This document discusses the key elements of building a successful customer loyalty program, including collecting customer data, developing a value proposition, designing loyalty mechanics like points and badges, setting investment ratios, creating clubs within the program, and developing coalition programs with partner brands. It emphasizes that loyalty programs should be targeted towards specific customer segments, provide rewards that motivate desired behaviors, and use gamification elements to increase customer engagement.

1. Loyalty Program

2. Presentation Flow
• History
• Why we need loyalty program ?
• Target customers
• Loyalty program essentials
• Building blocks
Data
Value proposition
Mechanics
Investment ratio
Clubs
Coalition
• Summary

3. History of Loyalty Program
1896
(tasty rewards)
Betty crocker points are
used for a popular
reward catalog
How: Customers
accumulate points by
buying Betty Crocker
products which they
could redeem for
rewards
1981
(reward program
with wings)
THE
CONCEPT OF
POINTS IS
INTRODUCED
!
American airlines
introduces the first
frequent flier
program with
AAdvantage
FREQUENT
FLYER MILES
ARE BORN
1985
(subway enters)
Subway rolls out the
Sub club, stamp based
loyalty program
1990
(Theatre)
AMC introduces Moviewatcher,
the very first customer rewards
program in the theatre industry
1991
(retail rewards)
Nordstrom establishes
Nordstrom FSB
How: It offers Nordstrom
customers cards under
Nordstrom fashion rewards -
Its customers loyalty
program
1995
(the first one !)
UK based supermarket, TESCO
launches the clubcard program,
believed to be first card based
loyalty program

4. 2002
(custom loyalty
at your hotel)
Kimpton hotel launches the
Kimpton Intouch loyalty program
based on preferences instead of
points
2003
(get in the zone!) Best Buy introduces the
Reward Zone loyalty
program
2005
(the Subway stops)
Subway discontinues
Subway club stamp
program due to fraud
2007
(enter automobile
sector)
Avis launches Avis First, a new
customer loyalty program for
frequent renters
2008
(time for coffee)
Starbucks launches their
own loyalty program for
customers
RECOGNITION
BASED REWARDS
ARE FIRST
INTRODUCED
How: the concept of short, quick
rewards that influence customer
behavior - coupled with a gold
card makes customer feel special
2011
(no need to
carry weight)
Mooyah burgers and fries
launches Mooyah rewards
powered by RewardMe
How: Customers enter their
mobile number on an Ipad
screen to join the rewards
program and earn points
House of Hiranandani launch
Loyalty program for real
estate customers
How :
???

5. Loyalty Program - WHY ?
GIVING POINTS DOES NOT CREATE
LOYALTY

6. How Loyalty program Pays
➢ Help to acquire data, not just repeat purchase.
○ Helps to learn more about the customers.
○ Know Customer preferences.
○ Find who is more profitable and who is less profitable.
○ What changes they want.
○ Custom made programs, make them more loyal.
➢ Rapid market penetration with coalition programs.
○ Helps to capture quickly significant portion of customers.
○ Expand into well established sectors - Groceries, fuel retailer,
credit card, mobile store, major telecom provider.
○ Raises customer awareness.
➢ Loyal customers directly impact profitability.
○ They buy more and willing to pay more.
○ Helps in a steady flow of cash.
○ Impact on friends and family is more than any ad campaign.
○ More forgiving when you make mistakes.
○ More familiar with the way of business.
➢ Target customer acquisition accurately.
○ Depends on how valuable are rewards for them.
○ Make demographic profiles of 'best customers' depending
upon program data.
○ Acquisition campaigns based on previous data.

7. ➢ Move customers up the spend band.
○ Grading the rewards to encourage low
spending customers to spend more and
increase the sales for top spending customers.➢ Win back profitable customers that are no more active.
○ Data for such customers is already available, can be easily
reached.
➢ Building customer relationship based on relevance.
○ Providing products and services that cater to customer's
unique needs.
○ Various surprises and delights based personal offers -
Discounted shopping days on Birthdays and Anniversary.
➢ Intelligent response to competitive challenges.
○ Handling future threats from competitors.
○ Making strategies on how to not lose our
customers to others.
➢ Reduce promotional and advertising costs.
○ Generate savings from targeted advertising.
○ No need to take pages of newspaper that
nobody will read.
Goals to customer loyalty program
Core Goals Primary Goals Secondary Goals
• Revenue
• Profit
• Market share
• Customer loyalty
• Acquisition of customers
• Retention of customers
• Building a database
• Create engagement opportunities.
• Increase customer relationship
• Increase repeat purchase.
• Increase referrals.
• Better customer support
• Customer satisfaction
• Improve brand
• Improve company image

