Business Problem: We want to develop a “VIP” program for our highest-value customers.

Customer loyalty programs drive sales and increase customer retention. Retaining a
customer is less expensive than acquiring a new customer. Loyalty programs also strengthen a
positive customer experience, encourage referrals, build social proof, encourage repeat
business, and deepen engagement (Bullock, 2016). 3F should design a loyalty program around
their best customers to maximize their returns.

1. Three potential analytics questions for this business problem:

a. Who are our highest-value customers?
b. What type of products do our highest-value customers purchase?
c. What is the average Customer Lifetime Value (CLV) of our highest-value
customers?
In other words, who are they, what are they buying, and how much are they worth to
our brand?
2. The first question above should be the priority. To develop an effective loyalty program,
you have to know who you are speaking to. If 3F proceeded with the program and
accidentally targeted the wrong audience, they could potentially lose a lot of money and
customers. Casino loyalty programs are an excellent example of a business effectively
tracking who their high-value customers are and how they spend. They have rewards
cards that track a customer’s gambling activity, dining, and entertainment spending.
This enables them to specifically tailor loyalty rewards to each level of customer,
ensuring that they are not rewarding customers who are not profitable.
3. Clarifying questions:
a. Once we have identified our highest-value customers, how should we segment
them? By age, gender, type of sports they are interested in, how/where they
make their purchases, or a combination of these?
b. Which competitors do our highest-value customers also purchase from?
c. How much does the average high-value customer spend per visit?
d. What are the goals of the loyalty program?
 4. Potential actions:
a. Develop a personalized email campaign for the highest-value customers to
increase visits and spend per visit.
b. Identify high-value customers who have been inactive and offer incentives to
return.
c. Review competitor loyalty programs to help guide the development of 3F’s
program.
d. Once the highest-value customers are identified, survey and test possible loyalty
programs. Possible program features include earning points for spending, tiered
rewards, and membership programs.
5. Business impacts:
a. Informing Product Development and Brand Strategy – Listening to your highest-
value customers about what products they currently purchase and would like to
be able to purchase in the future. Survey these customers before new product
designs to see what will sell well.
b. Driving Customer Acquisition and Retention – Offer a referral incentive to help
acquisition. Loyalty programs boost customer retention. “As many as 84% of
consumers say they’re more apt to stick with a brand that offers a loyalty
program” (Peacock, 2018).
c. Maximizing Consumer and Audience Value – Increasing brand loyalty will directly
impact a customer’s CLV by improving their recency, frequency, and monetary
value (Felbab, 2021). Sephora’s loyalty program members “make up as much as
80% of Sephora’s annual sales” (Peacock, 2018).

Business Problem: We are considering advertising on podcasts. Which ones should we pick?
According to Podcast Insights, there are currently over 1,750,000 podcasts (Winn, 2021).
It can be challenging to know which podcasts to choose. Midroll, a podcast advertising
company, says that 61% of listeners buy from podcast ads (midroll.com). The key business
problem is knowing which podcasts to select, which requires narrowing your target market’s
demographics.
1. Three potential analytics questions for this problem:
a. Who is our target audience for this advertising?
b. What interests does this audience have? (Fitness, cooking, travel, etc.)
c. What are the goals for this advertising? (New customers, brand recognition,
app downloads, blog sign-ups, etc.)
2. The third question needs to be the priority. To answer this question, 3F needs to
determine what outcome they are seeking. If you know what your goal is, you can
narrow down who you need to speak to. Answering the third question will help
answer the first question. Defining the specific goal you want to achieve will help
guide how the ads are crafted. If 3F determines they want to sell more women’s
mountain bikes and their target audience is women between ages 30-45 who like
mountain biking, the copy in their ads will speak to that audience. If the goal is to
create more brand awareness and sales in general, the target market will be
broader, perhaps men and women between ages 24-60.
3. Clarifying questions:
a. Which podcasts are our competitors advertising on?
b. Can we identify certain podcasts our target audience already subscribes to?
c. What types of offers should we make in our advertising?
4. Potential actions:
a. Tailor special offer codes to the podcast audience to track the effectiveness
of the advertising. Example: Get 15% off your purchase with code
MTBPOD15.
b. Advertise special content. Entice listeners to subscribe to your newsletter or
blog.
c. Promote 3F social media accounts.
5. Business impacts:
 a. Informing Product Development and Brand Strategy – Advertising will get the
word out to more prospects, increasing brand awareness. New product
launch news will reach a larger audience.
b. Measuring and Optimizing Media Effectiveness – By using specific offer codes
for each podcast, measuring effectiveness will be easy. If 3F’s ads on a
particular podcast are not performing well, they can be discontinued.
c. Driving Consumer Acquisition and Retention – Identifying the correct target
audience with effective ads will increase customer acquisition.

References

Bullock, L. (2016, July 21). 5 reasons why you should have a customer loyalty program. Smart
Insights. https://www.smartinsights.com/digital-marketing-strategy/customer-retention-
strategy/5-reasons-customer-loyalty-program/#:~:text=A%20loyalty%20program's
%20main%20purpose,of%2Dmouth%20and%20customer%20referrals.

Peacock, L. (2018, September 4). 10 Examples of Innovative Customer Loyalty Programs.

Shopify. https://www.shopify.com/blog/loyalty-program.

Felbab, A. (2021, January). Video Lecture 1b. Consumer and Audience Analytics MMC5449.
University of Florida College of Journalism and Communications; University of Florida
College of Journalism and Communications.

Winn, R. (2021, January 1). 2021 Podcast Stats & Facts (New Research From Jan 2021). Podcast
Insights®. https://www.podcastinsights.com/podcast-statistics/.