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From chapter 20 - Supermarket & Grocery Loyalty

Case studies
20.2.1.7 Case study: Tesco & Dunnhumby (Clubcard)

Tesco [www.tesco.com] launched its Clubcard nationally in 1995. It was the first major supermarket loyalty programme in the UK, so it was a calculated risk. Up until the launch, Sainsbury's had led Tesco in terms of UK market share. The month after the launch, Tesco passed Sainsbury's, and has been ahead ever since. Tesco calculated that a sales uplift of 1.6% would cover the 10 million cost of launch and the cost of issuing cards and reward vouchers. In fact, at first the uplift was more like 4%, settling at well over 2%. Some stores saw doubledigit increases in like-for-like sales. So far, Tesco has handed out well over 1 billion in Clubcard vouchers. In the book 'Scoring Points', the circumstances surrounding the inception, launch and later development of the Clubcard are discussed frankly and in detail. According to the book's authors, the factors that led to the success of the launch included: speed to market (the only option for competitors was to react); a simple uncomplicated message; trust in the team to act decisively; involvement of front-line staff; careful testing; confidence; and commitment. A programme with some 16 million members generates a tremendous amount of data - enough to significantly slow down any useful analysis. Tesco overcame this by deciding not to try to answer every question about every customer, but to answer some of the biggest questions about most customers. Marketing analysts, Dunnhumby [www.Dunnhumby.com], who had worked with Tesco on the Clubcard project since 1994, came up with some innovative ideas that significantly reduced the amount of data that had to be processed in order to make valid, useful decisions. Some of these are detailed in the book Scoring Points. (In May 2003, the US-based retail grocery chain, Kroger, partnered with Dunnhumby for the analysis of its customer data. This analysis offers Kroger new insight into its customers' needs, and improves their shopping experience.) Clubcard holders can collect points across the entire Tesco group (1 point for every 1 they spend instore, on petrol, or online at Tesco.com), and they can also collect points from Tesco Telecoms and Tesco Personal Finance as well as Clubcard partners such as E.ON, Avis, and National Tyres, and through bonus point coupons and various special offers. Points are collected and sent to customers with their quarterly loyalty statements, in the form of Clubcard Vouchers. Customers can redeem their Vouchers in store at face value or they can exchange them for 'Clubcard Deals Tokens' and get up to four times their face value. Clubcard has signed up over 300 Deals partners including Eurotunnel, selected hotels, magazines and holiday companies. Every quarter (13 weeks) Tesco sends a magazine to each of its Clubcard members. This contains coupons to the value of the reward earned over the three months - these can be used to pay for goods at the checkout, can be used to 'buy' Air Miles, or can be redeemed at a range of partners too extensive to list, but including theme parks and restaurants, museums and other attractions, hotels, holidays and travel, motoring organisations, magazines and beauty consultations, sport and leisure, and flights. The magazine also contains product specific discount vouchers, selected for each customer on the basis of previous purchases. When the magazine is posted each quarter it is said to account for some 6% of the total volume of mail handled by the Royal Mail at that time (see also 2.3.13). Tesco signed up with Air Miles [www.avios.com] in March 2002; previously Sainsbury's customers could redeem their Reward Points for them. At the time of the change, Tesco.com saw a surge of 450% in searches for store maps as customers looked online for their nearest Tesco store, and enquiries about home shopping rose by 300%. The Royal Bank of Scotland Group, Tesco's partner in the Tesco Personal

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Finance arm was, at the time, already the biggest originator of Air Miles in the UK through its credit card business. In September 2002, after a trial in Wales, Tesco rolled out targeted electronic coupons at the checkout for its Clubcard members. At the time, a Tesco spokesman said that these coupons were not intended to replace the mailings but to supplement them. The coupons are automatically printed by the tills at the time of purchase. Unlike some similar systems, they are not triggered by the purchase of a specific product at the time but by the customer's recent purchase history. One hundred different offers - changed every two weeks - are available at any one time. The system selects which of these offers are most relevant to the customer in real time. In November 2002 Tesco added an "online Clubcard" - its online rewards scheme - to its web site, Tesco.com. Tesco had been under pressure from rival supermarket Sainsbury's since the launch of the Nectar programme in September (of which Sainsbury's is a founding partner). Industry analysts, Datamonitor, called the move "clever marketing and deft online touch". Customers earn reward points that are converted into e-coupons and vouchers, which can then be redeemed online. All of the then 10 million existing customers were being encouraged to request vouchers and log on to the web site to redeem their new points. Essentially, the new e-coupons and vouchers extended the existing Clubcard scheme into the Tesco.com virtual store, which by then was handling some 85,000 visitors each day. The company made good use of the customer data gleaned from its Clubcard programme, allowing it to target customers based on their known spending and shopping habits, offering an array of customised mailshots highlighting different offers and advantages to well-segmented groups of consumers. When the Nectar programme was launched in September 2002, Tesco countered with a short-term programme offering its customers the chance to win 1 million. However, the customers first had several hurdles to overcome. Shoppers were given a game card for every 25 they spent. Each card contained a multiple choice question, with four possible answers. Any Clubcard customer who answered four of these game card questions correctly could enter the draw for one of 200 seats for an exclusive filming of a special episode of the hit television show, 'Who Wants To Be a Millionaire?. There, they were given the option to compete in a 'fastest finger first' contest, the winners of which were invited to answer fifteen questions for a million pound prize. According to Tesco marketing director, Tim Mason, the multiple- stage game approach was chosen because customers had previously indicated that "they want added excitement for their shopping trips as autumn closes in, before the run-up to Christmas." Five other shoppers won one million Air Miles each and another five won one million Clubcard points each. In March 2003, Tesco, bought out the online women's community, iVillage [www.ivillage.co.uk]. Following the sale, iVillage became a wholly-owned subsidiary of Tesco, subject to a 20-year licensing agreement for content and intellectual property, including trademarks and copyrights. The deal followed Tesco's launch of the MeTime women's reward category as part of its Clubcard loyalty programme. Tesco's MeTime programme is aimed at helping women to pamper themselves by using Clubcard points for luxury treats such as hair styling and make-overs. iVillage is an online community for women, with a variety of information and activities to take part in, including discussion groups, job seeking, health advice, and even a baby name chooser. The online community focuses on issues that matter to women, and offers interactive services, expert advice, and a support network. Other content channels include: diet and fitness, relationships, parenting, pregnancy, health, beauty, food and drink, money, news and entertainment, work and careers, astrology, computers and the internet, shopping, games, and motoring. Under the terms of the agreement, the iVillage online community will continue to operate under the iVillage UK name, and will continue to provide its 1.2 million visitors each month with information, articles, and offerings. The expansion of the relationship between the two companies also gives Tesco the ability to use iVillage to cross-market and interact with its other communication channels, including the Tesco.net internet service provider (ISP) as well as its bricks-and-mortar stores. Although iVillage continues to operate under its own branding, the online entity is expected to receive significant marketing and promotional support from Tesco to help drive qualified traffic, and to promote itself within the UK. The license agreement is structured so that the site's existing operator, iVillage UK Ltd, receives either a set monthly fee or a percentage of gross revenue, whichever is greater.

In March 2005, iVillage Inc. The Internet For Women, a women's media company and women's community online, announced that, through a subsidiary, the company has signed a definitive agreement to acquire the iVillage.co.uk website and certain related assets from a subsidiary of Tesco Stores Limited. iVillage expected to close the deal in May. In September, 2003, Tesco launched its new Tesco Mobile telephone service offering, beginning with a range of 'pay as you go' handsets. Users earn two Tesco Clubcard points for each 2.00 spent on airtime top-ups in-store, or one point for each 2.00 when topping up elsewhere. In November 2004, retail technology supplier Conchango observed that creating value for customers in order to earn their lifetime loyalty is a strategic vision for Tesco, and two important elements of that vision are customer-centricity and reducing queue times (both at the checkout and at in-store food counters). So, when the time came to upgrade the ageing weighing scale infrastructure, Tesco's service productivity team recognised the potential benefit of introducing a more intelligent weighing scale application that would improve the customer experience at in-store food counters like the delicatessen, butcher, fish counter, bakery and hot chicken counter. Using Microsoft's .NET technology, Tesco and Conchango developed a counter scale application that not only makes shopping easier, but also automates routines at the point of service, simplifies pricing integrity, centralises system support and provides real-time purchase information to other systems and timely summarised data to headquarters. Within twelve weeks, Tesco, Conchango and Herbert Retail (the scale supplier) were preparing the system for an in-store trial. This successful trial led to an extended trial in 17 stores. The system was then deployed to all UK stores. As a result, transaction speeds increased by 42% and staff are able to answer a wide range of enquiries with greater confidence, including an item's country of origin, whether it is organic or not, and provide suggestions for cooking methods and recipes. In August 2004, the signing of an exclusive 3-year agreement ago saw car rental company Avis Europe [www.avis-europe.com] establish itself as a Tesco Clubcard and Clubcard Deals partner. Clubcard cardholders earned points when renting a car with Avis and could pay for their Avis car rental by redeeming Clubcard vouchers at four times their face value. In February 2005, Tesco Ireland partnered with the points-based travel and leisure reward programme Buy and Fly! to offer flights, travel and leisure rewards to its Clubcard loyalty programme members. The partnership extended only to Clubcard members in the Republic of Ireland, who could choose to have their Tesco Clubcard points automatically converted into Buy and Fly! points. These points were then redeemable for a range of travel and leisure rewards including flights with eighteen airlines around the world. At the same time, Tesco UK began its involvement with self-checkout technology, freeing up extra staff time and improving customer satisfaction. Tesco installed 285 NCR [www.ncr.com] FastLane self-service checkout units, which enable customers to scan, bag and pay for their purchases themselves, in 96 Tesco Metro (High Street stores), Superstores and Extra stores (hypermarkets) in England, Wales, Scotland and Northern Ireland. Customers could scan, bag and pay for their purchases themselves. According to Tesco, shoppers of all ages took to the technology, scanning all sorts of goods ranging from food and clothes to pharmaceuticals and electronics. Self-checkout also enabled Tesco to free up more staff time to help other areas of the store or open more checkouts. According to NCR, Tesco's experience with selfcheckout was backed by research from IDC that showed that consumers see real value in the technology, and that UK consumers cited shorter queues (68%), faster check out times (68%), and having a choice of how to check out (66%) as the main benefits of self-checkout. By May 2005, an analysis of the UK supermarkets' market share from TNS Superpanel [www.tnsglobal.com], revealed that a recovery in Sainsbury's market was building (with its share lifting from 15.5% a year before to 15.9%, representing real turnover growth of 5%) - but the clear leader in the field was still Tesco, with an everwidening lead. Indeed, Tesco had continued its recent run of double-digit turnover growth to post a share of 29.8% (up from 27.5% a year before). All told, the UK supermarket share figures from 2004 to 2005 showed that Tesco continued to build on its impressive market lead while its closest rivals, Asda and Sainsbury's, continue to fight for second place. Against this competitive background, TNS said that Asda had suffered a small loss of share (from 16.6% to 16.5%), underlining the fact that the EDLP supermarket's growth had slowed from the levels seen in 2004. But by the end of June 2005, Tesco reached its anticipated market share breakthrough, passing the 30% mark in the UK market, according to the June 2005 figures from TNS Superpanel. It had actually reached an all-time UK

record market share of 30.3% (up from 27.9% for the same period one year before). This represented annual growth of some 11%, continuing the supermarket's consistent double-digit growth noted by TNS throughout 2005. According to the figures for the 12 weeks ending 19th June 2005, Sainsbury still held on to its share of 15.9% (up from 15.6% one year before). Asda, which is part of the Wal-Mart family, remained flat with a share of 16.4%, almost unchanged from the same time the year before. The combined Morrisons-Safeway share, however, slipped to 11.7%, marking the group's first time below 12%. Somerfield continued its strong run with its share having increased from 3.5% one year before to 4.0% in June 2005. However this share gain is balanced by the loss at Kwik Save so that the combined Somerfield/Kwik Save share actually remained relatively unchanged. Waitrose enjoyed another period of strong year-on-year growth (up 20%), holding on to the share gains it made earlier in 2005. In August 2005, in the UK and Ireland, Tesco Diets [www.tescodiets.com] implemented e-mail marketing technology from e-marketing technology firm e-Dialog [www.e-dialog.com] to deliver customised messages to its community of subscribers. The e-Dialog Precision Central software platform helps Tesco Diets to provide sound, relevant, and helpful advice to its members about maintaining a healthy weight. Among the platform's features that Tesco Diets is using are: custom publishing, live proofing, conversion tracking, management of unsubscribe templates, selection of audience lists from multiple sources, mail metering management, spam reporting, and reporting and analytics. In February 2006, Tesco announced its intention to enter the US market through the development of a new convenience format, beginning with stores on the West Coast in 2007. The new C-store format was designed for the American market, following extensive consumer research. The format was also modelled on Tesco's existing Express concept which already operates in five countries (including the UK) with over 800 stores serving around 8 million customers per week. Through the US operation, Tesco hoped to build up its position in the world's largest markets. The expansion will bring the global population of the company's combined markets to some 2.1 billion people. The development of the business will be through organic growth, with initial planned capital expenditure of up to 250 million per year funded from existing resources. Break-even was expected by the end of the second full year of operation. Tesco then traded in 12 countries outside the UK (mainly in Asia and Central Europe), and more than half of the company's selling space was outside the UK. But the announcement of a US-based initiative represented a strategic move into a highly developed market, which followed the company's entry into the emerging Chinese market in July 2004. At the same time, Tesco announced that up to 49,000 of its UK staff would share in a multi-million pound payout as two of its Save As You Earn (SAYE) share schemes matured. Under the SAYE scheme, staff can set aside a fixed sum between 5 and 50 from their salary every month for a three or five year period. When the scheme matures they have the option to buy Tesco shares at a price set when they joined the scheme. Top savers, including checkout assistants, internet shopping delivery drivers, and store managers, stood to gain some 5,300 (a 59% return on their initial investment in company shares). In June 2006, the Lean Enterprise Institute [www.lean.org] reported that one of the many keys to the success of Tesco's Clubcard loyalty programme is the retailer's 'lean provision' system that efficiently delivers exactly what customers really want, when they want it, and where they want it. According to James Womack, chairman of the non-profit Lean Enterprise Institute, the retailer's lean provision system allows it to respond rapidly to the wealth of data collected from its 12 million+ Clubcard users, giving appropriate discounts to loyal (frequent) shoppers. Tesco's lean provision system combines point-of-sale data, cross-dock distribution centres, and frequent deliveries to many stores along 'milk-runs' to stock the right items in a range of retail formats, including Tesco Express convenience stores, Tesco Metro (small supermarkets), traditional Tesco supermarkets, Tesco Extra stores (big box superstores), and the Tesco.com online shop. The range of retail formats the company has established, combined with detailed knowledge about specific consumers and the rapid replenishment of each store, allows Tesco to offer households convenient variety at a low total cost. The strategy has worked brilliantly, allowing Tesco to establish the lowest cost position among British retailers (including the Wal-Mart owned Asda chain) while posting progressively higher margins and steadily increasing its share in every format. In August 2006, Tesco offered Clubcard members special Green loyalty points for not using carrier bags, and bringing their own with them to the store instead. Consumers earn points for each carrier bag they bring in and reuse at the checkout, whether they are Tesco bags or those of competing supermarkets. Checkout staff ask customers how many bags they are reusing and agree the number of points to be awarded. Larger re-usable

trolley bags may earn more than one point. Staff have received training but also use their discretion when awarding points. According to Tesco CEO, Sir Terry Leahy, "We had a team looking at carrier bags, trialling different ideas in our stores and talking to customers about what we could do to encourage them to use fewer bags and to recycle the ones they do use." The aim of the programme, according to Tesco, was to reward customers for using fewer new bags. The company said at the time that it aimed to cut the number of new bags given out by 25% over the following two years - a potential saving of 1 billion bags per year. Tesco also introduced bigger, thicker bags in many of its stores so that customers can fit their shopping into fewer bags. All Tesco carrier bags have been biodegradable since October 2006. Another smart move for Tesco Clubcard members is that the company has issued coupons entitling members to a free reusable Bag for Life, making it easier to reuse and reduce bag consumption. All of Tesco's staff also received personal letters introducing them to the scheme, providing them with coupons for Bags for Life. At the same time, ComScore Networks [www.comscore.com] reported that Tesco had become by far the most popular online grocery shopping web site in the UK, capturing some 66% of all online grocery orders nationwide. From January to July 2006, Tesco gathered an average of 30,000 orders per day, representing total online sales of some 2.5 million per day. Tesco.com's closest online competitor was Asda, which captured 16% of all orders, followed by Sainsbury's with 14%. Despite its third-place standing in terms of order volume, Sainsbury's customers actually spent the most when they ordered, averaging almost 90 compared to 80 for both Tesco and Asda. In addition, Asda and Sainsbury's customers typically ordered more items, both averaging 69 units per order, compared to Tesco's 58. ComScore also tracked the delivery costs charged by each, and found that Sainsbury's online customers incurred the lowest delivery charges during the period (at just over 3 per delivery on average). Tesco's online customers paid over 4 per delivery, and Asda's online customers paid the most at nearly 5.50. In October 2006, Tesco launched a non-food direct retail operation called Tesco Direct, while at the same time bringing order fulfilment in-house to improve customer service and supply chain control. Tesco Direct is the retail web site that offers UK consumers a choice of over 8,000 non-food lines. In conjunction with the existing Tesco.com food retail service, Tesco Direct means that customers can not only do grocery shopping online but also buy a range of non-food goods such as furniture, kitchenware, gifts, toys and sporting goods. While the delivery of some lines was previously outsourced to logistics partners, Tesco has brought all fulfilment in-house with the aim of providing an improved service for its customers. In February 2007, Tesco announced its plans for a new chain of supermarkets in the US market. Tesco said that its new chain of grocery stores in the US would be called Fresh & Easy Neighborhood Market. Tesco veteran marketer Tim Mason (who joined the company in 1982) was named as the US operation's CEO. The company initially focused on the Greater Phoenix area, Las Vegas, Los Angeles and San Diego, with the first stores opening in late 2007. Tesco chose the Greater Phoenix area for its high population growth and the strong potential of its expanding market. Each of the stores are roughly 10.0 square feet in size, intentionally smaller than the usual supermarket in order to give customers a faster, easier shopping experience. The Fresh & Easy Neighborhood Market format was a result of extensive customer research in local US markets combined with the learning from Tesco's existing Express format which it operates in more than 1.0 stores in seven countries, serving approximately 10 million customers every week. At the time, Tim Mason said that he thought that the Clubcard programme would follow Tesco around the world, but that it was really a question of timing. At the same time, a new partnership between the UK's Open University (OU) and Tesco allowed Clubcard members to pay for all or part of their OU courses using Clubcard vouchers. The OU was the first university to add the Clubcard scheme to its marketing activities. Members can swap vouchers for Clubcard Deals and receive up to four times their value, so for every 10 worth of Clubcard vouchers shoppers can generate up to 40 toward the OU course of their choice. And, following its earlier Green promotion in which customers were rewarded for reusing plastic carrier bags, Clubcard members were again rewarded (with double Clubcard points) when they bought products from the supermarket chain's popular green and organic ranges. Those purchasing products such as organic fruit and vegetables, energy-efficient light bulbs, and environment-friendly brands earned double the number of Clubcard points for an eight-week period from 15th February 2007. According to Tesco's marketing director, Ian Crook, the previous bag reuse scheme had already helped save some 300 million carrier bags by changing consumer behaviour.

At the time, the bag re-use scheme had put Tesco well on track to meet its goal of cutting carrier bags issued by 25% by 2008, and that some 4 million customers had already collected Green Clubcard points through the programme. Members can also earn Green Clubcard points for recycling their old mobile phone handsets and inkjet printer cartridges. Customers collect 500 points or 5 to charity for each working phone recycled, and 100 points or 1 to charity for non-working phones. For recycled inkjet printer cartridges, customers receive 100 Clubcard Points or 1 to charity. Freepost envelopes are available in store for this. In March 2007, TNS Global [www.tnsglobal.com] identified Tesco as the UK's favourite retailer. Some 15.0 TNS Worldpanel consumer panellists were asked to nominate their favourite retailer in each key retail sector as well as their overall favourite. A significant 16.7% of respondents voted for Tesco as their overall favourite retailer, with Asda and Marks & Spencer (M&S) coming second and third respectively. At the same time, Tesco Direct announced that it would be installing up to 200 desks in stores across the country during 2007, allowing customers to order and collect non-food products from a store of their choice. The move followed positive feedback from customers who had used the desks at the handful of pilot stores since the in-store service launched in August 2006. Shoppers said that they liked the convenience of being able to collect or order products at the same time as they do their weekly shopping. According to a report in Retail Week magazine, Tesco does indeed plan to launch the Clubcard in every country where the company operates. Being such a powerful tool for gathering customer insight, Clubcard has already been introduced to the Republic of Ireland and South Korea. But other countries are expected to follow soon, including the US. In August 2007, marketing consultancy Dunnhumby announced the relaunch of Tesco TV, the in-store media system used in Tesco supermarkets, under the new name 'Tesco Screens'. First installed in 2004, the network consists of 5,000 LCD and plasma screens spread throughout 100 Tesco Superstores and Tesco Extra outlets. Advertising spots can be designed to fit within the store's own in-store promotional format or, for more product- and company-specific campaigns, brands can chose a new 'brand sting' format that uses Flash animations for eye-catching messages around the store. Tesco TV proved successful at driving brand sales, with average sales uplift on new and promo campaigns of 5% to 8%, rising to 18% for seasonal activity. The new brand stings have already achieved sales increases of up to 25%. In September 2007, Epsilon, the loyalty marketing arm of Alliance Data Systems [www.alliancedata.com], signed a multi-year agreement to provide permission-based email marketing solutions and services to Tesco.com, an online business of Tesco. Tesco.com deployed Epsilon's proprietary e-mail communications and campaign management platform, and Epsilon is providing additional professional services to help Tesco.com develop more highly targeted e-mail campaigns to acquire and retain customers and generate increased sales through up-selling and cross-selling. In November 2007, the first of the long-awaited Fresh & Easy Neighborhood Market stores opened its doors in the US. In addition to offering a range of national brand name products at low prices, Fresh & Easy has gone to great lengths to ensure all its own brand products contain no added trans-fats, artificial colours or flavours, and only use preservatives where absolutely necessary. The stores also offer a range of prepared meals (made fresh in the company's own kitchens at Riverside, California). Food is sourced locally wherever possible and deliveries are made daily to each store to ensure all products are as fresh as possible. A team of researchers spent time in the homes of US consumers looking at shopping and cooking patterns. They discovered shoppers wanted fresh, wholesome foods that were affordable and available in their local area. According to US CEO, Tim Mason, "We literally went into their kitchens and looked in their refrigerators. Based on our research, we are confident our stores will be a hit in every neighbourhood we open in." Around 50 Fresh & Easy Neighborhood Market stores were expected to be opened by February 2008 in all kinds of neighbourhoods, including those traditionally underserved by modern food stores. The first six stores in California were closely followed by five in and around Las Vegas, Nevada. San Diego and Phoenix were also included in the store openings schedule by the end of 2007. As part of Fresh & Easy's promise to be a good neighbour and a responsible company, it intends to keep all stores and car parks clean and tidy, and deliveries are scheduled to minimise noise and disruption. Each store will also help support local charities and projects. In addition, the company has committed to build LEED (Leadership in Energy and Environmental Design) certified buildings, recycle or reuse all shipping and display materials and use environmentally friendly trailers to transport food. Including the US, Tesco then operated stores in 12 markets outside the UK. Tesco's portfolio spans 13 countries (11 in Europe and Asia) making it the third largest retailer in the world. More than half the

company's retailing space is outside the UK, and Tesco has been cited as the market leader within the UK, Ireland, Poland, Hungary, Slovakia and Thailand. Tesco operates over 3,400 stores worldwide, including over 670 in Europe (in the Czech Republic, Ireland, Hungary, Poland, Slovakia and Turkey) and over 700 in Asia (in China, Malaysia, Korea, Japan, and Thailand). In January 2008, Tesco decided to expand its price checking programme to include 2,000 lines sold at discount outlets such as Aldi and Lidl, and to offer more than 400 food and non-food items at half price throughout the month of January. Tesco reports that it is now focusing on the growing discount retail sector in a bid to ensure that customers do not have to compromise on quality or service to enjoy the lowest prices. In June 2008, Tesco announced a voucher collection scheme that offers schools and clubs a range of free products. By merging its two existing voucher schemes ('Computers for Schools' and 'Sport for Schools and Clubs') into one catalogue, the supermarket is offering schools and clubs a wider choice as well as the freedom to decide where their priorities lie. To give schools and clubs longer to save up for big ticket items, Tesco offered the vouchers in-store for an extended period of 15 weeks. All equipment was delivered during the autumn term, getting the school year off to a good start. Computers for Schools was launched in 1992, and the supermarket gave 13,000 items to UK schools in that year alone. Sport for Schools and Clubs followed in 2005. By the end of 2009, Tesco had given away more than 3 million items of computing and sports equipment, with a value of over 150 million. Nearly 40,000 schools and clubs take part in these annual voucher collection schemes. In April 2009, Tesco announced the 150 million relaunch of the Clubcard programme in a bid to maintain its leading market share. According to a press comment by chief executive Sir Terry Leahy, while price and value matter more to many customers in hard times, the company aimed to improve all aspects of the shopping trip including service and product availability. Tesco Clubcard holders are now able to double the value of their vouchers against a wide range of popular products in Tesco stores and online. Until then, customers could spend their Clubcard vouchers at face value in-store and online, or increase the value by up to four times by trading them for a range of deals with Tesco Clubcard partners (ranging from restaurants and theme parks to Air Miles and driving lessons). New in-store features include Clubcard desks where customers can instantly exchange their vouchers for double the value in participating categories. The double-up vouchers must be spent in full in a single transaction in the chosen department, and they can't be exchanged in Tesco Express stores. Vouchers exchanged online are sent by post within five working days. Categories participating in the 'double up' promotion include: Clothing - including footwear, nightwear, underwear, accessories, and jewellery purchased instore; Baby and toddler - including nappies, wipes, clothing, nursery, feeding accessories, toys, food and baby toiletries, but excluding infant formula milk; Toys - including all children's toys, outdoor toys and children's bikes, but excluding games consoles and software; Cosmetics, skincare and fragrance - including skincare, sun cream, bath care, make-up and fragrances, but excluding all other toiletries; Tesco Mobile network top ups - excluding other network top-ups; Tesco instant travel and breakdown insurance; Wine and Champagne - including wine, Champagne, and fortified wines (for a limited period only); Flowers, plants and gardening - including fresh cut flowers, plants, gardening accessories, garden furniture and barbecue equipment.
In May 2009, Tesco urged its customers to hunt through their wallets, bookshelves and kitchen drawers to dig out forgotten Clubcard vouchers because they were collectively missing out on 40 million every year. Each quarterly mailing provides vouchers worth approximately 100 million, and the company's data showed that around 10% of this is never redeemed. In October 2009, Clubcard holders were offered double Clubcard points both in-store and online. This followed the successful 'Double Up' promotion, which doubled the reward for customers on selected categories and which attracted almost half a million new Clubcard members in three months. In the same period, more than 1.5 million customers doubled up their vouchers, with the most popular categories being clothing and wine. By January 2010, sales were increasing and the company's overseas businesses also saw continued growth over the Christmas and New Year period. Like-for-like sales in Asia, Europe and the US also continued the improving trend seen in Q3 2009. In the US, Fresh & Easy had a stronger Christmas and New Year period in

