Transcript Driving retail sales by innovative loyalty program

Driving retail sales by innovative loyalty program
Ewa Wegorkiewicz
13th of March, Sofia
Agenda
•Loyalty why to go into it?
•Loyalty in Retail – different approaches to different needs
•Key points to make a loyalty program a success
•Comarch CEMM as the tool for success
Page 2
85%
households participate in at least one
reward program*
12
loyalty programs per household on
average**
40%
participation in active loyalty programs**
Sources:
* Loyalty & Rewards: A Market Overview, Aite Group, January 2007
**
Colloquy®talk™ Censustalk, April 2007, pp. 3-6
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Customer acquisition is more expensive than retention
Small improvements in retention generate great returns:
Decreasing churn from 10% to 5% increases net present value by 75%.*
Following loyalty best practices can help deliver more than 15% in
annual improvement in return on gross revenues, customer retention
rates and marketing investment.
*The Loyalty Effect, by Reichheld & Teal
4
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So do we need to implement a loyalty program?
Your competition
You
Your Client
Your PROBLEM
Page 5
Wrong question!
The right question is:
How to make your Clients crazy about your brand?
Page 6
This is how our retail Clients made it work
Different possible loyalty
program schemes :
Emotional loyalty
Loyalty for mass clients
Multi-partner
Sales force incentive
Competition among sales
force
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All you need is love- Alma Market
 Premium department store
chain in Poland targeted to the
Clients with the above average
income
 Immense choice of high
quality products
 Client satisfaction taken to the
next level- emotional loyalty
- money can`t buy promotions
•The results:
 Increase in average basket
value 3 times higher for a
member than for a nonmember
Page 8
Money makes the world go round- Perekrostok
(X5 Retail Group)
The largest food retail company in Russia by sales volume
The company actively uses a multi-format strategy, developing three formats at the
same time: discounters, supermarkets and hypermarkets
The Average basket value of program members is 45% higher than for non-members
More than 26% of turnover is generated through loyalty transactions
More then 230 promotions active simultaneously
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Malina – multipartner = multisucess
The average transaction with the MALINA
card is 2640 rubles, which
is 20% higher than a "usual" average
transaction
IDEA:
Take advantage of
daily shopping and all
cleints activities
Russia’s richest consumer database
4,581,735 cards in the market with
8,5 Malina transactions every
second of the year!
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Make your revenue grow by motivating your sales force!
Single solution addressing the needs of different
types of B2B Partners in traditional retail channel
Communication via
SMS, Email, Mail,
WWW, Call Center
Program data analysis &
segmentation
Enrollment invitation to
selected Partners via Sales
Representatives
Motivating by rewarding (both
tanglible goods, emotional
rewards, experiences )
promotions depending
on the target group and
business need (SKU, invoice
value, turnover, etc)
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Tripple points- focus on different sales areas
1.
Basic points
For each 100 Pln on invoice
You get points
100 zł = 10 pts
We award full 100 zł on Invoice
Eg. Total on invoice is 980 zł 
Client gets 90 pts
2.
Points for no. of SKU
on invoice
You can double your basic points
Scoring:
Number of SKU on invoice:
10-14 5 pts/100zł
15-24 7 pts/100zł
25+ 10pts/100 zł
3.
Points for SPECIAL
ACTIONS
You can get
EXTRA POINTS
During each month a SPECIAL
ACTION will be launched
eg.
- SKU promo,
-Increase of turnover on
invoice vs. Last month
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Diversified reward catalogue
• Gift catalogue with more than 130 items + special awards
• Automatic settlements checking before the redemption
• Easy to get rewards
Page 13
Make your sales forces compete among each other!
Main program purposes:
• Motivation of both Sales Representatives and
stores offering CC products (outlets)
• Building competition among the Sales
Reps and outlets and in this way increasing
the sales volume
• Control of the stock
• Increasing the single invoice SKUs
• Focus on the specific products and their
promotion within cross and up selling
promotions
Page 14
Comarch Enterprise Marketing Management key
functionalities to make your loyalty program
a success
Collect and use
the data
Measure the
results and
improve !
