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Loyalty Program:
Worth the Effort?
2022
Loyalty for a D2C Company
Research has found that almost 75% of what drives customer engagement and
loyalty are emotional perks. Now more than ever customers, especially the
younger generations, decide to engage with brands based on emotional loyalty
drivers. Those emotional drivers including happiness, trust, surprise and delight,
anticipation and especially in the luxury realm, pride.
How D2C is acing the loyalty game..
When it comes to Loyalty, D2C companies are making an huge impact in the generic E-
Commerce sphere by employing some interesting methods:
1. Since D2C companies have complete control over their Supply Chain Cycle, which leads to
much more data points being captured and subsequently helping create a more personalized
experience, like a more advanced Grievance Redressal Journey.
1. D2C companies have a much better control on their packaging which creates an emotional
journey for the consumer, helping him to connect with the brand better.
2. Almost all D2C companies involve an physical discount coupon in their packaging, ensuring a
second purchase while making consumers feel valued and elated.
4. D2C companies enjoys a more accurate data points when it comes to replenishment hence a much
better targeted approach for a repeat purchase.
“The anatomy of a fail-proof customer engagement
campaign”
Knowing customer’s preference is the Key!!
Customer’s behavior on the site can tell us a lot about their future purchase, preferences and even
their favorite brands and category, we just have to look hard enough to catch up to this!
To understand how we can influence and help consumers in making a decision while purchasing,
we drilled down a program called Affinity Metric.
The theory behind the concept is simple, by using most commonly used metrics like view behavior,
wishlist, add to cart and ofcourse, purchase behavior, we try to determine which are the brands or
categories of each individual customer who have had made a purchase with us.
Each event can be given a different weightage to decide the top Brand/ Category Affinity for a
Consumer
“The anatomy of a fail-proof customer engagement
campaign”
This Campaign helped us
define the meaning of Hyper
Personalization, as we are
not only looking at past
consumer behavior to
determine which
brands/categories they are
likely to make purchase from
but also their live behavior
on app, to make sure our
communication is helping
the consumer make a
decision rather than
hindering his normal
purchase cycle
“The anatomy of a fail-proof customer engagement
campaign”
Loyalty 101
Why a loyalty program is needed:
Far too often, businesses choose to focus on attracting new shoppers – not looking after existing ones. It’s understandable that
you want to grow your customer base. But how do you keep hold of the people who are more likely to buy from you again? Well,
one solution is to create a customer loyalty program that rewards those shoppers who come back.
A dedicated program that offers customer loyalty benefits is a great way to say thank you.
Business needs a customer loyalty program because it has a major impact. Some researches have shows that a customer who
signs up to your loyalty program is 47% more likely to buy from you again. And when 80% of your business will come from just
20% of your customers, you can see why it pays to invest in – and reward – customer loyalty.
Add in that you can incentivize referrals, and the benefits of creating your own loyalty program for customers become even
clearer. The shopper gets a reward for spreading the word about your business. And you get someone to do your acquisition
marketing for you.
Ulta Beauty
The Ultamate Rewards Program
● The Ultamate Rewards Program
was launched in 1990 and re-
vamped to its current highly
successful format in 2009.
● The Ultamate Rewards program is
designed to leverage their
leadership in content and beauty
services as an add on to the points
based redemption model to make
it more rewarding for the customer
while keeping spend on the
program in check.
Conversion via Loyalty
Conversion via Loyalty
Member Platinum Diamond
Base Tier Middle Tier Top Tier
Multi-tiered Loyalty Program
Conversion via Loyalty
32 million
members in the
loyalty program
(Up 65% from
2015)
Ulta’s loyalty
program
contributes to
90% of all sales
Lower spends on
the loyalty
program vs
peers
Results
Thank You!
Any Questions or Feedback?

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EngageMint 2022: Loyalty Program - Worth the effort?

