telco loyalty - approaches from other sectors (iir telecoms conferernce, monaco july 2011)

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Driving greater customer loyalty: Exploring approaches from non-telco sectors

Alexander MeiliPlanning Director Europe

ICLP

• About ICLP

• Research – external view

• Customer lifecycle – internal view

• Best practice examples

• Conclusion and take aways

Content

• About ICLP

• Research – external view

• Customer lifecycle – internal view

• Best practice examples

• Conclusion and take aways

Content

Who we are

ICLP = International Customer Loyalty Programmes

A full-service loyalty marketing agency with a global presence

25 years of experience in loyalty marketing

LATITUDE

innovative products/solutions delivering incremental revenue to clients

Definitions: Loyalty Marketing & Loyalty Programmes

Using customer data and insight to generate

an incremental shift in behaviour

Customer proposition:

• Reward• Recognition

• Benefits

Loyalty Programme (memberships, points/tiers, rules)

• About ICLP

• Research – external view

• Customer lifecycle – internal view

• Best practice examples

• Conclusion and take aways

Content

Programme saturation levels in Europe

Very saturated

Saturated

© ICLP research 2011

4.5

Programmes per adult

consumer (average)

Saturatedmarket

Ranking: biggest loyalty programmes in Europe

• Sainsbury’s Nectar• Boots Advantage Card• Tesco Clubcard• British Airways Executive Club• Airmiles• Waterstones• Ikea Family• Diamond Club (bmi)• Costa Card• Ladbrokes

• Fidati (Esselunga)• Il Gigante• Nectar Italy• Carta Viaggio (Trenitalia)• Mille Miglia (Alitalia)• Agos• Findomestic• You and Agip Membercard• Sidis Card• Carta Club (Supermercati)

• Carrefour Carte Fidelité• S’Miles• Cartes Intermarché• Carte Auchan• Carte Leclerq• Air France Flying Blue• Carte Super U• Ikea Family• Carte Fnac• Club Total (Total)

• Travel Club (Airmiles)• Repsol YPF• El Corte Inglés• Carrefour• Iberia• Vips Club• Club AVE (AVE train)• Sol Melia MaS• NH Hoteles

• Migros Cumulus• Coop Supercard• Interior Plus Karte• PKZ Insider• Bonuscard (Jelmoli)• Pluscard (Globus)• UBS Keyclub• A la carte (Möbel Pfister)• Myone (Manor)

• Payback• Lufthansa Miles & More• Deutschland Card• Ikea family• BSW Bonusclub• Bahncard (Deutsche Bahn)• Shell Clubsmart• Douglas Club• Airberlin (Top Bonus)

Programme ubiquity or survival of the fittest?

© ICLP research 2011

Distribution of biggest loyalty programmes in Europe according to sector (units)

75%

Ranking: biggest loyalty programmes in Europe

• Sainsbury’s Nectar• Boots Advantage Card• Tesco clubcard• British airways Exec. Club• Airmiles• Waterstones• Ikea Family• Diamond Club (bmi)• Costa Card• Ladbrokes

• Fidati (Esselunga)• Il Gigante• Nectar Italy• Carta Viaggio (Trenitalia)• Mille Miglia (Alitalia)• Agos• Findomestic• You and Agip Membercard• Sidis Card• Carta Club (Supermercati)

• Carrefour Carte Fidelité• S’Miles• Cartes Intermarché• Carte Auchan• Carte Leclerq• Air France Flying Blue• Carte Super U• Ikea Family• Carte Fnac• Club Total (Total)

• Travel Club (Airmiles)• Repsol YPF• El Corte Inglés• Carrefour• Iberia• Vips Club• Club AVE (AVE train)• Sol Melia MaS• NH Hoteles

• Migros Cumulus• Coop Supercard• Interior Plus Karte• PKZ Insider• Bonuscard (Jelmoli)• Pluscard (Globus)• UBS Keyclub• A la carte (Möbel Pfister)• Myone (Manor)

• Payback• Lufthansa Miles & More• Deutschland Card• Ikea family• BSW Bonusclub• Bahncard (Deutsche Bahn)• Shell Clubsmart• Douglas Club• Airberlin (Top Bonus)

© ICLP research 2011

© ICLP benchmark 2011

Telcos with a loyalty programme

Low penetration of loyalty programmes within telco operators…

Telcos with a loyalty programme

Based onpoints incentives

loyalty programme

… with significant regional differences

25%

60%

Contract / subscription business(long term)

„No“ POS

Post payment

Customer Data(already available)

Note: Pre-paid business or ‘PAYG’ is following a different rationale, with other segment characteristics

otherpossibilitiesto connect

with customers

Why a programme is not the only option?

Contract / subscription business (long term)

„No“ POS

Post payment

Customer Data (already available)

Retail Travel Coalition MediaFinance Insurance

Similarities to other industries

Different sector –

Different customer expectation?Discounts

Vouchers (purchase)

Points/miles

Special events

VIP service

Products and services

Others

No incentive

What kind of incentive / benefit would you expect?

• About ICLP

• Research – external view

• Customer lifecycle – internal view

• Best practice examples

• Conclusion and take aways

Content

srg

Focus

Acquisition(introduction stage)

Up - and X-Sell(entry stage)

Retain / Hold(maturity stage)

Churn prevention(decline stage)

Customer lifetime

Cu

sto

mer

val

ue

The customer lifecycle

• About ICLP

• Research – external view

• Customer lifecycle – internal view

• Best practice examples

• Conclusion and take aways

Content

Segmentation – sign up for the cards most relevant to you

Sixt cards

Sixt Express Card

for all Sixt customers

Sixt Corporate Card for

corporate customers

Sixt Ladies Card profit from

your partner's corporate rate.

Sixt Gold Card customers

renting more than 5 times

per year

Example 1 – SIXT Car Rental

Up-sell promotion on

transactions(!) made

Mechanic:

• Online sales promotional tool that rewards customers for credit card purchases made

Reward:

• Tokens are issued to participants for each qualifying purchase made

• Matching tokens can be redeemed against a prize

Example 2 – VISA International

Protect share of wallet –

“My route”

• Do you fly a certain route on a regular

basis?

• double award miles when you fly your

favourite route within Europe - both ways.

• This makes collecting miles twice as much

fun – and you reach your award goal even

faster.

• Idea based on telco marketing

(‘my favourites’)

* Winner of the Loyalty Innovation award – Loyalty Awards 2010

Example 3 – Air Berlin

Leverage the power of partners (‘show your card and save’)

• Exclusive partner offers to American Express card members

• Advantage of a special price at selected partners in travel, leisure, dining and shopping offers from around the world

Example 4 – Amex Selects

• Full fledged loyaltyprogramme set up to‘fight attrition efficiently’.

• Unlike other industries, customer seniority is rewarded.

Example 5 – Fid’ Allianz Insurance

• About ICLP

• Research – external view

• Customer lifecycle – internal view

• Best practice examples

• Conclusion and take aways

Content

External view: know the market (across the industry)• You are not alone

• Your customers are the same as the members of Miles&More, Avis, Allianz…

Internal view: manage the customer lifecycle• It‘s about segmentation, emotion and experiences

Explore approaches from other industries• It‘s not about copying

• it‘s about making great ideas smarter and adapting to own needs

Take Aways

Q&A

Alexander Meili

Planning Director Europe

Tel +41 44 533 30 41

alexander.meili@iclployalty.com

twitter @ICLP_loyalty

Your contact at ICLP

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