Loyalty Program
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Table of Contents
Components of a Loyalty Program – Benefit Mix Strategy
Value:
Deliver perceived value to the customers, including:
‘Soft’ Value – intangible like exclusivity
‘Hard’ Value – discounts, rebates
Service:
Provide a premier level of service compared to a regular customer
‘Badge’ the higher service level (complements exclusivity value)
Rewards:
Recognize and reward customers
Components of a Loyalty Program – Benefit Mix Strategy
Value:
Deliver perceived value to the customers, including:
‘Soft’ Value – intangible like exclusivity
‘Hard’ Value – discounts, rebates
Service:
Provide a premier level of service compared to a regular customer
‘Badge’ the higher service level (complements exclusivity value)
Rewards:
Recognize and reward customers
The more valuable a customer is, the more they should be rewarded
Events:
Provide invitations to exclusive events
Provide VIP invitations to regular events
Tiered Loyalty Programs
Starting with three broad tiers of loyalty program is the most common approach.
Breakdown of typical number of tiers in loyalty programs, by industry:
Airlines: 3-4 tiers
Hotels: 2-3 tiers
Retail: 2-3 tiers
Telecom: 3 tiers
Source: Qais Consulting.
Reward Attainability
Critical to the success of a point-based rewards program is that rewards be attainable – not just by the top spenders, but by all eligible programme participants
From the spend data we can predict the value of different members points balance over time
The table below shows the value (S$) of accumulated by customers at different levels of spend after different lengths of time.
On average, people indicate that 7 months is an appropriate amount of time to have participated in a loyalty programme to earn a reward
Programme Funding Rates
It is recommended that the Retailer funds rewards in the loyalty program at levels comparable with other Retail Loyalty programmes
Customers have certain expectations of rebate rates, based on their experience with similar programs.
Expected rebate levels are as follows:
Airlines: 6 – 8 per cent
Petrol: 0.5 – 2 per cent
Retail: 2 – 7 per cent
Telecom: 1 – 4 per cent
Financial: 1 – 5 per cent
Sales & Marketing
Marketing for Dummies Guides
- Marketing for Dummies
- Marketing Plan
- Marketing Strategy
- Positioning
- Differentiation
- Brand Equity
- Brand Marketing
- Direct Marketing
- RFM – Recency Frequency Monetary
- Breakeven Response Rate
- Customer Profitability
- CLV – Customer Lifetime Value
- Loyalty Program
- The 4 Ps
- The Campaign Framework
- The Marketing Budget
- The Marketing Mix
Measuring, Marketing, Metrics & KPIs
- KPI – The One Key Marketing Metric
- Marketing KPIs and Metrics
- Measuring Marketing
- ROMI – Return on Marketing Investment
- Marketing Finance
- Financial KPIs
- Market Share
- Mind Share
- Customer Satisfaction (Cust Sat)
- Net Promoter Score
- Kano Model
Online Marketing/ Digital Marketing
- CPM Advertising
- CPC Advertising
- CPA Advertising
- Click Through Rate (CTR or Click Thru Rate)
- Conversion Rate
- SEO Marketing
- SERP: Search Engine Ranking Page
- Behavioral Email
- Guerilla Marketing
