Loyalty program

2.  Should I have a loyalty program?
 Do customers really value these programs?
 Do heavy investments in loyalty programs
actually influence customer’s behaviour?
 Are retailers getting their money’s worth?

3.  Programs may become no more than a value-
destroying mass discount vehicle with high
expenses and no incremental sales or
profit???????

4.  Strengthen customer relations
 Raise profit
 Reinforce value proposition of the brand
 Access to important customer information

5.  3 different ways
1. Frequent shopper card without credit
linkage
2. Store credit card with tiered membership
benefits
3. Co-branded credit cards with benefits
based on spending

6.  A loyalty program must
 Require customers to enroll
 Provide rewards, discounts, or services based
on a customers’ spending patterns
 Communicate benefits customers’ can
receive from specific

7.  Overcome consumer attraction hurdle
 Get the consumer and retail economies right
 Incorporate all expenses in assessing returns
 Compete with the next wave of loyalty
programs

8.  Set realistic and focused program goals
 Capitalize on consumers’ non monetary
interest
 Use attention-grabbing rewards to drive
participation
 Focus on delighting top customers
 Use the power of multiple categories to
inspire everyday customers
 Create programs for distinct segments

9.  Make rigorous program design trade-offs to
achieve goals
Example: Target chose to avoid price breaks
through its loyalty card, since that could
conflict with its low price positioning.
Instead it provides indirect emotional
benefits to consumer through school
donations

10.  Build on distinctive assets to make economics
work
Example: Target builds on its reputation for
everyday low pricing to turn a very modest
program into a strong, positive,
reinforcement of its fundamental value
proposition

11.  Execute skillfully and persistently to sustain
participation and impact
 Simplicity
 Complete within 15 seconds
 Connect with customers
 In store point-of-sale visibility
 Integrated marketing support