For companies that have or are considering a loyalty marketing program, this presentation provides 10 best practice tips for ensuring success, and 5 bad-practice tips to avoid.

1. 10 TIPS TO IMPROVE YOUR
LOYALTY MARKETING PROGRAM…
PLUS 5 REASONS TO KILL IT
Jay Weinberg, President, The JAY Group

2. 2
Total Number Loyalty Program Accounts in the U.S. is Over…
2,100,000,000
The Average Household is Signed up for…
18.4
The Average Household is Active in…
8.4
Source: 2011 Colloquy Loyalty Census

3. 3
Your Loyalty Program Needs to Work Hard!

4. 4
10 Tips to Improve Your Loyalty Program
1 2 3 4 5 6 7 8 9 10

5. 5
Understand where you are on the
Earn/Redeem spectrum
High value
Dept Store Credit Cards
Hotel
Retail (low Freq)
Casino
Low EARN Car Rental Airlines High
potential Retail (high Freq) potential
REDEEM
Drug Store Gas
Low value

6. 6
Ensure Everyone Knows About the
Program and Understands It
• Front-line service personnel are most important
• If they do not understand the benefits and features of the program, customers
will reject it
• Issues are often tied to extent employees are expected to deliver
benefits
• Instances where many front-line people never heard of the program
• High turnover, low training establishments
• Less control over messaging
He’s a Rewards
Club Member.
What Rewards
Club?

7. 7
Determine Whether You Need Points
• Soft benefits only may make sense
• Special discounts are easier to manage
• Experiential rewards provide high perceived value
• Points are good for enabling flexibility of choice
• Points make sense for high frequency transaction
industries (5-10+ per year)
• Points create opaqueness
POINTS DISCOUNTS EXPERIENCES

8. 8
Determine Whether You Need Points
• Examples of programs that focus on discounts and
special treatment

9. 9
Make Rewards Meaningful
• High perceived value
• Attainable
• Available
• Redeemed for good value

10. 10
Make Rewards Meaningful
$1,042 $599

11. 11
Going Mobile? Understand the Difference
Between Visits and Transactions
• Easy to integrate • POS integration ties rewards to
customer value
• Many third-party options • Gain the benefits of customer
• Relevant for stores that information
are not necessity-based • Segmentation!
• Less prone to fraud
Accrual scheme should be designed around the customer lifecycle

12. 12
Going Mobile? Understand the Difference
Between Visits and Transactions
VISIT TRANSACTION

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Be Unique
• You’re not an airline. Don’t copy their program
• Think about the added value you can bring to customers
• What unique, meaningful experiences can you provide?
• Are there private, exclusive communities you can create?
• Access creates demand and trumps discounts

14. 14
Be Unique High
BEST GOOD
BETTER
PERCEIVED VALUE
BETTER
GOOD
Transparent THE BERMUDA TRIANGLE
(cash) OF LOYALTY
Low COST High

15. 15
Be Unique

16. 16
Be Unique

17. 17
Use Data to Drive Incremental Sales
• Focus on the back end of the program as much as the
front end
• Segment messaging and offers
• At least based on RFM
• Win back profitable defectors
• Implement an at risk (defection) model
• Deselect unprofitable customers
• Use data to improve merchandising and site selection
• Become a customer centric organization

18. 18
Gamify
• Include gamification elements to increase engagement
and interest

19. 19
Gamify

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Treat Customers Better than Prospects
• Do not give better deals to new customers than existing
customers
• At least not blatantly
• People understand sign-up bonuses
• If they didn’t get one, give it to them later
• Surprise and delight current customers
• Not a special offer that requires a purchase
• Make it a real gift
• OK to require a visit, but not a purchase

21. 21
Keep it Simple
• From a business standpoint, do the cost/benefit analysis
INCREMENTAL TOTAL COST
REVENUE > - Rewards
- Acquisition - Delivery & execution
- Retention
- Share of wallet
- Cross/up sell

22. 22
Recap
Understand Where You Are on the Earn/Redeem Spectrum
Ensure Everyone Knows About the Program and
Understands It
Determine Whether You Need Points
Make Rewards Meaningful
Going Mobile? Understand the Difference Between Visits
and Transactions
Be Unique
Use Data to Drive Incremental Sales
Gamify
Treat Customers Better than Prospects
Keep it Simple

23. 23

24. 24
5 Reasons to KILL It
It’s the
Agency’s
fault!

25. 25
You’re Under Water
• Cost of the delivering benefits is greater than the
incremental return
• Negative ROMI
• Decreasing benefits or increasing promotions have not been
effective

26. 26
It’s Unnecessary
• There are more cost-effective ways to differentiate from
your competition
• Loyalty programs are best used as a tie-breaker
• “Real” loyalty strategies are always preferred

27. 27
Tracking Purchases is the Only Reason
• If there is no compelling value proposition for the
customer, it will not work
• The program, first and foremost, must be about providing
value to the customer
• That’s the path to incremental value

28. 28
Overcome Service or Product
Deficiencies
• No marketing program, rewards or otherwise, will
overcome product deficiencies or poor customer service

29. 29
To Dissuade Deal-of-the-Day Shoppers
• They are likely looking for deeper discounts that you can
provide
• If they like your product or service, they’ll come back

30. 30
Thanks for listening!
Jay Weinberg 312-447-0414 x1
The JAY Group Skype: jayweinberg
444 N Wells St. Ste 304 jay@thejaygroup.com
Chicago, IL 60654 www.thejaygroup.com