The document discusses the importance of customer loyalty marketing, emphasizing the need for businesses to establish effective loyalty programs that adapt to evolving customer expectations. Key success elements include setting clear objectives, personalizing customer engagement, and leveraging data to enhance customer relationships. Additionally, it highlights the necessity of understanding customer value, nurturing loyalty, and maintaining relevance in communication.

1. Loyal Customers: Why do they matter?February 2, 2011 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

2. PresenterSallie BurnettStrategist. Leader. Innovator.President of Customer Insight Group, Inc., a leading strategic relationship-marketing firmDigital marketing professor at prestigious Daniels College of Business2009 Direct Marketer of the Year 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

3. Customer Insight Group, Inc.InsightStrategyExecutionSystematic New Loyalty Program

4. Loyalty Audit

5. Loyalty Navigator

6. Custom Loyalty Workshop

7. Cause Marketing Exploration

8. Social Media Roadmap

9. Social Media Navigator

10. Custom Social Media Workshop

11. Data mining

12. Market research

13. Modeling

14. Profiling

15. Response analysis

16. Segmentation

17. Social media monitoring

18. Usage and attitudes

19. Audience targeted creative

20. Blogs

21. Content

22. Direct mail

23. E-mail design

24. Landing pages

25. Manage online conversations

26. Mobile marketing

27. Program management

28. Social media

29. Website design and contentCustomer Relationships – Engage. Keep. Grow. 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

30. AgendaWhat is loyalty marketing?How is customer loyalty marketing evolving?Where are loyalty programs today?What are the key elements of success? 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

31. What is loyalty marketing?Loyalty:Loyalty Marketing:Customer’s faithfulness; advocacy, devotion; constancyDiscipline of identifying and nurturing the yield of best customers through a long-term, reciprocity, value-added relationship.5 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

32. How is customer loyalty marketing evolving?61896TodayDevelopment has been directly related to advances in IT an POSFuture developments are supported by IT, specifically in the areas of:Social mediaPOSWeb 2.0 (iAPPS — web content management solutions)MobileLocation or proximity Ubiquitous, wearable computing 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

33. Where are loyalty programs today?7CUSTOMERMore demanding, more choicesTrust is key to keeping customer loyalty because people are seeking out cheaper private label optionsParticipation in loyalty programs increasingSTRATEGYMe too value propositionLaunch and put into “auto” driveMeasurement metrics not tied to strategyCOMMUNICATION Irrelevant, impersonal messagesEnrolled and forgottenNo customer engagement planINSIGHT Manage defection, not migrationData used to run program, not used to run the businessCustomer relationships are “siloed” in the organization 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

34. What could a loyalty program do for your business?Retain Customers8Target MarketingGain Customer InsightIncrease Spend & FrequencyAcquire New CustomersIncreased RevenueBuild Brand LoyaltyDifferentiate vs. CompetitionBuild Customer Relationship 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

35. What are the key elements of success?Establish program objectives and metrics to measure success.Make the program part of your corporate strategy.Treat different customers differently.Nurture customer loyalty.Be relevant.Monitor customer migration.Engage your customers. 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

36. #1 Establish program objectives and metrics to measure success.

37. Increase…customer retention…average profit per customer…frequency of purchase

38. Growth…in the number of profitable customers…in the number of new customers…in the number of brand advocates

39. Lift…number of product categories purchased…in average transaction size

40. #2 Make the program part of the corporate strategy.

41. Industry LeadersStrategyHallmarksAlign program structure with goals.15 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

42. #3 Treat different customers differently.

43. 173.3% Customers, 21.4% Purchases, 26.2% Margin & 11.6% VisitsLoyal4.1% Customers, 16.9% Purchases19.2% Margin & 13.2% VisitsFrequent 11.8% Customers, 31.4% Purchases32.1% Margin & 31% VisitsOccasionalInfrequent27% Customers, 30% Purchases22.3% Margin & 44% VisitsInactive54.2% Customers, 0% Purchases.0% Margin & 0% VisitsKnow the customers value to you. 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

44. Deliver value the way the customer wants it delivered.Customer Experiential Benefit Strategy is a customer-centric approach to align and deliver value that is meaningful, timely and mutually beneficial to the customer and ultimately the company as well.Initial participation and enrollment benefitsCumulative benefitsPeriodic benefitsInstant benefits Mix of hard and soft service-related benefitsSpend/earn rate, bonuses, capped/uncapped, transferable points and rewardsFlexibility for redemption, burn rate, channelsTiers and requalificationPartners for earn/burn and special offers18 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

45. #4 Nurture customer loyalty.

46. AdvocateRepeat CustomerMember &CustomerValue to the Organization Prospective CustomerUnqualified CustomerValue to the Customer/Member20Create strategy to manage customer lifecycle. 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

47. Grow new customers.GoalsIncrease frequency of purchaseIncrease annual spendGet members to purchase a second time and soonerIncrease number of departments purchasedIncrease in total retention rate of new membersIncrease in number of rewards issued and redemption rateStrategyScore all new customers.Execute multi-channel contact strategy.After the 90 day process, customers are scored based on their level of engagement.Based on the customers engagement score, you can tailor your communication strategy to focus resources to increase sales and retention. 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

49. Be relevant.59%Most marketing and advertising has very little relevance to me.Source: Yankelovich Consumer Trust Study60%companies are failing to send welcome emails to new subscribers, according to a study of major brands in the US. 2375%respondents said that irrelevancy is the main reason for unsubscribing from a company‘s email program. Source: Merkle 200815%retailers used data they received during the purchase process to target promotional messages to buyers. Return Path, March 2009 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

50. Always be relevant – understand how your customers define ‘value’.24Understand CustomersAlign Marketing InvestmentDeliver Relevant MessagesGolf Enthusiast 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

51. #6 Monitor customer migration.

52. Monitor and proactively manage your customer’s migration. 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

53. #7 Engage your customers.

54. Customer engagement, “repeated interactions that strengthen the emotional, psychological or physical investment a customer has in a brand,” supports loyalty goals. 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

55. Engaged customers buy more and refer more.The attribute of an engaged customer seen as most important is “recommends product, service or brand” (58% of company respondents).1

56. Other attributes regarded as very important are:

57. Engaged customers are “more likely to convert more readily (44%)

58. Engaged customers “purchase regularly” (36%

59. Engaged customers “less likely to switch supplier” (30%)1) E-consultancy Engagement Report 2009 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

60. Be responsive to your customers; let them tell you what they want.30When you know what your customers are saying and what they want and value, you can create a more meaningful connection.  2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

61. Remember the seven key elements of success.Establish program objectives and metrics to measure success.Make the program part of your corporate strategy.Treat different customers differently.Nurture customer loyalty.Be relevant.Monitor customer migration.Engage your customers. 2010 Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

62. Questions?Sallie Burnett, CEOCustomer Insight Group, Inc.Email: sallie@customerinsightgroup.comWebsite: www.customerinsightgroup.comTwitter: @sallieburnettLinkedIn Group: Customer Relationships — Engage. Keep. Grow