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Nine Laws on Loyalty Marketing
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Transcript of Nine Laws on Loyalty Marketing
Nine Laws of Loyalty Marketing
According to a Survey by EIU, Customer Loyalty is According to a Survey by EIU, Customer Loyalty is
One of the Top 10 Business Issues of Corporate One of the Top 10 Business Issues of Corporate
CEOsCEOs
What Is Loyalty Marketing?What Is Loyalty Marketing?
According to Colloquy, loyalty marketing is the effort to
identify, maintain and increase yield from best customers
through long-term, interactive & value-added relationships
There Are Nine Cardinal Laws To Be FollowedThere Are Nine Cardinal Laws To Be Followed
1. Focus On
Acquiring Data
2. Targeted
Member Acquisition
3. Calculate CLTV
4. Build Relationships
5. Develop Offer
6. Build Dynamic
Programme Structure
7. Build Emotional
Bond
8. Align Organisation
9. Involve Sr. Mgmt.
1. Focus on
acquiring data
• Collect relevant info
• Make better use of info
Harrah’s Total Rewards
has developed a centralised
& award winning
data warehousing system
that allows
them to better understand
their customers
2. Target Member
acquisition accurately
•
• Establish best customer profiles
• Go for quality over quantity
Harrah’s Total Rewards
Has built predictive tools
that reveal which customers
should be targeted for
loyalty incentive programmes
-
3. Calculate & increase
customer LTV
•
Estimate value of customers
over years
Tesco Clubcard
has developed models that
estimates the life time value
and profitability of each
customer. This allows them
to target effectively and
personalise communications
4. Build relationships
based on relevance
•
• Trust, excellent service
• Design products around
customer needs
Tesco
has leveraged customer data
from its loyalty programme
to move into offering banking
and financial services
5. Develop an irrefutable
core offer
•
• Plan for a differentiated offers
• Conduct research at regular
intervals
6. Build dynamic programme
structure
Vary the programme
benefits
Hilton HHonours
programme members earn
points for hotel stay and
airline miles for hotel stay
too. Members can choose to
earn in either currencies
or both. They call it
‘Double Dipping’
Types of Loyalty Programme StructuresTypes of Loyalty Programme Structures
Affinity
Programmes
Bonus &
Frequency
Programmes
Discount
Programmes
Coalition
Programmes
User
Communities
Affinity ProgrammesAffinity Programmes
Characterised by
recognition
Strong emphasis
on recognition
& privileges
Bonus & Frequency ProgrammesBonus & Frequency Programmes
Characterised by
reward currencies
viz. points
Encourages repeat
usage behaviour
Discount ProgrammesDiscount Programmes
Characterised by
discounts
Encourages volume
purchase behaviour
Coalition ProgrammesCoalition Programmes
Enables customers
to collect rewards which
otherwise may take
longer time
Characterised by
organisations offering rewards
under single banner
User CommunitiesUser Communities
Characterised by
dialogue & information
dissemination
Enables customers
to network and learn
about new happenings
-’
7. Build emotional
bond with customers
There should be greater stress on
‘moments of truth experiences
Via Rail of Canada
is using loyalty data to decide
- which type of wine to be
served on certain routes
and cabins which routes
needed stations
for nursing mothers
8. Align the
organisation to create true
loyalty
Overly focus on profits
and growth may destroy
customer loyalty
9. Involve senior mgmt. in
understanding customer
behaviour
Understand relationship
dynamics between acquisition,
retention, penetration & cost to serve
These Nine Laws will decide the success
of any loyalty marketing initiative
For further information please call:
Rajeev at (6)012-6301137 or e-mail: [email protected]
http://twitter.com/rajinkl
http://loyaltymarketingblog.blogspot.com/