Reward customers
for desired
behaviors
Get to know your
clients=> make
them better offers
Use REAL Time for
customer dialogue
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Collect and use
the data
Application form is the single
most important point of data
capture
a) Gather all data in form
b) Gather data incrementally
using electronic channels:
a) Transactional
b) Non-transactional
Anna, young mother, loves organic food and often purchases at the weekends
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Collect and use
the data
Primary Retail Segmentation Approaches
Recency, Frequency, Value (RFV): e.g. High Value Frequent Shoppers, Low Value Frequent Lapsed
Lifestage: e.g. Young Adult, Young Family, Older Family, Empty Nesters
Lifestyle: e.g. Organic, Fast Food, Home Cooking, TV Diners, Ethnic Dining based on basket
Data Collection
Internet Shopping: e.g. Trial, Cautious Developing, Everything
Recency , Frequency, Value Segmentation
Frequency
Visit
Recency
Frequency
Visit
Visit
Value $
Today
Time
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Make the clients feel
understood by well
targetted offers
Basket analysis to get shopper type and appropriate
offers
Price sensitive
Health Conscious
Low far milk
Natural
Yogurt
Eco-Washing
Powder
Basket <10
items
Lowest price
cola
Organic
Carrots
Brown Rice
Brown Bread
New organic
chocolate
Current
Basket
Lowest price
noodles
Uses 2-1
offers
New large value
biscuits
No fresh items
Cheapest
washing powder
large format
Recommended
46 other shopping types – tv dinners, deli divers, traditional,
ethnic explorers, meat feast, vegetarians etc
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Make the clients feel
understood by well
targetted offers
Points & Discount Promotions as the best way for motivation
 Points are used as motivation currency. The more you collect – the
more attractive Value Added Services you can get
 Additional discounts, lotteries, member gets member promotions
 High-value and aspiring customers receive additional promotions
 Time- and location-based promotions (e.g. new store openings)
Points are calculated for:
Transaction
value
Single shopping
basket value,
single order via
phone or internet
Increase in
transaction
value in time
Cumulative value
of all Customer
transaction in a
time period
Purchase of
specific
products
Extra points for
purchasing highmargin products
Customer status
and
segmentation
Special point
rules for
customers with
„Golden” or
„Silver” stauts in
the program
Relationship
building rules
Irregular
motivation and
recognition (e.g..
points for
registration,
birthday, 3-year
participation in th
program)
Page 19
Use REAL Time for
Client dialogue
From segmentation to effective Client communication
Enterprise-Initiated,
Marketing-Driven
Customer-Triggered,
Product as Service
Customer-Initiated,
Relationship-Driven
Campaign
Event-Driven
Real-Time
„Intrusive”
1%-5%
Response
„Convenient”
5x Success
„Appropriate”
10 X Success
Source: Gartner
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Use REAL Time for
customer dialogue
Customer Self Service
•Attractive tools for Loyalty Program Members
•Full account management through:
•Mobile Application
•Loyalty Program Website
•Contact Center Application
•Attractive set of functionalities:
•Personal data management
•Ordering and tracking rewards
•Special personalized offers and coupons
•Access to full history of transactions and communication
Page 21
Reward customers
for desired
behaviors
Multiple Rewarding Schemes
Real time
• Cash-back  paying with loyalty points for on-site products
• Discounts, free products  ticket level, item level discounts, pay 50
EUR for alcohol get 10 percent discount for soft drinks
Gift Catalogue
• Available for customers with certain points amount
Lotteries / Instant Win
• Coupons for lotteries can be printed as rewards i.e. at the store
Free services vouchers at partners stores :
• Free home delivery
• Free SPA vouchers
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Measure the
results and
improve!
Balancing Loyalty Investment Against Return
Loyalty Program is a cost
of learning about clients
Additional
Customer Profits
>
Loyalty Program
Investment
+
Loyalty Promotions
Costs
Page 23
Measure the
results and
improve !
Constant Reporting & Analysis
Report templates with scheduled generation
Different output formats (PDF, HTML, CSV, XML)
„Push” and „pull” reports: automatic reports sending or manual
downloading
Additional analysis on a Dashboard:
KPI’s presentation
Data manipulation
Creation of the customized reports by
the user with external tool
Notifications after generation
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What Comarch proposes as an IT tool for a loyalty
success
Marketing
Department
Administrator
& Marketing
Business
Campaign
Administration
Management
(BA)
Analytics
Smart
Analytics
B2B module
Partners
Web Portal
Clients
Contact
Center (CC)
Customer
Care
Page 25
Flexible projects implementation to optimize the costs
Our loyalty experience:
Over 80 million members
in 40 worldwide projects
over 2 mln transactions
processed every day
Flexibility in choosing the model:
• SAS/Installation on client premises
• Out of the box/ customized
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Q&A
Page 27
Thank you
www.comarch.com