Driving retail sales by innovative loyalty program

Ewa Wegorkiewicz13th of March, Sofia

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AgendaLoyalty why to go into it? Loyalty in Retail different approaches to different needs Key points to make a loyalty program a success Comarch CEMM as the tool for success

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85% households participate in at least one reward program*12 loyalty programs per household on average**40% participation in active loyalty programs**Sources: *Loyalty & Rewards: A Market Overview, Aite Group, January 2007**Colloquytalk Censustalk, April 2007, pp. 3-6

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**The Loyalty Effect, by Reichheld & Teal

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So do we need to implement a loyalty program? You Your ClientYour competition Your PROBLEM

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Wrong question! The right question is: How to make your Clients crazy about your brand?

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This is how our retail Clients made it work

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All you need is love- Alma Market Premium department store chain in Poland targeted to the Clients with the above average income Immense choice of high quality productsClient satisfaction taken to the next level- emotional loyalty - money can`t buy promotionsThe results: Increase in average basket value 3 times higher for a member than for a non-member

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Money makes the world go round- Perekrostok (X5 Retail Group)The largest food retail company in Russia by sales volumeThe company actively uses a multi-format strategy, developing three formats at the same time: discounters, supermarkets and hypermarketsThe Average basket value of program members is 45% higher than for non-membersMore than 26% of turnover is generated through loyalty transactionsMore then 230 promotions active simultaneously

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Malina multipartner = multisucessThe average transaction with the MALINA card is2640rubles, which is20%higher than a"usual" average transaction Russias richest consumer database4,581,735 cards in the market with 8,5Malina transactions every second of the year!

IDEA:

Take advantage of daily shopping and all cleints activities

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Make your revenue grow by motivating your sales force! Single solution addressing the needs of different types of B2B Partners in traditional retail channelEnrollment invitation to selected Partners via Sales RepresentativesCommunication via SMS, Email, Mail, WWW, Call Center Program data analysis & segmentation promotions depending on the target group and business need (SKU, invoice value, turnover, etc) Motivating by rewarding (both tanglible goods, emotional rewards, experiences )

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Tripple points- focus on different sales areas 1.Basic points2.Points for no. of SKUon invoice3.Points for SPECIAL ACTIONSFor each 100 Pln on invoice You get points

100 z = 10 pts

We award full 100 z on Invoice

Eg. Total on invoice is 980 z Client gets 90 pts

You can getEXTRA POINTS

During each month a SPECIAL ACTION will be launchedeg. SKU promo,

Increase of turnover on invoice vs. Last month

You can double your basic points

Scoring:Number of SKU on invoice:10-14 5 pts/100z15-24 7 pts/100z25+ 10pts/100 z

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Diversified reward catalogueGift catalogue with more than 130 items + special awardsAutomatic settlements checking before the redemptionEasy to get rewards

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Make your sales forces compete among each other!

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Comarch Enterprise Marketing Management key functionalities to make your loyalty program a success

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Application form is the single most important point of data captureGather all data in formGather data incrementally using electronic channels:TransactionalNon-transactional Anna, young mother, loves organic food and often purchases at the weekends

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Primary Retail Segmentation ApproachesRecency, Frequency, Value (RFV): e.g. High Value Frequent Shoppers, Low Value Frequent LapsedLifestage: e.g. Young Adult, Young Family, Older Family, Empty NestersLifestyle: e.g. Organic, Fast Food, Home Cooking, TV Diners, Ethnic Dining based on basketInternet Shopping: e.g. Trial, Cautious Developing, EverythingData CollectionRecency , Frequency, Value SegmentationTime

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Basket analysis to get shopper type and appropriate offers Brown RiceBrown BreadNaturalYogurtOrganic CarrotsLow far milkEco-Washing PowderLowest price colaNo fresh itemsUses 2-1 offersBasket

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Constant Reporting & AnalysisReport templates with scheduled generationDifferent output formats (PDF, HTML, CSV, XML)Push and pull reports: automatic reports sending or manual downloadingAdditional analysis on a Dashboard:KPIs presentationData manipulationCreation of the customized reports by the user with external toolNotifications after generation

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What Comarch proposes as an IT tool for a loyalty success Analytics PartnersClientsAdministrator & MarketingCustomer CareMarketingDepartment

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Flexible projects implementation to optimize the costs Our loyalty experience: Over 80 million members in 40 worldwide projects over 2 mln transactions processed every day

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Q&A

Thank youwww.comarch.com

******Strategic Planning Assumption: Despite continual improvements in customer segmentationand analysis, enterprises are likely to have declining success with outbound marketingcampaigns.

Enterprises interact with customers in three ways. The traditional way (from a marketing perspective) isthrough proactive, outbound campaigns. These usually focus on customer acquisition or cross-selling, butbecause they are driven by the requirements of the enterprise rather than the customer, they have arelatively low success rate. Despite more-sophisticated use of analysis, organizations are recognizing thataccurate timing of the offer one of the best predictors of responses is beyond most of thesecampaigns.To resolve the issue of poor timing, companies are looking at customer events to provide signals thatcustomers are likely to be receptive to particular offers. Early results from event-based campaigns are verypositive, and for most organizations, this is probably the fastest-growing type of campaign.The third kind of interaction capitalizes on inbound contacts from customers, but it aims to make themmore effective by adding a targeted message related to the immediate response given to each customer**BA Administrator i MarketingCWA klienciCC Agenci Contact CenterModu B2B- partnerzy i dostawcy nagrdOn-site application - sprzedawcyBI- analitycy*