2009 than in 2008, with a total sales growth of 35%. As a result of Double Clubcard Points and the additional Clubcard voucher mailing in December, over the Christmas and New Year period customers redeemed 34 million more Clubcard vouchers than in the same period in 2008. The statistics of the Clubcard programme are impressive, with 16 million members (at the end of 2009), and some 100 million being handed back to customers in vouchers every three months when around 9 million different versions of the Clubcard quarterly statement are mailed out. Amazingly, 95% of the vouchers issued are actually redeemed. Similarly, 35% of coupons issued by Tesco are redeemed, and 10,0 customers per week take the trouble to advise Tesco that they are moving house. Since its launch in 1995, Clubcard has returned approximately 3 billion pounds to loyal customers. Sister schemes operate in several of Tesco's markets outside Britain. The programme operates as Familycard in Korea (3.8 million members), Membercard in China (3+ million), and Clubcard/Biz Clubcard in Malaysia (1+ million). Tesco also has trial schemes operating in Thailand and Turkey. The schemes differ in structure and benefits from market to market. For example, the Korean scheme includes opportunities for customers to collect points when they shop at the retail tenants of malls owned by Tesco, as well as a Kids Club and Baby Club operated under the programme. In Malaysia, Tesco recently launched the Biz Clubcard to cater for the needs of the small business customer. Biz Clubcard holders enjoy additional services such as special counters for bulk purchase, pay & reserve and phone/fax ordering facilities. They are served by a special team in every Tesco Extra store in the country. In February 2010, Tesco celebrated the 15th birthday of Clubcard with over 120 million worth of rewards sent out to more than 14 million customers. It also announced that it would continue to give double points instore and online. More than one million new customers had signed up to Clubcard since its relaunch the previous year. Tesco had recently launched an iPhone app that turns the phone into an electronic Clubcard. As well as the vouchers, the mailing sent out also included a range of special birthday offers including: cut price deals at Hilton hotels; free entry into theme parks and other Merlin attractions; half price on popular magazine subscriptions; and hundreds of pounds off Virgin Holidays. And in a draw, five Clubcard customers became Clubcard millionaires' worth 10,000 in shopping or up to 40,000 if used for other rewards from holidays to restaurants. At the time, Clubcard had more than 400 partners. In 2009, Tesco issued vouchers worth 529 million to customers. To ensure that customers receive relevant rewards, there were 9 million variations of the Clubcard statement. No three customers got the same statement. At the time, Tesco had national loyalty card schemes based on Clubcard in Ireland, Poland, Malaysia, South Korea and China and pilot schemes in Slovakia, Thailand and Turkey. In early 2010, Tesco Mobile launched the iPhone with what it claimed to be the shortest and cheapest tariffs in the market. Customers could choose Pay as you go or Pay monthly with a 20 a month 12 month contract or a 60 a month 24 month contract with a free iPhone. Tesco Mobile iPhone customers also benefited from double Clubcard points on handset purchase and triple Clubcard points on top ups or with their monthly bill. Three iPhone apps have been launched by Tesco: Tesco Finder uses GPS to help customers find their nearest Tesco and can provide the exact aisle and shelf location of any product in a given store. Tesco Wine Finder uses advanced technology to recognise the labels on bottles of wine. Customers can take a photo of a bottle, and if Tesco stock it, they will be provided with tasting notes and the opportunity to buy it from Tesco online. The Clubcard App turns an iPhone into a Clubcard. All members do is open the app, type in their Clubcard number, and the app generates their Clubcard's barcode on the phone. This can then be scanned at the checkout. In September 2010, Just Food [www.just-food.com] reported that Tesco was about to launch Clubcard in the Czech Republic and expected to enrol some 1m households in the first year. In Poland and Slovakia, the Clubcard was launched the previous autumn and had 1.5m and 850,000 cardholders, respectively. In November 2010, Tesco announced a "double the value of your Clubcard vouchers", if they were spent on a range of non-food items in its supermarkets. The closing date for the exchange of vouchers into Big Clubcard Vouchers was December 5th. Tesco expected that some 50 million in Clubcard vouchers would be doubled by shoppers into 100 million in value. Every 5 in Clubcard vouchers could be exchanged for a 10 rewards token to spend on toys; clothing; baby and toddler; opticians; selected electrical goods, beauty and fragrance; flowers and plants. Every 10 in Clubcard vouchers could be exchanged for a 20 rewards token to spend on: artificial Christmas trees and Christmas lights; Finest wine and Finest Champagne; beds, bedroom furniture and bedding; DIY; computers; phones and accessories. However, in December 2010, This Is Money [www.thisismoney.co.uk] reported that thousands of people faced long queues on the final day for conversion of Clubcard vouchers and both the Tesco website and

the telephone call centre were clogged. Tesco later said that it was "doing everything we can at our customer service centres to help those customers affected." Also in December 2010, Tesco Direct announced the launch of its new mobile website, designed to facilitate easy shopping for non-food and household items, directly from mobile phones. This launch was the first step in Tesco's strategy to expand and develop mobile websites for core Tesco sites, with others set to follow. It followed closely on the heels of the Tesco's grocery app launch, featuring barcode scanning for iPhone - the first ever by a UK supermarket. Using the new site, Tesco Direct customers can search and buy everything from televisions to tables to toys using any smartphone. The initiative forms part of a wider commitment to make Tesco Direct available to everyone, anywhere, at anytime - whether that be through the Tesco Direct catalogue, instore, online, or by phone. Traffic to the Tesco Direct website via mobile telephones has grown steadily, with a 300% growth in mobile visitors between 2009 and 2010. At that stage, over half a million visitors a month were using their mobile phones to search and shop on the website. In April 2011, according to an article in Computer Weekly [www.computerweekly.com] Sir Terry Leahy told delegates at Teradata's user conference that collecting, analysing and acting on the insights revealed by customer behaviour, both at the till and online, allowed Tesco to find the truth. He said that customers were the best guide. "They have no axe to grind. You have to follow the customers, but learn from the competition, preferably before they do." According to Leahy, businesses change slowly, but customers change quickly. He said a better understanding of customer data helped Tesco to improve the productivity of its promotional budget tenfold, and its budget for retaining wavering customers threefold. In April 2011, online travel retailer, Redspottedhanky.com, began accepting Tesco Clubcard points, with the result that households could simultaneously receive Clubcard discounts on their train tickets, and earn loyalty points from redspottedhanky.com to put toward future travel. A return journey by train to London from Birmingham for a family of four could cost up to 203.50 if booked on the day of travel. But if booked in advance through redspottedhanky.com for an advance fare, the cost could be 93% less. In May 2011, in the UK, power and gas company E.ON and Tesco began piloting an initiative that allows E.ON customers to use Tesco Clubcard vouchers toward paying their energy bills. To reward customers for being with E.ON and Tesco, 50% is added to the face value of any Tesco Clubcard vouchers used. (For every 10 worth of Clubcard vouchers exchanged, 15 is deducted from the customer's energy bill). This follows a 13-year partnership between E.ON and Tesco Clubcard that already allowed eligible E.ON customers to earn Tesco Clubcard points for money spent on energy. The smallest amount redeemable is 5 worth of Clubcard vouchers which equates to 7.50 off an E.ON energy bill. The trial scheme was to run until 5 August. In June 2011, Tesco Clubcard's web site began allowing members to exchange their Clubcard vouchers for limited-time offers or limited-availability goods for up to three times the face-value. Tesco worked with multichannel firm IVIS Group, which built and implemented the technology running the new 'flash sales' promotions, through which a simple count-down shows customers how long an offer has to run, or how many products there are left to claim. Customers can see stock levels counting down in real-time as the products are being sold. This helps to create a 'me too' effect, with others rushing to take advantage of the special deals. At the time, Clubcard had some 32 million active Clubcard holders globally in nine markets, with over 16 million of those being in the UK itself. It has more than 600 reward partners offering deals on a range of days out, experiences and other essentials. Also in June 2011, the UK's The Financial Times [www.ft.com] reported that Tesco was to trial a loyalty card called the 'Friends of Fresh & Easy' card, based on the UK's Clubcard, at its 176 US Fresh & Easy stores. According to Fresh & Easy's CEO, Tim Mason, the card could replace the coupons that Fresh & Easy has been using to help drive sales. It will be able to personalise offers and distribute them cheaply via e-mail. In August 2011, Malaysian newspaper, The Star Online [http://biz.thestar.com.my] reported that Tesco was launching Clubcard in Malaysia. Dunnhumby Malaysia general manager, Michael Hawkins, says that the 'average' shopper spends about RM80 on a wide range of products on every visit - but there is no such thing as an average customer. All customers are unique in their own buying patterns, and Tesco's most loyal customers constitute about 6% of its local customer base but represent nearly 30-35% of its total sales combined. He says that one loyal customer is equal to 12 newly acquired customers. Tesco Malaysia sends about a million cash vouchers and product coupons to its two million-strong membership base, of which 455,000 different unique combinations of coupons are used, with 55% of the customers getting a completely unique set of rewards. In October 2011, following a successful trial of the Friends of Fresh & Easy card in the US, Tesco decided to

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roll it out nationwide. Membership of the pre-existing Friends of Fresh & Easy email programme had more than doubled soon after the card was introduced. Friends of Fresh & Easy is a digital points-based programme through which customers can earn 1 point for every US$1 they spend with Fresh & Easy. Members ('Friends') can then exchange their points for cash-back rewards, and they also receive personalised bi-weekly emails containing targeted bonus point coupons and real-time updates on points earned so far. In January 2012, Tesco launched its online grocery shopping service for customers in Prague, the first in its Central European business. The service offers Czech customers over 20,000 lines of fresh and frozen food and groceries, as well as non-food items such as toys, stationery and accessories. The launch followed a successful trial with customers and staff in November and is part of Tesco Group strategy to be an outstanding international retailer in-store and online. Tesco had entered the Czech Republic in 1996 through the purchase of K-Mart stores, and operates some 210 stores there.
20.2.1.7.1
Case study: Dunnhumby
Dunnhumby's [www.dunnhumby.com] role in Tesco's success is significant, as it carries out the data processing and analysis for the entire group. In April 2006, Dunnhumby expanded its operations in Ireland with the opening of a new office in central Dublin, aimed at better serving the Irish market. Dunnhumby has been working with a number of FMCG brands such as Colgate Palmolive, Unilever, P&G, Masterfoods and Coca Cola to help develop their brands in the Irish market. This work has included customer insight and marketing programmes (including collaborative marketing with Tesco). The Dublin office is expected to expand to house thirty staff within two years. The Irish office will be led by Carla Brooks (commercial director), who was initially based at Dunnhumby's head office in London. In August 2006, Dunnhumby announced that it was also taking responsibility for Tesco TV. At the same time, Tesco and JC Decaux (which previously managed Tesco TV) said they were in full agreement over the future of the in-store channel, and JC Decaux's existing ten-year partnership with Tesco remains unaffected. Dunnhumby said it would provide information to advertisers about the effectiveness of instore TV through detailed analysis of customer purchasing behaviour, with the ultimate aim of enhancing the customer experience and using that information to help drive brand awareness. Tesco believes that its in-store TV channel is a good way for brand owners to reach and influence shoppers at the point of decision, and that the partnership with Dunnhumby would allow the channel to "shift to a new level" as part of its overall media offering. In June 2007, Dunnhumby USA [www.us.dunnhumby.com] established a new office in Atlanta, Georgia, to serve its retail and manufacturing clients in the region, and plans to further expand its client base there. Within weeks, a staff of 10 were based there and, by late summer, this grew into a team of 25 and office space more than doubled. A number of employees relocated from the company's Cincinnati office to Atlanta, with remaining staff for the new office being newly recruited. In addition to the new hires for the Atlanta office, Dunnhumby USA planned to add 35 more staff at its Cincinnati headquarters during 2007, bringing the total there to 215. The company employs more than 700 people worldwide in nine countries. Dunnhumby USA's Atlanta and Southeast-based clients include The Home Depot, The Kroger Company and Coca Cola. In April 2008, Tesco and Dunnhumby extended their customer insight and analysis to almost all of the countries in which Tesco operates, including (in some areas) the Clubcard programme's data. Analysts from Dunnhumby now work locally with Tesco in South Korea, China, Turkey, Malaysia, Thailand, Slovakia, the Czech Republic, Poland and Hungary. Using data that customers voluntarily share with Tesco about their shopping habits, or anonymous data gathered at the point of sale, Dunnhumby provides Tesco with insights to help it continue offering optimum product ranges, prices and services for local markets.
20.2.1.7.1.1 Who is Dunnhumby?

Editor's note: This case study of Dunnhumby's development, operations and involvement with Tesco was specially prepared for The Loyalty Guide by Dunnhumby. The authors of this report thank the team for providing so much insight. Dunnhumby is the global loyalty expert behind the Tesco Clubcard. Dunnhumby is now based in 24 countries around the world impacting over 350 million customers worldwide. If you wondered where the name came from the company was started by Edwina Dunn and Clive Humby. We started working with Tesco in 1995 just after the Clubcard was launched. When Clive and Edwina presented the first results to the Tesco board, the then chairman Sir (now Lord) Ian MacLaurin remarked that we had found out more about Tesco customers in 3 months than he had discovered in 30 years. Then we recognised how the data would be useful to suppliers and we partnered with companies

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like P&G and Nestle. We then took our model to other international retailers like Kroger in the USA and Casino in France. Now as Tesco grows internationally we follow them everywhere they go, we've just announced that we will support the Tesco Fresh & Easy business in America. Dunnhumby partners with several other leading retailers outside of the UK - including Kroger in the USA, Casino in France and Brazil and Metro in Canada. Dunnhumby supports Tesco in every one of its international markets and works with global manufacturers like Coca-Cola, Heinz, P&G, Unilever and Kelloggs, using insight from the retail environment to better understand customer loyalty towards brands. It is, however, the work with Tesco that Dunnhumby is most famous for and this case study will explore this special relationship a bit further.
20.2.1.7.1.2 About Tesco

Tesco is one of the world's largest retailers with operations in 14 countries, employing over 492,000 people and serving millions of customers every week. Since the company first used the trading name of Tesco, in the mid 1920s, the group has expanded into different markets, different formats and different sectors. Jack Cohen opened the first Tesco store in 1929 in Burnt Oak North London. He was a retail innovator, introducing ideas of central headquarters and distribution and own label products - the first was Tesco tea. Tesco floated on the Stock Exchange in 1947 and now has 5,380 stores worldwide, 2,715 are in the UK. Back in Jack's day the shopping experience was a very personal one. No doubt he knew his regular customers by name, what they purchased and the preferences of their children and grandchildren. The customer might try something new on Jack's recommendation, Jack might give them a discount on their regular items. Cultivating this personal, intimate engagement with customers was something a good business would do. As supermarket chains have grown you could argue that this personalisation of the shopping experience has disappeared but actually this is where data can help. By starting with the data, large retailers and brands are now able to look into their customers shopping baskets and understand what drives their behaviour. Data-driven insights are shifting how businesses see their future and therefore, how they understand and communicate with their customers. Knowing how, when and where to communicate with customers and delivering a personalised experience is now a priority. To put it simply, smart businesses, empowered with granular sophistication, are working their way back to the customer relationship of the corner store. 20.2.1.7.1.3 About Tesco Clubcard Tesco has been working with Dunnhumby since the launch of Clubcard in 1995. The two companies have been collaborating to put the customer at the heart of the business enabling Tesco to create a strong brand identity and fulfil its core purpose: To create value for customers to earn their lifetime loyalty. Clubcard is often referred to as the original' loyalty scheme and is now one of the biggest in the world. There are more Clubcard members internationally than in the UK. Since Clubcard launched, the scheme has centred around rewarding customers, every Clubcard statement offers rewards that reflect what each individual, as a customer, wants to buy. Clubcard is Tesco's way of saying thankyou to customers for their loyalty, In 16 years, this core objective has not changed. Tesco is continually looking at improving the Clubcard scheme for customers. For example, in the UK Clubcard now offers more than 600 Clubcard Rewards for customers to choose from which have helped broaden the choice and appeal of the scheme.
20.2.1.7.1.4 Personalisation - the value of customer insight

Clubcard data enables the folks at Dunnhumby to understand current customer trends, the products that are most important to Tesco customers and products that may appeal to them. Using this insight we can make judgements as to which products customers would like to see in store and the kind of promotions that are most likely to benefit them. Over the years, the more data we have gained from Clubcard, the stronger the picture we get of customers, which means we are getting better and better at helping Tesco personalise offers to customers. For example, if a customer purchases nappies we know that they might be interested in a coupon for baby food.

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Tesco sends out millions of variations of the Clubcard statement to ensure customers get extra rewards that are relevant to them. Together, Dunnhumby and Tesco are using this insightful data to put customers at the heart of all our business decisions, from new product development to how we manage stores, and most importantly, how we serve customers. Ultimately, the more we can give customers what they want, the more they will choose to shop at Tesco. This makes good customer service and good business sense. Our knowledge of customers has also enabled Tesco to expand their business in other areas. For example, their online offering could not have been developed without the knowledge gained from Clubcard and the introduction of Tesco premium label Tesco Finest was based on customer insight. Similarly, Clubcard fuelled the growth of Tesco's non-food sector by identifying possible customers and communicating the new product areas through Clubcard mailings. In addition, despite being the longest running loyalty scheme around, Clubcard is up to date with the latest technology. In a UK first, Tesco launched a smartphone app in 2010 that turns a mobile phone into a Clubcard. In 2011 Tesco launched My Clubcard Account , which enables customers to make changes to their account online such as personal details and also view their used and unused vouchers. Customers love this - it's a good way to keep track of vouchers and offers. In the UK, Clubcard goes from strength to strength. It is by far the most rewarding loyalty scheme in the market and the number one reason customers prefer to shop at Tesco.

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20.2.1.7.1.5 Tesco & Dunnhumby: the partnership

A greater understanding of customer behaviour enables Tesco to personalise the shopping experience and ensures that Tesco can create a brand that consumers return to time and time again. In the current climate of shopping around for the best deals it is more important than ever that the customer believes Tesco is worth a visit. The Dunnhumby strategy is similar to that at Tesco, assisting companies to put the customer at the centre of each business. In Figure 1.1 the additional layers that surround "customer" highlight how the business must change in order to accommodate for the consumer. In essence, Dunnhumby helps Tesco by analysing item-level data for over 15 million households in the UK. This helps Tesco to drive sales through specific promotions, save money through removing unnecessary advertising and identify trends in sales data. Both Dunnhumby and Tesco firmly believe that by understanding the customer, the business can grow. Dunnhumby has four core beliefs and four core values depicted here. The four phrases in the central grey area are Dunnhumby's core beliefs which form the foundation on which our work is based and underpin our ways of working with clients and retailers.. The coloured areas on the outside of the model depict our values which inform our approach to our work and our culture and make Dunnhumby a unique and great place to work!
Values
Curiosity: we have an endless appetite to understand, challenge, innovate and learn Passion: we are relentless in our positive enthusiasm Courage: we take the right route, not always the easy one Collaboration: we work best when we work together Beliefs Start with data: customers tell us the right thing to do through the data Our great people: great people are what sets us apart Genius of simplicity: true genius comes from making the complex simple Customer first: if you're loyal to customers, they'll be loyal to you
20.2.1.7.1.6 Learning across borders

Through working in partnership with major retailers around the world Dunnhumby is in the unique position of being able to share learning and best practice to help grow the businesses of our major retail and manufacturer partners and to benefit customers everywhere. Following the success of the Loyal Customer Mailing (LCM) in the United States the principles of the LCM have been tested and now delivered to Tesco customers in the UK.

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20.2.1.7.1.7 The Loyal Customer Mailing

In the United States Dunnhumby works with Kroger, a giant supermarket chain, who has for several years sent a Loyal Customer Mailing (LCM) to its most loyal and therefore valued customers. Kroger says thank you to these special and valuable customers by giving them money-off coupons on products that they frequently buy. Customers in the United States love the LCM, they appreciate the value of the coupons and that Kroger takes the time and invests the resource to understand what they buy. This has had a measurable impact on sales with an increase of 64% since its introduction. Since beginning its relationship with Dunnhumby in 2003, Kroger has seen 31 consecutive quarters of same store sales increases. Dave Dillon, CEO of Kroger often describes Dunnhumby as his secret weapon. Well we may not be that secret anymore but what we do really can change a business. In the UK in December 2011 2.5 million customers received money-off coupons for products they already buy from Tesco, plus extra or double points coupons. This was based on the level and frequency of spend over the previous eight weeks, and it proved very popular. So just before Christmas the most loyal Tesco customers received special offers relevant to them. Every Little Helps! Mark Wilmot, head of UK Communications and Media at Dunnhumby worked very closely with Kroger in developing the LCM several years ago. Now bringing this learning to the UK he says: "As we have learnt from Kroger, this targeted approach and providing relevant offers drives customer loyalty to the retailer and brands. Customers are similar the world over so there is no reason why it won't work in the UK."
20.2.1.7.1.8 Innovating to better serve customers

As part of our commitment to deliver measurable value for a billion people Dunnhumby is dedicated to putting the insight at the heart of business decisions. We were challenged by Tesco to make insight available and affordable to all types and sizes of suppliers. This is to enable all kinds of businesses not just the big manufacturers like Unilever and P&G to really put the customer at the heart of their decision making. In response to this challenge we launched a new solution the Shopper KPI report which is delivered quarterly. Following an initial trial at the end of September, feedback from suppliers has been really positive. Simon Day from Winterbotham Darby, a supplier of continental meats & pate said: "The solution is simple to use and gave us a really good understanding of the category we work in. We felt we were at a real advantage when going into our meetings with Tesco as we were able to talk in their customer language." We are also innovating in the challenging area of digital measurement - helping brands understand the real value of online loyalty schemes by tracking the behaviour of loyal customers in store. We can now measure the effectiveness of a digital campaign by comparing the shopping behaviour of Tesco Clubcard customers who use brands' online loyalty campaigns and those who do not. This means we can quantify the effect of online loyalty campaigns on brand trial, loyalty, sales uplifts and return on investment so that brands can improve the relationship between online and offline activity. Danone's Activia and Actimel brands, Reckitt Benckiser's Air Wick brand and Pfizer's SMA baby milk brand have all used the application to shape digital and in-store marketing. Halla Ragi, Air Wick's senior brand manager, says the Dunnhumby data has been "invaluable" to developing its Air Wick Fresher Homes Club eCRM programme and optimising its targeting strategy to drive both online and offline loyalty to the brand.
20.2.1.7.1.9 Where next for Clubcard?

Since the launch of Clubcard, Tesco has evolved a customer contact strategy incorporating multi-channels across the various parts of the business as it has expanded. In addition to the core Clubcard communications of

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Statement and Loyal Customer Mailing, there are targeted customer mailings designed to drive sales and drive customers up the loyalty ladder at key trading periods through direct mail, e-mail and coupon at till in support of stores, online and Retail Services. Central to all activity is a consistent focus on staying true to the brand and surprising and delighting customers through personalised offers. The focus of Clubcard remains the same - to reward customers. Tesco listens to customers about how they are changing and looks at how their behaviours are changing so that it can give them what they want. The retailer will continue to bring more choice to customers and ensure that customers continue to find it exciting, rewarding and convenient. At a conference hosted for Tesco and manufacturers in 2011, Tesco's UK CEO, Richard Brasher, ended on this note: "If you want to go fast go on your own. If you want to go far go together". Collaboration is at the heart of Dunnhumby and it is only when we work together with the retailer and the brands that can we serve the customer best and, in doing so, be successful in the long term.
NOTE:
The Loyalty Guide's numerous case studies are carefully constructed to provide full background, history, and current-day detail, along with partnership developments, points structures, redemption options, and the latest facts and figures concerning each programme.
For details and online ordering information, visit: www.theloyaltyguide.com
theloyaltyguide 5

Executive Summary
Introduction
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1.1
The Loyalty Guide 5 [www.theloyaltyguide .com] is the world's only complete, comprehensive report covering every aspect of customer loyalty marketing, customer engagement, customer acquisition, customer retention, best customer marketing, customer relationship management (CRM), social media marketing, customer data-driven business intelligence (BI), loyalty metrics, measurement, reporting and predictive analytics. The report provides not only detailed case studies, best practices, marketing theory, and all the latest research, but also the kind of practical know-how, up to date facts and figures, market trends, forecasts, best practices, expert opinions, practical advice, and sheer hard data that are needed for well informed and forward-looking business decisions. This summary provides an overview of The Loyalty Guide 5, and aims to help you quickly identify the aspects of loyalty marketing that are most relevant to you right now. Each section summarises the essence of a complete chapter of the guide, making it simple to navigate the report's 1,300+ pages and its wealth of illustrations, charts, tables and graphs. We, the authors, welcome you to what has built up over the past ten years to become the world's fullest and most complete report on marketing techniques, practices, strategies, measurement, management, and accountability.
The
Business
Case for
Loyalty
There are two basic points of view to be considered when discussing the business case for introducing - or keeping - a customer loyalty programme: Some industry observers have argued that a loyalty programme is often unnecessary because it's just a way of spending money rewarding customers who would probably have been loyal anyway. Others, however, have recognised that the real benefit of a loyalty programme is not necessarily felt first by the customer, and that it is the merchant that gains the necessary insight (from detailed analysis of its loyalty programme and transactional data, for example) to be able to improve the way it communicates with and deals with its customers. The customer is actually the secondary (but still the most important) recipient of the benefits of a true loyalty programme. To say that a loyalty programme is not useful, or is a waste of marketing budget, is to have misunderstood the real purpose of the programme. Rather than offering a simplistic discount or rebate programme, a real loyalty programme offers the customer any number of incentives to allow the programme operator to collect accurate and useful data about their lifestyle, purchase choices, motivations, interests, circumstances, and in many cases even about their household and immediate family. The reason for gathering this data is not - as a very small minority of consumers seem to fear - to create some kind of 'Big Brother' database of peoples' personal habits, but to gain practical insights into ways in which the merchant could serve each customer more effectively, more easily, and more satisfyingly. The best reasons for having a customer loyalty strategy... In this chapter we explain in detail the different reasons, benefits, strategies and factors driving customer

