Watt International Loyalty Report - Our 15 best picks for innovative and effective marketing in loyalty programs.

1. Building Brands. Building Business.
Loyalty Program Marketing

2. The significance of shopper loyalty programs to the retailer
74% of consumers somewhat or strongly agree that, “retailers need new and better
ways of rewarding loyal customers”
Ideally, loyalty programs need to affect, impact and influence the shopper’s
experience in positive, meaningful ways.
Loyalty programs at many retailers are focusing more on rewarding the shopper for
coming into the store on a regular basis (Starbucks, Target), rather than trying to
incentivize the customer to return to the store to buy more via a coupon.
Using a blend of traditional tactics and new media, loyalty programs will continue to
become further customized to suit the individual shoppers’ needs.

3. Loyalty program effectiveness
What shoppers want
• 70% of program members want to see more discounts and savings from loyalty programs
• 58% want better personal benefits and services
More than 64% of consumers want to receive information and notifications via email.
However, they are tired of irrelevant and excessive communications.
Among a list of negatives associated with loyalty and rewards program membership, these
are the top three:
• Too much spam and junk email: 44%
• Too many conditions and restrictions: 38%
• Rewards that lack real value: 37%
Most customers (60%) say they learn about programs through retail or point-of-sale
engagements.

4. Loyalty program marketing
Most marketers do not fully explore and leverage their customer data sets
• Only 13% of marketers say that they have been effective in leveraging loyalty and brand
preference among club members
• Basic demographics: 73%
• Location of members: 68%
• Brand loyalty and attachment: 27%
• Satisfaction levels 33%
• Product preferences: 38%

5. Loyalty program marketing
These are our 15 picks for innovative and effective marketing in loyalty programs.

6. 1.
Brand: Target
Place: US
Offering: replacing the
previous awards program is the
new discount program.
Shoppers using their card for
online or in-store purchases
receive 5% off. Other incentives
include receiving 10% once 10
prescriptions have been filled
using the card at the Target
Pharmacy.

7. 2.
Brand: Sobeys Club Card
Place: Canada
Offering: The Sobeys club card
works in affiliation with Aeroplan,
with members collecting 1 point per
dollar spent at Sobeys stores.
Club Sobeys points can be
converted at any point to Aeroplan
Miles at a rate of 2 Sobeys point to 1
Aeroplan Mile.

8. 3.
Brand: Loblaws
Place: Canada
Offering: Use of the PC Financial
debit card will earn 5 points to the
dollar, 10 points for PC MasterCard.
Every time a customer checks out at a
Loblaw store, a cashier circles the
area on the receipt that highlights the
amount of PC Points you could have
earned (in this case 250), and invites
you to join. PC Financial acts almost
as a full service bank, offering
mortgages and various types of
insurance.

9. 4.
Brand: Cineplex/Scotiabank Scene Card
Place: Canada
Offering: A Scene card from Cineplex will
earn holders 100 points with every movie
they attend. In conjunction with Scotiabank,
there is a Scene debit card and Visa card.
The debit card earns users 1 point for every
$5 spent at any merchant. Opening an
account earns 2,000 points, or 2 free movies.
The Scene Visa card earns 1 point for every
dollar spent. Points can also be used toward
purchases of videos from the Cineplex store,
and card gives members 10% off of
concessions.

10. 5.
Brand: Payback
Place: Europe
Offering: A retail loyalty
program for several retailers
that carefully uses personal
information and purchase
history to enhance customer
experience. Trending data is
also utilized to develop new
products.

11. 6.
Brand: Wal-Mart Credit Card
Place: US
Offering: Starting a WM Visa account
will earn you $20 back initially. Shoppers
earn up to 1% cash back on all
purchases. Using the card at participating
Wal-Mart gas stations will save shoppers
3¢ to the gallon.

12. 7.
Brand: Kmart/Sears
Place: US
Offering:
• Earn Rewards on qualifying purchases at
Sears, Kmart, Lands' End, sears.com,
kmart.com and mygofer.com
• Spend Rewards at participating stores or
save them up for something special
• Earn bonus Rewards during exclusive
promotions throughout the year
• No-receipt-required returns on purchases at
Kmart and Sears stores
• Win great prizes with Kmart K'Ching
Surprises at Kmart Stores

13. 8.
Brand: Kmart/Sears Christmas Club
Place: US
Offering: Instead of functioning like a
credit card the Christmas card allows
users to add value beforehand.
Providing they did this before mid
November 2009, members were
entitled to a reward of 3% extra to
spend in Sears, Kmart and associated
stores.

