This document discusses the impact of loyalty programs on customer retention and satisfaction. It provides data showing that customer satisfaction reduces churn rates and increases cross-selling. When loyalty programs are working properly, members report higher satisfaction than non-members. During a "churn crisis", loyalty program members had significantly lower churn rates than non-members, demonstrating the impact of the program. The document also includes an author biography providing experience with designing and implementing various loyalty programs.

1. Why having a loyalty program in
the first place?
Benjamin Filaferro – filaferro@yahoo.com – May 2013

2. Why Amazon has no Loyalty Program?
2Benjamin Filaferro – filaferro@yahoo.com – May 2013

3. Customer Satisfaction will always remain the top
factor influencing Customer Loyalty
3
Disguised Example
6-Month Retail Churn Rate By Customer
Satisfaction
12.9 %
9.4 %
5.3 %
Poor Customer
Satisfaction
Mediocre
Customer
Satisfaction
Good Customer
Satisfaction
Score from 1 to 4 Score from 5 to 7 Score from 8 to 10
27 %
decrease
44 %
decrease
6-Month Cross-Sell Rate By Customer
Satisfaction
4.3 %
5.9 %
Poor Customer
Satisfaction
Good Customer
Satisfaction
Score from 1 to 5 Score from 6 to 10
37 %
increase
Benjamin Filaferro – filaferro@yahoo.com – May 2013

4. What do surveys show when a Loyalty Program is
properly working?
4
 1 out of 2 respondents was very to extremely satisfied with the program
 Satisfaction and recommendation of the members is higher than average
overall satisfaction with the overall operator brand
 The higher the customer value and the tenure of the customer, the higher
the satisfaction about the program
 If the program would be stopped, 1 out of 5 customers would churn to
another operator
 When comparing with the outcome of the survey organized in 2011, it can
be noticed that the overall satisfaction level has increased with 5 - 15%
Disguised Example
Benjamin Filaferro – filaferro@yahoo.com – May 2013

5. During a “Churn Crisis” customers leave without
contacting their operator
5
Only 5.5% of the customers called
to receive a counter offer
Disguised Example
Benjamin Filaferro – filaferro@yahoo.com – May 2013

6. The impact of a Loyalty Program is easier to
measure during a crisis
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18.50% 17.20%
21.30%
56.30%
3.80% 5.10% 7.00%
11.50%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
M1 M2 M3 M4
Evolution of Churn During a Crisis
Non Members Program Members
Disguised Example
During several years, this European Telecom
Operator was discussing internally the reasons
behind the lower churn rate (“A”) of Program
Members: what is because the program was
efficiently creating stickiness or because only the
customers that were already attached to brand
were actively enrolling.
Then a major change in the regulation has
allowed the customers to break more easily their
contracts what resulted in an explosion of the
Churn Rate. And even though the gap “A” could
still be discussed the dramatic gap “B” had be
explained by the performance of the loyalty
program.
A
B
Benjamin Filaferro – filaferro@yahoo.com – May 2013

7. Benjamin Filaferro – Independant Customer Strategy Advisor
I have been a Strategy Consultant for
the last 10 years at first for Banks and
then for Telecom Operators, and I have
specialized myself in Customer Strategy
over the last 6 years.
I have especially assisted Fixed and
Mobile Operator CMOs on the design
and the implementation of:
• Segment Strategies
(ATL, BTL, Touchpoint
Experience, etc.)
• New products
• Retention Strategies (Loyalty
Programs, Winback, etc.)
In the specific field of Loyalty
Programs, my experience covers:
• The design, the
implementation, and the launch
of 2 Point Programs, 2 Affinity
Programs, 1 Enterprise Affinity
Program
• The supervision of an
outsourced team managing
from end-to-end
(Marketing, Communication, An
alytics, Logistics, & Partnerships)
2 Point Programs and 1 Prepaid
Stimulation Game 7Benjamin Filaferro – filaferro@yahoo.com – May 2013

8. Benjamin Filaferro – filaferro@yahoo.com – May 2013
Thank you