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loyalty, including ideas about how to set up a new loyalty programme, what will be involved, and pointers for the financial and operational implications of launching your own loyalty iniative, including: The business benefits of a loyalty strategy How customer loyalty pays back, both short term Factors affecting and driving customer loyalty How a loyalty initiative grows and improves your Financial and operational aspects of a loyalty strategy What you need to know to run a successful loyalty programme Viable alternatives to traditional loyalty offerings customer base and long term
1.3
Loyalty Coalitions
There are two main types of multi-partner programmes: true coalition programmes, and single operator programmes that include other partners. For example, Air Miles and Nectar are true coalition programmes. The programme management is independent of any of the partners. The partners have contracts with the operators of the programme to issue and/or redeem the currency of the programme, and only have access to data harvested by the programme through its operator. Individual partners don't have direct access to other partners' data held in the programme, although the operators of the programme will usually market to other partners' customers on behalf of another member. For example, a supermarket member could ask for mailings to be sent to the customers (or just certain segments of the customers) of a fuel retailer partner in an area where a new supermarket is being opened. Tesco's Clubcard is an example of a single operator programme that involves other partners. The programme is owned and run by Tesco. However, Clubcard holders can collect points when buying from various partners in the programme, such as Alders, Beefeater, Marriott, and National Tyres. Vidal Sassoon is an example of a redemption partner. The best reasons for coalition-based loyalty initiatives... This chapter examines the many essential goals that any coalition programme must achieve if it's going to succeed, and why they're so important. Examples of these goals include: 1. Rapid market penetration 2. Delivery of attractive rewards 3. Being the first in the market 4. Building communication channels The key benefits of joining a coalition programme... Supported by statistics, illustrations and expert opinions, the advantages, disadvantages and structural needs of coalition programmes (compared to, say, a non-partnered loyalty programme) are detailed, covering critical factors such as:
Greater interest in the programme Members have fewer cards to carry Members earn points more quickly A greater variety of rewards Concentrated, coherent promotions Time saved in development Lower costs of development Database run by professionals Sector exclusivity Coalition marketing campaigns Higher penetration rates Real cost benefits of coalition
Detailed case studies of major coalition programmes... This chapter also provides details and comprehensive case studies of the world's major coalition loyalty programmes, including: 1. 2. 3. 4. 5. 6. 7. 8. Avios, UK (aka Air Miles) Air Miles, Canada Air Miles, Spain (aka Travel Club) Air Miles, Netherlands Air Miles, Middle East Aeroplan, Canada BonusLink, Malaysia eBucks, South Africa 9. Fly Buys, New Zealand 10. FlyBuys, Australia 11. iPoints & Maximiles, UK & Europe 12. Malina, Russia 13. Nectar & Nectar Business, UK 14. Nectar Italia, Italy 15. PayBack, Germany & Poland 16. PayBack India (aka i-Mint)
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Othe key topics covered in this chapter include: r Why a coalition? The essentials of a coalition The advantages of a coalition The challenges of a coalition Typical application areas Expanding into a coalition
Loyalty
Rewards & Incentives
The reward is a vital part of any loyalty programme. It is the bait on the end of the line: the bit that actually convinces the customer to sign up. It is also a complex part of the programme and usually presents a delicate juggling act: it must be worth enough to be attractive to the customer but not cost enough to make the programme unprofitable. It must appeal to consumers of the right profile and it must cater for wide variations in taste and desires among those customers. All in all, the reward has many functions that we examine in detail in this chapter. We also examine the properties of a good reward, and which of these consumers think are the most important. We also look at the many types of reward that can be offered: Discounts (both targeted and untargeted), pointsdriven programmes, hard and soft rewards. Which do customers prefer, and why? We also look at how, in the eyes of an expert, one should go about planning a successful and appealing reward catalogue - quite often a component that lets a reward programme down. And finally, we examine some recent research into what motivates consumers when they are faced with a choice of rewards. Reward drives behaviour. Experiments have revealed that, while a bigger reward reinforced the desired behaviour better than a small reward, when the rewards were discontinued, those who had received the big rewards were more likely to return to the unwanted pattern of behaviour than the group who had received the small reward. So the warning is there. Never let your best customers feel that you are withdrawing privileges from them, and try to ensure that customers become loyal to the product or service, and not simply to the reward. But, to have any effect at all, the reward must be desirable enough to actually stimulate a change in behaviour among customers. It also has to be affordable, and balancing the two sides of the desirability/affordability equation is tricky.
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LI I y ^ I you may not copy or reproduce this licensed document Structuring your rewards for optimal redemptions and engagement...
In this chapter we explain all the necessary attributes and practical planning of loyalty rewards, including: 1. The value of the rewards offered 2. The function of the rewards offered 3. The properties of an attractive loyalty reward 4. How to profit from reward redemptions 5. 6. Lowering the fulfilment budget without risking loyalty How to extract maximum value from your rewards
7. Setting reward levels and tiers 8. Using different rewards to change customer behaviours 9. Types of rewards (goods, discounts, experiences or other benefits?) 10. Timing of rewards (now, soon, or much later?) 11. Rewards that consumers actually want (and what they think they want) 12. Redemption strategies (i.e. internal or outsourced) 13. How to plan a compelling rewards catalogue 14. Strategies to drive both redemptions and engagement 15. Matching rewards with different point levels 16. Insights into loyalty rewards and their effectiveness 17. Using coupons and vouchers as rewards
1.4
Customer Engagement and Loyalty
As time passes and more loyalty programmes are launched, it is becoming increasingly difficult to actually engage the customer in the programme. Customers are now so used to handing over a card at the POS that they feel little real involvement. If there is such a thing as a hot topic in loyalty, it is customer engagement. Handing over a card when transacting and receiving a quarterly statement within a pile of other mail is not engagement. Engagement grows little by little, each time the customer has to actively think about and make a decision about the programme. In fact, although nearly 90% of shoppers in the US participate in rewards programmes to earn points, discounts or prizes, loyalty programmes alone are not yet fostering the kind of emotional connection that is needed to develop long term customer engagement. Engagement is something that can only be built up over time, and it usually stems from mutually beneficial relationships between customers and brands. It could be argued that engagement comes not a result of a marketing campaign but from the full range of interactions between the customer and the brand, as well as brand-related interactions between customers and their peers. The key to building a real sense of engagement is to provide the consumer with something of personal value that is timely, relevant, wanted, and preferably repeatable. Insights for true customer engagement... In this chapter we explain why customer engagement is now seen by most marketing experts as the key to future survival, and how smart marketers are already rethinking the idea of customer engagement. Among the key topics covered in detail: 1. Insights into consumer engagement and its benefits 2. How incentives can drive customer engagement 3. Customer engagement strategies 4. How to engage the individual customer (the 'new CRM') 5. Why engagement strategy goes way beyond CRM

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6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.
How to drive engagement with loyalty rewards Why loyalty without engagement is a dangerous trap How to engage loyalty programme members for life How social media is reshaping customer engagement How to building customer engagement the social way Gamification's effect on consumer/brand engagement How e-mail can create customer engagement - or not Ways to capture and engage online customers How digital rewards can increase both engagement & loyalty How mobile can drive cross-channel engagement Recent innovations in customer engagement technique
Social
Media and Loyalty
Social media marketing is a relatively new field, driven by the widespread popularisation among consumers of social networking web sites and services such as Facebook, Google+, Twitter, Foursquare and others. These services don't only hold true to the original vision of sites such as Facebook (i.e. connecting people in a safe and personal way) but they now also include other services and technologies that augment that goal, such as location-based services which allow people to 'check in' just about anywhere - whether it be a popular club, restaurant, or their own home, or any other venue - usually thanks to the GPS that's built into their mobile phone handset. This allows people to 'be seen' in all the right places but, more importantly, it has important implications for brands that they choose to associate with in their social network. One of the most common misconceptions among marketers is that social marketing is as easy as putting up a page on Facebook, or setting up a Twitter account. Of course those are the basic building blocks, but there's a whole world of detail that needs to be considered first. As in any other marketing or advertising discipline, you first need to identify and clarify a host of factors, such as the brand identity, brand message, brand values, target audiences, value proposition, referral and advocacy benefits, social gaming elements, social commerce and currency, messaging strategy, creative elements and imagery, and how it links up with your loyalty programme. Turning social media into a loyalty driver, rather than a publicity risk... Among the many topics examined in detail, and the down-to-earth practical advice found in this chapter: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Types of social media and their uses Social customer loyalty & engagement best practices Other social media marketing best practices Does the marketer really have to lose control? Planning and setting up a social marketing strategy How social media can drive customer loyalty How social media supports your loyalty strategy The impact of social media on loyalty schemes The impact of social media on brand reputation Maximising social media's brand marketing value The link between social media and customer engagement Building customer engagement the social way Gathering insights from social network profiles Social media as a customer loyalty channel Social media as a customer service channel
... continued

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16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29.
Integrating the social channel into the marketing mix Social media as seen from the marketer's side Social media as seen from the consumer's side The adoption of social media into corporate strategy How to find the true ROI of a social media initiative Getting board level buy-in for social media marketing Which markets & sectors lead in social media usage How consumers use different social media platforms How to turn social customers into social advocates How 'social shopping' has changed the retail landscape How location-based marketing ties into customer loyalty Bridging the real world/social media loyalty gap Working with viral social marketing The future of social & location-based marketing
Loyalty
&
Marketing Tools
A customer loyalty programme, despite having all the right rewards and engagement strategies in place, can fail catastrophically if the tools and technologies that drive it are either insufficient for the task or inadequately integrated. How could a large coalition loyalty programme ever function if the reward fulfilment function wasn't tightly integrated with the web site, or if the marketing team had to refer to and deduplicate information from several siloed data sources? The technology, the tools, and every functional back-end system must be not only scalable enough to cope with the future success of the loyalty programme but also to be adapted to every market-driven change that affects the programme's goals and direction. For example, the authors of this report conducted a survey of retail customer loyalty and commitment strategy, and found that while 93% of retailers run a loyalty programme for their web site, stores, or catalogue customers, 74% reported 'partial to no tangible improvement' in their programmes compared to their competitors. This suggests a need to review current and future loyalty processes and solutions, and that a wealth of very similar loyalty platforms may be the cause of a degree of commoditisation of loyalty offerings. Another example of the more interesting - and potentially gamechanging - technological developments has been that, in the US, the nationwide rollout of EMV smart chips on debit and credit cards has opened up a whole range of possibilities and opportunities for loyalty marketing via the payment card platform. Particularly if combined with the mobile channel by means of smart phones and NFC technology, the possibilities for loyalty applications are endless. Independent advice about what matters most in a loyalty platform... This highly practical chapter provides details of loyalty tools, technologies and innovations currently in the market, offering advice on the advantages and disadvantages of these approaches. Among the technologies and tools examined are: 1. 2. 3. 4. 5. 6. 7. 8. 9. Loyalty platforms & technologies New loyalty card technologies & platforms The potential for EMV-based loyalty The rise of mobile & app-based loyalty technologies Contactless loyalty technologies The benefits of NFC & RFID technology How mobile & NFC will impact loyalty strategy Tools for loyalty metrics, analytics & insight Loyalty platforms & technology innovations
... continued
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Benefits of loyalty scheme-enabled self-checkouts Augmenting Reality for greater engagement & loyalty Linking loyalty points with prepaid cards Linking loyalty points with mobile payments Integrating loyalty into smartphones and apps Cloud-based loyalty innovations & platforms Benefits of a virtual loyalty currency Data pattern-spotting for competitive advantage Developments in Retail 3.0 and resulting consumer insights The benefits of intelligence-based marketing Differentiation using new retail technologies Better customer service with kiosks & self-service Case study: how Points.com changed the loyalty landscape
Loyalty
&
Marketing Operations
The theory of customer loyalty is quite plain: a business that retains its customers for longer usually makes more money from them at lower cost than one that is constantly paying to acquire new customers. Actually doing that - the practice of customer loyalty - is not so straightforward. It's not a trick that can be quickly learned and performed; creating loyal customers depends fundamentally on following good and sound business and marketing practices right across the business all the time. It's a sad truth of business that customers are hard to win but easy to lose. A loyalty programme is not a quick fix that can simply be bolted on and produce measurable results immediately. That said, the principles are quite simple: know your customers, reward them for behaving in the way that you want, and don't reward them for behaving in any other way. In order to know them, you need to collect data and then use it intelligently to identify the valuable customers and to reward them for generating more profit. Of course, there are many refinements that can be made to this broadly stated principle. Enter the loyalty programme. But many of the so-called loyalty programmes in operation today are not really loyalty programmes at all. Perhaps 'frequent customer programme' is a more accurate term. To be loyal to a business is one thing, but to use it frequently is another (for example, it could be a result of circumstances that there is simply no other choice). Clearly, if another choice becomes available, then the distinction becomes critical. This means that most prudent businesses aim to create loyal customers, not just frequent customers. Of course, not all customers are potentially loyal customers, for a variety of reasons. So the ideal loyalty programme would be one in which already loyal and potentially loyal customers benefited, but other customers didn't. This means that the customers have first to be sorted into groups, and different approaches have to be made to each group. Or, more likely, a programme has to be designed so that it will appeal to the desired group more than to the other group. The 3 top reasons to have a loyalty programme... A good point at which to start is at the very beginning - when acquiring the customers. In many typical businesses, as many as 45% of direct, new, one-off purchasers do not go on to purchase a second time. In order to grow and maintain a successful business, three simple rules should be followed: 1. Acquire customers that are likely to repurchase - even though this may be at the expense of initial raw response; 2. Recognise which customers are unlikely to repurchase and limit your marketing spend for this segment accordingly; 3. Focus the marketing budget on those who exhibit the same profile as existing repurchasers but have yet to buy a second time.

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The main goals of a loyalty programme... In this chapter we detail the workings of an effective customer loyalty programme, and how to achieve several obvious goals: Retaining existing customers Acquiring new customers Moving customers up the RFM segments Deselecting or 'firing' unprofitable customers Win-back techniques (recovering lost customers) Increasing CLV (customer lifetime value) Best customer marketing (targeting the most worthwhile customers) Building long-lasting customer relationships Creating advocates from loyal customers Adjusting pricing strategy for greater profitability Responding to competitive challenges Selecting stock lines more effectively Planning merchandising optimally Cutting promotional and advertising costs Selecting new trading sites based on profitable customer profiles
Critical success factors for a loyalty programme... We also go into depth on the 17 key factors that make a loyalty offering successful, both in the eyes of the customer and in terms of bottom line business results: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Loyalty programmes are never a 'quick fix' Targeting the right people at the right time Gaining customer buy-in Knowing your customers and gathering intelligence Not rewarding the wrong behaviour Rewarding versus recognising Spotting defection patterns Taking advantage of customer lifecycles and trends Offering attainable & affordable rewards Recovering the programme's cost Keeping communications relevant and well-timed Keeping it simple Measuring the programme's results Attracting new customers Providing unique, hard-to-copy benefits Empowering your customer-facing teams Making things easier - for both you and the customer
Guidance for running a profitable loyalty programme... Among the key topics covered in this chapter, we explain operational details including: Critical capabilities for customer loyalty Loyalty programme models & strategies The many structures of loyalty marketing Planning the 'grand design' of customer loyalty Forming the right customer loyalty strategy Best practices for loyalty management Research into the drivers of customer loyalty Loyalty tokens & identifiers, and choosing the right ones
... continued

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Examples of different loyalty tokens at work Increasing your loyalty scheme's personal relevance Stealth loyalty programmes and real-time targeting CRM and one-to-one marketing systems Generalised, targeted and customer-specific pricing Loyalty through stored value, prepaid & gift cards Credit and debit card-based loyalty strategy Turning ancillary revenue into customer loyalty Designing and implementing your loyalty process Shattering the myths of customer loyalty
1.9
Customer Data Strategy
ana use or aata. me more aata we can practically use, tne Detter: customer |;|-~\ asa r~ demographics, preferences, lifestyle and life stage, transaction history, returns,p r r ~ | | and even customer service event history. Lr^ll I 1 The loyalty programme gives us a way of identifying specific customers, and tying their demographic records to their transaction records in the back-end database (whether that be an in-house collection of databases, an enterprise-wide CRM system, or some other data warehouse that's being updated, analysed, and used across the whole business). The uses of the resultant array of data, given all the technologies that are now available toanalyse it and turn it into useful support for business decisions, are potentially endless. Everybodyunderstands that customers' supermarket transaction data can be used to segment them for marketing campaigns later on, whether that's based on demographics, spend, or products purchased. How customer data turns into loyalty by providing new insights... Perhaps the most important lesson we teach in this chapter is that customer data - in almost any form - can be turned into insights, which drive continual business improvements, which translate into greater customer loyalty, satisfaction, and engagement. For example, some of the most important data-driven techniques and insights available to loyalty marketers include: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Customer behaviour profiling Customer lifestyle & demographic profiling Customer product preferences and repertoire Product category relationships & cross-selling Dynamic pricing strategies Online shopping suggestions Segmentation and customer tiering Customer base analysis and trend predictions Customer flow analysis Share-of-wallet estimation Market share estimation Early defector detection and customer win-back opportunities Lower cost competitive response
... continued

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14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
Customer targeting and differentiation Advertising campaign targeting Circular efficiency Offer planning and promotion analysis Differentiated marketing Intelligent deselection of unprofitable customers Green targeting to save costs (and the planet) Planning and merchandising Human resources planning Geographical store site selection Inventory rationalisation & selection Planogram adjacencies & merchandising Differentiation based on data analysis Real-time data mining and the 'single customer view' Behaviour prediction based on past events Affinity marketing strategies Predictive modelling
Factors involved in planning a customer loyalty database... This chapter also details the process of planning a customer loyalty programme database, providing advice and guidance on usually thorny issues including: Data processing Data flow Data warehouses and data marts Data duplication Data accuracy Data cleansing Data ethics Data security and privacy Data analysis to support business processes Predictive analytics to help drive change
How much data is needed, and where and how should you get it? Another common issue that we explain in detail is the question of how much data to collect, when, where, how, and how often it should be refreshed and 'cleansed'. The most popular data collection methods for loyalty programme operators currently include: the loyalty programme sign-up, web site, direct mail responses, mobile apps and sites, transaction records, reward redemptions, promotional responses, customer feedback, customer services and call centres, social media and location-based services, third party data sources, programme partners, point-of-sale (POS) terminals, among others - all of which we explain and illustrate in detail. This chapter also examines all the best practices, strategies, legalities and theory that go into creating an operational customer data model, such as: 1. 2. 3. 4. 5. 6. 7. 8. The technologies behind customer data The importance of loyalty data collection Ways to gain business value from customer data How loyalty data drives relevance and adds value How loyalty data improves marketing effectiveness How data ignorance damages both loyalty and the brand Turning loyalty data into actionable insights How customer data is harnessed to drive customer loyalty
... continued

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9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37.
How loyalty data is harnessed to drive engaged relationships The customer-related benefits of using loyalty data Database planning, data processing & data flow Data analysis to support business processes The 'how, where, when, why & how much' of data collection How long does customer data last? Data duplication, accuracy, and cleansing Predictive analytics & business intelligence Benefits of data collection and analysis Profiling customer behaviour, lifestyles & demographics Intelligence from mystery shoppers & feedback systems Why customer data has become the 'new oil' Segmentation of the customer base Customer lifetime value (CLV), RFM & customer tiering Customer base & flow analysis Share-of-wallet & market share estimation Best customers, defectors and win-back strategies Customer targeting and differentiation Intelligent deselection & differentiated marketing Turning 'blind data' into lifetime relationships Using data for planning and merchandising Using data for other business objectives Data mining, OLAP, MOLAP, ROLAP and Magic Cubes The practical application of business intelligence Data ethics and privacy policies Data security & privacy, and related consumer concerns What happens when customer data is breached or lost How digital security issues are affecting brands Conclusions on the benefits of loyalty data
1.10
Loyalty & Marketing Communications
There are many more communication channels available today than there were before the rise of social, interactive and other electronic media. Even in the past two years since the publication of The Loyalty Guide 4, marketers have found a growing number of innovative ways to reach consumers, whether at home, at work, or at play - especially through the rapidly growing social media phenomenon. Communication with consumers and other businesses can take place by mail, telephone, fax, text message (SMS), multimedia message (MMS), computer games, television, films, radio, mobile sales units, in-store teams of brand representatives, focus groups, leaflets, newspapers, free-standing inserts, coupons, e-mail, instant messaging (IM), voice over IP (VoIP), web chat, web sites, bulletin boards, online communities, social networking platforms, and even other internet-based and mobile systems such as video conferencing and meeting sharing systems. Clearly, each channel has different costs, social implications, complications, emotional connotations, privacy issues, and various perceived benefits and risks for the consumer. Each brings its own challenges in terms of finding the right frequency, message, tone, voice, relationship-based permission, and value proposition.

27
And with each comes a unique set of challenges: as a rule, consumers don't like junk mail, or 'spam' (unsolicited commercial messages), or unsolicited sales calls. They complain about their mobile phone being invaded by irrelevant advertising messages, and they don't want companies "muscling in" on their private social networks without permission. They don't want to waste bandwidth by receiving unwanted videos and sound clips by e-mail, and they don't want their instant messenger services popping up unwelcome advances from companies they've never heard of or dealt with. The list goes on. But the good news is that there are still ways, means, laws, and ethical practices that cut through the communication barrier for all of these channels, allowing you to communicate and build relationships with existing customers and sales prospects alike. Benefits and pitfalls of all the key communication channels... In this chapter we explain the advantages, disadvantages, strengths, weaknesses, opportunities and threats involved in communicating with your most valuable asset: your customer base, with specific guidance and best practices for each of the major channels and communication strategies, including: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. Forecast of consumer communication trends A new focus on thinking psychologically Loyalty and the mobile channel Code of conduct for mobile marketing Loyalty and the e-mail channel Driving greater customer loyalty through e-mail Opt-in and opt-out: a practical guide Getting the right timing for e-mail marketing How e-mail marketing can become more social Loyalty and the web channel Web marketing depends on content & personalisation How the 'cookie laws' affect marketers Loyalty and the social media channel How social communications boost customer retention Loyalty and word-of-mouth (WOM) Word-of-mouth's impact on customer loyalty Why loyalty schemes create more WOM champions The effect of legislative clamp-downs on WOM Loyalty and the the direct mail channel Loyalty and the multi-channel approach How loyalty depends on multi-channel integration Integrated channels give the best marketing ROI Loyalty and the self-service/kiosk channel Loyalty and the call centre channel How contact centres drive customer satisfaction & loyalty Loyalty and the advertising channel Why advertising's long-term value is being rediscovered
The
Human
Aspect of Loyalty
It's easy to get so involved in the intricacies and technicalities of loyalty programmes that the most important part - the human aspect - gets neglected. The technology involved is a marvellous tool without it, loyalty programmes as we know them would not be possible. But we must remember that loyalty (and its opposite, the desire to simply walk away) are both intensely human emotions. And unless the programme generates the right feeling in people, it won't work. We must also remember that humans aren't as predictable as technology. Actions that might make one person loyal could well turn off someone else. It gets even more complicated: something that could engender loyalty in someone on one day might do the opposite on another day. Customers are human, and loyalty is a strong emotional link... After all, who is more qualified than customers to tell us what customers want, and what they don't want? For this reason, much of the research presented here looks at the customer/supplier relationship from their

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side. But one thing is certain: the building of loyalty will not get any easier. While advances in technology have made loyalty programmes more effective, accurate and appealing to customers, these same advances have made it much easier for customers to switch suppliers. Comparisons of stock, prices, trading policies and delivery times and costs are now only a mouse click away from many customers. And if the item is to be sent to them, need they care from where it comes? Many suppliers are apparently equally trustworthy and reputable. It is important to have some unique property that makes you stand out from the crowd. All other things being equal, a good loyalty programme can do just that. Because all customers are not the same, we have looked at the different ways that different groups of customers respond to marketing, at the psychology of loyalty, and the influence that different rewards have. In addition, factors such as age, gender, race, wealth, pricing policy, general satisfaction, level of service, the internet and the new 'green marketing' all come into planning a programme for a target market. All of these are examined separately. Practical ways to keep your customers engaged and loyal... The customer-related human insights we explain and demonstrate in this chapter include: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. The human side of customer loyalty The psychology of customer loyalty How consumers interpret and choose loyaltyrewards Why customers won't go out without a loyalty card Trends and changes in consumer behaviour The role of trust in consumer relationships The role of the customer experience Why good customer experiences are more profitable Why bad customer experiences travel fastest Major enhancers of the customer experience How product recalls can actually increase customer loyalty Why customer intimacy is the next loyalty frontier
Employees are also human, and they bond emotionally with the customers... At the same time, there is no question in any executive's mind about the significant role that your employees play in both generating and maintaining the loyalty of your customers. Without polite, courteous, knowledgeable, efficient and empowered staff to help the customer, what chance is there of a customer wanting to repeat their experience with your company or brand? With very few exceptions (i.e. products or services with no differentiating factors and with extremely high utility value), no company can afford to be rude or unhelpful to even a single customer. After all, reports of bad experiences travel far more quickly among consumers than reports of good experiences, and they tend to live longer in people's memories. A helpful employee represents a chance to acquire new customers by word of mouth - and that's a free advertising campaign. In order to keep your employees on board with corporate goals such as customer loyalty and service excellence, you have to keep them happy, give them all the right tools, and empower them to use them. Furthermore you have to be seen to be listening to what your frontline staff say about problems and potential improvements, and actively seek their feedback and ideas. And you have to reward them for their observations and desirable behaviours 'above and beyond the call of duty'. With all of this in mind, we have pulled together much of the relevant research that has been done on the subject over the past couple of years, and have extracted the salient points. We have also reported some
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LI I y ^ I may not copy or reproduce this document of the knowledge that experience has you brought. There islicensed a comforting correlation in most of the findings, but there are also some differences of opinion and experience.
Practical ways to keep employees engaged, and customers happier... The employee-related human insights we explain and demonstrate in this chapter include: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Employee loyalty insights & research Customer experiences linked with employee engagement How employee engagement affects the bottom line Why good customer service trumps call centre efficiency Why employees should be segmented, not just customers Why employee loyalty is not just about the money Best practices for rewarding employees Ways to keep good employees engaged and loyal How travel incentives boost employee performance How top retailers build greater employee engagement
Loyalty
&
Marketing Best Practices
Over the past few years there have been many innovations in the field of customer loyalty marketing, and many of these have come about through the earnest implementation of established best practices. For example, the idea of giving customers exactly what they expect and engaging them in a meaningful twoway dialogue is not something new - but it is the foundation of the current trend toward greater customer engagement and satisfaction. In this chapter we detail the best practices that need to be observed when building customer loyalty, and to make sure your loyalty initiative doesn't stumble or fail, whether it's online, offline, or both. We also examine the best practices behind successful customer loyalty management techniques, and highlight the main traps and pitfalls that catch so many new programme operators. In addition, we cover best practices for e-mail marketing - including details of the strategies that have worked best, and the strategies that didn't work at all - as well as customer management, customer retention, customer relationship management (CRM), digital marketing, and a number of other more general marketing best practices and guidelines, including green marketing and how to 'keep it real' and avoid consumer backlash over 'greenwashing' issues. This chapter explains the latest best practices for customer loyalty management, including: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Best practices for increasing customer loyalty Top ten ways to improve a loyalty scheme The key attitudes of successful loyalty marketers Principles that create highly loyal customers Voice of the Customer (VOC) best practices Best practices to stop a loyalty scheme stalling Best practices for online customer loyalty The six P's of customer loyalty marketing Creating loyalty with 'surprise and delight' Building loyalty through customer service Loyalty management best practices A relationship model that predicts customer loyalty Safely lowering the cost of a loyalty scheme Recession-proofing a loyalty programme
This chapter also explores in detail the latest thinking and best practices behind customer retention and customer relationship marketing, including: Customer relationship best practices Customer management best practices Best practices for successful CRM Essential rules for retaining your best customers Growing customer loyalty in a recession Best customer management strategies Forming a customer-centric marketing strategy We also detail a wide array of other marketing best practices that are essential in today's fast-paced electronic market, including email, web, social, cause-related and green marketing: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. The new focus on marketing performance management Best practices for mobile marketing Best practices for social media marketing Digital marketing best practices E-marketing strategies that didn't work E-marketing strategies that did work Best practices for digital customer engagement How cause-related marketing increases sales Green marketing best practices Who consumers trust most when 'going green' Why 'plant a tree' is actually a loyalty strategy Consumer responses to green marketing The strength of green customer relationships
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1.11
Loyalty Metrics & Accountability
The business case for any loyalty programme needs to be well supported and justified, not only in the planning stages but on a continuing basis after implementation, and during development. The application of solid mathematics, statistics, and scientific measurement is the only way to prove the effect the programme is likely to have on profitability and the customer base. And the application of regular and meaningful management reporting is the only way to monitor all the factors involved both before and after implementation of the programme. Every aspect of the creation of a loyalty marketing initiative - or of any differentiated marketing initiative - must be evaluated at all stages, and useful metrics must be implemented with proper processes and controls to help determine the success, failure, progress or stagnation using preset standards. In this chapter we examine the detail and practical workings of the necessary formulae, calculations, metrics, and management reporting tools that every marketer needs during the process of evaluating new and ongoing loyalty marketing initiatives. A loyalty programme's results are often nebulous - hard to see accurately, usually being viewed in combination with the results of other marketing initiatives, seasonal variations in the market, and other disguising factors that make it hard to measure how successful (or not) the programme really is. Being able to monitor, measure, track, and analyse the level of customer loyalty before, during, and even after the programme, is of central importance to the financial justification of a loyalty programme. So, although the psychology and implementation of your programme may be something of an art, the only way to track its performance is through the combined sciences of logic and mathematics.

