Customer Loyalty in The Age of Abundance

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Introduction

• Customer Loyalty in The Age of Abundance

• Lets Explore How

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Loyalty In The Age of Evolved Internet Shopping

• Are you really customers really loyal?
  ..given everything is a click away
• Price comparison engines
• Review guides
• Affiliates
• Bloggers, tagging, social networking sites
• Lack of differentiation in ecommerce site
  experiences

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Lets Review A Few Programs
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Program Reviews - Barnes Noble

• Program Name
• Readers Advantage
• Their Hook
• 10 discount on almost anything for a 25 annual
  fee
• Results
• Company is very pleased with results higher
  sales per customer, annual fee offsets startup
  and maintenance costs

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Program Reviews Big Y Foods

• Program Name
• Express Savings Club
• Their Hook
• Rewards Coins - randomly receive coins at POS
  good for prizes
• Similar payback to slot machines
• Results
• 95 of sales from members

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Program Reviews - REI

• Program Name
• REI Co-op Membership
• Their Hook
• Members share in the profits
• Perceived Fund Rate
• Up to 10
• Results
• Over 2 million members

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Case Study - Smith Hawken

• Wanted a fully integrated, multi-channel loyalty
  program
• Different systems for store, online, catalog
  (phone)
• Wanted a way for customers and CSRs to check on
  awards progress
• Net Effect, Six Months
• Purchase frequency 18
• Basket Size 8
• Average number of transactions 15
• Average dollars spent per product 11
• Average dollars spent 54

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Case Study - Pfaltzgraff

• Wanted a fully integrated, multi-channel loyalty
  program
• Different systems for store, online, catalog
  (phone)
• Wanted to stimulate repeat sales
• From the program, they learned their customer
  base motivated by promotions
• One pre-holiday offer (buy 10 items, get 1 free)
  had 123 redemption rate

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What Retailers Need to Know

• You and your customer retention programs must be
  differentiated from competitors
• ? Find your Hookyour USP, your heart
• Customers respond to promotions
• ? Prepare to fund them
• Fund rate determines impact
• ? Shoot for 5 but expect a 12-15 lift
• Remember you are saving to customer
  acquisition tax
• Breakage design is crucial
• ? Makes the economics work

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What Benefits do my Customers Require?

• ASK!
• But before you ASK, brainstorm
• (then Test, Test, Test some more)
• Dont layer in lots of low-value benefits
• Keep it simple and focused
• Be willing to change benefits over time
• Keep the surprises coming

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How Do I know My Programs Work?

• Have your customers changed their behavior?
• Sales lift/reduced churn
• Increase in desired behaviors/activities
• Are they excited about participating?
• Enrollment rates
• Sales penetration

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• Announcing today,
• for MarketLive 5.1
• clients, single channel
• retailers can be live
• in less than 30 days

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Conclusion

• 3 Key Things to Remember About Retail Loyalty
• Multi-channel Loyalty Programs are for all
  merchants.
• Your customers fundamentally understand them
• Loyalty Programs mo longer Have to be complex,
  monolithic, expensive behemoths
• Loyalty Programs are a key tool for retail CRM
• Loyalty Programs must be fully integrated, user
  friendly, and democratic (open for all)

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3-5 Questions From The Floor

• The best questions
• win you your own
• Loyalty Lab retriever!

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About Us

• Loyalty Lab, Inc.
• Loyalty Management as an On-Demand Service
• Well-known retail clients