This document provides an introduction to loyalty programs, including: - Loyalty programs aim to build long-term relationships and trust between companies and customers through targeted communication and relevant benefits. - There are four main types of programs: open, closed, emotional ties, and high/low engagement. Programs provide both hard benefits like discounts and soft benefits like exclusive events. - The purpose of a loyalty program should be considered part of a company's overall strategy and business goals. It should aim to increase customer retention and lifetime value as well as company profitability.

1. Loyalty programmes –
a brief introduction
Mads Fuhr Frederiksen – Digital Advisor
December 8th,, 2011

2. Loyalty programmes
“It’s always easier to start a loyalty programme, than to end one”

3. What is it?
A
loyalty
programme
is
unique
in
rela2on
to
the
individual
industry
it
resides
in
–
it
should
be
consider
a
part
of
the
company's
overall
business
strategy.
We
work
with
3
mayor
segments:
1. Customer
2. Employee
3. Provider
Consis4ng
of:
1. Hard
benefits
• Discounts,
special
deals,
bonus
deals,
milage
etc.
2. SoG
benefits
• VIP
membership
status,
events
etc.
“A
loyalty
programme
should
be
consider
and
implemented
as
a
long-­‐term
strategy
for
the
company.
The
trust
will
not
come
overnight
as
with
any
other
rela<onship
IRL.”

4. 4 types of programmes
1. Open
programmes
(wide
public)
2. Closed
programmes
(focused
on
customer
reten2on)
3. Emo2onal
2es
to
the
company/products
4. High
or
low-­‐engagement
category

5. 4 types of programmes
• Hard
benefits
• Discounts
• Special
offers
• Bonus
programs
Long-­‐term
• So;
benefits
strategy
• VIP
membership
status
• Events
• Exclusiveness
• Unique
advantages

6. Communication approach
• Targeted
communica2on
• Highly
relevant
communica2on
• Exclusive
communica2on/dialogue
• Ac2on-­‐driven
CTA
dialogue
• Sense-­‐of-­‐urgency
methods

7. One question to ask: What’s the purpose?
• What
is
the
purpose?
• What
do
we
want
to
achieve?
• What
can
the
customers
expect?
• What
are
the
KPI’s?
”
A
loyalty
programme
is
a
strategic
add-­‐on
to
the
overall
marke<ng
plan
and
if
one
does
not
es<mate
increased
profitability
based
on
the
such
a
programme,
don’t
bother
ini<ate
one.”

8. KPI/Goals
• Overall
goal:
Profit
The
clubs
should
not
be
seen
as
a
way
to
make
the
customers
more
loyal
as
much
as
a
way
to
• Build
loyalty
make
the
company
more
profitable.
• Brand
awareness
• Advocacy
effect
• Repurchase/Addi2onal
sales
• Gain
knowledge
from
customer
input/feedback
• Customer
reten2on
and
durability
• Re-­‐ac2va2on
of
passive
customers/leads
• Life2me
value
(contribu2on
margin/total
revenue
per
customer)
• Build
and
develop
the
rela2onship
between
company
and
customer

9. Company value?
• Increased
profit
over
2me
• Great
influence
on
the
company
cost-­‐effec2veness
• Increased
brand
awareness/equity
• Increased
compe22ve
posi2on
• Future
market
posi2ons
• Market
propaga2on/spread
• Systema2c
collec2on
of
customer
data
• Mapping
of
customer
behaviour
• Enriched
data
segmenta2on
(micro
variables)
”only
through
targeted
and
relevant
communica<on,
can
you
create
genuine
and
long-­‐term
loyalty”

10. Getting started
• Brand
it,
Name
it!
• Iden2fy
cri2cal
customer-­‐touch
points
• Create
overview
of
customer
journey
• Define
your
segments
• Build
your
subscrip2on
database
over
2me
• What’s
in
it
for
me?
• Develop
improved
customer
experiences
• Make
it
easy
to
love
• Make
it
hard
to
leave
• Define
financial
poten2al

11. Industries with loyalty programmes
• Tele
companies
(3Bonus,
Telia
EliteMoblist)
• Travel
agencies
(SAS
Eurobonus)
• Detail
(COOP+)
• Insurance
(Tryg
Forsikrings
”Helkunder”)
• Mortgage
credit
companies
(Nordea
Fordel+)
• Banks
(Capital
One
Rewards
Program)
• Apparel
(Bestseller)
• Electronics
(HIFI-­‐klubbens
Kundeklub)
• Car
companies
(BMW,
Audi)
• TV-­‐sta2ons
(Klub
Lorry)
• Unions
(Forbrugerforeningen)
• Toys
retailers
(LEGO
Club,
Fæger
BR)
• Newspapers/Publishing
(Poli2ken
Plus,
Børsens
Execu2ve
Club)
• Rental
companies
(Hertz
no.1
Gold
Club,
AVIS
Preferred)
• Music
services
(iTunes,
Spo2fy,
YouSee
Play,
PLAY)
• Gas
sta2ons
(Statoil
Premium
Club)
• Hotel
chains
(Marriot,
Ritz-­‐Carlton)
• Entertainment
industry
(Tivoli
Klubben)
• Bookstores
(Gyldendals
Bogklub,
Bog&Idé
Flip)
• Personal
care
(Club
Matas)

12. Thanks!
playgrounds.dk
twitter.com/madsfuhr
linkedin.com/in/madsfuhr
scribd.com/mads_frederiksen