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Customer loyalty itself is difficult - if not impossible - to measure accurately. Loyalty means different things to different people - there are many aspects of it and each could vary in importance depending on the viewpoint of the observer. In addition, loyalty involves emotion, and that's notoriously difficult to measure meaningfully. However, over time the necessity of measuring results has led to the development of some formulae that have become as close to standard as you get. Three of these are the patronage ratio, the switching ratio, and the budget ratio. Added to these, to complete the picture, are a range of other composite measures, such as the Enis-PaulIndex and customer retention measurements.
R - fa + 1) - pi
11
^ _ ^Pi 0-+r) & = fc+ 1)- a

111
NPt (l+r)'
It's probably true to say that the ultimate measure - the one that the board of directors will be interested in is the effect on the bottom-line profit. But in order to see how well aspects of the programme are functioning, and to be able to make adjustments to it and see what difference they will make, these more specific formulae are needed. Step-by-step calculations for loyalty, retention, profitability, and segmentation... In this chapter we provide not only the exact formulae needed to measure and calculate customer loyalty and all its sub-parts, but this report's readers-only web site provides working versions of all of them, both online and as a downloadable Excel spreadsheet. This chapter takes you step-by-step through the calculation and interpretation of dozens of business-critical metrics and analyses, including: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. The budget ratio (share of wallet) Retention rates & customer churn Customer lifetime value (CLV/CLTV) Customer retention, attrition and lifetime Potential, existing, and defected customers The patronage ratio The switching ratio The Enis-Paul Index Customer profitability Drivers of loyalty and profitability Loyalty and profitability models The 'loyalty and profitability chain' Past, actual, and future profitability RFM segmentation Net Promoter Score (NPS) Attitudinal equity Customer-centric metrics New digital marketing metrics Examining individual customers and customer groups Statistical primer: the mean, median, mode, variance & standard deviation
1.12
Reporting & Segmentation
Marketing departments are in ever-greater need of both tools and techniques to help them prove to the board of directors and shareholders that they are performing as well as they should, given the budget they have been given. Moreover, marketing is a fast-developing science combined with a 'human art' that requires constant development, innovation, fine-tuning, and new technologies if the company is to stay one step ahead of the competition. This requires not only more money in the budget to cover the costs of developing new techniques but also a certain amount of money that will be 'at risk' without any certain ROI (return on investment). While most forward-thinking FDs (finance directors) and CFOs (chief financial officers) accept that development is an ongoing and unavoidable cost of business, most will also demand that the marketing
function can pay for itself in other ways - with an increasing ROI, for example. As a result, the days of analysis and reporting for the sake of simply monitoring the success (or otherwise) of individual marketing campaigns are over, and marketers must now show not only their smaller successes but also their overall contribution to the bottom line, brand equity, and corporate well being. The importance of statistical analysis and proper management reporting cannot be understated. How to prove the loyalty programme's ROI and bottom-line impact... In this chapter we demonstrate and explain - by way of practical examples, calculations, tables and charts - the most important management reports and tools in the loyalty marketer's portfolio. These calculations, comparisons and reports make the process of proving and justifying the loyalty programme's contribution to the bottom line not only easier but also more timely and accurate. Reports that we detail include: 1. 2. 3. 4. 5. 6. 7. 8. The Bathtub report The Decile report (RFM/RFS) The Quo Vadis Retention report The New Member Frequency Report The Cardholders' Summary Report Traditional RFM segmentation (125 cells) Reduced RFM segmentation (27 cells) Flexible RFM segmentation (8 cells)
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1.13
Brand Marketing & Loyalty
There would be no point in spending marketing dollars building brand awareness if customers don't buy the brand again after they've tried it the first time. Today's brand marketers all have the same aim: to encourage brand loyalty - the situation where consumers choose a brand over its competitors and private label equivalents because they want to. In this chapter we focus on the successes and techniques seen most recently, and also the problems facing brand marketers and how they can be overcome. We look at the key drivers of brand loyalty, how to form a more effective brand strategy, and how to predict the impact of brand loyalty. We also detail ways to build and boost a brand, both offline and online, along with an examination of common brand threats and nationally successful brand strategies. A good definition of brand loyalty is that given by Jan Hofmeyr and Butch Rice, in their book 'Commitment-Led Marketing;':
"Brand loyalty is the tendency of someone to buy a brand again and again because they prefer it over others."
Hofmeyr and Rice developed a brand marketing tool called The Conversion Model, which enables the marketer to segment users of a brand in a market by their commitment to staying with the brand, and non-users by their openness to adopting the brand. Research shows that the brand loyalty of customers has fallen steadily over the past two or three decades. Results vary, but it's probably fair to say that today's average consumer is only 75% 85% as loyal as the consumer of the 1970s or 1980s. So why did this happen? There are several reasons: 1. There is much more choice today: the number of products within categories has increased. 2. Many "me too" products have been launched, some looking very similar to the original. 3. The number of advertisements seen by consumers daily has increased enormously, especially since new channels like the internet, email and SMS have come on the scene.

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4.
Modern consumers are more sophisticated and more likely to think for themselves and to try new products. 5. There is more comparative information available, on web sites and in consumer magazines and the national press. 6. The standard of service (and of products) has in many cases improved to the stage where there is not much difference between brands. 7. Price competition has increased. It must never be forgotten that brands exist in the minds of consumers. A brand is not a finite thing like a building, that will remain unchanged no matter what people think of it. As public perceptions change, brands change with them. A brand can change without the brand owner making any changes simply because, for some reason, public perception of it has changed. That's why much of this chapter is devoted to the consumer's perception of brands. Brand development and brand marketing are inextricably tied to brand loyalty. And companies that tie brand development to top level corporate goals deliver better shareholder value and build stronger brands. Strategies and best practices to create value through brand loyalty... In this chapter we clearly explain the linkage between customer loyalty attributes and brand loyalty, and provide you with the necessary strategies and insights to increase your customers' loyalty to your brand. Key strategies and insights covered include: 1. Creating & updating a brand loyalty strategy 2. Drivers of post-recession brand loyalty 3. Factors that break brand loyalty 4. Brand positioning's role in customer loyalty 5. Why consumers want more emotional ties with brands 6. Mobile brand interactions must be more personal 7. The role of trust in brand loyalty 8. The role of word-of-mouth (WOM) in brand loyalty 9. The role of digital channels in brand loyalty 10. The role of new technologies in brand loyalty 11. Drivers of CPG brand loyalty & defection 12. Brand marketing & loyalty strategies 13. Premium & luxury brand marketing strategies 14. Brand building in the low-carbon economy 15. Top brands worldwide and their reputations 16. Top brands according to social media data
Business-to-Business
(B2B) Loyalty
Business to business loyalty programmes and incentive schemes seem, on first consideration, to be a great idea: a way of encouraging one business to continue doing business with another. But they also come with their own pitfalls that don't occur in consumer-based loyalty programmes. For example: 1. Is it ethical to reward a client's employees to make decisions based on personal gain? 2. Who should be rewarded: the business owner, management, employees, the business itself, or all? 3. Is the person who gets the benefits always the one who makes the actual purchase decisions? The list of problems grows or shrinks depending on the industry sector involved, and on how well the relationship between supplier and client is defined and controlled. For example, there is little point in a
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CPG manufacturer rewarding the product buying clerks at a supermarket's head office when the decisions on product range, quantity, and shelf space allocation are taken by others (such as marketing and merchandising managers). This represents a tightly controlled buying environment in which direct rewards for employees are fruitless.
However, in a more flexible (and typically smaller) business environment, buyers often have authority over stock control, product range, quantities, and even merchandising arrangements. In these cases, a B2B loyalty programme that rewards the buyer would probably work - even if it stands on unsteady ethical ground. There is another situation where B2B loyalty schemes work very well: channel sales partner programmes. These are where a manufacturer directly rewards the sales staff of companies that resell its products. This kind of selling incentive is very constructive because it benefits both businesses equally, in terms of greater sales and profit. By generating strong engagement between channel partners' sales people and the products themselves, the resultant increase in product knowledge and familiarity means that a more authoritative line can be taken in the sales process when dealing with end users. A fine example of this kind of programme's success is the Indian networking specialist Nortel, which achieved 40% growth in channel sales after one year of running such a programme. Four main B2B loyalty strategies... This chapter explains several different B2B loyalty strategies and describes the situations and circumstances under which each should be used, along with practical ideas on which job roles can be most effectively targeted within the client company. The main B2B loyalty marketing strategies are: 1. The two-link chain 2. The three-link chain 3. The four-link chain 4. Targeting the SME owner-manager Five attitudes of the most successful B2B marketers... We also explain, step-by-step, the five key attitudes that make a B2B client loyalty initiative successful: Understand the clients. Learn about them, and make good use of what you learn. Deliver flawless results. Always fulfil every benefit and promise made. Just let the customer buy. Don't put any unnecessary obstacles in their way. Develop a proactive plan, then execute it thoroughly and completely. Don't assume the client is loyal, and don't give up when they seem to stray.
We also detail the key drivers of B2B loyalty, strategies for channel loyalty and reward schemes, a new channel engagement strategy, the major factors that drive channel partner loyalty, the link between business intelligence (BI) and successful channel marketing, and how word-of-mouth travels between businesses. Case studies of successful B2B loyalty programmes... The detailed case studies in this chapter drill down into some of the world's best B2B loyalty success stories, what they did, how they did it, and what the results were, including: 1. Nectar Business (UK) 2. Argos Business Solutions (UK) 3. 4. Nortel (India) ARBL (India)

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Market
Sizing & Valuation
In this chapter we explore, on a country-by-country basis, global consumer market sizes and statistics, providing breakdowns of population structure, numbers of households, household income distributions, consumer age groups, gender bias, and other commercially useful facts and figures. The 2010 global data has been researched through and gathered from a number of trustworthy sources including various annual consumer-oriented and marketing fact books and tables. The result is an overall snapshot of each country's key marketing statistics, up to date as of January 2012. Figures & forecasts for loyalty schemes, worldwide... Among the up-to-date facts, figures and market forecasting tools provided in this chapter: How to estimate a loyalty scheme's market size and future penetration rates, year-on-year Factors governing a loyalty scheme's participation rate and penetration rate Current loyalty market sizes, values, demographics, and developments for major loyalty markets, including the USA, Canada, United Kingdom, Australia, South Africa and China. Key demographic data about each of the world's 54 biggest countries, plus aggregated totals and averages for North America, Europe, the Middle East, and the Whole World, including: 1. Consumer age breakdowns 2. Consumer gender breakdowns 3. Household sizes, population count, and number of households 4. Household income share breakdowns (highest and lowest earners)
1.17
Forecasts & Trends
The times, they are a-changing, as Bob Dylan said. But what Bob neglected to tell us was how fast. In terms of customer loyalty marketing, the most significant trends that seem to be surfacing include those surrounding social media, gamification (adding fun and value by providing subject-relevant games), consumer communities, the mobile channel (including apps, web sites, coupons, NFC-based contactless payments, and location-based services), emotional and personal relevance to the customer, cause-related initiatives, more insightful analysis and usage of customer data, and customer advocacy and engagement. When it comes to consumer behaviour, there are several ongoing changes that are likely to be with us for years to come. The global recession has had a significant effect on consumer attitudes to money - and more specifically value for money - even at the highest ranks of the wealthy and the elite. Shoppers have become increasingly promiscuous when it comes to everyday purchases, but they still value quality and value above simple price. The pace of change is increasing, thanks to the smartphone... Mobile marketing is about to see a number of significant developments and changes in thinking, the next few years are likely to see not only an increase in marketing spend on mobile search and a widespread improvement in both speed and usability where mobile web sites are concerned, but also a growing battle between SMS, mobile sites, and the ubiquitous mobile app, thanks to a range of factors including marketing costs, user convenience, security concerns, and mobile platform technology considerations. And the meteoric rise of the smartphone (in the guise of the Apple iPhone, Blackberry, Android-based handsets and numerous others) has changed the way consumers think about product research: when considering a retail purchase of any significant value, most consumers will now reach for their smartphone to find out about the item, read reviews written by 'people like me', compare prices, and even determine product availability. Social networks have also changed the way consumers interact, not only with each other but also with brands; there is now a sense that anything short of an immediate response to a question or complaint

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posted via social media should be a public relations disaster. Consumers are changing far more quickly than marketers, and it's a full time job keeping up. Customers arent as predictable as they used to be. Theres a whole new way of thinking... Consumers are also crystalizing into distinct behavioural groups that can help marketers segment them more easily, even when nothing else is known about them. For example, the art of examining web site visitor behaviour and drawing meaningful conclusions about their possible purchase intentions is no longer an art: it's a very precise science. As more and more data is collected about customers and the way they interact digitally with their chosen suppliers, increasingly refined models can be built to help predict the intentions of other unknown consumers when they make first contact with a brand, regardless of which channel they choose to use. As a result, those parts of the organisation that collect, handle, process, analyse and use data are becoming more instrumental in the success of loyalty and marketing initiatives, turning from back-room IT geeks into modern front-line heroes. Brands are doing battle with unexpected challenges from every side... Finally, brand marketing is no exception to the rule, seeing changes in approach not only from the consumer's side but also from the way in which brands are tackling a host of complicating factors, such as the recession, new technologies, changing legislation and government guidelines, evolving consumer needs and the different wants and desires of different age groups. For example, brands will increasingly become a surrogate for the concept of 'value', and what makes goods and services valuable will increasingly be associated with the brand itself and what consumers believe the brand stands for. For this reason, brands will need to make as much as possible out of green and ethical issues, eco-friendly products and services, emotional engagement and every other aspect of consumers' everyday lives that bears an emotional tie. The challenge, however, will be to find out which issues are most important to the brand's targpt audience, and how to address those issues in a sincere and relevant way that makes consumers feel good about the brand. Find out whats really happening out there, and get practical advice on how to deal with it... In this chapter we examine the latest trends and forecasts involving customer loyalty (from both a strategydriven and a consumer-driven perspective), consumer behaviour and preferences, social media marketing and social loyalty strategies, digital marketing (including web-based, email, digital communications and augmented reality), mobile marketing and mobile media, multichannel marketing and 'commerce anywhere' strategy, brand loyalty and affluent customer loyalty, traditional marketing and mailing, voice-of-the-customer initiatives, green marketing, and experiential loyalty rewards. Our detailed explanations and analysis of trends and forecasts include: 1. Strategy-driven customer loyalty trends 2. Key loyalty marketing trends for 2012-2016 3. Coming trends for retail loyalty marketing 4. Trends for the future of loyalty in the UK 5. Loyalty 2.0 - and what comes next 6. Consumer-driven customer loyalty trends 7. Coming trends in travel loyalty schemes 8. Customer engagement and behaviour trends 9. Customer behaviour change forecast 2012-2020 10. Social & mobile consumer behaviour 2012-2015 11. Customer communication trends 2012-2016 12. Social marketing trends & forecasts 13. Mobile & social strategies to become a priority 14. Digital marketing trends & forecasts 15. Email marketing trends for 2012-2015 16. Online marketing trends for 2012-2015 17. Mobile marketing trends 2012-2016 18. Mobile media trends forecast 2012-2016 ... continued 19. Multichannel marketing trends & forecasts 20. Key brand marketing trends 2012-2016 21. Brand power and brand strength forecasts 22. Traditional marketing trends 2012-2015

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23. Voice of the Customer (VOC) trends 2012-2015
1.18
What The Experts Say
If you could have a hour-long personal interview with the world's leading experts on customer loyalty, retention marketing, customer win-back, retail operations, and marketing operations management, what would you ask them? We've done exactly that, and asked a selection of thought leaders from around the world to share with us their thoughts on customer loyalty marketing. They were given the freedom to comment and expound upon any subject that they think matters most today, and their honest opinions, advice, answers, practical guidance, predictions, and solutions are detailed for you in this chapter. We hear from more than thirty world experts on customer loyalty, including: Loyalty Around The World, according to the regional branches of ICLP Don Peppers and Martha Rogers from Peppers & Rogers Group Bryan Pearson from LoyaltyOne Tim Keiningham et al from Ipsos Loyalty Brian Woolf from the Retail Strategy Center Terry Vavra et al from Customer Experience Partners Andrea Burchett from The Mileage Company Jolande Duvenage from eBucks Kelly Hlavinka from Colloquy Gary Hawkins from Hawkins Strategic Robert Passikoff from Brand Keys Cheryle Frenzel from Maritz Motivation Janet Titterton from Collinson Latitude Dominic Hofer from Loylogic Mike Capizzi et al from Marketing Strategists Mike Atkin from the Customer Strategy Network Peter Wray from Loyalty Matters Bill Hanifin from Hanifin Loyalty Carlos Dunlap from Kobie Marketing Jill Griffin from Griffin Group ... among many others.
1.19
Supermarket & Grocery Loyalty
With consumers becoming ever smarter about prices and product options, countries of origin, 'food miles' (i.e. how far an item actually travels before reaching the shelf), green and organic foods, and healthy lifestyle options, it is no surprise that supermarkets are finding it more difficult to satisfy all of the customers all of the time. But the problem is worse still, with competition having really opened up on the internet over the past two years, and even greater price pressure being applied by discount supermarkets

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such as Wal-Mart in the US and Asda in the UK. No consumer market is safe from this intensively competitive atmosphere, it seems. When Sir John Cohen, founder of the UK-based Tesco empire, brought the idea back to the UK from the US soon after World War II, the model for supermarkets was to "pile it high and sell it cheap". Many of the original supermarkets were like glorified market stalls. Then came the concept of self service, and the distant ancestor of the modern supermarket was born. But today, the leading supermarkets (such as Tesco) are among the most sophisticated retailers in the world. They lead every other sector in terms of customer data collection and analysis, stock management, customer service, and pure retail innovation. Metro Group [www.metrogroup.de] in Germany continues to push forward with new automation technologies (such as RFID-based tracking of goods throughout the supply chain, self-checkouts, and 'intelligent' shopping carts), and is steadily marching forward with its Future Store [www.future- store.org] initiative. And as supermarket groups and traditional grocery retailers diversify rapidly into other markets and sectors, they are strengthening not only their hold on the consumer's monthly household budget but also on insurance, communications, banking, loans, credit cards, household maintenance, car maintenance, travel and holidays, health and well being, and a vast array of other aspects of daily life. This, of course, means that their loyalty card programmes can now collect even more valuable data, gaining a much wider and more general view of each household's lifestyles and life stages. These 'mega retailers' are now the leaders in customer segmentation based on purchases in multiple categories and sectors, and are the ones to watch to find out how to target both meaningful and appropriate offers at specific customers. With respect to customer retention strategies, supermarkets can be broadly divided into three groups: 1. Those that rely on every-day low prices (EDLP) to keep their customers; 2. Those that rely on loyalty programmes for best customer marketing; 3. Those that rely on excellent service and ranges of products. Of course, there are many shades in this spectrum and some supermarket chains adopt all three methods to varying degrees. Just as there is no such thing as an average customer, there are no definitely 'right' or 'wrong' approaches to customer retention. EDLP will appeal to one group of consumers, better service and choice will appeal to another, and loyalty programmes will appeal to another. It is important to choose the method that will appeal to the chosen market sector: if the culture of the business revolves around quality (up-market premises, exclusive ranges of premium goods and a superior shopping experience) then EDLP is probably not the way to go. However, for an enterprise geared toward attracting and retaining the bulk of the population as customers, EDLP may be the answer. Once the decision is made, it has to be whole-heartedly applied. All decisions should be made with the culture of the business in mind. Key insights into the success of supermarket loyalty schemes... This chapter explains why supermarket loyalty programmes usually succeed where other retailers' loyalty programmes risk stalling, as well as other insights such as: Why supermarkets are usually the best at understanding their customers What drives grocery shoppers' choices What grocery shoppers need and want from their favoured supermarkets
Case studies showing how the best loyalty schemes work, and why... In this chapter we have researched, explored, detailed, summarised and explained every aspect of what we believe are some of the world's most exemplary supermarket loyalty programmes, and we present details

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of the programme and rewards structure, the programme operator, and programme developments over the past few years, along with membership counts and redemption figures wherever possible, including: Case studies of UK supermarkets: 1. 2. 3. 4. 5. 6. Asda (EDLP) Co-op (Dividend Card) Iceland (Bonus Card) Sainsburys (Nectar) Tesco (Clubcard) Dunnhumby (the story behind Tesco's analytics)
Case studies of US supermarkets: 1. 2. 3. 4. 5. 6. 7. 8. Big Y (Express Rewards) Giant Foods (BonusCard) Kroger (Kroger Plus) Meijer (EDLP) Price Chopper (AdvantEdge Card) Safeway US (Club Card) Safeway Canada (Club Card) Wal-Mart (EDLP)
Case studies of other supermarkets around the world: 1. 2. 3. Coles/Wesfarmers, Australia (FlyBuys) Countdown, NZ (OneCard) PicknPay, S. Africa (Smart Shopper)
We also highlight some of the most recent and innovative developments in customer loyalty from other supermarkets including: Giant Eagle (USA), Winn-Dixie (USA), Stop & Shop (USA), Market Street (USA), ShopSavvy & Grocery Server (USA), Metro (Canada) and Carrefour (France).
1.20
General Retail Loyalty
In general retail, today's key need is to focus on what drives loyalty programmes, what customers actually prefer, and what the future is likely to bring. Most retailers accept that they need to know more about their customers, and that the knowledge should be centrally recorded so that it is available to employees when they need it. In this chapter we examine what makes consumers shop the way they do, what makes them choose one retailer over another, and illuminate the dynamics and challenges of loyalty programmes in the general retail sector, looking in detail at some of the leading programmes, operators, and developments in the field. Most retailers accept that they need to know more about their customers, and that the knowledge should be centrally recorded so that it is available to employees when they need it. The days when it was enough for 'Mary in Haberdashery' to know all about which lace sells and which one doesn't, or who the best customers are and what they like, have long gone.

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Loyalty programmes enable that information to be recorded and so are an essential part of retail. The retailer judges the usefulness of a loyalty programme by how it can help run the store more efficiently and profitably. But customers have a different view of loyalty programmes. To the customers, the programme exists solely to reward them for their custom. If they think that they would prefer to be rewarded in some other way, they dismiss the programme as being unnecessary. The people on opposite sides of the counter assess the usefulness of loyalty programmes in totally different ways. With that in mind, it's not surprising that many customers, when given the choice, opt for simple discounts instead of a loyalty programme - they are not taking into account the hidden benefits that a programme provides for them - the more effective stock control, the better merchandising and the greater personal relevance of marketing messages. However, it's what the customer thinks of the programme that really matters. That's why it's important to listen to their views and to do whatever is possible to correct their misapprehensions. It must also be understood that loyalty cards are not a substitute for getting the basics right, even though they do add value to the retail proposition. Strategies and insights for a successful retail loyalty scheme... In this chapter we detail all the latest insights, strategies, and 'pain points' affecting retail customer loyalty, including: Retail loyalty strategies The arguments for retail loyalty schemes Latest US retail loyalty programme membership figures Insights into the retail customer The effect of the increasingly anonymous customer The effect of the retail customer experience Consumers' enthusiasm for new retail technologies How loyalty has saved retailers from the recession The business benefits of cross-channel retail systems
Case studies showing how the top retail loyalty schemes have succeeded... For this chapter we researched, summarised and explained every aspect of what we believe are among the world's finest retail customer loyalty programmes, and we present details of the programme and rewards structure, the programme operator, and programme developments over the past few years, along with membership counts and redemption figures wherever possible, including: Retai l 1. 2. 3. 4. Retai l 1. 2. 3. 4. 5. 6. 7. 8. 1. case studies from the UK: Boots (Advantage Card) LG (brand loyalty) Pigsback (retail rebates) Superdrug (Beautycard) case studies from the USA: Best Buy (Reward Zone) CVS/Pharmacy (Extra Bucks) eBay (eBay Bucks) Neiman Marcus (InCircle) Nordstrom (Fashion Rewards) Rite Aid (Wellness+) Sears/Kmart (Shop Your Way Rewards) Staples (Staples Rewards) Hbc, Canada (Hbc Rewards)
Retail case studies from other countries: 2. Canadian Tire (Canadian Tire 'Money') 3. Home Ideas, Australia (AdvantageCard)

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4.
Jet, South Africa (Jet Club)
5. SPC Card, Canada (Student Price Card) We also highlight some of the latest innovations and developments in customer loyalty from other retailers around the world, including: Amazon.com (USA), Bluewater Mall (UK), Buy.com (USA), Citizy NFC Project (France), DubLi (Spain), Green Stamp (Japan), HMV (Canada), Holland & Barrett (UK), House of Fraser (UK), IndiaPlaza.com (India), JCPenney (USA), Jewel-Osco (USA), Macy's (USA), National Gift Card (USA), Sam's Club (USA), Sears (Canada), Shoppers Drug Mart (Canada), Toys'R'Us (USA), Zazzle (USA), and Zed Tema (Russia).
Financial Services
Loyalty
Customer acquisition and retention costs a lot in the financial services sector, and that calls for deeper relationships to help keep customers loyal over time. With a growing ease of switching, relying on inertia is no longer an option to keep customers tied in, so financial service institutions in every country have identified the need to adjust their customer loyalty strategy to suit today's highly competitive marketplace. It's often said that it can cost up to seven times more to acquire one new customer than to retain an existing one. But in the financial industry, the costs reach a whole new level: acquiring one new customer can exceed US$350. As a rule, of these 20% will be very profitable, 20% will cost money to retain, and the middle 60% will pay for themselves while generating marginal revenue, according to Harvard Business Review [www.hbr.com]. With statistics like these, a customer engagement and retention plan based on extensive data collection and analysis is imperative for the long-term health of companies in the financial industry. Financial institutions must therefore find a way to retain profitable customers, make marginally unprofitable customers into profitable ones, and reduce the marketing budget spent on the most costly customers. To do that, and to increase customer loyalty, financial industry firms need to constantly monitor their customer portfolio and actively manage their marketing efforts based on the changing behaviour of their customers. Best practices and insights to grow financial customer loyalty... In this chapter, we examine not only the latest thinking on how to do so, but also the many customer retention, loyalty and CRM initiatives that have been launched during the past two years. Among the practical insights and best practices detailed in this chapter for financial service providers: Drivers of financial loyalty and churn Building loyalty to banks How credit unions can boost loyalty Barriers to banking loyalty How banks can earn younger customer loyalty Co-branded payment card initiatives Debit & credit card loyalty strategies How customers choose their preferred payment method The potential for debit card loyalty The potential for credit card loyalty Factors driving insurance provider loyalty How car insurance providers are earning new levels of loyalty

