Click to edit Master subtitle style

Retail Loyalty Programmes

4/11/12  
 

Contents
What is a loyalty programme?
 Loyalty Success Factors
 Introduction to Retail Loyalty Programmes
 Loyalty Programme Structure Secrets
 Loyalty Programme Promotions - Driving Sales
 Summary

4/11/12  
 

What is a loyalty programme?

The systematic collection of customer data in return for rewards or 
benefits, often used to give customer additional privileges or services
to best/loyal customers

Opportunities
• Understand customers
• Give discounts to best customers only

• Adjust real price for certain customers

• Use data to negotiate with partners

4/11/12  
 

Loyalty Programme Options

Points Ess Discount Jusc Rebate
o o
Smil
Earn points and redeem es Immediate discount for  Reward spend over 
for rewards presenting card time
Good  Good  Good  Starb
-Offers control -Easy and instant -Easy to manage
ucks
-Customer understands - No liability Bad
-Lower cost Bad - Little control
Bad - Discount has to be large - Easy to copy e.g. stampcard
- Points cost are knowledge (+10%) - Little emotional connection

- Accrued liability - No control

Privilege Krisflyer 
Cathay
Marco
Polo
Earn points and redeem for rewards plus tiers of privilege
Good  Bad
-Privileges lead to loyalty - Low spend customer disillusion
-Offers control - Competitors can match
-Customer understands

4/11/12  
 

How does it work?

Nets & Credit
Ban
Data
k entry
Dat
Application
n
Form
 N a
em
R 
Ime

a
aC o
a
g bf i
e aill
m
e 1
i 2
l 2
y 1
Customer card 3
2

122132

Marketing
Planning &
Promotion tactics
Analysis
Custom services
Transaction ers

Database
4/11/12  
 

Considering a
programme?
Steps to launch
Planning
1. Feasibility audit
2. Customer research
3. Financial planning
4. Develop programme model
Implementation
1. Implementation – develop systems/communications
2. Launch
Management (operations)
4/11/12  
 

Click to edit Master subtitle style

Loyalty Success Factors

4/11/12  
 

Critical Success Factors for Customer

Loyalty

Target Degree of  Delivery Getting

Audience Participation Customers to
of   join
rewards

Brand Choice of  Liability Competitor 

Positioning rewards Strength
risk

Customer  Generosity Investme Sales

Loyalty
Drivers nt Focus
Cost

4/11/12  
 

How is it
successful?
Target Degree of  Delivery of  Getting
Audience Participation Rewards – Customers to
Regular  High rebate Join
shoppers vouchers Easy – free
(cash membership
effectively)

Brand Choice of  Liability Competitor 

Positioning rewards Risk Strength
- for everyone Choose from High but also n/a
-Birthday treats whole store High
-Members only redemption

Customer  Generosity Investment Sales

Loyalty Very generous Cost Focus
Drivers rebate up to High Very High
Use 20%
membership
To make offers

4/11/12  
 

Click to edit Master subtitle style

Loyalty Program
Structure Secrets

4/11/12  
 

Loyalty Programme Structure

Secrets

Data Collection

FMCG Value
Partnerships Proposition
1
8 2
Brand Extension
7 3 Loyalty Programme
Mechanics

6 4
5
Investment
Clubs within
Ratio
programme

Sales Promotion
Integration

4/11/12  
 

Click to edit Master subtitle style

Loyalty Programme
Promotions - Driving
Sales

4/11/12  
 

Promotions
1. Statements
2. Personal shopping lists
3. Geo-targeting
4. Events
5. Layered promotions
6. Regular communications

4/11/12  
 

Summary
 Programmes offer opportunity to get to know
customer – that’s cost of knowledge that must be
recovered
 Opportunity comes from using the data – to drive
more spend - personal shopping lists
 Customers enjoy being part of programmes if 
they get privileges of whatever value therefore
work hard to give them value

4/11/12  
 

4/11/12