Seeing Beyond The Loyalty Illusion In Germany: It’s Time You Invest More Wisely

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Loyalty programs in Germany typically cost more, and deliver less, than many realize. To reclaim the loyalty value that is slipping through their fingers, savvy business leaders are starting to rethink what loyalty means for their customers—and for their business. Along the way, they are creating new strategies that unlock loyalty’s untapped potential.

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Seeing Beyond The Loyalty Illusion In Germany: It’s Time You Invest More Wisely

1. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. Strategy | Consulting | Digital | Technology | Operations SEEING BEYOND THE LOYALTY ILLUSION: IT’S TIME YOU INVEST MORE WISELY Germany

2. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. PAINS GROWING INVESTMENTS IN LOYALTY ARE BOOMING. Accenture found that members of loyalty programs generate between 12 and 18 percent incremental revenue growth per year than non- members.4 However, there are several indications that loyalty investments in their current form are not generating all the value they could. Our recent research confirms that for growing numbers of consumers, many loyalty investments are simply missing the mark.

3. Businesses spend billions each year for non-cash loyalty incentives. Even more — and potentially greater — costs are hidden in the “loyalty” line item within programs that simmer in the background, consuming investments at a steady pace, year after year. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. THE COSTOF LOYALTY LOYALTY PROGRAMS TYPICALLY COST MORE, AND DELIVER LESS, THAN MANY REALIZE.

4. Accenture has found that members of loyalty programs generate between 12—18% incremental revenue growth per year than non-members. BUT… Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. DOES LOYALTY WORK?A LOOK AT THE NUMBERS BEGS THE QUESTION: GIVEN THE HIGH COST, IS THE BUSINESS CASE FOR LOYALTY INVESTMENTS SOUND? THE ANSWER: IT DEPENDS.

5. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. DOES LOYALTY WORK?A LOOK AT THE NUMBERS BEGS THE QUESTION: GIVEN THE HIGH COST, IS THE BUSINESS CASE FOR LOYALTY INVESTMENTS SOUND? THE ANSWER: IT DEPENDS. IN GERMANY: 72% admit they now retract their loyalty more quickly than they did three years ago. 22% demonstrate a negative or non- existent reaction to companies’ loyalty efforts. And that number is rising, particularly among younger consumers who will be critical to driving revenue growth in the years ahead.

6. Justify every investment. Identify and shut down programs that dilute margin. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. LOYALTY REINVENTEDAS COMPANIES STRUGGLE TO FIND CAPITAL TO DRIVE GROWTH, THEY'RE TAKING A HARD LOOK AT NEW STRATEGIES TO UNLOCK LOYALTY'S TRUE POTENTIAL. SO HOW CAN COMPANIES MAXIMIZE LOYALTY'S VALUE? 1

7. Boost acquisition through retention. Leverage connections of existing customers to acquire new ones. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. LOYALTY REINVENTEDAS COMPANIES STRUGGLE TO FIND CAPITAL TO DRIVE GROWTH, THEY'RE TAKING A HARD LOOK AT NEW STRATEGIES TO UNLOCK LOYALTY'S TRUE POTENTIAL. SO HOW CAN COMPANIES MAXIMIZE LOYALTY'S VALUE? 2

8. Learn Millennials’ loyalty language. Millennials are less swayed by loyalty programs. Understand what they like, and what types of promotions they will embrace. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. LOYALTY REINVENTEDAS COMPANIES STRUGGLE TO FIND CAPITAL TO DRIVE GROWTH, THEY'RE TAKING A HARD LOOK AT NEW STRATEGIES TO UNLOCK LOYALTY'S TRUE POTENTIAL. SO HOW CAN COMPANIES MAXIMIZE LOYALTY'S VALUE? 3

9. Encourage customer advocacy. Customers that recommend brands to others are key. Invest in strengthening this loyalty behavior. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. LOYALTY REINVENTEDAS COMPANIES STRUGGLE TO FIND CAPITAL TO DRIVE GROWTH, THEY'RE TAKING A HARD LOOK AT NEW STRATEGIES TO UNLOCK LOYALTY'S TRUE POTENTIAL. SO HOW CAN COMPANIES MAXIMIZE LOYALTY'S VALUE? 4

10. View loyalty as a team sport. Capture, analyze and act on customer feedback across silos. Work with partners to share expenses associated with loyalty. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. LOYALTY REINVENTEDAS COMPANIES STRUGGLE TO FIND CAPITAL TO DRIVE GROWTH, THEY'RE TAKING A HARD LOOK AT NEW STRATEGIES TO UNLOCK LOYALTY'S TRUE POTENTIAL. SO HOW CAN COMPANIES MAXIMIZE LOYALTY'S VALUE? 5

11. LEARN MOREabout how to re-evaluate your loyalty investments with our full report: Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. Seeing beyond the loyalty illusion: It’s time you invest more wisely @AccentureStrat Follow us on LinkedIn

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