The document discusses how to create and maintain a successful loyalty program. It defines loyalty and its impact on marketing. It provides 7 keys to successful loyalty programs: 1) programs must provide value to customers, 2) customers should have choices within the program, 3) programs should provide aspirational rewards, 4) programs and communications should be relevant to individual customers, 5) programs require commitment from the company, 6) programs need easy engagement for customers, and 7) programs require measurement and optimization. The document advocates for loyalty programs as a way to build stable revenue and brand engagement.

1. How to Create and
Maintain a Successful
Loyalty Program

2. Our Goals for this Session
• Define Loyalty and it’s impact on marketing
• Give you the 7 keys to successful Loyalty
Programs
• Demonstrate the power of Customer Loyalty for
Life Line Screening

3. Introductions
• Alan Rosenspan, President of Alan Rosenspan & Associates.
Has created and worked on loyalty programs for clients
such as AT&T, HSBC, and has over 25 years experience in
direct marketing.
• Trish Mathe is a nationally recognized and award winning
database marketing executive with over 15 years
ofexperience both in financial and healthcare services. She
is Vice President, Database Marketing for Life Line
Screening.

4. What is “Loyalty?”
• Not a dog-like devotion to your company and
your products
• Not a one-time event. An ongoing relationship
that must be continually renewed and refreshed
• Is it attitude or action on the part of the
customer?
• The same is true of the marketer

5. “Loyalty Marketing is a mindset
– involving reallocating
marketing budget from
acquisition to cross-sell, share of
wallet capture and retention”

6. Does Loyalty Matter?
• It helps you build a stable base of reliable
revenue and continued interest in your brand
• It can lead to brand innovation and new product
development
• It can be an effective tool to gain new
customers, through referral and word-of-mouth
• It can have a huge impact on profits (not just
sales)

7. • “As a customer’s relationship with the company
lengthens, profits rise. And not just by a little.
Companies can boost profits by almost 100
percent by retaining just 5 percent more of their
customers”
- F.P. Reichheld
The Loyalty Effect

9. Has Loyalty Changed?

10. Loyalty Becomes Mobility
• Loyalty used to be seen as a good thing
• Now it is often seen as “stupid” or “lazy”
• People used to stick with one provider or one product
• They usually had fewer choices
• How many kinds of shampoo can you buy?

11. 11

12. Take Financial Services….
• You used to have one bank...
• If you had three or more relationships with that bank, you were
probably a customer for life (unless you moved or changed jobs)
• The bank’s goal was to increase the number of relationships
• How many banks do you currently work with - for your
checking, electronic bill payment, credit cards, etc.
• Plus now many companies offer credit or other banking services

13. How to Generate Loyalty

14. Tangible, tactile membership
 Most Loyalty programs have something the consumer can keep in
their wallet or on their key chain
 It becomes a physical reminder of their membership - even if they
don’t have to use it that often
 Can we be more innovative?

15. Newsletters
• Helps generate loyalty among customers; especially B2B
customers
• Can lead to pass-along’s and referrals
• Must be “customer-centric”
• Customer stories, helpful tips, user-driven content essential
• Involvement devices very important

16. Customer Surveys
• One of the best ways to generate loyalty among customers
• Shows you care
• Identifies potential problems or issues that could disrupt loyalty
• Helps you understand loyalty drivers (discounts, service, etc) that
are most relevant to your market
• Survey customers at least once a year
• ....and act on what you learn

17. Added Recognition
• Use valued customer language
• Remember their likes and dislikes and respect them
• If possible, give them advance notice – “We wanted you to be the
first to know…”
• Treat them like the airlines do – separate lines for checking in
and boarding

18. Added Service
• Capital One - “Talk to a real person”
• Dedicated customer service representatives
• Moneyback guarantee extended to best customers
• Better customer problem/resolution
• Neiman Marcus advance sale - best customers get in first!

19. www.thedoghouse.co.uk
• Gift buying service
• What do you want us to remind you about?
• When would you like us to remind you?
• How about an automatic purchase?

22. Do you need a
Loyalty Program?

23. Loyalty Programs
• They started with Frequent Flyer Miles in 1981
• American Airlines noticed that 3% of it’s passengers represented
over 65% of it’s business
• Virtually every category of company has one
• Your competitors probably have one too
• But your customers are already loyal, aren’t they?

24. …or are they?
• The Ogilvy Loyalty Centre in the U.K. identified what they call the
Customer Satisfaction Trap.
• They report: In the automotive business, on average 85% of all
people report being satisfied with the cars they’ve purchased -
but only 40% buy from the same dealer again.
• In business to business, 65-85% of defectors report that they
were either satisfied or even very satisfied with their former
supplier. Note: their former supplier.

25. • “Customers contribute greater share and
purchase more frequently from Brands with
whom they have a relationship and they
continue to purchase from these Brands over
longer periods of time. Research has shown
that attrition isn’t a result of brand
dissatisfaction, but often because a
meaningful relationship has never been
established with the customer.”

26. 7 Keys to Every Successful
Loyalty Program

27. 1. Value
• The customer must perceive value or the loyalty program won’t
work. Value doesn’t have to mean only premiums or prizes.
• The Emerald Aisle campaign for National Car Rental is a frequent-
renters program, with rewards and prizes.
• The reasons that I belong are: I don’t have to wait on line to get
my car, and at certain locations, I can rent a Porsche, a Rolls-
Royce, a Ferrari and other cars I can’t afford to own.

28. Low cost Extras

29. 2. Choice
• This involves the customer. American Express led the way by
changing it’s Membership Miles program to the even more
successful Membership Rewards.
• Many travel programs offer you the opportunity to use your
points for magazine subscriptions, hotel offers or gift certificates.
• Credit cards give you a choice of money-back, travel rewards or
merchandise
• Few successful loyalty programs are one-dimensional

30. 3. Aspirational Value
• Rewards can’t simply be cash back or discounts
• That’s too much like always having a “Going Out of Business”
Sale
• You need to build in some extra emotional value - for
example, not just frequent flyer miles but miles towards a well-
deserved vacation

31. 4. Relevance
 Use appropriate channels to gather customer profile data,
including registration pages and surveys
 Make each customer’s experience (with product and in
communications) unique based on their needs.
 Deliver message to customer at times when they will be
the most receptive
 Develop customer lifecycles as customers have different
needs at various stages of the brand relationship