8. Loyalty program - For WHOM ?
IT IS NOT FOR ANYONE AND
EVERYONE

9. • Entrepreneur, Inheritor and Professional are three customer segments for HNI/UHNI [Source: Kotak wealth management]
• Lifestyle and value for money are 2 most important drivers of spending for Entrepreneur, Inheritor and Professional.
• These attributes helps us in behavioral study of HNI/ UHNI.
• Discretionary expenses is a cost which is not essential in operation of a home or business, example - entertainment, eating out.
• Non discretionary expenses are those which cannot be changed, example - rent, basic food, clothes.
• Investment is 2nd highest factor of expenditure after Non-discretionary expenses.

10. • These different areas of interest and spend let us know
what features we need to have in loyalty program.
• All areas of spend can be included in reward section.
• Environment, education and health factors should be
used as opportunities for philanthropy.
• Customers will spend more only when they see value in
Loyalty program.

11. Loyalty program - Essentials

12. Rewards - help to achieve and entice loyalty program goals
• We need to give the customers some reason to give us their details.
• Need rewards for some one-on-one time and strentghen the relationship.
➢ To encourage customers to perform more actions
○ A reward just for signing up.
○ Create rewards at different interval to keep them excited.
○ Actions which otherwise are hard to get.
➢ To show appreciation to loyal customers
○ Exclusivity increases loyalty towards a brand.
○ A VIP night or a specially designed product.
○ Meeting a chef and design exclusive dinner.
➢ To encourage customers to try new product and buy additional product.
○ On purchase of two products, give an upgrade.
○ Option to customize second on purchase of more than one.
○ Give discount on a group purchase.
➢ To encourage customers bring their friends in.
○ Referral reward system
○ Helps increase customer base
Employee - powerful agent
• Everyone working in the company is responsible for creating
customer loyalty.
• If employees know about it, they will help to build better
database.
• Let everyone know about the loyalty program.
• Everyone should know the mechanism of the program
and how to operate it.
• Make such rewards which any employee can use as
examples and tempt customer.
• Keeping track what rewards are favored by customers
and implement more such rewards.

13. Social Media - encourage customers to
share
Reward website visitors
➢ Use the technique - facebook retargeting and twitter retargeting.
➢ Helps to drive traffic through a range of pages and reward those
who complete the process.
86%
Indian web users visit a
social networking site
33 Million
Twitter users
90 Million
facebook users
18 Million
Linkedin Users
Reward ongoing facebook engagement
➢ Provide points for each Like or comment on
the post.
➢ Likes and comment increase exposure.
➢ The content will also reach their friends.
➢ can be done using Shortstack, Antavo

14. Building blocks of Loyalty Program

15. Data collection
EVERYTHING IS DATA, DATA IS EVERYTHING

16. How ?
Gift/Promo
cards
Online survey
Survey
Research
Analytics tool
Loyalty cards
connect with social
media
Mobile App
Forms

17. What ?
Profile - gender, age
Interests
Investment/ enduse
E-mail addresses
shopping list,
spending habits
User preferences,
Lifestyle
Residential address
Joint purchaser
Company, designation
Purchase pattern
Customer attributes
Trends
Market scenario
Customer preference
???
Favorites
Category of products
Frequency
Location
preferences
Contacts
???
Complete profie
data
Friends, colegues
Interests

18. Analysis
Data
Attitude
Preference
s
Habit
Lifestyl
eDemography
Data Warehouse
Analytics tool
Targeted
• Campaigns
• Promotions
• Events
• Rewards, Discounts
• More personal
relationship

19. Value Proposition
A PROMISE OF VALUE TO BE DELIVERED

20. "Class apart"
Strategy
Making a statement to which target customers can
directly relate and other customers would like to become
a part of it.
Approach
• Value proposition has emotional and practical appeal
and the Loyalty program aims to deliver the
proposition
in the customer experience.
• Value proposition for Loyalty program should be made
from key attributes of HNI/UHNI (in the same way
employees modify their CV based on job description of
a company)
Advantage
• It makes you focus on aspects of your business and
initiatives that make the biggest difference.
• Customer benefit is clear.
• Customers see program as more indulging, different
from others and offers more suitable rewards
Philanthropy
VVIP access
Self
recognition
Value for
money
Value of
time
Luxuries
Achievement Wealth for
family
Surprises
and
delights
Program positioning

