• Why we need loyalty program ?
• Target customers
• Loyalty program essentials
• Building blocks
History of Loyalty Program
Betty crocker points are
used for a popular
accumulate points by
buying Betty Crocker
products which they
could redeem for
introduces the first
Subway rolls out the
Sub club, stamp based
AMC introduces Moviewatcher,
the very first customer rewards
program in the theatre industry
How: It offers Nordstrom
customers cards under
Nordstrom fashion rewards -
Its customers loyalty
(the first one !)
UK based supermarket, TESCO
launches the clubcard program,
believed to be first card based
at your hotel)
Kimpton hotel launches the
Kimpton Intouch loyalty program
based on preferences instead of
(get in the zone!) Best Buy introduces the
Reward Zone loyalty
(the Subway stops)
Subway club stamp
program due to fraud
Avis launches Avis First, a new
customer loyalty program for
(time for coffee)
Starbucks launches their
own loyalty program for
How: the concept of short, quick
rewards that influence customer
behavior - coupled with a gold
card makes customer feel special
(no need to
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
Loyalty Program - WHY ?
GIVING POINTS DOES NOT CREATE
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.
➢ 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
➢ Building customer relationship based on relevance.
○ Providing products and services that cater to customer's
○ 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
• 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
Loyalty program - For WHOM ?
IT IS NOT FOR ANYONE AND
• 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.
• 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
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
• If employees know about it, they will help to build better
• 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.
Social Media - encourage customers to
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.
Indian web users visit a
social networking site
Reward ongoing facebook engagement
➢ Provide points for each Like or comment on
➢ Likes and comment increase exposure.
➢ The content will also reach their friends.
➢ can be done using Shortstack, Antavo
EVERYTHING IS DATA, DATA IS EVERYTHING
connect with social
Profile - gender, age
Category of products
• Rewards, Discounts
• More personal
A PROMISE OF VALUE TO BE DELIVERED
Making a statement to which target customers can
directly relate and other customers would like to become
a part of it.
• Value proposition has emotional and practical appeal
and the Loyalty program aims to deliver the
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
• 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
Achievement Wealth for
iTS MORE THAN JUST GIVING POINTS FOR PURCHASE OR
Gamification Elements :
Points Level Badge Leaderboard Collection
• 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.
Points - What Points - How
• Points stay at the intrinsic level.
• Used for calculations and rewarding customers
• 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
• Creative ways should be found to make rewarding system
• 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
Level - What Level - How
• It helps to show progress towards a reward.
• Levels should be structures such that goals seem within
• 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.
Badges - What Badges - How
• Used to demonstrate customer status and progress.
• 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
• 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
• Felicitate in functions.
For most Purchases
For most referrals
For most money spent
For most diverse (properties in many
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).
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
Kids club Youth Club
• Develop clubs within loyalty program to
redeem all the points earned.
• 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.
• Customers find relevant content of their
• A new business entity - generate profit
BETTER THAN STANDALONE PROGRAM
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
• 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.
• 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.
• Aspirational • Rewards that motivate to change
• Analytics • Need to maintain a database and
• Find opportunities.
• Reachable • Make believe that rewards can be
• 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
Two choices for coalition
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
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
• 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.
➔ Customers are ranked on
the basis of points.
➔ Cultivate competition.
➔ Display profile pic with
➔ Gamification - Share the
➔ Opportunity for better
➔ 24/7 support
➔ Latest pictures
➔ Part of social media.
➔ Project based groups after
➔ Help society members to
➔ Displayed in notification area and
➔ Not to spam, Just one or two
notification per day.
➔ Keep customers updated/aware.
➔ Help CRM with notifications, alerts,
➔ Great way of marketing.
➔ Send campaign details
➔ Add/delete users
➔ Send personal invitations
for Events and
➔ Update campaigns.
➔ Surprise rewards/delights.
➔ Handle database
➔ Sign up with facebook
➔ News & weather
➔ on site live feed
➔ GPS for project
➔ One touch calling
Mobile app -Features
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.
★ These are the points which a
customer can transfer to his referred
friend so that his friend gets discount
on his purchase.
★ In addition to Base point and
Accrual points we give away
★ Instead of directly giving away
discounts, we spend on boosting
★ Benefit of customer as well as the
★ Say, initially everyone gets 100
referral points (Let 1 point = Rs
★ 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
★ Need to have social media
connect (FB, LinkedIn, twitter) to
let customers share and let their