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This chapter contains detailed case studies and programme summaries of major financial institutions around the world and their loyalty offerings, including: 1. 2. 3. 4. 5. . 7. . 9. 10 . 11 . American Express (Global) Bank of America (USA) Barclaycard (Global) Barclays Lifes Rewards (UK) BMO (Canada) Capital One (USA) Chase (USA) Citi (Global) Discover (USA) HSBC (Global) o L
l
12. 13. 14. 15. 1. 17. 1. 19. 20. 21. 22.
MasterCard (Global) MBNA (Global) MoneyGram (US, Canada & Europe) PayPal (Global) RBC (Canada) Scotiabank (Canada/USA) TD Bank (Canada) US Bank (USA) Visa (Global) Wells Fargo (USA) Zions Bank (USA)
We also detail some of the latest developments and innovations from other brands and companies using financial products to engender greater loyalty, including: Qantas, Priority Club Rewards, QuickTrip Rewards, NFL, Delta Air Lines, Hyatt, Kroger, AAA, AviancaTaca LifeMiles, Amazon.com, and Gulf Bank Kuwait, among others.
U B S T s
1.21
Airlines, FFPs & Airport Loyalty
The traditional long-haul and domestic airlines and their frequent flyer programmes have faced increasing competition over the past few years, not only from each other but also from a vast array of smaller startups and low cost, budget carriers. An increasing number of 'business class only' airline operators has added extra pressure to a market that relies heavily on business and first class fares to subsidise operations. And business growth has been made even harder to achieve by increasing numbers and complexities of security checks and updated airport procedures, all of which have conspired against the humble passenger and caused many people to seriously re-think any plans they have for air travel. The simultaneous rise of internet-based phone calls (such as Skype), online meeting and presentation services, and of course video conferencing has provided many business people - who would previously have had to travel by air - with an alternative way of conducting business without the cost or inconvenience of leaving the office. These factors have combined to spur airlines across the board into ever-more clever and innovative frequent flyer programme developments. Some of the new features focus on the airport and its associated services, while others focus on the flight itself. Almost all focus on passenger comfort and convenience, with almost all higher tiers (the so-called 'elite' frequent flyers) being offered faster ways of getting through check-ins, security checks, baggage collection, and transfers. There has also been a mass move among the larger airlines into online loyalty malls and new mileage redemption options that start at lower levels than the traditional 25,000 or 35,000 miles-per-seat award ticket. The higher classes of travel (business class, premium class, first class, and half a dozen other names describing non-economy classes) are clearly the focus of airlines' attention. This report's authors predict that this trend will continue to grow, driving a significant wedge between airlines that carry economy passengers (for whom personal service can be expected to decline in line with decreasing prices) and those that carry business and luxury passengers (for whom personal service will increase thanks to the lower financial and staffing overheads caused by the loss of economy class). But otherwise-loyal passengers face a growing problem... There is, however, a consumer-facing problem that is common to many of today's airline loyalty programmes: excessive complexity. While airlines are complex enterprises with many hundreds of variations of tickets, seats, classes, routes, destinations, customers, and even baggage and security rules, the customer should not have to understand and negotiate all of these complexities in order to work out what reward they can get for flying from Point A to Point B next month. Most frequent flyer programmes offer different tiers or status levels (which are clearly necessary to

43
differentiate between high-end benefits for profitable customers and low-end rewards for occasional passengers), but programme members are understandably confused by a wealth of tier points, elite status qualifying miles, qualifying segments, qualifying miles, partner points exchange rates, redemption mechanisms, vouchers, class upgrade options, and so on. Now compare this situation to a supermarket retailer's "points means rewards" loyalty card programme, in which shoppers understand that every US$1 they spend earns them 1 loyalty point, which equals US$0.01 in rewards, and in which redemption is as simple as walking up to a checkout counter. New ideas to support differentiation in the commoditized air travel market... If frequent flyer programmes are really aiming to differentiate their respective airlines in the mind of the timepressured traveller, airlines must surely take a step back and re-examine their loyalty offerings with a view to simplifying them and making them more predictable and comparable. Among the hundreds of facts, figures, insights and consumer research detailed in this chapter: Why FFPs are still vital to airlines' future growth Strategies to reinforce the value of FFP miles Key factors for building stronger FFP relationships How even low-cost airlines can benefit from Why FFPs represent a Panacea for airport
Value that airlines can extract from their loyalty data loyalty loyalty The benefits of an FFP in times of recession income airports
How FFPs can generate significant increases in How passengers really feel about airlines and
Case studies of 26 major FFPs and their strategies, structures and development... In this chapter we present detailed case studies and programme summaries for 26 major airlines, with programme developments and membership figures in all cases, including: l. 2. 3. 4. 5. 6. 7. . 9. lG . ll. l2. l3. Air Canada (Aeroplan) Air France/KLM (Flying Blue) Air New Zealand (Airpoints) Alaska Airlines (Mileage Plan) American Airlines (AAdvantage) British Airways (Executive Club) Brussels Airlines (Miles&More) China Southern (Sky Pearl Club) Continental Airlines (MileagePlus) Delta Air Lines (SkyMiles) Emirates (Skywards) Etihad (Etihad Guest) Frontier (Early Returns) l4. l5. l6. l7. 1. l9. 2G. 2l. 22. 23. 24. 25. 26. Jet Airways (JetPrivilege) JetBlue Airways (TrueBlue) Lufthansa (Miles&More) Malaysia Airlines (Enrich) Northwest Airlines (merged with Delta) Qatar Airways (Qmiles) South African Airways (V oyager) Southwest Airlines (Rapid Rewards) United & Continental (Mileage Plus) US Airways (Dividend Miles) Virgin America (Elevate) Virgin Atlantic (Flying Club) Virgin Blue (Velocity Rewards)
Hotel
We also chart the latest developments and loyalty initiatives of several other airlines from around the world, including: Aeromexico (Club Premier), Air China (Companion), AirTran (A+ Rewards), Bahrain Air (Loyalty Rewards), bmi (Diamond Club), Flybe (low cost flights), Hawaiian Airlines (HawaiianMiles), Kulula (Jetsetter Club), Qantas (Frequent Flyer), and TAM Brazil (Multiplus Fidelidade).
&
Resort
Loyalty
In today's competitive hospitality market, many hotel operators are adding frequent guest loyalty programmes to foster customer relationships, attract new customers, and encourage longer stays, which suggests that rewards programmes are seen as being more effective in creating loyalty to hotel brands than simple discount-based promotions and incentives.

44
In the past two years, hotel and resort operators have also made significant efforts to expand the 'pampering' and luxury options available to their most frequent guests. Many hotel groups have also found value in providing extras and perks for every guest, regardless of membership of a frequent guest programme. But by far the most valuable rewards offered to travellers who frequent the same hotels time after time are the personal touches that provide a feeling of consistency, familiarity, and home-like comfort - such as having their preferred newspaper delivered each morning, having their preferred type of pillows and bedding, or having the hotel staff know their preferences in advance. While there is still a lot of progress that can be made in this respect - for example, with the use of technologies such as RFID, NFC, and even biometrics many upscale hotels have already taken active steps to get this aspect of their service right. Case studies, programme summaries, and up-to-date membership figures... In this chapter we provide not only the latest membership figures of each of the major hotel frequent guest programmes around the world, but also complete case studies and programme summaries for each of the following: 1. Accor (A-Club) 2. Best Western (Best Western Rewards) 3. Carlson Hotels (Club Carlson) 4. Choice Hotels (Choice Privileges) 5. Hilton (Hilton HHonors) . Hyatt (Gold Passport) Case studies charting the rise of the independent hotel alliance... Another growing trend that has appeared in the hotel industry over the past few years is the rise of 'hotel alliances' - such as Voila - which seek to unite smaller hotel groupsand independent hotels under one marketing umbrella, and usually under a single loyalty programme offering. Inthis chapter we provide detailed case studies and breakdowns of each of four major alliances: 1. 2. 3. 4. GHA Discovery (Global) sQuidcard (UK) Stash Hotel Rewards (USA) Voila Hotel Rewards (Global) 7. . 9. 10. 11. IHG (Priority Club Rewards) Marriott (Marriott Rewards) Ritz-Carlton (Ritz-Carlton Rewards) Starwood Hotels (Preferred Guest) Wyndham (Wyndham Rewards)
General
Travel
&
Tourism Loyalty
This chapter looks into recent developments and innovations in the general travel and tourism sector that are not directly associated with airlines, frequent flyer programmes, hotels, holiday resorts, and frequent guest programmes. It includes loyalty and customer satisfaction-related developments throughout the sector, worldwide, and the findings of surveys and research concerning cruises, travel sellers, travel incentives and loyalty schemes, rail operators, regional and national tourism initiatives, and car rentals. Clearly, the loyalty market has reached a state of maturity in the airline, hotel and car rental industries, with very few such loyalty programmes today being able to claim genuine competitive differentiation. Simply matching the proposition offered by the competition is not enough to create lasting customer loyalty. When all programmes within a sector are basically the same (e.g. they all have online enrolment, an award chart, a welcome bonus, double miles promotions, and so on), customers tend to react with indifference. With this in mind, true differentiation is the best way (and arguably the only way) to maintain interest and increase consumer awareness, for the simple reason that customers tend to notice new products and services that stand out from the crowd. So how can travel-related loyalty programmes differentiate? To gain that competitive advantage, the marketing team responsible for the loyalty programme must: 1. Use their member data to garner true customer insights; 2. Use all their market know-how to enable better market positioning on a strategic level. Only by using this knowledge - and using it before the competition does - can a travel sector loyalty programme create a sustainable, differentiated proposition.

45
Indeed, loyalty schemes cannot afford to stand by and watch new schemes and approaches develop among their competitors. Along with some methods for measuring differentiation, some best practices, and some future trends, this chapter demonstrates that: Despite significant competition in the travel sector, there is still plenty of room for differentiation; Smart positioning and innovative techniques can make the difference between successful differentiation and being "just another travel programme".
Loyalty programmes are adding much needed value for travel customers. It is true that there are still many opportunities for travel loyalty programmes to lead the way, but having the next 'great idea' is just part of the success equation: putting them into action before the competition does (and creating a barrier to entry wherever possible) is what completes the equation. Case studies and summaries of the major car rental loyalty schemes... In this chapter we provide detailed case studies and programme summaries of car rental companies' loyalty programmes and incentive schemes, including: 1. Avis (Avis First) 2. Budget Rent A Car (RapidRez) 3. Dollar Rent A Car (Dollar Express) 4. Enterprise (Enterprise Plus) 5. Europcar (Privilege) 6. Hertz (Gold Plus Rewards) 7. National Car Rental (Emerald Club) 8. Thrifty (Blue Chip Rewards)
Insights for a deeper understanding of what travellers want from loyalty schemes... This chapter also examines a number of other travel and tourism-related customer loyalty insights, including: Why the travel industry needs to re-ignite customer loyalty Why value is the key driver of travel loyalty and engagement How travel loyalty schemes need to 'go the extra mile' Why travel loyalty schemes should offer 'lifestyle bundles' Why there's little brand loyalty among online travel bookers
We also detail a number of the latest innovations and developments in travel-related loyalty programmes around the world, including: Club Yogi Rewards (USA), Raiffeisen-Tours-Kooperation (Germany), Seawings (UAE), Affmion & Connexions (USA), Amtrak Guest Rewards (USA), Sabre Red (Global), Travelex & Air Miles (UK), Royal Caribbean Crown & Anchor Society (USA), Club Med & Carlson (USA), SuperAgency SuperCa$h (USA), RBC Rewards & Travelocity (Canada), Marriott Rewards (Global), Latitudes Rewards (Norway), Sixt & PayBack (Germany), Eurostar Plus (Europe), Expedia Rewards (USA), Ticketmunky (UK) and Merseytravel Walrus Card (UK).
1.22
Food, Drink & Entertainments Loyalty
Food and drink providers - whether they are diners, quick service restaurants, pizzerias, snack bars, or full service restaurants - have all had a hard time differentiating their offerings during the past few years. The over-abundance of these establishments in every town in almost every country has had a profound effect on customer loyalty, with many consumers now viewing the task of choosing a place to eat or drink as being insignificant and irrelevant. The nearest place is often the first choice. But there have been many innovative efforts to combat this undifferentiated and often lack-lustre market, including the use of new technologies such as mobile phone loyalty programmes, new and more convenient payment methods, programmes to drive greater emotional engagement, internet-based and mobile phonebased coupons and vouchers, and a host of partnerships between food service providers and major brands in other sectors. Other recreational sectors have also seen great strides in terms of customer loyalty innovation over the past few years, with new programmes, rewards, and engagement tactics appearing in family entertainments, film and video, sports (of just about every kind), and of course the ever-popular casinos and gaming markets. Eating... In this chapter we examine the best of the best among these initiatives, and explore how their mechanisms work, and what effect they have had on customer loyalty, repeat business, and overall customer retention and engagement, along with studies and insights including:

46
Factors that influence diners' restaurant choices Proof that loyalty schemes work for restaurants Evidence that restaurants leak 30% of their customers
We also examine the latest developments in food-service customer loyalty, including initiatives at CA Pizza Kitchen, Panera Bread, Carl's Jr. & Hardee's, Eat24Hours.com, Dunkin' Donuts, Red Robin, and UltraONE. Drinking... Loyalty to beverage suppliers is also a hot topic, and we examine and highlight recent changes and innovations in the drinks loyalty market, including Starbucks, Guinness, Coca-Cola and Baristas Coffee among others. And being merry... At the same time, in the field of entertainments, movie theatres have also been very active in nurturing not only repeat business but perks and benefits-based customer loyalty. In this chapter we examine the cream of these programmes from the US, including AMC Theatres, Audience Rewards, Red Carpet Rewards Club, Regal Crown Club, and Star Rewards.
1.23
Mobile, Fixed Line & ISP Loyalty
Telecoms operators across the world have tried a number of different techniques to nurture customer loyalty and reduce the inevitable churn produced by number portability and mobile handset subsidies. Some operators have paired up with existing loyalty programmes while others have set up their own schemes. Yet others have chosen to run shorter-term promotions in their bids to both acquire and retain customers. As has been the case for at least the past three years, much of the sector's loyalty-related activity has come from the mobile telecoms sector, while fixed line providers - particularly in the USA - seem to have been concentrating more on the bundling of services, internet and cable broadband services, VoIP (voice over internet), and improvements in both customer service and satisfaction. In particular, the mobile phone has become increasingly associated with customer loyalty, not only because mobile network operators and handset manufacturers are desperate to find ways of 'locking customers in' to their brands but also because the mobile phone itself has become a worthy target for all kinds of new loyaltyenabling concepts and technologies. For example, loyalty marketers are now - as we predicted in The Loyalty Guide 4 - looking at the consumer's mobile phone as not only a potential replacement for plastic loyalty cards, but also as a replacement for payment cards and as a mechanism for direct, personalised, one-to-one marketing communications. And with the addition of contactless technology and integrated social networking to many mobile phones, our next prediction is that personalised, opt-in, event-based and location-based marketing will increasingly take place through contactless consumer interactions with anything from POS systems and 'smart posters' to social networks and mobile apps. In this chapter we examine customer loyalty to both mobile telecoms providers and fixed line telecoms providers, charting the telecommunications industry's progress in terms of earning greater loyalty and reducing the churn levels that have for so long characterised the market. Mobile network customer loyalty explained... This chapter's coverage of developments and insights into mobile customer loyalty include: 1. Mobile loyalty insights and research 2. Why loyalty is the top priority for mobile networks 3. Mobile network rewards programmes drive satisfaction 4. Why smartphone users are more loyal to their networks 5. How smartphone loyalty can't be forced 6. Drivers of mobile network loyalty and churn 7. The key drivers of smartphone user churn 8. A bright future for mobile loyalty schemes 9. Why loyalty to European mobile networks is high

47
10. How unsuitable CRM systems ruin mobile relationships 11. Which customers aren't loyal to their mobile service, and why 12. Loyalty offerings from mobile network operators around the world Fixed line telecoms customer loyalty in a nutshell... And our coverage of developments and insights into fixed line customer loyalty include: Consumers' surprising loyalty to fixed line telcos Customer loyalty's critical role in telco growth Why telecoms customers don't really want discounts The primary driver of telco customer defections Why broadband churn has become an epidemic
Automotive & Fuel
Loyalty
There are two key areas involving customer loyalty in the automotive sector: automotive sales, and fuel sales. In this chapter we examine both areas, showing how each is being handled by manufacturers and suppliers. Cars are now almost a commodity, and car manufacturers have a problem. It might almost be fair to say that the most noticeable point of differentiation between competing, similar marques is the dealer who sells the car. Certainly, that seems to be the area where most can go wrong, and most complaints arise. So much depends on the way the car is sold and particularly the way that the after sales contacts and service are carried out. It's quite possible that it's for this reason that research shows less loyalty to dealers than to manufacturers.
theloyaltyguide 5

49
To build loyalty to the marque, the manufacturer has to produce an attractive, desirable, reliable vehicle at the right price. Most of them would seem to be very good at doing that. It is essential that dealers - the potential weak link in the chain - are single pointed, focusing on finding out what their customers want, why they want it, and work out ways of meeting these needs as closely as possible. And, while new cars with very lengthy service intervals may be very convenient for the customer, they make it even less likely that the dealer and customer will have many opportunities to build a relationship. Every contact - rare as they are becoming must be treated with great care and delicacy if any loyalty is to be built. And the fuel retail market (that is, 'petrol' to the Briton or 'gasoline' to the American) was one of the first to become involved in loyalty programmes. In fact, in the early 1990s, many people equated loyalty programmes with forecourt programmes. Many of the initial programmes were quite rudimentary and collected no useful customer data. Some gave a gift when a certain amount was spent on fuel - for example, a free drinking glass for each 5 spent. Not even the customer's name was collected. Others issued stamps or coupons for each purchase. And when these were redeemed, the customer was only sometimes identified. Another problem with forecourt loyalty programmes is that they tend to eat into already-slim profit margins, and usually contribute very little to lucrative non-fuel sales in forecourt shops. However, the market has changed significantly over the past few years, and fuel companies have been quick to change their tactics accordingly. Loyalty card and token-based initiatives on the fuel forecourt have become far less common. Today, the most common types of reward seen on fuel forecourts are undoubtedly the 'cents off per litre' discount offers tied to various minimum supermarket spend levels, reward points-per-litre that are redeemable for fuel discounts and convenience store vouchers, and fuel retailer branded credit cards that offer rebates against future fuel purchases. Factors driving vehicle buyer loyalty, and how the market has responded... This chapter details all the latest customer loyalty research, insights and developments in the automotive field, including: 1. Automotive loyalty insights 2. Why car buyers seem to prefer imported vehicle brands 3. Who leads and lags behind in car owner loyalty 4. Factors that drive loyalty to vehicles and marques 5. Details of loyalty-boosting ideas from Belle Tire, Pit-Stop, AAA, Ford and Tata Motors. How rewards and incentives are being used to drive vehicle sales... We also provide case studies and programme summaries of the major vehicle purchasing loyalty initiatives (while most are in fact incentive-based offerings), including: Chrysler Group (USA) Kenworth Trucks (USA) Kia (USA) Kia (Canada) Mercedes-Benz (USA) Toyota (Canada)
How fuel retailers keep motorists coming back to their pumps, again and again... In addition to detailing the latest loyalty and reward programme developments in the fuel retail market, this chapter provides detailed case studies and programme summaries of 11 major fuel retailer loyalty programmes around the world, including: 1. 2. 3. 4. 5. 6. BP (UK) Coles Express (Australia) Esso (Canada) Esso/Exxon Mobil (Singapore) FuelPerks! & Fuel Rewards (USA) Indian Oil (India) 7. 8. 9. 10. 11. Petro-Canada (Canada) Shell (UK) Shell (USA) Shell (other countries) Texaco (UK)

50
1.24
Media & Publishing Loyalty
Many media publishers and channels (particularly magazines and radio stations) have recently found that, with an increasing number of non-traditional entertainment options (such as internet video and radio, and online daily journals and blogs), the battle for the loyalty of listeners, viewers and readers has become more intense than ever before. Many forward-thinking newspapers and magazines have begun rewarding subscribers and re-subscribers with luxury or aspirational rewards and services. Radio stations are increasingly using web sites and the mobile channel to encourage listeners to engage with them and earn rewards. Marketers have also come to realise that today's youngsters are tomorrow's mature consumers, and a number of youth loyalty initiatives have also been implemented to make brand advocates out of students. And, with the rise of online booksellers (for both new and second hand books), a number of bricks-andmortar book retailers have implemented loyalty programmes to help them keep customers coming into their stores. What booksellers have been doing to keep customers loyal... In addition to examining newspaper & magazine loyalty, radio & television loyalty, and other media publishing loyalty initiatives, this chapter provides detailed case studies and programme summaries of four major bookseller loyalty programmes (including the one that got away): 1. Angus & Robertson (A&R Rewards) 2. Barnes & Noble (B&N Member) 3. 4. Borders Rewards (now closed down) Indigo Books & Music (Plum Rewards)
1.25
Loyalty in Other Sectors
Organisations in a wide variety of market sectors- other than the most familiar onessuch as travel, retail, and grocery - have begun to experiment with customer loyalty, behavioural rewards andincentives. And there are yet more sectors that are increasingly becoming involved in loyalty and relationship management initiatives, despite not having "customers" in the usual sense of the word. For example, charities and non-profit organisations (NPOs) around the world are increasingly turning their attention to donor relationship management to either stabilise or increase their flow of donations. During the past two years, many NPOs have discovered what they believe to be flaws in traditional charity marketing strategies and have set about creating new strategies, often employing the latest customer loyalty ideas and technologies. At the same time, a number of everyday retail and coalition loyalty programmes have found favour with consumers by offering charitable donation facilities among their other redemption options. Many consumers appear to feel that, while their loyalty points do not accumulate quickly enough to provide them with worthwhile personal rewards, their loyalty points could be better used by donating them (or their cash value) to deserving charities or local community non-profit initiatives. Governments have also become far more involved in rewards programmes to drive citizen behaviour changes, including the use of emerging technologies and complex rewards platforms to encourage, for example, waste recycling efforts. How loyalty is changing in diverse and niche markets... In this chapter we examine all the other sectors in which customer loyalty has - in one way or another helped to change the way people think and behave, whether that's toward brands, charities, services, education, authorities, lifestyles, or even other people. Among the topics and insights examined:

51
1. 2. 3. 4. 5. 6. 7. 8. 9.
Community, town and city loyalty schemes Government/citizen reward schemes Charitable and cause-related loyalty schemes Education-related loyalty schemes Health & lifestyle loyalty schemes Green, eco-friendly & recycling loyalty schemes Energy utility loyalty schemes Sports loyalty schemes Gaming loyalty schemes
10 Gambling loyalty schemes . 11 Niche market loyalty initiatives .
1.26
Global loyalty suppliers
This appendix provides a detailed, categorised directory of customer loyalty related businesses and service providers, created to provide a quick reference and access to market-leading suppliers, whether they are potential suppliers, clients or strategic partners. Each company is listed along with contact details, company background (where available), a summary of its usual activities, service provision categories (as determined by the company itself), and a list of countries or territories in which the company usually operates. The appendix is split into two sections. The first section lists the 17 service provision categories (each company is associated with up to five such categories). For each category the relevant suppliers are listed in groups according to their country of origin. The service provision categories are: Customer loyalty systems CRM/BI systems Customer experience management Call centres Developers & integrators Application hosting Loyalty scheme operators Point of Sale (POS) technology Data warehousing & data mining Consultancy & advice Couponing Gift certificates & incentives Internet marketing Direct marketing Research and analysis Public relations/media/events Industry associations
The second section includes a complete listing of all 208 customer loyalty and service suppliers in strict alphabetical order.
theloyaltyguide Table of Contents

1 1.1
1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1.24 1.25 1.26 1.27 1.28 1.29 1.30 1.31
Volume 5
Executive Summary Introduction

The business case for loyalty Loyalty coalitions Loyalty rewards & incentives Customer engagement and loyalty Social media and loyalty Loyalty & marketing tools Loyalty & marketing operations Customer data strategy Loyalty & marketing communications The human aspect of loyalty Loyalty & marketing best practices Loyalty metrics & accountability Reporting & segmentation Brand marketing & loyalty Business-to-business (B2B) loyalty Market sizing & valuation Forecasts & trends What the experts say Supermarket & grocery loyalty General retail loyalty Financial services loyalty Airlines, FFPs & airport loyalty Hotel & resort loyalty General travel & tourism loyalty Food, drink & entertainments loyalty Mobile, fixed line & ISP loyalty Automotive & fuel loyalty Media & publishing loyalty Loyalty in other sectors Loyalty suppliers directory
2 2.1 2.2
2.2.1 2.2.2 2.2.3 2.2.4 2.2.5 2.2.6 2.2.7 2.2.8 2.2.9
The Business Case for Loyalty Introduction Business benefits

Benefits of a good loyalty strategy Thriving in a rapidly changing market Loyalty programmes drive advocacy Retail choices are swayed by loyalty schemes Consumers will spend more for valued rewards Loyalty scheme members simply respond better Loyalty is the key to the young and wealthy Loyalty schemes drive customer advocacy Benefits of Business-to-Business (B2B) loyalty
2.3
2.3.1 2.3.2 2.3.3 2.3.4 2.3.5 2.3.6 2.3.7
Factors influencing loyalty

Core offering Satisfaction Elasticity level The marketplace Demographics Share of wallet Other factors affecting loyalty
2.4 2.5 2.6

2.6.1 2.6.2 2.6.3 2.6.3.1 2.6.3.2 2.6.3.3 2.6.3.4 2.6.4 2.6.4.1 2.6.4.2 2.6.5 2.6.5.1 2.6.5.2 2.6.5.2.1 2.6.5.2.2 2.6.5.2.3 2.6.5.2.4 2.6.6 2.6.6.1 2.6.6.2
Financial aspects How loyalty programmes pay back BCM: an alternative strategy
Introduction Long term or short term? The case for Best customer marketing Rediscovering and reinventing an old concept The introduction of loyalty programmes How many customers are really profitable? Customer-focused marketing: the long term view The properties of Best Customers What are Best Customers? What makes a Best Customer? Customer segmentation What segmentation involves Methods of segmentation RFM Deciles or quintiles Thresholds Demographics The direct approach to BCM Introduction TCC: the retail marketer's best kept secret
3.1 3 3.2 3.2.1 3.2.2

3.2.2.1 3.2.2.2 3.2.2.3 3.2.2.4
Introduction Loyalty Coalitions Coalition programmes Why a coalition programme? Essentials

Rapid market penetration Ability to deliver attractive rewards Need to be the first Build reliable communication channels
4 4.1 4.2 4.3 4.4 4.5

4.5.1 4.5.2 4.5.3
Loyalty Rewards & Incentives Introduction The value of rewards The function of the reward The properties of a loyalty reward Getting value from the reward
Lowering the loyalty budget without risking loyalty The level of the reward Leveraging the reward
3.2.3 3.2.4
3.2.4.1 3.2.4.2 3.2.4.3 3.2.4.4 3.2.4.5
Advantages of coalitions Challenges of a coalition programme

What about the grocer? Who owns the data? Loyal to programme or partner? Reputation Difficult to pilot
4.6
4.6.1 4.6.1.1 4.6.1.2 4.6.1.3 4.6.1.3.1 4.6.1.3.2 4.6.2 4.6.3
Types of reward
Discounts Untargeted discounts Targeted discounts Discount programme insights Price-led adverts have become brand killers Prestige brand discounts have paid off Points-driven programmes Soft rewards
3.2.5 3.2.6
3.2.6.1 3.2.6.2
Typical application areas Making a single programme a coalition

Taking it to the next level Prerequisites of expanding the programme
4.7 4.8
3.3
3.3.1 3.3.1.1 3.3.1.2 3.3.1.3 3.3.1.4 3.3.1.5 3.3.2 3.3.3 3.3.4 3.3.5 3.3.6 3.3.7 3.3.8 3.3.9 3.3.10 3.3.10.1 3.3.10.2 3.3.10.3 3.3.10.4 3.3.10.5 3.3.10.6 3.3.10.7
Coalition programme case studies