21. Loyalty Mechanics
"Gamification"
iTS MORE THAN JUST GIVING POINTS FOR PURCHASE OR
REFERRAL.

22. Gamification Elements :
Points Level Badge Leaderboard Collection
Introduction
• It is a process which can be applied to transform experiences and make them more game-like.
• It can be applied to program (loyalty) as a whole or specific to acquisition, retention or various campaigns.
Competition
Recognition
Cooperation
Instant
Feedback
Cooperation
Recognition
Points,
Rewards
Badges
Leaderboard
Instant
Feedback
Points,
Rewards
Competition Leaderboard
Engagement
circle

23. Points - What Points - How
• Points stay at the intrinsic level.
• Used for calculations and rewarding customers
accordingly.
• Customers perform actions not to gain points but to get
various rewards - points are added anyways.
• Rewards (say points) will be used to increase customer
engagement.
• Creative ways should be found to make rewarding system
interesting.
• Points can be given for every small action which
customers feel lazy to perform.
• Helps to gain valuable information.
• Can be purchased.
• For Signing up.
• For Providing personal information.
• For completing the profile.
• For visiting the site.
• For exploring pages of the site.
• For filling out surveys.
• For sharing on social media.
• For Liking the page.
• For check-ins at various site offices.
• For providing feedback.
• For attending events.
• For timely installment of payment.
• For performing any action on alliance brands.
• And of course for purchase of property and referral of
friends.

24. Level - What Level - How
• It helps to show progress towards a reward.
• Levels should be structures such that goals seem within
the reach.
• Gives a feeling of achievement.
• Rewards are based on what level the customer is
(expensive rewards - top level)
• Each customer jumps a level on achieving a milestone.
• A milestone should encourage customer participate in all
aspects of loyalty program.
• Levels should pose a challenge.
• Not just rewards but sense of achievement and status
should motivate customers to reach new levels.
• By giving more rewards to higher level customers we
show that their value to our business is more than just
one time purchaser.
• Levels are made on the basis of customer engagement
and information provided and not just money spent.
Entry level - For signing up the program.
Level 1 - Milestone 1
Level 2 - Milestone 2
• Let every milestone be a mix of 3 factors.
• Each factor contributing towards earning respective
currency (platinum, gold and silver).
Platinum bars - Money spent
Gold bars - Referral made
Silver - Social and all other actions.
• Conversion possible from one currency to another, to
handle special cases.

25. Badges - What Badges - How
• Used to demonstrate customer status and progress.
• Recognition
• Awarded to people who stand out.
• Generally helps to push customers to purchase or to perform actions
which they have not performed.
• Badges will be awarded as 1st, 2nd and 3rd
place.
• Need not be a tangible award.
• If Tangible - can become collectibles.
• Badges will be a digital emblem awarded on
completion of specific task.
• Pictures can be posted on loyalty web page.
• Post pics in annual magazines (take
permission)
• Felicitate in functions.
For most Purchases
For most referrals
For most money spent
For most diverse (properties in many
cities)
For top-most flat
For largest Bungalow
For check-in at all sites
For early birds
• For collecting 3 different badges
• Can have alliance with some brands regarding
the same (in case of tangible badges).

26. Investment ratio
IT IS MORE PROFIT THAN LOSS

27. Incremental Revenues Incremental costs
• Sign-up fee
• Partner payments
• Increased Purchase
• Increase Repeat purchase
• Reduction in customer churn rate
• Willingness to pay premium
• Increased referral.
• Increased advocacy
• Cost of rewards (perks, discount, rebate)
• Cost of events.
• Advertising costs
• Investment in IT and maintenance
• Enterprise training and support.
• Research and development
Buying
more
Referring
more
Promo
Reward
cost
IT
cost
Support
staff

28. Clubs within Program

29. Kids club Youth Club
Entertainment club
Casino
Philanthropy Club
Adventure club
Sports
club
Royal club
Shopping club
Strategy
• Develop clubs within loyalty program to
redeem all the points earned.
Approach
• Clubs will be based on basic interest.
• Membership to clubs will require a fee.
• Different levels to have default open clubs.
• Other customers may pay and join any club.4
• Or they can make personalized clubs (dish tv)
• Clubs contain ample rewards, packages,
coupons which customer can redeem.
Advantage
• Customers find relevant content of their
interest.
• A new business entity - generate profit