  • 2. Loyalty for a D2C Company Research has found that almost 75% of what drives customer engagement and loyalty are emotional perks. Now more than ever customers, especially the younger generations, decide to engage with brands based on emotional loyalty drivers. Those emotional drivers including happiness, trust, surprise and delight, anticipation and especially in the luxury realm, pride.
  • 3. How D2C is acing the loyalty game.. When it comes to Loyalty, D2C companies are making an huge impact in the generic E- Commerce sphere by employing some interesting methods: 1. Since D2C companies have complete control over their Supply Chain Cycle, which leads to much more data points being captured and subsequently helping create a more personalized experience, like a more advanced Grievance Redressal Journey. 1. D2C companies have a much better control on their packaging which creates an emotional journey for the consumer, helping him to connect with the brand better. 2. Almost all D2C companies involve an physical discount coupon in their packaging, ensuring a second purchase while making consumers feel valued and elated. 4. D2C companies enjoys a more accurate data points when it comes to replenishment hence a much better targeted approach for a repeat purchase.
  • 4. “The anatomy of a fail-proof customer engagement campaign” Knowing customer’s preference is the Key!! Customer’s behavior on the site can tell us a lot about their future purchase, preferences and even their favorite brands and category, we just have to look hard enough to catch up to this! To understand how we can influence and help consumers in making a decision while purchasing, we drilled down a program called Affinity Metric. The theory behind the concept is simple, by using most commonly used metrics like view behavior, wishlist, add to cart and ofcourse, purchase behavior, we try to determine which are the brands or categories of each individual customer who have had made a purchase with us. Each event can be given a different weightage to decide the top Brand/ Category Affinity for a Consumer
  • 5. “The anatomy of a fail-proof customer engagement campaign” This Campaign helped us define the meaning of Hyper Personalization, as we are not only looking at past consumer behavior to determine which brands/categories they are likely to make purchase from but also their live behavior on app, to make sure our communication is helping the consumer make a decision rather than hindering his normal purchase cycle
  • 6. “The anatomy of a fail-proof customer engagement campaign”
  • 7. Loyalty 101 Why a loyalty program is needed: Far too often, businesses choose to focus on attracting new shoppers – not looking after existing ones. It’s understandable that you want to grow your customer base. But how do you keep hold of the people who are more likely to buy from you again? Well, one solution is to create a customer loyalty program that rewards those shoppers who come back. A dedicated program that offers customer loyalty benefits is a great way to say thank you. Business needs a customer loyalty program because it has a major impact. Some researches have shows that a customer who signs up to your loyalty program is 47% more likely to buy from you again. And when 80% of your business will come from just 20% of your customers, you can see why it pays to invest in – and reward – customer loyalty. Add in that you can incentivize referrals, and the benefits of creating your own loyalty program for customers become even clearer. The shopper gets a reward for spreading the word about your business. And you get someone to do your acquisition marketing for you.
  • 8. Ulta Beauty The Ultamate Rewards Program ● The Ultamate Rewards Program was launched in 1990 and re- vamped to its current highly successful format in 2009. ● The Ultamate Rewards program is designed to leverage their leadership in content and beauty services as an add on to the points based redemption model to make it more rewarding for the customer while keeping spend on the program in check. Conversion via Loyalty
  • 9. Conversion via Loyalty Member Platinum Diamond Base Tier Middle Tier Top Tier Multi-tiered Loyalty Program
  • 10. Conversion via Loyalty 32 million members in the loyalty program (Up 65% from 2015) Ulta’s loyalty program contributes to 90% of all sales Lower spends on the loyalty program vs peers Results
  • 11. Thank You! Any Questions or Feedback?

Editor's Notes

  1. What is Retention? - The art of engaging with the existing customers so they not only stay with the brand but also continue buying products or services from your business. Customer retention increases your customers' lifetime value and boosts your revenue. It also helps you build amazing relationships with your customers. You aren't just another website or store. They trust you with their money because you give them value in exchange The best customer retention strategies enable you to form lasting relationships with consumers who will become loyal to your brand. They might even spread the word within their own circles of influence, which can turn them into brand ambassadors.
  2. Suggested content direction: How is D2C different from E-Commerce and how that difference plays well on the part of a D2C brand? (Aspects that brands can leverage while engaging their audience. For Ex: Complete control over end-to-end supply chain leads to much more data-points being captured and subsequently helping you create a more personalized shopping experience) Research has found that almost 75% of what drives customer engagement and loyalty are emotional perks. Now more than ever customers, especially the younger generations, decide to engage with brands based on emotional loyalty drivers. Those emotional drivers including happiness, trust, surprise and delight, anticipation and especially in the luxury realm, pride.
  3. Suggested content direction: How is D2C different from E-Commerce and how that difference plays well on the part of a D2C brand? (Aspects that brands can leverage while engaging their audience. For Ex: Complete control over end-to-end supply chain leads to much more data-points being captured and subsequently helping you create a more personalized shopping experience)
  4. Suggested content direction: “The anatomy of a fail-proof customer engagement campaign” Along the lines of Data & Segmentation, Messaging, Channel Selection, Analytics (You can create specific slides for each of these points, add numbers, throw in some quick hacks) Can we create a framework of sorts that our audience can tweak and use for their own benefit?
  5. Suggested content direction: “The anatomy of a fail-proof customer engagement campaign” Along the lines of Data & Segmentation, Messaging, Channel Selection, Analytics (You can create specific slides for each of these points, add numbers, throw in some quick hacks) Can we create a framework of sorts that our audience can tweak and use for their own benefit?
  6. Suggested content direction: “The anatomy of a fail-proof customer engagement campaign” Along the lines of Data & Segmentation, Messaging, Channel Selection, Analytics (You can create specific slides for each of these points, add numbers, throw in some quick hacks) Can we create a framework of sorts that our audience can tweak and use for their own benefit?
  7. - Building a loyalty program from scratch - Wins and learnings of running a loyalty program - How to reward customer behaviour to drive conversions
  8. - Building a loyalty program from scratch - Wins and learnings of running a loyalty program - How to reward customer behaviour to drive conversions
  9. - Building a loyalty program from scratch - Wins and learnings of running a loyalty program - How to reward customer behaviour to drive conversions
  10. - Building a loyalty program from scratch - Wins and learnings of running a loyalty program - How to reward customer behaviour to drive conversions