Case study: Air Miles (worldwide) Air Miles (UK) - (now known as Avios) Air Miles (Canada) Air Miles (Spain) - aka 'Travel Club' Air Miles (Netherlands) Air Miles (Middle East) Case study: Aeroplan (Canada) Case study: BonusLink (Malaysia) Case study: eBucks (South Africa) Case study: Fly Buys (New Zealand) Case study: FlyBuys (Australia) Case study: PayBack India (previously i-Mint) Case study: iPoints/Maximiles (UK/Europe) Case study: Malina (Russia) Case study: Nectar (UK) Nectar's database and IT systems Milestones in Nectar's development Nectar Business Changes to the company structure The Moorhead interview Nectar's online portal: Nectar eStores Nectar rewards and redemptions at-a-glance
4.8.1 4.8.2 4.8.3 4.8.4 4.8.5 4.8.6
Timing of rewards: instant or later? What rewards do consumers really want? What consumers think they want
What consumers actually want Consumers now seek security before rewards Consumers want 'redemption with cash' options Rebates drive retail responses Rebates increasingly popular with US consumers
4.9
Redemption strategies
External redemption Internal redemption Networked rewards
4.9.1 4.9.2 4.9.3
4.10
4.10.1 4.10.2 4.10.3
How to plan a rewards catalogue

Strategy to drive redemptions and engagement Major factors for 'high attraction' rewards Matching the rewards with various point levels
4.11
4.11.1 4.11.2 4.11.3 4.11.4 4.11.5 4.11.6 4.11.7 4.11.8
Loyalty reward insights

Loyalty rewards: what works and what doesn't Instant redemptions cited as best incentive Consumers use loyalty points to stretch budgets Payment methods chosen for best rewards Loyalty rewards drive online shopping trend Loyalty rewards are still too distant 33% of US loyalty rewards still unredeemed Consumers using loyalty rewards for travel
4.12
4.12.1 4.12.1.1 4.12.1.2 4.12.1.3 4.12.1.4 4.12.1.5 4.12.1.6 4.12.1.7 4.12.1.8 4.12.1.9 4.12.1.10 4.12.2 4.12.2.1 4.12.2.2 4.12.2.3 4.12.2.4 4.12.2.5 4.12.2.6 4.12.2.7
Coupon rewards
Insights into coupon rewards Wealthy consumers use more coupons Mothers spurn social and mobile coupons US coupon redemption increasing slowly M-coupons segment iPhone & Android users Coupons more popular in US than Canada E-coupon growth outpaces newspaper coupons E-coupon sites preferred by deal-seekers Myths about coupon marketing strategy US coupon usage exceeded US$2bn in 2011 Coupon usage up as consumers save cash Couponing initiatives UK fair trade snack firm starts couponing Digital coupons saved to credit cards Cellit enables Android m-coupon redemptions PayBack launches German couponing platform Smartphones get new loyalty coupon app ShopText & AOL Shortcuts' loyalty m-coupons Coupons.com launches consumer Savings Club
3.3.10.7.1 Nectar earning opportunities for consumers 3.3.10.7.2 Nectar redemption options for consumers 3.3.10.7.3 Nectar earning opportunities for businesses 3.3.10.7.4 Nectar redemption options for businesses 3.3.10.7.5 Nectar's special interest clubs 3.3.10.7.6 Latest membership and redemption figures 3.3.11 3.3.12 Case study: Nectar Italia (Italy) Case study: PayBack (Germany/Poland/India)
5 5.1 5.2
5.2.1 5.2.2 5.2.3 5.2.4 5.2.5 5.2.6 5.2.7 5.2.8 5.2.9 5.2.10 5.2 5.2.1 5.2.2 5.2.3
Customer Engagement and Loyalty Introduction Customer engagement insights

Customer engagement begins at home Trigger marketing keeps customers engaged CMOs need to understand customer engagement Incentives can drive retail customer engagement Engaging the individual customer Gladvertising leads to deeper engagement How to engage loyalty scheme members for life Card marketers focus on mobile & engagement Customer engagement seen as key to survival Loyalty without engagement is a dangerous trap Customer engagement strategy Engagement strategy goes far beyond CRM How to engage consumers the Web 2.0 way Driving engagement with loyalty rewards
6 6.1
6.1.1 6.1.2 6.1.3 6.1.4 6.1.5 6.1.6
Social Media and Loyalty Introduction

Social marketing is more than a fan page The push & pull of social media marketing Viral social marketing Do brands really lose control? Types of social media The impact of social media on customer loyalty
6.2
6.2.1 6.2.2 6.2.3 6.2.4 6.2.5
Benefits of social loyalty marketing

Social media supports customer loyalty strategy A need for more social customer experiences Social media reshapes customer engagement Social network profiles help explain brand choices Social media could be the 'New CRM'
6.3 6.3.1
6.3.1.1 6.3.1.2 6.3.1.3 6.3.1.4 6.3.1.5 6.3.1.6
Social marketing insights Social media as a loyalty channel

Social brand relationships: good, bad, or ugly? Why the social channel is not stand-alone Social media drives customer engagement Social media drives customer loyalty Going beyond 'social experimentation' The social channel has become a 'must have'
5.3
5.3.1 5.3.2 5.3.3 5.3.4 5.3.5 5.3.6 5.3.7
Social engagement & gamification

Social media reshapes customer engagement Building engagement the social way How social media drives engagement Building brand engagement via Facebook Loyalty Gamification: let the fun begin! Priority Club Rewards tests online gaming Gamification insinuates brands into people's lives
6.3.2
6.3.2.1 6.3.2.2 6.3.2.3 6.3.2.4 6.3.2.5 6.3.2.6 6.3.2.7 6.3.2.8 6.3.2.9 6.3.2.10 6.3.2.11 6.3.2.12 6.3.2.13
Social media from the marketer's side

Sales from social networks still a challenge Social media belongs in corporate strategies Marketers target better social media ROI Understanding the 'social buzz' Social tribes stronger than social networks Social commerce is key to e-retail's future Executives must grasp social media's impact Social marketing strategy seen as essential Social media ROI can be hard to measure Tarnished social media still strong for marketing Social media's brand marketing value revealed Emerging markets ahead in social media usage Facebook & Twitter dominate customer service
5.4
5.4.1 5.4.2 5.4.3 5.4.4 5.4.5 5.4.6 5.4.7 5.4.8 5.4.9 5.4.10 5.4.11
Digital & online customer engagement

Six ways to look at digital customer engagement How e-mail can boost customer engagement Targeted emails lead to 13% more engagement Digital production aids customer engagement How to capture and engage online customers Remote video attendants engage customers How e-retail customer engagement is at risk Apps trump content for digital engagement Mobile drives cross-channel engagement Digital rewards increase engagement & loyalty Online retailers face email disengagement danger
6.3.3
6.3.3.1 6.3.3.2 6.3.3.3 6.3.3.4 6.3.3.5 6.3.3.6 6.3.3.7 6.3.3.8 6.3.3.9 6.3.3.10
Social media from the consumer's side

Social networks hold the key to customer insight Brands failing to work with social media advocates Consumers reveal brand preferences on Facebook The social shopping trend is spreading Brand 'break-ups' surfacing in social media The age of 'social shopping' is here Brand choices follow the social crowd Social media fatigue may be setting in Tweeted complaints not being taken seriously Social customer service: a new digital divide
5.5
5.5.1 5.5.2 5.5.3 5.5.4
Customer engagement developments

Maritz challenges stakeholder engagement ideas Alterian & Experian team up for engagement Virtual events: a new engagement channel Enterprise Engagement Institute offers certification
6.4 6.4.1
6.4.1.1 6.4.1.2 6.4.1.3 6.4.1.4 6.4.1.5 6.4.1.6
Social marketing best practices Social loyalty/engagement best practices Using social media to deepen customer loyalty
Building customer engagement the social way Bridging the real world/social media loyalty gap Building brand engagement using Facebook Advocacy 2.0: start listening to the voices S-commerce is more about 'Engage' than 'Like'
6.4.2
6.4.2.1 6.4.2.2 6.4.2.3 6.4.2.4
Social media marketing best practices

Best practices for social media marketing Keys to sustainable social media marketing Ways to improve social media targeting Setting up a Facebook marketing strategy
7 7.1 7.2 7.2.1

7.2.1.1 7.2.1.2 7.2.1.3 7.2.1.4 7.2.1.5
Loyalty & Marketing Tools Introduction Loyalty platforms & technologies Card-based loyalty technologies
EMV heralds smart card loyalty in the US Card connects EMV to LCD display Self-programmable mag-stripe card launched Carlson's recycled plastic loyalty card Vivotech and Taggo simplify loyalty enrolment
6.4.3
6.4.3.1 6.4.3.2 6.4.3.3 6.4.3.4 6.4.3.5 6.4.3.6
Social media strategy best practices

How to strategize for social media marketing How retailers can improve social media marketing Marketers must embrace Twitter, not fear it Email and social networks compete for attention How email marketing can be truly social Email marketing helps social media strategy
7.2.2
7.2.2.1 7.2.2.2 7.2.2.3 7.2.2.4
Mobile & app-based loyalty technologies Carlson Marketing's mobile Instant Rewards
iPhone app replaces plastic loyalty cards Cardmobili's mobile loyalty platform Mobile app uses sound as loyalty identifier
6.5
6.5.1 6.5.2 6.5.3 6.5.4
The role of location-based marketing

Real-time location marketing: the loyalty technique How location-based marketing ties into loyalty Mobile app makes loyalty cards location-aware The future of location-based marketing
7.2.3
7.2.3.1 7.2.3.2 7.2.3.3 7.2.3.4 7.2.3.5 7.2.3.6 7.2.3.7
Contactless loyalty technologies

Contactless smartcard loyalty schemes Mobile NFC impacts loyalty strategies Terminals for personalised NFC mobile loyalty DeviceFidelity's contactless loyalty solution NFC loyalty platform for Irish merchants The retail benefits of RFID technology Key lessons learned from retail RFID trials
6.6
6.6.1 6.6.2 6.6.3 6.6.4 6.6.5 6.6.6 6.6.7 6.6.8 6.6.9 6.6.10 6.6.11 6.6.12 6.6.13 6.6.14 6.6.15 6.6.16 6.6.17 6.6.18
Social loyalty & marketing initiatives

Social loyalty scheme rewards brand ambassadors Choice Privilege rewards tweeters and sharers RFID mobile tool rewards experience sharers Walkabout loyalty scheme goes social TrueBlue members rewarded through Facebook Facebook Deals launches across Europe New social brand recommendation platform Social check-ins added to Beanstalk POS Air Miles UK's daily deal Facebook app Amex helps SMEs with social engagement Ceasars resorts & Topguest reward social users Best Western's rewards for social check-ins Marriott drives engagement with Facebook game Chinese bank's social loyalty credit card Big Y's social shopping loyalty card Wolfe's social media-linked reward card Estonian Air's social loyalty & advocacy scheme Neolane's personalised Facebook offers
7.3
7.3.1 7.3.2 7.3.3 7.3.4
Loyalty metrics, analytics & insights

Mall Networks' enhanced shopper analytics CSN's loyalty scheme performance tool Analytical tool segments ethical customers Satmetrix's NPS Go! and NPS Go+ tools
7.4
7.4.1 7.4.2 7.4.3 7.4.4 7.4.5
Loyalty technology innovations

Twenty years worth of loyalty innovations Loyalty rewards from bus shelter posters Retailers move loyalty toward NFC Loyalty-enabled self-checkouts Augmented Reality (AR)
7.5
7.5.1 7.5.2 7.5.3 7.5.4 7.5.5 7.5.6 7.5.7
Other loyalty tool developments

NGC's prepaid American Express reward cards Mobiles scan loyalty cards for points balance Consumers value self-checkout above all else QuintLoyalty's online loyalty platform Satmetrix's cloud-based franchise loyalty platform Cloud-based loyalty platform for local merchants M-payment & loyalty platform for pharmacies
6.7
6.7.1 6.7.2 6.7.3 6.7.4
Other social marketing developments

Consumers tap into Facebook recommender app LoyaltyMatch's social loyalty rewards platform Social marketing turns a good profit in the UK Smart Button's social loyalty platform
7.6
7.6.1 7.6.2
The changing loyalty landscape

Virtual currencies create a whole new economy Pattern-spotting provides a competitive advantage
7.7
7.7.1 7.7.2 7.7.3 7.7.4
Retail 3.0 customer intelligence

Retail 3.0: what it is, and what it means to loyalty Retail 3.0 redefines retail customer intelligence Intelligence-based marketing born from Retail 3.0 Differentiating using smarter retail technology
7.8
7.8.1 7.8.2 7.8.3
Kiosks and self-service tools

Loyalty kiosks improve customer relationships Price and time drive consumers to self-service Case study: Points.com (self-service rewards portal)
8 8.1 8.2
8.2.1 8.2.2 8.2.3 8.2.4 8.2.5 8.2.6 8.2.7 8.2.8 8.2.9 8.2.10 8.2.11 8.2.12 8.2.13 8.2.14 8.2.15
Loyalty & Marketing
Operations 8.7
8.7.1 8.7.2 8.7.3 8.7.4 8.7.4.1 8.7.4.2 8.7.4.3 8.7.4.4 8.7.4.5 8.7.4.6 8.7.5
Introduction How a loyalty programme works

Keep your customers Get new customers Move customers up-segment Deselect unprofitable customers Recover defected customers Increase Customer Lifetime Value Best customer marketing Build relationships Create advocates Adjust pricing levels Respond to competitive challenges Select stock lines effectively Plan merchandising optimally Reduce promotional and advertising costs Select new trading sites
Loyalty with prepaid cards

Building loyalty with prepaid cards How to set up a prepaid card programme Successful users of prepaid programmes Arguments for combined prepaid/loyalty cards Gift cards offer a way ahead for retailers UK gift card offerings to grow rapidly Outsourcing as a retail opportunity Gift cards are popular with consumers Consumer gift card usage increasing Gift cards favoured during hard times Prepaid card suppliers and platforms
8.8
8.8.1 8.8.2 8.8.3 8.8.4 8.8.4.1 8.8.4.2 8.8.4.3 8.8.4.4 8.8.4.5 8.8.4.6 8.8.4.7 8.8.4.8 8.8.4.9 8.8.4.10
Pricing strategies
Hi-Lo pricing Everyday low prices (EDLP) Profit-up-front pricing (PUF) Access Pricing How Access Pricing works Forced, intense interaction Minimise price gap perception Golden handcuffs Favour regular customers Meaningful rewards Differentiator The future of Access Pricing Will Access Pricing continue to work? Which sectors could use Access Pricing?
8.3
Secrets of a successful loyalty initiative

Loyalty programmes are not a 'quick fix' Accurate targeting Gain consumer buy-in Know your customers Don't reward the wrong behaviour Reward or recognise? Spotting defection patterns Customer lifecycles Rewards must be seen to be attainable & affordable Cost of programme must be recoverable Good communications Keep it simple Results must be measurable It should attract new customers It should provide unique, hard-to-copy benefits Empower the team It should make life easy Develop and deliver a branded experience Create and shape demand Harness talent and technology Translate foresight & insight into marketing goals Drive marketing to meet performance objectives
8.3.1 8.3.2 8.3.3 8.3.4 8.3.5 8.3.6 8.3.7 8.3.8 8.3.9 8.3.10 8.3.11 8.3.12 8.3.13 8.3.14 8.3.15 8.3.16 8.3.17
8.9
Loyalty management insights

Ten ways to improve your loyalty scheme Planning the 'grand design' of customer loyalty Forming the right customer loyalty strategy Drive retail loyalty with real-time interactions Drivers of different levels of customer loyalty Web site features that drive e-retail loyalty Top service performers report 91% retention The seven habits of effective marketers Customer retention efforts falling behind Turn ancillary revenue into customer loyalty
8.4
Critical capabilities for customer loyalty
8.4.1 8.4.2 8.4.3 8.4.4 8.4.5
8.9.1 8.9.2 8.9.3 8.9.4 8.9.5 8.9.6 8.9.7 8.9.8 8.9.9 8.9.10
8.10
8.10.1 8.10.2 8.10.3 8.10.3.1 8.10.3.2 8.10.3.3 8.10.3.4 8.10.3.5 8.10.3.6 8.10.4 8.10.4 8.10.5.1 8.10.5.2 8.10.5.3 8.10.6 8.10.7 8.10.7 8.10.9
Shattering the myths of customer loyalty In the beginning

Know the value of each customer Shattering the myths Myth #1
8.5
8.5.1 8.5.2 8.5.3 8.5.4 8.5.5 8.5.6 8.5.7 8.5.8 8.5.9 8.5.10 8.5.11
The structure of loyalty marketing
Best customer marketing Access Pricing Multi-partner programmes Turnkey programmes Bespoke programmes CRM and One-to-One Credit and debit card-based programmes Stored value, prepaid and gift cards Stealth programmes Real-time targeting Personal Relevance marketing (PRM)
Increasing retention by 5% boosts profits 25%-80% Myth #2 Most databases are adequate for building loyalty Myth #3 Loyal customers grow a business by positive WoM Myth #4 Loyalty programmes solve attrition problems Myth #5 Greater loyalty leads to higher market share Myth #6 Satisfied employees create loyal customers The truth is rarely pure and never simple Three essential Loyalty Truths Truth #1 Manage for selection first, then for retention Truth #2 Focus on customers' share of wallet Truth #3 Learn the specific response patterns Building a loyalty process Implementing the loyalty process Setting the record straight The pursuit of loyalty can be highly profitable
8.6
The loyalty token

How to choose the right loyalty token Questions for choosing a loyalty token
8.6.1 8.6.2
8.6.3 Examples of different loyalty tokens at work Current 8.6.4 options for loyalty tokens 8.6.4.1 'No token' programmes 8.6.4.2 Stamps 8.6.4.3 Vouchers 8.6.4.4 Coupons 8.6.4.5 Card-based programmes Smart cards (chip cards) Mobile 8.6.4.6 phone-based loyalty 8.6.4.7
9 9.1
9.1.1 9.1.1.1 9.1.1.1.1 9.1.1.1.2 9.1.1.1.3 9.1.1.1.4 9.1.1.2 9.1.1.2.1 9.1.1.2.2 9.1.1.2.3 9.1.1.2.4 9.1.1.2.5 9.1.2 9.1.3 9.1.4 9.1.5 9.1.6 9.1.7
Customer Data Strategy The technology behind customer data

The importance of loyalty data collection How proper data usage benefits the business 7 ways to gain value from customer data Customer data is more than just a marketing tool Loyalty data drives the most relevant offers How loyalty data translates into better marketing How data ignorance harms the business Companies failing to unlock the value of their data Marketers still 'flying blind' with customer data Most consumers will defect over banking data loss High-tech firms still don't know their customers Too many companies ignore customer insights Database planning Data processing and data flow Data analysis to support business processes Predictive analytics to drive change Data warehouses Data marts
9.3.3
9.3.3.1 9.3.3.2 9.3.3.3 9.3.3.4 9.3.3.5 9.3.3.6 9.3.3.7 9.3.3.8 9.3.3.9 9.3.3.9.1 9.3.3.9.2
Segmentation and the customer base

Segmentation by various attributes Customer lifetime value (CLV) Recency, Frequency, Monetary value (RFM) Customer tiering Customer base analysis and prediction Customer flow analysis Share-of-wallet estimation Market share estimation Examples of how airlines benefit from FFP data Commoditised airlines see value from loyalty data How airlines can use FFP data to increase loyalty
9.3.4 9.3.5 9.3.6

9.3.6.1 9.3.6.2 9.3.6.3
Data analysis eliminates marketing waste Retail loyalty data's clustered insights Best customers, defectors and winback Early defector detection
Win-back opportunities Lower cost competitive response
9.3.7
9.3.7.1 9.3.7.2 9.3.7.3 9.3.7.4 9.3.7.5 9.3.7.6 9.3.7.7 9.3.7.7.1 9.3.7.7.2 9.3.7.7.3 9.3.7.7.4 9.3.7.7.5 9.3.7.7.6 9.3.7.7.7
Customer targeting and differentiation

Advertising campaign targeting Circular efficiency Offer planning and promotion analysis Differentiated marketing Intelligent deselection Green targeting to save costs & the planet Loyalty based on insights from customer data Consumer data is the 'new oil' of customer loyalty Customer data is vital to cross-channel loyalty Loyalty data saved retailers from recession Customer data underpins 'next gen' marketing Customer win-back born from the 'single view' Transform 'blind data' into lifetime relationships Consumers not benefiting from their own data
9.2
9.2.1 9.2.2 9.2.2.1 9.2.2.2 9.2.2.3 9.2.2.4 9.2.2.5 9.2.2.6 9.2.2.7 9.2.2.8 9.2.2.9 9.2.3 9.2.4 9.2.5 9.2.5.1 9.2.5.2 9.2.5.3 9.2.6
Data collection: how, where, when & why?

What data can or should be gathered? How much data, and where to collect it The application form The web site Social sources
Mobile devices Third party sources Mystery shoppers & feedback systems The EPOS terminal Customer services Repair/replacement centres How long does data last? Data duplication, accuracy, and cleansing Data security and privacy The impact of customer data loss The impact of handling data incorrectly How digital security issues affect brands Data ethics policies
9.3.8
9.3.8.1 9.3.8.2 9.3.8.3 9.3.8.4
Planning and merchandising

Human resources planning Geographical store site selection Inventory rationalisation & selection Planogram adjacencies & merchandising
9.3.9
9.3.9.1 9.3.9.2 9.3.9.3 9.3.9.4 9.3.9.6 9.3.9.7 9.3.9.8 9.3.9.9 9.3.9.9.1 9.3.9.10 9.3.9.11
Business intelligence from raw data

Differentiation based on the use of data Data mining software Counting on the internet clickstream Real-time data mining OLAP, MOLAP, ROLAP and Magic Cubes Prediction based on past behaviour Data mining and analysis tools Practical application of business intelligence High ROI from good business intelligence Affinity marketing Predictive modelling
9.3 9.3.1
9.3.1.1 9.3.1.2
Benefits of data collection and analysis How does data turn into loyalty?
Customer data is the driver of positive change Loyalty data builds lasting relationships
9.3.2
9.3.2.1 9.3.2.2 9.3.2.3 9.3.2.4 9.3.2.5 9.3.2.6
Customer-related benefits
Customer behaviour profiling Customer lifestyle & demographic profiling Customer product preferences and repertoire Product category relationships & cross-selling Pricing Online shopping suggestions
9.3.10
Conclusion on the benefits of loyalty data
10 Loyalty/Marketing Communications 10.1 10.2

10.2.1 10.2.2 10.2.3 10.2.4
Introduction Communicating loyalty

Forecast of consumer communication trends Loyalty scheme messages not engaging enough Consumers talk more about the bad experiences Marketers encouraged to think psychologically
10.6
10.6.1 10.7.1 10.7.2 10.7.3 10.7.4 10.8.1 10.8.2 10.8.3 10.8.4 10.8.5 10.9.1 10.9.2 10.9.3 10.9.4 10.9.5
Social media
10.7
Social communications boost customer retention
Word-of-mouth
Loyalty schemes likely to breed 'WOM champions' Word-of-mouth's impact on customer loyalty UK clamps down on WoM; USA set to follow Most customer reviews found to be positive
10.3
10.3.1 10.3.1.1 10.3.1.2 10.3.1.3 10.3.1.4 10.3.1.5 10.3.1.6 10.3.1.7 10.3.2 10.3.2.1 10.3.2.2 10.3.2.3
Mobile
Mobile insights Short-termist mobile marketing spells trouble Retail marketers not making enough of mobile Combine SMS, mobile ads & traditional marketing SMS still essential to mobile marketing strategy E-consumers prefer mobiles to PCs Mobile marketing success depends on rewards Code of conduct for mobile marketing Other mobile developments Bluetooth-based mobile marketing guidelines MMA supports mobile affiliate marketers Germany's own Mobile Marketing Association
10.8
Direct mail marketing
Digital drives the comeback of offline marketing Direct Mail promising despite economic woes Direct mail drives digital marketing success DM timing more important than personalisation Online response is critical to direct marketing
10.9
Multi-channel
Big brands fail their multi-channel customers Retail loyalty subject to cross-channel strategy Categories shape consumers' channel choices Euro retailers embrace more digital channels Combined channels provide best marketing results
10.4
10.4.1 10.4.1.1 10.4.1.2 10.4.1.3 10.4.1.4 10.4.1.5 10.4.1.6 10.4.1.7 10.4.1.8 10.4.2 10.4.2.1 10.4.2.2 10.4.2.3 10.4.3 10.4.3.1 10.4.3.2 10.4.3.3 10.4.3.4 10.4.3.5
E-mail
E-mail marketing Driving greater customer loyalty through e-mail Opt-in and opt-out: a practical guide Permission-based e-mail boosts retail loyalty Permission-based email builds CPG loyalty Getting the right timing for e-mail marketing Email battles social networks for people's attention How e-mail marketing can become truly social How video can send ordinary marketing 'viral' E-mail insights Brands have more to gain from e-marketing E-marketing links customer desires and behaviours Untargeted e-marketing loses most customers E-mail developments Loyalty scheme members respond more to email Most email marketing is still badly targeted Marketing emails still lack the 'personal touch' Consumer email dips as new e-channels rise Suggested e-mail marketing guidelines
10.10
10.10.1 10.10.2 10.11.1 10.11.2 10.12.1
Kiosks & self-service

Web chat and self service improve e-tail experiences Brands test in-store digital marketing tools
10.11 10.12
Call centres Advertising
Contact centres drive customer satisfaction Focus on inbound customer contact points Advertising's long-term value rediscovered
10.5
10.5.1 10.5.1.1 10.5.1.2 10.5.1.3 10.5.1.4 10.5.1.5 10.5.1.6 10.5.1.7 10.5.2 10.5.2.1 10.5.2.2 10.5.2.3 10.5.2.4
Web sites
Web site insights Consumers seek better product detail online E-marketing hangs on content & personalisation How the EU 'cookie law' affects marketers Web cart abandonment must be addressed Factors that drive online consumer reviews Web 2.0 helps to boost branding & engagement Banks could gain from Web 2.0, if it's done well Web site developments E-retailers investing more in web interactions E-tail spending impacted by 'web stress' Digital diseases damage e-retailers Digital inserts set to provide value both ways
11 The Human Aspect of Loyalty 11.1 11.2 11.2.1

11.2.1.1 11.2.1.2 11.2.1.3 11.2.1.4 11.2.1.5 11.2.1.6 11.2.1.7
Introduction The human side of customer loyalty The psychology of customer loyalty
How consumers interpret loyalty rewards Loyalty mirrors human relationships The role of trust in consumer relationships Consumers are less loyal & more rational Purchase decisions are increasingly complex Study cites keys to consumers' retail choices There's nothing like a Mother's loyalty
11.2.5
11.2.5.1 11.2.5.2 11.2.5.3 11.2.5.4 11.2.5.5 11.2.5.6 11.2.5.7 11.2.5.8 11.2.5.9 11.2.5.10 11.2.5.11 11.2.5.12 11.2.5.13
Customer loyalty developments

Consumer brand loyalty still in decline Women business owners ignore loyalty Bad customer experiences cause churn epidemic Youth is more receptive to direct mail Most Americans will churn for a good cause E-retailers benefit from 'stay home' consumers Half of UK shoppers defect after bad service Product recalls increase customer loyalty Customer service counts for nervous shoppers Men use one loyalty card but women shop around Customers churn thanks to poor experiences Mobile wallets cause consumer caution Shoppers lose 33% of loyalty rewards
11.2.2
11.2.2.1 11.2.2.2 11.2.2.3 11.2.2.4 11.2.2.5 11.2.2.6 11.2.2.7 11.2.2.8 11.2.2.9 11.2.2.10 11.2.2.11
The customer experience

Consumers want greater value and service Consumers feel customer service has declined Bad customer experiences leave a trail online Customer experiences must be rewarding Good customer experiences are more profitable A customer is for life, not just for Christmas Bad customer experiences travel fastest UK customer satisfaction benchmarks What are the top 100 customer experiences? Five enhancers of the customer experience How to manage future customer experiences
11.3 11.3.1
11.3.1.1 11.3.1.2 11.3.1.3 11.3.1.4 11.3.1.5
The human side of employee loyalty Employee loyalty insights

