Tua will try to make an interesting 30 minute presentation about customer programs in the digital age. Hien Le will discuss how 80% of sales come from 20% of customers, and how to collect customer data to understand different customer types. He outlines several loyalty models including point-based, personalized, tier-based, and partnership models. Finally, he discusses how companies can use behavioral locks, data locks, switching costs and network effects to increase customer retention.

1. HELLO, MY NAME IS /TUA/, AS IN TOUR GUIDE.
THE OTHER GUY IS HIEN LE, HE WILL TALK ABOUT THE TOPIC “CUSTOMER
PROGRAM IN DIGITAL AGE”.
I WILL TRY MY BEST TO AMUSE YOU THROUGH THIS BORING TOPIC IN THE
NEXT 30 MINUTES.

2. What is customer program?
PARETO’S PRINCIPLE
"80% of your sales come from 20% of
your clients."

3. First step: Collect your data
Primary data (YOUR data):
- Customer survey
- Transaction history, customer
database…
Secondary data (THEIR data):
- Market research firms
- Internet

4. Who are your customers?
Type: Hunter
- “Price is everything”
- Loyalty scheme: always discount/
the more you buy the higher
discount rate we offer.
- Who: low income class such as
students, blue collar workers…

5. Who are your customers?
Type: Achiever
- “I am the best”
- Loyalty scheme: gamification with
badges/ rewards.
- Who: gamers, high achievers
Type: Luxury shopper
- “Get me the most expensive”
- Loyalty scheme: personalized
experience, VIP status.
- Who: rich, brand conscious
consumers

6. Who are your customers?
Type: Creature of habit
- “Let’s do something old”
- Loyalty scheme: seamless
experience with minimum effort/
subscription
- Who: busy people, people who
value convenience
Type: Experimenter
- “Let’s do something new”
- Loyalty scheme: promotion on new
arrival. Early bird program
- Who: young and love new things,
maybe tech savvy

7. Tell them about these loyalty
models already!!

8. Require joining fee
(can offer together
with free trial)
Exclusive offers
M1: Upfront VIP fee

10. M2: Freemium
Free version
with limit
Capacity limit. Ex: Soundcloud, Dropbox…
Feature limit. Ex: Spotify…
Student version/ Personal use. Ex: Microsoft Office, Teamviewer…
User limit. Ex: Slack, Mailchimp…
Effort limit. Ex: Candy Crush…
Customer service limit. Phone/ Email support.
Premium
version Regular users with higher needs can purchase premium version to
unlock exclusive benefits

12. M3: Point-based model
77% transaction-based program failed in the first 2 years
 Offer non-transaction rewards, surprise points…

13. M4: Personalized model
• Birthday offer
• Get to know your customer by name and by heart
• Biggest target: luxury shoppers
• New model: Subscription Box

14. M5: Tier-based Model
•Umbrella plan (Spotify Family Program, Office 365 Home & Personal)
•Increase benefits by number of users in the same account (Netflix Screen sharing program)
•Pricing by the size of the organization (Slack) or need capacity (Mailchimp)
•Integrate with tier-based model (Bing Rewards program)

17. M6.1: Coalition network model
+ Easy to setup and join
- High cost
- Low bargaining power
- Uneven CX & data collection
- No loyalty toward brands

18. M6.2: Partner network model
+ Everything coalition model cannot do
- Require high bargaining power (banks,
insurances)

19. How to trap your customers
aka Customer Lock-in and Switching Cost

20. Common traps
•Behavioral lock-in/ learning curve trap
• Data trap: Spotify playlists, Android/ iOS
exclusive apps
•Switching costs/Exit trap: Early termination fee
(AT&T, Verizon…)

21. Common traps
• Network effect trap: Facebook
• Industry standards trap: HTML5, Facebook Ads
•Base products & consumable trap: Nespresso,
Gillette…

22. Common traps
• Network effect trap: Facebook
• Industry standards trap: HTML5, Facebook Ads
•Base products & consumable trap: Nespresso,
Gillette…

23. 1. Read full at bit.ly/Tua16
2. Happy shopping at Tiki.vn (I get 44VND for every 1,000,000VND you spend on Tiki.vn)
3. WAKE UP, his talk is finally over!!!
Now what?