- The document proposes strategies to increase revenue from an existing loyalty program for TGI Fridays restaurants through segmentation, pricing changes, and targeted promotions. - Customers in the loyalty program were segmented into 5 groups based on purchase patterns, price sensitivity, and other factors. Strategies like targeted discounts, product bundling, and price increases were recommended for each segment. - Modeling suggests these strategies could increase total loyalty program revenue from $1.9 million to $2.01 million, a 5% increase, through higher returns and purchases from selective customer segments. A test plan was proposed to evaluate impacts.

1. -By
Chinar Singh, Dinaz Malik,
Lakshmi Sahana Voleti & Pranav Navandar
LOYALTYPATRONTRENDS
ANDREVENUEMAXIMIZATION
A Group 6 Presentation

2. THE MENU
AGENDA
Executive Summary
Data Overview
Business Objective and Marketing Strategy
Segmentation
Test Plan
Financial Implications
Group 6 Presentation

3. THE PLOT
EXECUTIVE SUMMARY
TGI Fridays run a successful loyalty program – Fridays Rewards
Program.
Using Elasticity modelling, Market Basket Analysis, Segmentation
and Survival Modelling , we propose a strategy that will analyze
the loyalty patron expectations. We propose a model that
suggests a 5% increase in price will yield an increase in total
revenue by $51,554
Group 6 Presentation
$1.9m
$2.01m
Current Loyalty Revenue Predicted Loyalty Revenue

4. THE INGREDIENTS AND TECHNIQUES
DATA OVERVIEW
Data Categories Analytical Techniques Used
Group 6 Presentation
11991 Loyal Patrons sorted by Customer Number
Email- Marcom Variables
Product Categories- Food , alcohol and beverages purchased
Promotion Discount Variables
Frequency and Location Variables
Quantity and Sales Variables
Market
basket
Analysis
Price
Elasticity
Modelling
Cluster
Analysis
Survival
Analysis

5. THE RECIPE
BUSINESS OBJECTIVE AND MARKETING STRATEGY
Analyze Loyalty Patron Activity
Group 6 Presentation
OBJECTIVE Maximize Revenue
STRATEGY
Loyalty Patron
Segmentation
Understanding
Trends, Price
Sensitivity and
Revenue
Contribution
Least Revenue
Contributing
Segments
Most Revenue
Contributing
Segments
• Response to price
sensitivity
• Discounts
• Product Bundling
• Remove ineffective
Products
• Potential areas for
improvement
• Apply test and learn
strategies
OPTIMIZE
REDUCE
INEFFECTIVENESS

6. THE CUSINE
SEGMENTATION OVERVIEW
Group 6 Presentation
Pro’s & PromosDEWKs & Tykes Budget Brunchers Rambling Redeemer Thriller Filler
PRICE SENSITIVITY PROBLEM AREAS
1 432 5
Least
Low
Moderate
High
Very
High
3
4
5
1
2
• Employee and Company
Discounts
• Emails variables
• Café and patio
• Party Discounts, Smart
and Demo discounts
• Buffet
32%
16%
18.32%
23%
21.27%
24%
21.42%
19%
7.07%
18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
% Customers % Revenue
Market Share by Revenue
Cluster 1 Cluster 2 Cluster 3 Cluster 4 Cluster 5

7. DEWKs & Tykes
SEGMENT 1
Group 6 Presentation
CHARACTERISTICS
RECOMMENDATIONS
BUNDLING RECOMMENDATIONS
Dual Employed Professionals who come with their kids, mostly during the lunch hours.
Members least likely to return to the restaurant after one visit.
They like to dine in the restaurant and prefer meal options with more appetizers and healthy light entrees.
They consume less alcohol and prefer soup salad options.
They are price sensitive and look out more for value discounts amongst the others.
Breakfast has high positive impact on sales for this segment - price should be increased by 5%.
The Give Me More Strips discount frequency should also be increased by 10%.
Kid meals and soup salad price should be increased by 5%.
Ticket discounts need to be reduced , as they negatively impact the sales for this segment.
Email communications are ineffective for this cluster, rather negatively impact it
SEGMENT FINANCIAL IMPACT: Increase revenue by
Appetizers
+
Other Food
Varieties
Beverages
+
Light entree2.49%~$7907