Staff engagement tied to customer experiences Customer service trumps call centre efficiency Why employees should also be segmented Employee loyalty is not all about money Best practices for rewarding employees
11.2.3
11.2.3.1 11.2.3.2 11.2.3.3 11.2.3.4 11.2.3.5 11.2.3.6 11.2.3.7
Consumer behaviour trends

Retail loyalty doesn't always depend on a card Shoppers want to 'channel hop' as they shop 25m Britons loyal to same shops for 20 years Most UK consumers prefer multi-channel retailers What women want when they're shopping Top reasons for using mobile shopping Customers won't go out without a loyalty card
11.3.2
11.3.2.1 11.3.2.2 11.3.2.3 11.3.2.4
Employee loyalty developments

Travel incentives boost staff performance Airline pays staff for better customer loyalty How Macy's builds employee engagement Pricelock launches employee fuel incentives
11.2.4
11.2.4.1 11.2.4.2 11.2.4.3 11.2.4.4 11.2.4.5 11.2.4.6 11.2.4.7 11.2.4.8 11.2.4.9 11.2.4.10 11.2.4.11 11.2.4.12 11.2.4.13 11.2.4.14
Customer loyalty insights

Customer intimacy is the next loyalty frontier Loyalty in Latin America, USA & Canada Satisfaction still drives customer loyalty Boosting Hispanic loyalty scheme participation Service is the key factor in affluent loyalty Consumers explain how marketing should work Consumers dislike vague eco-marketing Study segments multichannel consumers British shoppers still prefer the High Street Offline WoM most influential among parents Youth cards offer marketing opportunities Generation Y will reshape customer loyalty Millennial life stage marketing strategy Mobile payments 'feel safer' than cards
12 12.1 12.2
12.2.1 12.2.2 12.2.3 12.2.4 12.2.5 12.2.6 12.2.7 12.2.8 12.2.9 12.2.10 12.2.11 12.2.12 12.2.13 12.2.14
Loyalty & Marketing Best Practices Introduction Loyalty best practices

Top ten ways to improve a loyalty scheme Ways to increase customer loyalty Key attitudes of successful loyalty marketers Principles that create highly loyal customers Best practices to increase customer loyalty Voice of the Customer (VOC) best practices Customer satisfaction surveys are essential Best practices to stop a loyalty scheme from stalling Best practices for online customer loyalty The six P's of customer loyalty marketing Create loyalty through 'surprise and delight' Ten ways to win loyalty through customer service It's loyalty, but not from the customer's viewpoint Value-adds build more customer loyalty
12.7
12.7.1 12.7.2 12.7.3 12.7.4 12.7.5 12.7.6 12.7.7 12.7.8
Marketing best practices

Seven ways to halt marketing wastage Recession-led focus on acquisition, not retention Key to customer-centricity strategy Assessing marketing channel profitability How retail promotions can build more loyalty A new level of marketing subtlety: north or south? Cause-related marketing increases sales Retailers embrace affiliate marketing strategy
12.8
12.8.1 12.8.1.1 12.8.1.2 12.8.1.3 12.8.1.4 12.8.1.5 12.8.2 12.8.2.1 12.8.2.2 12.8.2.3 12.8.2.4 12.8.2.5 12.8.2.6 12.8.2.7
E-marketing best practices

E-marketing strategies that didn't work UK retailers miss the mark with e-marketing Email marketers fail to follow best practices Travel firms lose customers through bad email Retailers must improve e-marketing ROI Critical insights lost through 'no-reply' emails E-marketing strategies that did work Five tips for email marketing and engagement Best practices for digital customer engagement Digital marketing best practices E-marketing links customer desires & behaviours Technology can help fulfil shoppers' real needs E-marketing relevance driven by DDM E-commerce's new role in the customer experience
12.3
12.3.1 12.3.2 12.3.3 12.3.4 12.3.5 12.3.6 12.3.7 12.3.8 12.3.9
Loyalty management best practices

Customer loyalty's future lies in 'trustability' Focus on marketing performance management Better marketing metrics are still needed Investor loyalty depends on marketing relevance Attitudinal targeting is highly effective Relationship model to predict customer loyalty E-retail loyalty depends on smarter testing How to lower the cost of your loyalty scheme Loyalty programmes can easily be recession-proofed
12.9
12.9.1 12.9.2 12.9.2.1 12.9.2.2 12.9.2.3 12.9.2.4 12.9.2.5 12.9.3 12.9.3.1 12.9.3.2 12.9.3.3
Green marketing best practices

Green marketing strategy Green marketing in practice Putting your primary green benefits first Alternatives to 'eco-label' marketing Green marketing drives more campaigns online Who consumers trust most when 'going green' 'Plant a tree' is actually a loyalty strategy Consumer response to green marketing Consumers balance 'green' with convenience The strength of Green customer relationships Consumers overly-cynical thanks to greenwashing
12.4
12.4.1 12.4.2 12.4.3 12.4.4 12.4.5 12.4.6 12.4.7
Customer retention best practices

Three steps for a successful CRM strategy Customer win-back The top 11 rules for keeping existing customers How to grow customer loyalty in a recession Relating customer experiences to retention Customer experience makes or breaks loyalty E-retail survival depends on customer retention
12.5
12.5.1 12.5.2 12.5.3 12.5.4 12.5.5
Customer relationship best practices

How to strengthen customer relationships in a crisis How well-executed CRM increases sales Consumer involvement is a retail opportunity Keys to building stronger FFP relationships What are the latest CRM best practices
13.1
13.1.1 13.1.2
The calculation of customer loyalty

How to measure customer loyalty successfully The importance of customer-centric metrics
13.2
13.2.1 13.2.2 13.2.3 13.2.4 13.2.5 13.2.6 13.2.7 13.2.8
Measuring loyalty - the metrics

Patronage ratio Switching ratio Budget ratio (share of wallet) Enis-Paul Index Retention rate & churn Customer Lifetime Net Promoter Score (NPS) Attitudinal equity: a powerful brand loyalty metric
12.6
12.6.1 12.6.2 12.6.3 12.6.4 12.6.5 12.6.6 12.6.7 12.6.8 12.6.9 12.6.10
Customer management best practices

How to manage the multi-channel surfer Best customer management strategy Loyalty 2.0 actually links loyalty with customers Best practices for effective mobile marketing Best practices for social media marketing F actors driving shopping mall purchasing & loyalty Customer experience offers competitive advantage Four recession-driven consumer segments identified Recession proofing: clone your loyal customers Differentiating loyalty schemes by customer needs
13.3 13.4
13.4.1 13.4.2
Customer Lifetime Value Practical statistics

The mean The median
13
13.4.3 13.4.4 13.4.5
Loyalty Metrics & Accountability

The mode Variance Standard deviation 13.13.2 13.13.3 13.13.4 13.13.5 13.13.6 13.13.7 Competitors have become a key loyalty metric Marketers not yet accountable for revenue growth US adopts new loyalty liability accounting principles Weak marketing metrics remain a business issue Marketers face tougher metrics & accountability ROI metrics linked to strong corporate growth
13.5
13.5.1 13.5.1.1 13.5.1.2
Customer Lifetime Value (CLV/CLTV)

CLV is vital for strong customer relationships Calculating the cost of keeping the customer Four ways of improving customer profitability
13.6
13.6.1 13.6.2 13.6.3 13.6.4 13.6.5
How to calculate customer profitability

Individual customers and customer groups Potential, existing, and defected customers Past, actual, and future profitability The RFM method The CLV method
13.7
13.7.1 13.7.2 13.7.3 13.7.4 13.7.5 13.7.6 13.7.7 13.7.8 13.7.9 13.7.10 13.7.11 13.7.12 13.7.13
Calculation of CLV
The history of CLV Definition of CLV The formula for CLV General concept of CLV Understanding the concept of CLV Examples of calculation of CLV First CLV and Second CLV CLV on a customer loyalty and satisfaction The Historic CLV method Predictive CLV method CLV as basis of strategy decisions Market strategy and CLV Case: Danish insurance company
13.8 13.9
13.9.1 13.9.2 13.9.3
CLV models & systems (marketing ROI) How to get started with CLV
Can any organisation use CLV? The objectives of calculating CLV The ten steps
13.10 Loyalty practice

13.10.1 13.10.2 13.10.3 13.10.4 13.10.5 13.10.6 13.10.7 13.11.1 13.11.2 13.11.3
&
profitability
in
theory
&
13.11
Alternatives to an investment in customer loyalty Loyalty and profitability: a hypothesis Are generally accepted hypotheses always reliable? Different loyalty and profitability models: examples Segmentation (defining loyal/profitable customers) The loyalty & profitability chain Customer retention, attrition & customer lifetime
Drivers of loyalty & profitability
Drivers of loyalty and profitability Examples of correlations Real loyalty, customer lifetime, and profitability
13.12
13.12.1 13.12.1.1 13.12.1.2 13.12.2 13.12.2.1 13.12.2.2 13.12.2.3
Net Promoter Score (NPS)

How the Net Promoter Score works Four key elements of the Net Promoter discipline NPS versus customer loyalty: the ongoing debate The NPS process NPS book explains the process practically Multi-industry NPS benchmarks Business-to-Business (B2B) NPS benchmarks
13.13
13.13.1
Marketing metrics and accountability

Moving from metrics to performance management
14.1 14.2
14.2.1 14.2.2
Introduction Management reports and tools

The Bathtub report The Decile report (RFM/RFS)
14.2.3 The Quo Vadis Retention report 14 Reporting & Segmentation 14.2.4 The New Member Frequency Report 14.2.5 The Cardholders' Summary Report
15 Brand Marketing & Loyalty
14.3
14.3.1 14.3.2 14.3.3
RFM segmentation
Traditional: 125 cells Reduced: 27 cells Flexible: 8 cells
15.1 15.2
15.2.1 15.2.2 15.2.3 15.2.4 15.2.5 15.2.6 15.2.7
Introduction Brand loyalty strategy

Brand loyalty drivers & strategies Consumers want emotional ties with brands Warmth & competence create brand loyalty CMOs not yet ready to build brand loyalty Brand loyalty evaporates with out-of-stocks Brand positioning's role in customer loyalty Mobile brand interactions become more personal
15.3
15.3.1 15.3.2 15.3.3 15.3.4 15.3.5 15.3.6 15.3.7
Brand loyalty insights

Trust drives up to 44% of brand loyalty The rich love to spread the word about brands Factors behind post-recession brand loyalty Customers must be given an online voice Heavy web users show volatile brand loyalty Fewer women show retail or brand loyalty UK shoppers not so loyal to fair trade brands
15.4
15.4.1 15.4.2 15.4.3 15.4.4 15.4.5 15.4.5.1 15.4.5.2 15.4.5.3
Brand marketing strategy

How to compete with a dominant brand Prestige brand discounts have paid off Brand building in the low-carbon economy Promotional merchandise adds lasting brand value CPG brand marketing strategy Drivers of CPG brand loyalty erosion Why CPGs should go direct-to-consumer TV ad responses linked to CPG purchases
15.5
15.5.1 15.5.2 15.5.3 15.5.4 15.5.5
Brand marketing insights

Few companies earned true loyalty in 2010 Only 20% of shoppers are brand loyal Brand break-ups surface in social media Brands more comfortable talking to consumers Luxury brands embrace augmented reality (AR)
15.6
15.6.1 15.6.2 15.6.3 15.6.4 15.6.5 15.6.6
Brands and their reputations

Top US brands, by customer loyalty score Brand power improving, and Coke is king Loyalty awards honour FedEx, Sears & Coca-Cola NPS benchmark reveals brand loyalty leaders NPS reveals UK's most recommended brands Top brands according to social media
16 16.1 16.2 16.3

16.3.1 16.3.2 16.3.3 16.3.4 16.3.5
Business-to-Business (B2B) Loyalty Introduction Five strategies to build B2B loyalty The structure of B2B loyalty
The two-link chain The three-link chain The four-link chain T argeting the SME owner-manager The purposes of B2B loyalty
17 17.1 17.1.1
17.1.1.1 17.1.1.2 17.1.1.3 17.1.1.4 17.1.1.5 17.1.1.6
Market Sizing & Valuation Introduction National loyalty market sizes and values
Size of the USA's loyalty market Size of the UK's loyalty market Size of Canada's loyalty market Size of Australia's loyalty market Size of China's loyalty market Size of South Africa's loyalty market
16.4
16.4.1 16.4.2 16.4.3 16.4.4
B2B loyalty programme case studies

Case study: Nectar Business (UK) Case study: Argos Business Solutions (UK) Case study: Nortel (India) Case study: ARBL (India)
17.2 17.3
17.3.1 17.3.2
Household/population data Loyalty market size estimation

Factors involved in market size estimation Loyalty programme market size estimations
17.4 17.5 17.6 17.7
Household income share analysis Consumer age analysis Consumer gender analysis Standard region groupings
16.5
16.5.1 16.5.2 16.5.3
B2B loyalty strategy

Four key factors for channel partner loyalty Strategies for channel loyalty and reward schemes A new channel engagement strategy
16.6
16.6.1 16.6.2 16.6.3 16.6.4 16.6.5
B2B loyalty insights

The key drivers of B2B loyalty Channel marketing requires real intelligence Channel choice begins the 'customer loyalty chain' Dedicated account managers boost B2B satisfaction 40% of happy B2B clients make referrals
16.7
16.7.1 16.7.2 16.7.3 16.7.4 16.7.5 16.7.6 16.7.7 16.7.8 16.7.9
B2B loyalty developments

PTC extends B2B loyalty with HP partnership GiftCards.com's corporate rewards unit Hawkeye's ChannelRewards loyalty platform Hitachi Power Tools' channel sales scheme Tonnex relaunches Reseller Rewards scheme Delta, Air France, KLM & Alitalia reward SMEs Virgin America's SME loyalty scheme Big Train's B2B loyalty scheme Amex Blue for Business rewards SMEs
18 Forecasts & Trends
18.1 18.2 18.2.1

18.2.1.1 18.2.1.2 18.2.1.3 18.2.1.4 18.2.1.5 18.2.1.6
Introduction Customer loyalty trends & forecasts Strategy-driven customer loyalty trends
26 loyalty marketing trends for 2012-2016 Coming trends for retail loyalty marketing Trends for the future of loyalty in the UK Brands still not doing enough for loyalty Canadian loyalty fell prey to pricing Loyalty 2.0 - and what comes next
18.6
18.6.1 18.6.2 18.6.3 18.6.4 18.6.5 18.6.6
Mobile marketing trends & forecasts

Mobile marketing trends 2012-2016 Mobile shopping trends must not be ignored In-store mobile apps are a coming trend Mobile media trends forecast 2012-2016 New mobile customer segments identified Consumers respond to mobile interactions
18.7
18.7.1 18.7.2 18.7.3 18.7.4 18.7.5
Multichannel marketing trends & forecasts
18.2.2
18.2.2.1 18.2.2.2 18.2.2.3 18.2.2.4 18.2.2.5 18.2.2.6 18.2.2.7
Consumer-driven customer loyalty trends

Groceries still key to loyalty scheme success Brands not using their loyal advocates New transactional customer loyalty trend Loyalty marketing to fickle teens & tweens Price is a loyalty driver for US retailers Smart shoppers have redefined their loyalty Coming trends in travel loyalty schemes
Marketers must walk the multichannel walk What 'Commerce Anywhere' means for retailers Sales & marketing fusion fuels sales growth Customers who web-chat tend to buy more High street retail faces online-hybrid future
18.8
18.8.1 18.8.2 18.8.3
Brand loyalty trends & forecasts

23 key brand marketing trends 2012-2016 Brand power and brand strength forecasts Affluent customers demand more value
18.3
18.3.1 18.3.2 18.3.3 18.3.4 18.3.5 18.3.6 18.3.7 18.3.8 18.3.9 18.3.10 18.3.11 18.3.12 18.3.13
Consumer behaviour trends & forecasts
18.9
18.9.1 18.9.2 18.9.3 18.9.4
Other marketing trends & forecasts

Traditional marketing trends 2012-2015 Voice of the Customer (VOC) trends 2012-2015 Green issues return with economic recovery The role of experiential rewards in loyalty
Customer engagement and behaviour trends Post-recession shopping behaviour shift Customer behaviour change forecast 2012-2020 Consumers widen mobile shopping behaviour Social & mobile consumer behaviour 2012-2015 Customer communication trends 2012-2016 Well-off consumers tend to use more coupons Shoppers return with an upbeat economy Five global types of shopper identified Value for money is more important than price Shoppers driven by price, quality & service Customers heading for a 'less cash society' New global consumer mindset evolves
18.4
18.4.1 18.4.2 18.4.3
Social marketing trends & forecasts

Email & social marketing are now main priorities Social channel to incorporate customer service Mobile & social strategies become a priority
18.5
18.5.1 18.5.2 18.5.3 18.5.4 18.5.5 18.5.6 18.5.7 18.5.8
Digital marketing trends & forecasts

Key digital marketing challenges Factors driving digital marketing success Digital data budgets doubled in 2 years Six email marketing trends for 2012-2015 Ten online marketing trends for 2012-2015 Marketers head toward Augmented Reality Customers recommend the higher-tech retailers Online consumers reluctant to share data
19.1
19.2.1 19.2.2 19.2.3 19.2.4 19.2.5 19.2.6 19.2.7 19.2.8 19.2.9 19.2.10 19.2.11 19.2.12 19.2.13 19.2.14 19.2.15 19.2.16 19.2.17 19.2.18 19.2.19 19.2.20 19.2.21 19.2.22 19.2.23 19.2.24 19.2.25 19.2.26 19.2.27
Introduction
Richard Cramer, Achievement Awards Group Is Steve Schroeder, AmeriCardGold Robert Passikoff, Brand Keys
Loyally occupying the digital world your loyalty programme 'The One1? Cause marketing's best practices & key benefits
20 20.1
20.1.1 20.1.2
Supermarket & Grocery Loyalty Introduction

What customers want from grocery retailers Loyal grocery shoppers still want deals
19 What The Say say 19.2 Wh atExperts the experts
Janet Titterton, Collinson Latitude Kelly Hlavinka, Colloquy
Making your loyalty currency irresistibly valuable Three loyalty trends that will shape the next 20 years Is the importance of technology being recognised at last? Using word of mouth to strengthen customer loyalty
20.2 20.2.1
20.2.1.1 20.2.1.2 20.2.1.3 20.2.1.3.1 20.2.1.3.2 20.2.1.4 20.2.1.5 20.2.1.6
Case studies UK supermarket case studies

UK grocery market shares Consumers swap supermarkets for better discounts Case study: Asda (EDLP) Using EDLP instead of a loyalty initiative Asda's customer retention strategy Case study: Co-op (Dividend Card) Case study: Iceland (Bonus Card) Case study: Sainsbury's (Nectar)
Mike Atkin, Customer Strategy Network
Vavra & Pruden, Customer Experience Partners N Ramasubramani, Direxions Jolande Duvenage, eBucks Jill Griffin, Griffin Group
Loyalty marketing: Full speed ahead! The keys: Tangible benefits, versatility & convenience How to ace your buyer's 'worth-it test' Customer loyalty driven by three not-so-little words Customer marketing in the Age of 'i'
Bill Hanifin, Hanifin Loyalty
Gary Hawkins, Hawkins Strategic Carlos Dunlap, Kobie Marketing

The evolution of loyalty marketing
20.2.1.7 Case study: Tesco & Dunnhumby (Clubcard) 20.2.1.7.1 Case study: Dunnhumby 20.2.1.7.1.1 Who is Dunnhumby? 20.2.1.7.1.2 20.2.1.7.1.3 20.2.1.7.1.4 20.2.1.7.1.5 20.2.1.7.1.6 20.2.1.7.1.7 20.2.1.7.1.8 20.2.1.7.1.9 About Tesco About Tesco Clubcard Personalisation - the value of customer insight Tesco & Dunnhumby: the partnership Learning across borders The Loyal Customer Mailing Innovating to better serve customers Where next for Clubcard?
Keiningham/ Aksoy/Buoye/ Cooil/Williams, IPSOS

Loyalty goes to WAR. (the Wallet Allocation Rule) loyalty buck with airports as FFP partners The five top sources of social media marketing ROI Four steps to making the leap to customer intimacy Points and miles, follow me!
Sanjai Velayudhan, ITC Infotech India Stretching the Jim Lenskold, Lenskold Group Bryan Pearson, LoyaltyOne Dominic Hofer, Loylogic
Peter Wray, Loyalty Matters
The impact of the global recession on customer loyalty people-focused global rewards strategy
Frenzel, Luckey & Eichwald, Maritz Motivation A M.Capizzi & T.Gaughan, Marketing Strategists The
intersection of loyalty and the mobile channel The importance of travel in loyalty
20.2.2
20.2.2.1 20.2.2.2 20.2.2.3 20.2.2.4 20.2.2.5 20.2.2.6 20.2.2.6.1 20.2.2.6.2 20.2.2.7
US supermarket case studies

Case study: Big Y (Express Rewards) Case study: Giant Foods (BonusCard) Case study: Kroger (Kroger Plus) Case study: Meijer (EDLP) Case study: Price Chopper (AdvantEdge Card) Safeway US & Canada Case study: Safeway US (Club Card) Case study: Safeway Canada (Club Card) Case study: Wal-Mart (EDLP)
Andrea Burchett, The Mileage Company D.Peppers & M.Rogers, Peppers & Rogers Group Neil Raphel, Raphel Marketing
Isn't our budgeting backwards? Changing shopper behaviour to boost sales profitability loyalty: Less is becoming more Loyalty in the age of the empowered customer Customer experience advances loyalty marketing
Brian Woolf, Retail Strategy Center Gordon Cooper, TCC USA
Tim Crank, Young America Retail
20.2.3
20.2.3.1 20.2.3.2 20.2.3.3
Other supermarket case studies

Case study: Coles/Wesfarmers, Australia (FlyBuys) Case study: Countdown, N Z (OneCard) Case Study: Pick'n'Pay, S. Africa (Smart Shopper)
19.3
19.3.1 19.3.2 19.3.3 19.3.4 19.3.5 19.3.6 19.3.7
The Global State of Loyalty, by ICLP

The The The The The The The state state state state state state state of of of of of of of loyalty loyalty loyalty loyalty loyalty loyalty loyalty in in in in in in in the UK (David Langton) Europe (Judith Raymakers) the US (Phil Seward) the Middle East (Dion Maritz) India (Krishna Iyer) China (Kevin Yeow) Asia-Pacific (Stephen Hay)
20.3
20.3.1 20.3.2 20.3.3 20.3.4 20.3.5 20.3.6 20.3.7
Other supermarket loyalty developments

Carrefour, France Metro, Canada Giant Eagle, USA Winn-Dixie, USA Stop & Shop, USA
Market Street, USA ShopSavvy & Grocery Server, USA
21 21.1 21.2 21.2.1

21.2.1.1 21.2.1.2 21.2.1.3
General Retail Loyalty Introduction Retail customer loyalty The case for retail loyalty schemes
90% of best-in-class retailers have loyalty schemes US loyalty memberships exceed 2 billion Top retail customer loyalty pressures
21.5
21.5.1 21.5.2 21.5.3 21.5.4 21.5.5
Case studies from other countries

Case study: Hbc, Canada (Hbc Rewards) Case study: Canadian Tire (Canadian Tire 'Money') Case study: Home Ideas, Australia (AdvantageCard) Case study: Jet, South Africa (Jet Club) Case study: SPC Card, Canada (Student Price Card)
21.6
21.6.1 21.6.2 21.6.3 21.6.4 21.6.5 21.6.6 21.6.7 21.6.8 21.6.9 21.6.10 21.6.11 21.6.12 21.6.13 21.6.14 21.6.15 21.6.16 21.6.17 21.6.18 21.6.19 21.6.20
Other retail loyalty developments

Amazon.com & Discover, USA Bluewater Mall, UK Buy.com, USA Citizy NFC Project, France DubLi, Spain Green Stamp, Japan HMV, Canada Holland & Barrett, UK House of Fraser, UK IndiaPlaza.com, India JCPenney, USA Jewel-Osco, USA Macy's, USA National Gift Card, USA Sam's Club, USA Sears, Canada Shoppers Drug Mart, Canada Toys'R'Us, USA Zazzle, USA Zed Tema, Russia
21.2.2
21.2.2.1 21.2.2.2 21.2.2.3 21.2.2.4 21.2.2.5 21.2.2.6 21.2.2.7
Retail customer loyalty insights

Loyalty data saved retailers from recession Retailers get highest loyalty ratings Retailers lag behind consumer technologies Cross-channel retail systems show benefits UK retailers forced to fight based on price Retailers must work on the mobile channel Retailers at risk from the 'anonymous customer'
21.2.3
21.2.3.1 21.2.3.2 21.2.3.3
Other retail loyalty scheme launches

Denmans Electrical Wholesalers, UK Christopher & Banks, USA BMR Le Groupe, Canada
21.2.4
21.2.4.1 21.2.4.2
Retail customer experiences

Consumers enthusiastic about new technologies Retailers still need better brand communication
21.3
21.3.1 21.3.2 21.3.3 21.3.4
Case studies from the UK

Case study: Boots (Advantage Card) Case study: LG (brand loyalty) Case study: Pigsback (retail rebates) Case study: Superdrug (Beautycard)
21.4
21.4.1 21.4.2 21.4.3 21.4.4 21.4.5 21.4.6 21.4.7 21.4.8
Case studies from the USA

Case study: Best Buy (Reward Zone) Case study: CVS/Pharmacy (Extra Bucks) Case study: eBay (eBay Bucks) Case study: Neiman Marcus (InCircle) Case study: Nordstrom (Fashion Rewards) Case study: Rite Aid (Wellness+) Case study: Sears/Kmart (Shop Your Way Rewards) Case study: Staples (Staples Rewards)
22 Financial Services Loyalty 22.1 22.2 22.2.1 22.2.1. 1 22.2.1.1.1

22.2.1.1.2 22.2.1.1.3 22.2.1.1.4 22.2.1.1.5 22.2.1.1.6
Introduction Insights and developments Financial loyalty insights Drivers of financial loyalty and churn
Bank customers more loyal if known in branch What makes customers switch payment methods Banks expect customers to shop around more Financial loyalty driven by consumer trust What makes financial service customers churn Financial services e-mail can improve brand loyalty
22.3.11 22.3.12 22.3.13 22.3.14 22.3.15 22.3.16 22.3.17 22.3.18 22.3.19 22.3.20 22.3.21
Case study: MasterCard (Global) Case study: MBNA (Global) Case study: MoneyGram (US, Canada & Europe) Case study: PayPal (Global) Case study: RBC (Canada) Case study: Scotiabank (Canada/USA) Case study: TD Bank (Canada) Case study: US Bank (USA) Case study: Visa (Global) Case study: Wells Fargo (USA) Case study: Zions Bank (USA)
22.2.1. 2
Building loyalty to banks

Creating the ideal banking relationship UK banks' profit-driven image stalls loyalty UK consumers miss out on bank rewards How credit unions can boost loyalty Australians trapped by their banks Australian banks lack confidence in loyalty insight Bank customer loyalty tied to customer service Barriers to banking loyalty How banks can earn younger customer loyalty
22.3.22
22.3.22.1 22.3.22.2 22.3.22.3 22.3.22.4 22.3.22.5 22.3.22.6 22.3.22.7 22.3.22.8 22.3.22.9 22.3.22.10 22.3.22.11 22.3.22.12 22.3.22.13 22.3.22.14
Co-branded card developments

