keeping the excitement with your customers

Keeping the Excitement with your Customers

Global Loyalty Solutions

28.09.12

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Loyalty Landscape

Maritz Loyalty Insights (2012)

1,673,000,000 members

5.4 / person

Colloquy

14 (6 active) / household

are members of at least one program92%

6.4 / person

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Loyalty Programs are now a Commodity

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Raising Perception NOT Costs

“Price is what you pay. Value is what you get.”Warren Buffett

Loyalty is driven by ‘emotion’ not ‘rationale’

The right types of reward have a perceived value that far outweighs the underlying cost

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Drive Excitement by Giving More?

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Rewards must be Attainable

"69% of the people surveyed said they left a loyalty program because it took too long to earn enough points to get a reward”

Maritz Loyalty Track Survey (Nov 2003)

Maritz Loyalty Track Survey (Oct 2004)

Rewards if not attainable, will lead to reduced engagement and ultimately defection

1 2 3 4 5 6 7 8 9 10 11 12

Reasonable months-to-earn average:

20% 37%1,000 respondents

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Experiential Rewards

“We don’t remember days; we remember moments.”Cesare Pavese

Reward program members who have redeemed for experiential rewards are 30% more likely to be WOM

Champions than those who have redeemed for discountsColloquy

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Lucky Draws

Excite customers by giving them the chance to win something ‘desirable’

Fixed reward cost!

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Auctions

Stir up competition, by auctioning off highly sought after rewards that ‘money cannot buy’

Stand a chance to win EXCLUSIVE VIP backstage passes

We’re auctioning off a PRICELESS F1

driving experience

Dramatically increase the perceived value with rewards that

‘money cannot buy’

Increase customer engagement by creating a competitive environment

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Selfless Rewards

Harness ‘causal’ drivers to give customers a community-based collective goal

Leverages on social pressure to encourage continued participation

More appealing to customers who do not see the value in traditional loyalty rewards

HSBC Green Roof for Schools

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Differentiated Rewards

Originally the exclusive domain of airlines, ‘Status Programs’ are now common place in other sectors

Flat Tieredvs.

‘Status Tiers’ are an effective way of introducing ‘Soft benefits’ for premium customers, whilst at the same time

creating ‘aspirational drivers’ for lower-tier customers

“A three-tier program (e.g. Gold, Silver, and no-status) is more satisfying to all involved than a two-tier program (Gold and no-

status), even to those who do not qualify for elite status”Dreze and Nunes (2009)

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Perception of Status Programs

Dreze and Nunes (2009)

ranked ‘Chain C’ as the most popular

of the ‘No Status’ participants prefer the program that has 2 elite tiers!

82.5%

71.4%

“If you create an elite tier, it is better to create two”

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Status Programs by Industry

Airlines

Hotels

Car Rental

Others

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Reward Timing: Immediate vs. Delayed

“With a scheme based on rewards-on-demand you may get an increase in behavioural-loyalty but it won’t go any further;

there’s no opportunity to extend emotional loyalty.”

Scoring Points: How Tesco Continues to Win Customer Loyalty (Clive Humby)

“delayed rewards in a loyalty program have a significant impact on customer loyalty, whereas one-shot promotional features do not”

Leenheer and Bijmolt (2008)

“delayed rewards work better than immediate rewards only if customers are satisfied with their experience”

Hu et al. (2010)

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Engage Customers Socially

Harness social networks to open rich and diverse two-way communication channels with customers

Actively encourage customer interaction

Avoid the tendency to over-promote

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Help Customers Share Their Excitement

People are more likely to trust a recommendation from a friend

Colloquy

AHAlife / Twitter

Self-described WOM Champions 55%Likelihood of an

‘active’ member being a WOM Champion

3x

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Social Media is not a Quick-Win Solution

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The Power of Postcards

How a UK-based Charity slashed donor attrition rates using Postcards

Rapidata Case Study

Attrition rate after 6 months halved!

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Communication: Old is New

Sometimes it’s the little things in life

that count the most

Johnny the bagger

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Look for compelling Quick Wins

Stay ‘front-of-mind’ by giving your customers easy

and up-to-date access directly from PassBook

Loyalty Card (Balance)

Coupons / Vouchers

Welcome Real-TimeOverview

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15 Years of Experience in Loyalty

2011 live projects

Sao Paulo

Singapore

Aix-en-Provence (France)

300,000 daily loyalty transactionsbetween 1+ Million Retailers and50+ Million consumers.

> 20 live projects across 5 continents.> 14 different spoken languages> Local presence in 30+ countries (direct or via partners)

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Products Overview

MerchantPortal

Application used by Merchants

ePOS

POS

Real-time customer interaction@ Payment

AnalyticsPortal

Loyalty SchemeManagement

Portal

Internet payment

Loyalty scheme App

PC & tablets version Smart phone

version

Online redemption Push offers

Applications used by the loyalty scheme operator / the issuer

Media Integration

+

Welcome LoyaltyEngine

E-Wallet integration

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Sample References

Retail Banking

Partners and OperatorsPayment Processors

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