8. Budget Brunchers
SEGMENT 2
Group 6 Presentation
CHARACTERISTICS
RECOMMENDATIONS BUNDLING RECOMMENDATIONS
Mostly retired couples or middle aged couples who are extremely price sensitive.
Possibly young graduates with the growing trend of millennials combining the lunch and breakfast option.
They look out beverages, drinks and alcohol options with the food.
Extremely price sensitive and high revenue contribution.
Increase the Give Me More Strips discount by 5%.
Increase other discount promotions like Senior Citizen discount by 5% via newspapers advertisements etc.
Provide alcohol /beverage combo options to the brunch menu.
The frequency of return is extremely high for this category and hence price increase should be extremely
incremental for this category.
Reduce BOGO discounts to this segment as it has a negative impact to total sales.
SEGMENT FINANCIAL IMPACT: Increase revenue by
Brunch
+
Other Food
Varieties
Beverages
+
Brunch
Priority Segment
Appetizer
+
Drinks
4.9% ~ $21,546.66

9. Pro’s & Promos
SEGMENT 3
Group 6 Presentation
CHARACTERISTICS
RECOMMENDATIONS BUNDLING RECOMMENDATIONS
The YUPPIE , Savvy, Professionals and loyal TGIF patrons!
Come for the steaks, ribs , alcohol and all TGIF specialties.
Use majority of the discounts and promotions.
Prefer coming early evenings to late nights.
Extremely social yet infrequent.
This segment is least price sensitive and contribute the highest revenue.
Increase targeted email promotions by 5%.
Increase happy hour promotions and maintain the Give Me More Strips promotion moderately.
Promote alcohol and beverage combos.
Reduce discounts for this segment as they are least sensitive to price.
SEGMENT FINANCIAL IMPACT: Increase revenue by
Beverage
+
Heavy Entree
Alcohol
+
Appetizers
Priority Segment
Appetizer
+
Other food
1.6%~$7469

10. Rambling Redeemers
SEGMENT 4
Group 6 Presentation
CHARACTERISTICS
RECOMMENDATIONS BUNDLING RECOMMENDATIONS
The old TGIF loyalty patrons, who come to redeem the accumulated loyalty points.
They usually visit in the odd hours and are not very price sensitive.
They may use some gift promotions that they earn from the loyalty points .
Increase loyalty promotions and Give Me More Strips promotions by 10% .
Reduce food discounts and email promotions as they negatively impact revenue contributed by this segment.
Provide more points ratio incentives.
SEGMENT FINANCIAL IMPACT: Increase revenue by
Alcohol
+
Appetizers
Appetizer
+
Other food
1.8%~ $6850.17

11. Thriller Filler
SEGMENT 5
Group 6 Presentation
CHARACTERISTICS
RECOMMENDATIONS BUNDLING RECOMMENDATIONS
Variety seekers who have the highest revenue per customer.
Come for the desserts , alcohol, appetizers, drinks and the burgers.
Visit very often but don’t responds to many emails and discounts.
Limited members in this segment., most returning customers.
Increase only other gift promotions and appetizers by 10%
Increase dessert and ticket discounts by 10%
Reduce brunch promotions.
Provide burger combos and happy hour promotions through other promotion channels.
SEGMENT FINANCIAL IMPACT: Increase revenue by Steak
+
Beverages
Appetizer
+
Other food
Burger
+
Combos
2.23% ~$7781.4

12. TIME TO TASTE!
TEST PLAN
Group 6 Presentation
TEST PERIOD
• Monitor monthly financial
impact based on
recommendations.
TEST MARKET
• 2 Samples are taken from each cluster.
• A control group and experiment group
• Recommendations are tested on the
experiment group and the control group is
left the same.
• Financial changes are contrasted.
TEST IMPACT
• Test the incremental price
increase/decrease on each
sample
• Monitor churn rate
• Monitor change due to
bundling strategies.

13. WORTH IT?
FINANCIAL IMPLICATIONS
Group 6 Presentation
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
DEWKs & Tykes Budget Brunchers Pro's & Promos Rambling Redeemers Thriller Filler
Revenue increase by Segment
Current Revenue Predicted Revenue

14. THANK YOU!