Qantas launches rewards credit card Priority Club Rewards card designed by members QuickTrip Rewards adds affinity debit card NFL's Extra Points credit card Delta's debit card with discounts & benefits Hyatt's Visa card carries extra rewards Kroger's rewarding payment cards UFL's rewarding payment card Ukraine airline's FFP credit card AAA Visa card offers triple reward points AviancaTaca revamps LifeMiles with credit cards Chinese bank's social rewards credit card Discover & Amazon partner up Gulf Bank Kuwait's loyalty credit card
22.2.1.2.1 22.2.1.2.2 22.2.1.2.3 22.2.1.2.4 22.2.1.2.5 22.2.1.2.6 22.2.1.2.7 22.2.1.2.8 22.2.1.2.9
22.2.1. 3 22.2.1.3.1
22.2.1.3.2 22.2.1.3.3 22.2.1.3.4 22.2.1.3.5
Debit & credit card loyalty

EMV heralds smart loyalty in the USA Loyalty credit cards: fees, or no fees? Credit card reward caps are unpopular Payment methods chosen for best rewards Massive potential for debit card loyalty
22.2.2
22.2.2.1 22.2.2.2 22.2.2.3
Debit & credit card loyalty insights

Debit card loyalty points largely unredeemed Time to focus on mobile & engagement Credit card reward redemption rate rises
22.3.23
22.3.23.1 22.3.23.3 22.3.23.4 22.3.23.5 22.3.23.6 22.3.23.7 22.3.23.8 22.3.23.9 22.3.23.10 22.3.23.11 22.3.23.12 22.3.23.13 22.3.23.14
Other developments
Travelex offers bonus BA Miles for ForEx Digital coupons saved to credit cards SME satisfaction with banks declines Fiserv Relationship Rewards adds loyalty points Credit card rewards usage barometer begins US payment networks support Isis platform Santander's cashback rewards card Priceless loyalty scheme issues 60,000th card Banco do Brasil rolls out Dotz loyalty scheme Bulgarian bank's contactless loyalty card Nationwide's UK loyalty scheme Navy Federal's rewarding Member Mall North Shore Bank's Relationship Rewards
22.2.3
22.2.3.1 22.2.3.2 22.2.3.3 22.2.3.4
Loyalty to other financial services

Highly satisfying claims boost insurance loyalty Health insurers not profiting from satisfaction South African insurer rewards good drivers Grid Miles scheme rewards safer drivers
22.3
22.3.1 22.3.2 22.3.3 22.3.3.1 22.3.4 22.3.5 22.3.6 22.3.7 22.3.8 22.3.9 22.3.10
Case studies and developments

Case study: American Express (Global) Case study: Bank of America (USA) Case study: Barclaycard & Barclays (Global) Case study: Barclays Life's Rewards (UK) Case study: BMO (Canada) Case study: Capital One (USA) Case study: Chase (USA) Case study: Citi (Global) Case study: Discover (USA) Case study: HSBC (Global) Case study: Lloyds TSB (UK)
23
Airlines, FFPs & Airport Loyalty
24
Hotel & Resort Loyalty
23.1 23.1.1
23.1.1.1 23.1.1.2 23.1.1.3 23.1.1.4 23.1.1.5 23.1.1.6 23.1.1.7 23.1.1.8
Introduction Air travel loyalty insights

FFPs play vital role in airlines' future growth Airlines must learn from FFP loyalty data Low-cost airlines to benefit from loyalty FFPs are a Panacea for airport loyalty Benefits of an FFP in times of recession How FFPs can generate serious income Faster flight updates boost airline loyalty What passengers don't like about airlines
24.1 24.2
24.2.1 24.2.2 24.2.3 24.2.4 24.2.5 24.2.6 24.2.7 24.2.8 24.2.9 24.2.10 24.2.11
Introduction Hotel loyalty scheme case studies

Case study: Accor (A-Club) Case study: Best Western (Best Western Rewards) Case study: Carlson Hotels (Club Carlson) Case study: Choice Hotels (Choice Privileges) Case study: Hilton (Hilton HHonors) Case study: Hyatt (Gold Passport) Case study: IHG (Priority Club Rewards) Case study: Marriott (Marriott Rewards) Case study: Ritz-Carlton (Ritz-Carlton Rewards) Case study: Starwood Hotels (Preferred Guest) Case study: Wyndham (Wyndham Rewards)
23.1.2
23.1.2.1 23.1.2.2 23.1.2.3
Air travel loyalty best practices

Strategies to reinforce the value of FFP miles Key factors for building strong FFP relationships Commoditised FFPs can still find value in data
24.3
24.3.1 24.3.2 24.3.3 24.3.2 24.3 24.3.1 24.3.2
Hotel loyalty alliance case studies

Case study: GHA Discovery (Global) Case study: sQuidcard (UK) Case study: Stash Hotel Rewards (USA) Case study: Voila Hotel Rewards (Global) Hotel loyalty insights European hotel satisfaction due to lower prices Study reveals changing drivers of hotel loyalty
23.1.3
23.1.3.1 23.1.3.2 23.1.3.3 23.1.3.4 23.1.3.5 23.1.3.6 23.1.3.7 23.1.3.8
Air travel loyalty developments

AirBaltic launches online rewards shop Webloyalty signs Wizz Air partnership Aegean Airlines' wider loyalty footprint Capital One matches existing cards' FFP miles Middle East Airlines joins Sky Team Alliance Nectar and easyJet sign partnership deal NBAD Star Points partners with FlyDubai Estonian Air's social loyalty rewards
Other hotel loyalty developments

Hotels.com launches Welcome Rewards in the UK Aeroplan miles for Fairmont hotel redemptions Premier Inn's budget hotel stay rewards La Quinta's loyalty deal with Avis & Budget Las Vegas resorts & Topguest reward social users
24.4
24.4.1 24.4.2 24.4.3 24.4.4 24.4.5
23.2
23.2.1 23.2.2 23.2.3 23.2.4 23.2.5 23.2.6 23.2.7 23.2.8 23.2.9 23.2.10 23.2.11 23.2.12 23.2.13 23.2.14 23.2.15 23.2.16 23.2.17 23.2.18 23.2.19 23.2.20 23.2.21 23.2.22 23.2.23 23.2.24 23.2.25 23.2.26
Airline loyalty case studies

Case study: Air Canada (Aeroplan) Case study: Air France/KLM (Flying Blue) Case study: Air New Zealand (Airpoints) Case study: Alaska Airlines (Mileage Plan) Case study: American Airlines (AAdvantage) Case study: British Airways (Executive Club) Case study: Brussels Airlines (Miles&More) Case study: China Southern (Sky Pearl Club) Case study: Continental Airlines (MileagePlus) Case study: Delta Air Lines (SkyMiles) Case study: Emirates (Skywards) Case study: Etihad (Etihad Guest) Case study: Frontier (Early Returns) Case study: Jet Airways (JetPrivilege) Case study: JetBlue Airways (TrueBlue) Case study: Lufthansa (Miles&More) Case study: Malaysia Airlines (Enrich) Case study: Northwest Airlines (merged with Delta) Case study: Qatar Airways (Qmiles) Case study: South African Airways (Voyager) Case study: Southwest Airlines (Rapid Rewards) Case study: United & Continental (Mileage Plus) Case study: US Airways (Dividend Miles) Case study: Virgin America (Elevate) Case study: Virgin Atlantic (Flying Club) Case study: Virgin Blue (V elocity Rewards)
23.3
23.3.1 23.3.2 23.3.3 23.3.4 23.3.5 23.3.6 23.3.7 23.3.8 23.3.9 23.3.10
Other airlines & FFP developments

Aeromexico (Club Premier) Air China (Companion) AirTran (A+ Rewards) Bahrain Air (Loyalty Rewards) bmi (Diamond Club) Flybe (low cost flights) Hawaiian Airlines (HawaiianMiles) Kulula (Jetsetter Club) Qantas (Frequent Flyer) TAM Brazil (Multiplus Fidelidade)
25 25.1 25.2
25.2.1 25.2.2 25.2.3 25.2.4 25.2.5 25.2.6 25.2.7 25.2.8
General Travel & Tourism Loyalty Introduction Car rental loyalty case studies
Case study: Avis (Avis First) Case study: Budget Rent A Car (RapidRez) Case study: Dollar Rent A Car (Dollar Express) Case study: Enterprise (Enterprise Plus) Case study: Europcar (Privilege) Case study: Hertz (Gold Plus Rewards) Case study: National Car Rental (Emerald Club) Case study: Thrifty (Blue Chip Rewards)
26.1 26.2
26 Food/Drink/Entertainment Loyalty
Introduction Food loyalty
26.2.1
26.2.1.1 26.2.1.2 26.2.1.3 26.2.2 26.2.2.1 26.2.2.2 26.2.2.3 26.2.2.4 26.2.2.5 26.2.2.6 26.2.2.7 26.2.2.8
Restaurant loyalty insights

Factors that influence restaurant choice Restaurants find loyalty schemes do help Restaurants leak 30% of customers Food-related loyalty developments CA Pizza Kitchen's loyalty rewards Panera Bread's loyalty scheme Carl's Jr. & Hardee's mobile rewards Eat24Hours.com's loyalty scheme Dunkin' Donuts' loyalty scheme Restaurant advocacy via 'WOW' incentives Red Robin's diner loyalty scheme UltraONE's loyalty scheme
25.3 25.3.1
25.3.1.1 25.3.1.2 25.3.1.3 25.3.1.4 25.3.1.5
Travel and tourism loyalty Travel and tourism loyalty insights

Travel industry must re-ignite customer loyalty Value drives travel loyalty & engagement Travel loyalty must 'go the extra mile' Travel loyalty aided by 'lifestyle bundles' E-travel customers show little brand loyalty
26.3
26.3.1 26.3.2 26.3.3 26.3.3.1 26.3.3.2 26.3.3.3 26.3.3.4
Drinks loyalty
Starbucks' loyalty scheme Case study: Guinness (Hong Kong) Drink-related loyalty developments Tuborg beer's mobile loyalty scheme Coca-Cola's online loyalty scheme Baristas Coffee's prepaid loyalty card Coffee drinkers not as loyal as you think
25.3.2
25.3.2.1 25.3.2.2 25.3.2.3 25.3.2.4 25.3.2.5 25.3.2.6 25.3.2.7 25.3.2.8 25.3.2.9 25.3.2.10 25.3.2.11 25.3.2.12 25.3.2.13 25.3.2.14 25.3.2.15 25.3.2.16 25.3.2.17 25.3.2.18
Travel and tourism loyalty developments

Club Yogi Rewards (USA) Seawings (UAE) Affinion & Connexions (USA) Amtrak Guest Rewards (USA) Sabre Red (Global) Travelex & Air Miles (UK) Royal Caribbean Crown & Anchor Society (USA) Club Med & Carlson (USA) SuperAgency SuperCa$h (USA) RBC Rewards & Travelocity (Canada) Marriott Rewards (Global) Latitudes Rewards (Norway) Sixt & PayBack (Germany) Eurostar Plus (Europe) Expedia Rewards (USA) Ticketmunky (UK) Merseytravel Walrus Card (UK) Raiffeisen-Tours-Kooperation (Germany)
26.4
26.4.1 26.4.2 26.4.3 26.4.4 26.4.5
Recreational loyalty
AMC Theatres (USA) Audience Rewards (USA) Red Carpet Rewards Club (USA) Regal Crown Club (USA) Star Rewards (USA)
27 Mobile, Fixed Line & ISP Loyalty 27.1 27.2 27.2.1

27.2.1.1 27.2.1.2 27.2.1.3 27.2.1.4 27.2.1.5 27.2.1.6
28 Automotive & Fuel Loyalty
Introduction Mobile telecoms loyalty Mobile loyalty insights

Loyalty is top priority for mobile networks Smartphone users loyal to their networks Smartphone loyalty can't be forced 40% of smartphone users churn each year App users work on recommendations Mobile loyalty schemes set to take off
28.1 28.2 28.2.1

28.2.1.1 28.2.1.2 28.2.1.3 28.2.1.4
Introduction Automotive loyalty and rewards Automotive loyalty insights

Americans happier with imported vehicle brands Toyota still leads in US car loyalty US online car shoppers loyal to Chevrolet Fun driving experience vital to vehicle loyalty
28.2.2
Automotive loyalty case studies

Case study: Chrysler Group (USA) Case study: Kenworth Trucks (USA) Case study: Kia (USA) Case study: Kia (Canada) Case study: Mercedes-Benz (USA) Case study: Toyota (Canada)
27.2.2
27.2.2.1 27.2.2.2 27.2.2.3
28.2.2.1 28.2.2.2 Loyalty to mobile providers 28.2.2.3 Relationships rule the wireless roost Mobile operators lose 28.2.2.4 25% of retail sales 28.2.2.5 Unsuitable CRM systems ruin mobile relationships 28.2.2.6
27.2.3
27.2.3.1 27.2.3.2 27.2.3.3 27.2.3.4
Mobile consumer loyalty

Drivers of mobile network loyalty and churn Who's not loyal to their mobile service, and why Mobile networks' rewards drive satisfaction Loyalty to European mobile operators is high
28.2.3
28.2.3.1 28.2.3.2 28.2.3.3 28.2.3.4 28.2.3.5 28.2.3.6
Automotive loyalty developments

Belle Tire's mobile loyalty scheme Pit-Stop workshops offers PayBack points Card-free loyalty platform for car dealers AAA Visa card's loyalty bonus PayBack & Ford's new car bonuses Tata Motors' loyalty scheme in Odisha
27.2.4
27.2.4.1 27.2.4.2 27.2.4.3 27.2.4.4 27.2.4.5 27.2.4.6 27.2.4.7
Other mobile loyalty developments

Sprint's enhanced loyalty scheme Buongiorno's expanded mobile loyalty platform Sundrop's cardless mobile loyalty platform US Cellular's loyalty initiatives Russian mobile/retail loyalty club Orange's contactless prepaid loyalty card Vodafone UK's prepaid loyalty scheme
28.3 28.3.1 28.3.2

28.3.2.1 28.3.2.2 28.3.2.3 28.3.2.4 28.3.2.5 28.3.2.6 28.3.2.7 28.3.2.8 28.3.2.8.1 28.3.2.8.2 28.3.2.8.2 28.3.2.9
Fuel retailer loyalty and rewards Fuel retailer loyalty insights Fuel retailer loyalty case studies
Case study: BP (UK) Case study: Coles Express (Australia) Case study: Esso (Canada) Case study: Esso / Exxon Mobil (Singapore) Case study: FuelPerks! & Fuel Rewards (USA) Case study: Indian Oil (India) Case study: Petro-Canada (Canada) Case study: Shell (Global) Shell in the UK Shell in the USA Shell in other countries Case study: Texaco (UK)
27.3
27.3.1 27.3.2 27.3.3 27.3.4 27.3.5 27.3.6
Fixed line telecoms loyalty

Telecoms customers want love, not discounts Customer loyalty is critical to growth Most broadband customers have churned Consumers surprisingly loyal to telcos Etisalat's online bill payment rewards Billing makes 10% of telecom customers defect
Fuel retailer loyalty developments

Giant Eagle's food-and-fuel perks QuickTrip Rewards' affinity debit card ConocoPhillips joins Kickback loyalty coalition Murphy and Wal-Mart's fuel rewards South African fuel market warms to loyalty
28.3.3
28.3.3.1 28.3.3.2 28.3.3.3 28.3.3.4 28.3.3.5
29 Media & Publishing Loyalty 29.1 29.2

29.2.1 29.2.2 29.2.3 29.2.4 29.2.5 29.2.5.1 29.2.5.2 29.2.5.3
30 Loyalty in Other Sectors
Introduction Book store loyalty

Case Study: Angus & Robertson (A&R Rewards) Case study: Baines & Noble (B&N Member) Case study: Borders Rewards (now closed down) J V / Case Study: Indigo Books & Music (Plum Rewards) Other book store loyalty developments eCampus tiered textbook rewards First Club's e-book & audio book rewards Irish bookseller launches loyalty scheme
30.1 30.2
30.2.1 30.2.2 30.2.3 30.2.4 30.2.5 30.2.6
Introduction Community & government loyalty

BeanSaver community rewards Yorkshire town loyalty card a success Irish town offers local loyalty card Northampton offers town loyalty card Mobile app rewards locally loyal shoppers Bolton offers market loyalty smartcard
30.3
30.3.1 30.3.2 30.3.3 30.3.4 30.3.5
Non-profit & cause-related loyalty

Medical charity offers affinity debit card Consumers embrace cause marketing Causes are critical to loyalty, if they fit Kula Causes turns points into donations British Red Cross offers local loyalty card
29.3
29.3.1 29.3.2 29.3.3
Newspaper & magazine loyalty

News website loyalty tied to satisfaction UK's Daily Mail launches loyalty scheme Sanoma trials contactless payment & loyalty
30.4
30.4.1 30.4.2 30.4.3 30.4.4
Education loyalty
Campus Dough helps university students Prepaid cards reward better teachers Teacher Rewards amount to US$4.5m Mint offers school fundraising loyalty card
29.4
29.4.1 29.4.2 29.4.3
Radio & television loyalty

Conde Nast's revamped e-shopping rewards Jetcast rewards internet radio listeners USA Network rewards loyal viewers
30.5
30.5.1 30.5.2 30.5.3 30.5.4
Health & lifestyle loyalty

Fitness First's trainer loyalty scheme Canadians rewarded for good health 911HealthShop.com offers loyalty scheme Customer trust creates healthy rewards
29.5
29.5.1 29.5.2 29.5.3
Other publishing loyalty initiatives

Flowd's music frequent fans scheme e-Miles' 1 billionth ad-based reward PosterRevolution's loyalty scheme
30.6
30.6.1 30.6.2 30.6.3 30.6.4 30.6.5
Eco-friendly & green loyalty

RecycleBank, USA Office Depot offers 100% Green rewards Rewards scheme promotes green ethics British Gas relaunches Green school rewards ICE rewards sustainable living
30.7
30.7.1 30.7.2 30.7.3
Energy utility loyalty

NPower's Barclaycard Freedom incentives TXU Energy doubles loyalty rewards How smart meters affect energy consumers' loyalty
30.8
30.8.1 30.8.2 30.8.3
Sports loyalty
National Football League (USA) Major League Baseball (USA) Jockey Club (UK)
30.9
30.9.1 30.9.2
Gaming loyalty
Game Points reward currency starts well Gamestop's PowerUp Rewards
30.10
30.10.1 30.10.2 30.10.3
Gambling loyalty
Caesars rewards guests for social exposure Paddy Power Bingo's loyalty card City Bingo rewards player loyalty
30.11
30.11.1 30.11.2 30.11.3 30.11.4 30.11.5 30.11.6 30.11.7 30.11.8
Other loyalty initiatives

Meeting Rewards expands into Latin America Igo-Post's long-term loyalty scheme Aeropostale's multi-channel loyalty scheme Transit Treasure rewards public transport users Groupon's payment card loyalty scheme Re/Max's affiliate-driven loyalty scheme CouponCabin's loyalty scheme Good Sam Club members save on fuel
Appendix A - Loyalty supplier directory A.1 Suppliers listed by category & country
Customer loyalty systems CRM/BI systems Customer experience management Call centres Developers & integrators Application hosting Loyalty scheme operators POS technology Data warehousing & data mining Coupons/gift certificates/incentives Internet marketing Direct marketing Research and analysis Public relations / media/ events Industry associations
Reference of Loyalty Case Studies 20.2.3.2 Countdown, NZ, OneCard 20.2.3.3 Pick'n'Pay, South Africa, Smart Shopper
General retail loyalty case studies

21.3.1 21.3.2 21.3.3 21.3.4 21.4.1 21.4.2 21.4.3 21.4.4 21.4.5 21.4.6 21.4.7 21.4.8 21.5.1 21.5.2 21.5.3 21.5.4 21.5.5 Boots, UK (Advantage Card) LG, UK (brand loyalty) Pigsback, UK (retail rebates) Superdrug, UK (Beautycard) Best Buy, USA (Reward Zone) CVS/Pharmacy, USA (Extra Bucks) eBay, USA (eBay Bucks) Neiman Marcus, USA (InCircle) Nordstrom, USA (Fashion Rewards) Rite Aid, USA (Wellness+) Sears/Kmart, USA (Shop Your Way Rewards) Staples, USA (Staples Rewards) Hbc, Canada (Hbc Rewards) Canadian Tire (Canadian Tire 'Money') Home Ideas Centre, Australia (AdvantageCard) Jet, South Africa (Jet Club) SPC Card, Canada (Student Price Card)
A.2 Supplier details (208 companies) Coalition loyalty case studies

3.3.1.1 3.3.1.2 3.3.1.3 3.3.1.4 3.3.1.5 3.3.2 3.3.3 3.3.4 3.3.5 3.3.6 3.3.7 3.3.8 3.3.9 3.3.10 3.3.11 3.3.12 16.4.1 16.4.2 16.4.3 16.4.4 20.2.1.3 20.2.1.4 20.2.1.5 20.2.1.6 20.2.1.7 20.2.1.7.1 20.2.2.1 20.2.2.2 20.2.2.3 20.2.2.4 20.2.2.5 20.2.2.6.1 20.2.2.6.2 20.2.2.7 20.2.3.1 Air Miles, UK (Avios) Air Miles, Canada Air Miles, Spain (Travel Club) Air Miles, Netherlands Air Miles, Middle East Aeroplan, Canada BonusLink, Malaysia eBucks, South Africa Fly Buys, New Zealand FlyBuys, Australia PayBack India, previously i-Mint iPoints/Maximiles, UK/Europe Malina, Russia Nectar, UK Nectar Italia, Italy PayBack, Germany & Poland Nectar Business, UK Argos Business Solutions, UK Nortel, India ARBL, India Asda, UK, EDLP Co-op, UK, Dividend Card Iceland, UK, Bonus Card Sainsbury's, UK, Nectar Tesco, UK, Clubcard Dunnhumby, UK, Tesco's analytics Big Y, USA, Express Rewards Giant Foods, USA, BonusCard Kroger, USA, Kroger Plus Meijer, USA, EDLP Price Chopper, USA, AdvantEdge Card Safeway, USA, Club Card Safeway, Canada, Club Card Wal-Mart, USA, EDLP Coles/Wesfarmers, Australia, FlyBuys & discounts
B2B loyalty case studies
Supermarket loyalty case studies
Financial services loyalty case studies

22.3.1 22.3.2 22.3.3 22.3.3.1 22.3.4 22.3.5 22.3.6 22.3.7 22.3.8 22.3.9 22.3.10 22.3.11 22.3.12 22.3.13 22.3.14 22.3.15 22.3.16 22.3.17 22.3.18 22.3.19 22.3.20 22.3.21 23.2.1 23.2.2 23.2.3 23.2.4 23.2.5 23.2.6 23.2.7 23.2.8 23.2.9 23.2.10 23.2.11 23.2.12 23.2.13 23.2.14 23.2.15 23.2.16 23.2.17 23.2.18 23.2.19 23.2.20 23.2.21 23.2.22 23.2.23 23.2.24 23.2.25 23.2.26 24.2.1 24.2.2 24.2.3 24.2.4 24.2.5 24.2.6 24.2.7 24.2.8 24.2.9 24.2.10 24.2.11 American Express (global) Bank of America, USA Barclays Life's Rewards, UK BMO, Canada Capital One, USA Chase, USA Citi (global) Discover, USA HSBC (global) Lloyds TSB, UK MasterCard (global) MBNA (global) MoneyGram, US/Canada/Europe PayPal (global) RBC, Canada Scotiabank, Canada/USA TD Bank, Canada US Bank, USA Visa (global) Wells Fargo, USA Zions Bank, USA c a B
r
Car rental loyalty case studies

25.2.1 25.2.2 25.2.3 25.2.4 25.2.5 25.2.6 25.2.7 25.2.8
Avis (Avis First) Budget Rent A Car (RapidRez) Dollar Rent A Car (Dollar Express) Enterprise (Enterprise Plus) Europcar (Privilege) Hertz (Gold Plus Rewards) N ational Car Rental (Emerald Club) Thrifty (Blue Chip Rewards)
Airline & FFP loyalty case studies

Air Canada (Aeroplan) Air France/KLM (Flying Blue) Air New Zealand (Airpoints) Alaska Airlines (Mileage Plan) American Airlines (AAdvantage) British Airways (Executive Club) Brussels Airlines (Miles&More) China Southern Airlines (Sky Pearl Club) Continental Airlines (MileagePlus) Delta Air Lines (SkyMiles) Emirates (Skywards) Etihad (Etihad Guest) Frontier (Early Returns) Jet Airways (JetPrivilege) JetBlue Airways (TrueBlue) Lufthansa (Miles&More) Malaysia Airlines (Enrich) Northwest Airlines (merged with Delta) Qatar Airways (Qmiles) South African Airways (V oyager) Southwest Airlines (Rapid Rewards) United Airlines & Continental (Mileage Plus) US Airways (Dividend Miles) Virgin America (Elevate) Virgin Atlantic (Flying Club) Virgin Blue (V elocity Rewards) Accor (A-Club) Best Western (Best Western Rewards) Carlson Hotels (Club Carlson) Choice Hotels (Choice Privileges) Hilton (Hilton HHonors) Hyatt (Gold Passport) InterContinental Hotels (Priority Club Rewards) Marriott (Marriott Rewards) Ritz-Carlton (Ritz-Carlton Rewards) Starwood Hotels (Preferred Guest) Wyndham (Wyndham Rewards)
Hotel & frequent guest loyalty case studies
Hotel loyalty alliance case studies

24.3.1 24.3.2 24.3.3 24.3.4 GHA Discovery (global) sQuidcard, UK Stash Hotel Rewards, USA Voila Hotel Rewards (global)
g d r a c y l a
) a b l o
Automotive loyalty case studies

28.2.2.1 28.2.2.2 28.2.2.3 28.2.2.4 28.2.2.5 28.2.2.6 Chrysler Group (USA) Kenworth Trucks (USA) Kia (USA) Kia (Canada) Mercedes-Benz (USA) Toyota (Canada)
Fuel retailer loyalty case studies

28.3.2.1 28.3.2.2 28.3.2.3 28.3.2.4 28.3.2.5 28.3.2.6 28.3.2.7 28.3.2.8.1 28.3.2.8.2 28.3.2.8.3 28.3.2.9 BP, UK Coles Express, Australia Esso, Canada Esso/Exxon Mobil, Singapore FuelPerks! & Fuel Rewards, USA Indian Oil Petro-Canada Shell, UK Shell, USA Shell (other countries) Texaco, UK
Book store loyalty cases studies

29.2.1 29.2.2 29.2.3 29.2.4 Angus & Robertson (A&R Rewards) Barnes & Noble (B&N Member) Borders Rewards (now closed down) Indigo Books & Music (Plum Rewards)
Other loyalty marketing case studies

7.8.3 26.3.2 Points.com (global) Guinness (Hong Kong)
fo d rm r

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theloyaltyguide 5

... the whole of customer loyally, engagement and profitability

The Loyalty Guide 5

What's in this sampler?

PUBLISHER'S NOTE ON CURRENCIES AND EXCHANGE RATES:

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From chapter 20 - Supermarket & Grocery Loyalty

20.2.1.7 Case study: Tesco & Dunnhumby (Clubcard)

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Case study: Dunnhumby

20.2.1.7.1.1 Who is Dunnhumby?

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20.2.1.7.1.2 About Tesco

20.2.1.7.1.4 Personalisation - the value of customer insight

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20.2.1.7.1.5 Tesco & Dunnhumby: the partnership

20.2.1.7.1.6 Learning across borders

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20.2.1.7.1.7 The Loyal Customer Mailing

20.2.1.7.1.8 Innovating to better serve customers

20.2.1.7.1.9 Where next for Clubcard?

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Rewards & Incentives

Customer Engagement and Loyalty

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6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.

Media and Loyalty

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Customer Data Strategy

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Loyalty & Marketing Communications

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Marketing Best Practices

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Loyalty Metrics & Accountability

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^ _ ^Pi 0-+r) & = fc+ 1)- a

Reporting & Segmentation

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Brand Marketing & Loyalty

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Sizing & Valuation

Forecasts & Trends