DO CUSTOMER LOYALTY

PROGRAMS REALLY WORK?

Presented By:

Ankit (23)
Mayank (26)
Karan (31)
Karun (36)
MAYANK (26)
WIDELY HELD BELIEFS
 Customers want involving relationships
 Some buyers are hard core loyalists to one brand
 Hard-core loyalists are frequent, profitable buyers
 Possible to reinforce loyalty
 Database facilitates relationships and loyalty
REASONS FOR RETAINING CUSTOMERS
 Maintain sales, margins, and profits
 Increase loyalty and value of existing customers
 Induce cross product buying
 Differentiate brand
 Preempt entry of new brand
 Preempt competitor’s loyalty program
KARUN (36)
THEORIES
 Leaky Bucket Theory
 Polygamous Loyalty Theory
DOUBLE JEOPARDY AND BRAND LOYALTY
KARAN (31)
LINKING REWARDS TO LOYALTY
 Direct or indirect effect

 Value determination

 Timing
BENEFITS OF LOYALTY PROGRAMS
 Costs less to serve loyal customers
 Loyal customers are less
 Loyal customers spend more with the company
 Loyal customers create positive word-of-mouth
advertising
ANKIT (23)
How to design an effective Loyalty program
Requirements

LONG TERM COMMITMENT AND FUNDING

PROGRAM FOR HIGH INVOLVEMENT PURCHASES

 Steps for effective loyalty program

 Design program to enhance the product value

 Fully cost the program

 Reward scheme to enhance buyers motivation

(zone1,2,3)

 Consider market situations in planning

 Conclusion

 3 lessons learnt

1. Competition is the reason for launch

2. If not customers then distributors

3. Brand affects the program

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