14. 9.
Brand: Best Buy
Place: US
Offering: Best Buy offers shoppers
the ability to browse and purchase
items via the website on their
phone, browse and save or receive
text alerts for time-sensitive deals.
In conjunction with Loopt, the
location-based incentives app, Best
Buy is offering smartphone users
loyalty perks and coupons as they
enter the vicinity of a Best Buy
location.

15. 10.
Brand: Tesco Club Card
Place: UK
Offering: Receive a £1 voucher for
every 100 points collected.
Tesco is preparing to invest further in
its loyalty program, using shopping
behaviour data collected through the
program to create more personalised
offers to shoppers.
Tesco’s club card is considered a
major differentiator from the other big
UK grocery chains.

16. 11.
Brand: 4Food
Place: New York City
Offering: Customers have the
option to create and advertise, via
social networking sites, their own
version of a burger.
If that customized burger is
selected by any other customers,
the originator will receive 25 cents
off of any subsequent purchases.
Orders taken in the restaurant are
processed on iPads.

17. 12.
Brand: Starbucks (among other
retailers) and foursquare
Place: Global
Offering: Using the mobile gaming
app, Foursquare, users can achieve
loyalty points at the stores they
frequent. By “checking in” online as
they enter store locations, gamers
acquire badges and points. When
Starbucks customers acquire a
“mayor” badge, they receive a dollar
off their favorite drink, every time they
enter the store.

18. 13.
Brand: RecycleBank
Place: Los Angeles; Houston
Offering: Subscribers use a special ID tag for
their home-recycling bins. When collected, the
bins are weighed, with the heavier bins gaining
more rewards.
RecycleBank points are redeemed within your
account for rewards.
Rewards are used with partners such as: Coca-
Cola, Clorox's Greenworks, CVS/pharmacy,
Hearst Magazines, McDonald’s, Kimberly-Clark,
Purina Pet Care, Bed Bath & Beyond, and Dick's
Sporting Goods.

19. 14.
Brand: O2
Place: UK
Offering: In 2009, UK based telecom company
O2 created an added value service for people
that use their website to book concert tickets
for the O2 Arena in London.
The company developed an online area called
blueroom which allows clients to get Perk
Packs which, in turn, give access to specific
amenities at a particular show.
Offers for blueroom consumers include priority
ticketing, advanced release notice of ticket
sales, discounts and VIP treatment at events.

20. 15.
Brand: Whole Foods
Place: US
Offering: Whole Foods offers
smartphone apps that organize
shopper needs needs by creating
shopping lists according to recipe
desires, and filtering choices by kids
meals, dietary restrictions, or budget.

21. Loyalty program marketing
These are 3 loyalty programs offered by pharmacy chains in North America.

22. Brand: Shoppers Drug Mart
Place: Canada
Offering: Optimum Card and others
Shoppers Drug Mart offers the Optimum card,
which collects points when the shopper swipes
the card at check out. Recently introduced is
the “VIB” program, which is targeted toward
new mothers.
The Optimum points can now also be collected
on a MasterCard.

23. Brand: CVS
Place: US
Offering: Extra Care card
Shoppers using their card for online or in-store
purchases earn 2% back with every purchase,
which eventually adds up to “Extra Bucks” that
are revealed on store receipts every 3 months
and can be used toward purchases at CVS.
Offers and savings are available to those who
sign up for email offers and members benefit
from periodic “double bucks” promotions (earn
4% instead of 2%) .

24. Brand: Duane Reade
Place: US
Offering: FlexRewards
Members have the option to redeem points at
the $5 level, or redeem at a higher level and
earn extra points.
Double Flex points are offered on a weekly
basis.
Shoppers who become members of any of the
DR clubs earn FlexRewards bonus points.

25. Loyalty program marketing
To Summarize
Transforming consumers into loyal customers and, better yet, brand ambassadors, requires
a deep understanding of the aspirations and motivations behind the data sets; involving
attitudinal as well as behavioural studies.
As with PL programs, loyalty programs can be tailored to support and enhance the brand’s
core proposition, whether for premium quality and personal service or for low prices and
value-based, or a carefully balanced combination of both.
We would welcome the opportunity to discuss how your company can forge stronger
connections and affiliations with target customers and drive frequency, higher conversion
rates and increased transaction values by enhancing their experiences with a Loyalty
program that includes relevant, meaningful and channel-appropriate, value-add rewards
and incentives.

26. Watt International
Patrick Rodmell
President + CEO
prodmell@wattintl.com
300 Bayview Avenue
Toronto, ON
Canada M5A 3R7
www.wattintl.com
T 416 364 9384
F 416 364 1098
Thank you
An envoy group company