserved. 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
  4. 4. © 2014 Acxiom Corporation. All Rights Reserved. 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
  5. 5. Case Study #1 – Yelp Online urban guide and business review site.
  6. 6. © 2014 Acxiom Corporation. All Rights Reserved. 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
  7. 7. © 2014 Acxiom Corporation. All Rights Reserved. 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
  8. 8. © 2014 Acxiom Corporation. All Rights Reserved. Yelp Elite delivers a rewarding social interaction within the consumer experience Gets recognized and upvoted Wins perks, parties and Elite Status Writes Review
  9. 9. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  10. 10. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  11. 11. © 2014 Acxiom Corporation. All Rights Reserved. Yelp reviews drive local purchases and increase small business revenue Source: Nielsen Survey, June 2014
  12. 12. © 2014 Acxiom Corporation. All Rights Reserved. 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
  13. 13. Case Study #2 – Amazon Prime
  14. 14. © 2014 Acxiom Corporation. All Rights Reserved. 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 §  Card-based: No §  Rewarding: Free-shipping, content stream, special offers §  Issuer: Amazon §  Country: US §  Members: 20 million §  Launched: 2005 §  Earnings: $19.74 billion (2014 Q1) Key data Key Insights Value Proposition Source: Company/program reports; Web search; Internet search; Acxiom analysis
  15. 15. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  16. 16. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  17. 17. © 2014 Acxiom Corporation. All Rights Reserved. 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
  18. 18. © 2014 Acxiom Corporation. All Rights Reserved. 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
  19. 19. © 2014 Acxiom Corporation. All Rights Reserved. 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
  20. 20. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  21. 21. Case Study #3 – AmEx Membership Rewards
  22. 22. © 2014 Acxiom Corporation. All Rights Reserved. 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 §  Country: US §  Members: 20 million §  Cards Issued: 107,2 million §  Launched: 1995 §  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 Source: Company/program reports; Web search; Internet search; Acxiom analysis
  23. 23. © 2014 Acxiom Corporation. All Rights Reserved. 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
  24. 24. © 2014 Acxiom Corporation. All Rights Reserved. Multi-channel presence provides great online customer experience for a connected audience Offer Pop-up inside InSite Points awarded when using Uber
  25. 25. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  26. 26. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  27. 27. Case Study #4 – Disney MagicBand
  28. 28. © 2014 Acxiom Corporation. All Rights Reserved. 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 §  Card-based: No §  Rewarding: Preferred Access, Early Planning, Digital Resources §  Issuer: Walt Disney Parks & Resorts §  Country: US §  Issued: 74.000 §  Launched: 2013 Key data Key Insights Value Proposition
  29. 29. © 2014 Acxiom Corporation. All Rights Reserved. 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
  30. 30. © 2014 Acxiom Corporation. All Rights Reserved. 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  
  31. 31. © 2014 Acxiom Corporation. All Rights Reserved. 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
  32. 32. Case Study #5 – Uber
  33. 33. © 2014 Acxiom Corporation. All Rights Reserved. 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 §  Card-based: No §  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 Source: Company/program reports; Web search; Internet search; Acxiom analysis
  34. 34. © 2014 Acxiom Corporation. All Rights Reserved. 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)
  35. 35. © 2014 Acxiom Corporation. All Rights Reserved. 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.”
  36. 36. © 2014 Acxiom Corporation. All Rights Reserved. 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
  37. 37. © 2014 Acxiom Corporation. All Rights Reserved. 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
  38. 38. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  39. 39. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  40. 40. © 2014 Acxiom Corporation. All Rights Reserved. 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
  41. 41. © 2014 Acxiom Corporation. All Rights Reserved. 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)
  42. 42. © 2014 Acxiom Corporation. All Rights Reserved. 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. Source: Company/program reports; Web search; Internet search; Acxiom analysis Key Take Away
  43. 43. Case Study #6 – AirMiles
  44. 44. © 2014 Acxiom Corporation. All Rights Reserved. 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) §  Sector: Retail §  Card-based: Yes §  Rewarding: Cash, Merchandise, Travel §  Issuer: AIR MILES §  Country: Canada §  Members: ~10 million §  Launched: 1992 Key data Key Insights Value Proposition Source: Company/program reports; Web search; Internet search; Acxiom analysis
  45. 45. © 2014 Acxiom Corporation. All Rights Reserved. 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
  46. 46. © 2014 Acxiom Corporation. All Rights Reserved. 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
  47. 47. © 2014 Acxiom Corporation. All Rights Reserved. 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
  48. 48. © 2014 Acxiom Corporation. All Rights Reserved. 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
  49. 49. © 2014 Acxiom Corporation. All Rights Reserved. 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
  50. 50. © 2014 Acxiom Corporation. All Rights Reserved. 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
  51. 51. © 2014 Acxiom Corporation. All Rights Reserved. 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
  52. 52. © 2014 Acxiom Corporation. All Rights Reserved. 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
  53. 53. Case Study #7 – Barclays Loyalty Through Sports Sponsorships
  54. 54. © 2014 Acxiom Corporation. All Rights Reserved. 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 §  Card-based: No §  Rewarding: various (events, traditional card benefits, etc.) §  Issuer: Barclay §  Country: UK/Europe §  Members: ~10 million §  Launched: 2001 Key data Key Insights Value Proposition §  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 Source: Company/program reports; Web search; Internet search; Acxiom analysis
  55. 55. © 2014 Acxiom Corporation. All Rights Reserved. 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 Continuous evolution Anticipating Needs 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
  56. 56. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  57. 57. © 2014 Acxiom Corporation. All Rights Reserved. Consumer Value Proposition 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.
  58. 58. © 2014 Acxiom Corporation. All Rights Reserved. Multi-Platform Extension • 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.
  59. 59. © 2014 Acxiom Corporation. All Rights Reserved. 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
  60. 60. Case Study #8 – Macy’s Star Rewards
  61. 61. © 2014 Acxiom Corporation. All Rights Reserved. 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) §  Sector: Retail §  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 Key Insights Value Proposition §  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) Source: Company/program reports; Web search; Internet search; Acxiom analysis
  62. 62. © 2014 Acxiom Corporation. All Rights Reserved. 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 Continuous evolution Anticipating Needs 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)
  63. 63. © 2014 Acxiom Corporation. All Rights Reserved. Consumer Value Proposition 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
  64. 64. © 2014 Acxiom Corporation. All Rights Reserved. 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
  65. 65. © 2014 Acxiom Corporation. All Rights Reserved. Multi-Platform Extension 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
  66. 66. © 2014 Acxiom Corporation. All Rights Reserved. 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
  67. 67. Case Study #9 – Gilt
  68. 68. © 2014 Acxiom Corporation. All Rights Reserved. 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 §  Card-based: No §  Rewarding: Gilt insider members get exclusive discounts and rewards §  Issuer: Gilt Groupe §  Country: USA (NYC) §  Members: N/A §  Launched: 2007 Key data Key Insights Value Proposition §  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. Source: Company/program reports; Web search; Internet search; Acxiom analysis
  69. 69. © 2014 Acxiom Corporation. All Rights Reserved. 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 Continuous evolution Anticipating Needs 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.
  70. 70. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  71. 71. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  72. 72. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  73. 73. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  74. 74. © 2014 Acxiom Corporation. All Rights Reserved. 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.
  75. 75. © 2014 Acxiom Corporation. All Rights Reserved. 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
  76. 76. © 2014 Acxiom Corporation. All Rights Reserved. © 2014 Acxiom Corporation. All Rights Reserved. Best-in-Class Benchmarks (Digital Rewards Experiences) Study sponsored by: 7

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