30. Coalition program
BETTER THAN STANDALONE PROGRAM

31. Benefits of Cross Branding
• Right offer, to the right customer, at the right time and place.
• More rewards = more value of program; win - win for company and
customers.
• Narrow down options and influence customer choice.
• Collect valuable data.
• Help understand customer's behavior, lifestyle and aspiration.
• More customer referrals.
• Accelerate time to earn reward.
What ?
• It's a multi-company shopper rewards program.
• Participating customers are rewarded a common currency.
• Points can be redeems for variety of rewards at different coalition partners.
Strategy
• Aspirational • Rewards that motivate to change
behavior.
• Analytics • Need to maintain a database and
monitor KPI.
• Find opportunities.
• Reachable • Make believe that rewards can be
earned fast.
• Rewards worth the cost.
• Understanding • Benefits must be marketed to
both partners and customers.
• Obtainable • Easy to collect & easy to redeem. • Affordable • Cost of reward < investment

32. Two choices for coalition
Rewards
1. Building a complete marketplace
where products from every possible
industry are available
2. Variety based on the behavioral
data and spending pattern of target
customers - HNI/UHNI

33. Plenti Rewards - Program by American express
How to earn points
• ExxonMobil – whenever you buy a tank of fuel
• AT&T – by paying for qualifying wireless services and eligible charges on bills
• Nationwide – by making eligible property and auto insurance payments
• Rite Aid – with purchases of beauty, health & wellness, and everyday products
• Macys – most purchases with the store, excluding some luxury brands from select NYC and San Francisco stores
• Hulu, Direct Energy – customers can earn Plenti points here by simply paying their bills
About
• A cross-brand loyalty rewards program
• Points are earned when customers shop with any alliance partners.
• Each participating members decide how to give points.
• Points collected can be used with any of the participating members.

34. Leaderboard
➔ Customers are ranked on
the basis of points.
➔ Cultivate competition.
➔ Recognition
➔ Achievement
➔ Display profile pic with
badges
➔ Gamification - Share the
success
Chat
➔ Opportunity for better
CRM.
➔ 24/7 support
News center
➔ Alerts
➔ Updates
➔ Audio
➔ Video
➔ Latest pictures
➔ Part of social media.
Discussion groups
➔ Project based groups after
possession.
➔ Help society members to
interact
Push Notifications
➔ Displayed in notification area and
lock screen.
➔ Not to spam, Just one or two
notification per day.
➔ Keep customers updated/aware.
➔ Help CRM with notifications, alerts,
deadlines.
➔ Great way of marketing.
➔ Send campaign details
➔ Promotions
Admin login
➔ Add/delete users
➔ Send personal invitations
for Events and
promotions.
➔ Update campaigns.
➔ Surprise rewards/delights.
➔ Handle database
connectivity.
Customer login
➔ Sign up with facebook
connect, Linkedin
Connect, email,
Twitter.
More
➔ News & weather
➔ Calendar
➔ Appointment
➔ on site live feed
➔ GPS for project
location
➔ One touch calling
Mobile app -Features

35. Summary
Loyalty program offers opportunity to get to know customer.
Data collected is the cost of knowledge that needs to be recovered.
Through data, customers can be driven to spend more.
Customers enjoy being part of the program if they get privileges.
Key ingredients of a loyalty program - Data, Rewards, customer engagement,
surprise and delight and Marketing.
Need good IT support.

36. THANK YOU

37. Friend points
What
★ These are the points which a
customer can transfer to his referred
friend so that his friend gets discount
on his purchase.
Strategy
★ In addition to Base point and
Accrual points we give away
Friend points.
★ Instead of directly giving away
discounts, we spend on boosting
the referrals.
★ Benefit of customer as well as the
referral.
How
★ Say, initially everyone gets 100
referral points (Let 1 point = Rs
1K)
★ Validity of points is 1 year from
the launch of program.
★ Friend points can also be given to
customer as prize or at special
events like Birthdays or
Anniversary.
★ Need to have social media
connect (FB, LinkedIn, twitter) to
let customers share and let their
friends know.