loyalty marketing & loyal customers

8/14/2019 Loyalty Marketing & Loyal Customers

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LOYALTY MARKETING &LOYAL CUSTOMERS

PREPARED BY: RACHIT, AAFAQUE &SUSHIL


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POINTS OFDISCUSSION

Objectives of Loyalty Marketing

Principles of Loyalty Marketing

Building a strategy

Difficulty in Building true Loyalty

Customer Recognition

Economic Value Of a Loyal Customer

Future of Loyalty Programs

Conclusion


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THE BOTTOMLINE

"As a customer's relationship with thecompany lengthens, profits rise. And not

just by a little. Companies can boost

profits by almost 100 percent by retaining just 5 percent more of their customers" -F.P. Reichheld


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LOYALTY PROGRAMS

A marketing process that generates rewards to

customers based on their repeat purchasing .

Consumers who enter a loyalty program are expected totransact more with the focal company, giving up the free

choice they have otherwise.

In exchange for concentrating their purchases with the focalfirm, they accumulate assets (for example, points).

Points are exchanged for products and services, typicallybut not necessarily associated with the focal firm.

CRM tool used by marketers to identify, award, and retain

profitable customers.


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PRINCIPLES OF LOYALTY MARKETING

Relevance is the key to Loyalty Marketing-The magnitude of the reward is less important that the perceived value of thereward.

Special treatment, recognition.

Loyalty Marketing reduces the consumers decision-makingcomplexity.

Loyalty Marketing reinforces the rightness or wrongness of the consumers choice.

Loyalty Marketing is information-dependent.


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TYPES OFCUSTOMERS

Loyal Customers

Discount Customers

Impulse Customers

Need- Based Customers

Wandering Customers


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BUILDING STRATEGY- GRAPHICDEPICTION

Product

Performance

ServicePerformance

EmployeePerformance

CustomerSatisfaction

Retention /Loyalty

Revenue /Profit


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DIFFICULTY IN BUILDING TRUELOYALTY

According to a report from Mintel Research:Only 15% of all grocery shoppers are completely loyal to thestore where they do their main grocery shopping

29% use one other store

22% use two others

Men are more likely than women to be loyal to a single store

46% of men shop in just one or two main stores

This study helps us to understand that merely spendingmillions does not creates Loyalty. A continous approach isessential.


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CUSTOMER LOYALTY CYCLE


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ACTIONOUTLI NE

4. Measure effects of program and redesign Maintain constant communication with your loyal customers Monitor costs and results of your program

3. Implement a loyalty treatment Design specific communication strategy and message Train staff to understand the importance and the process Create opportunities to invest and receive investments Generate a sense of community among your customers

2. Design a relationship-building service culture Identify what type of treatment promotes customer loyalty Identify what loyal customers want to give to you Identify potential for the development of a brand community

1. Select your market segmentIdentify most valuable customers (what criteria?)Identify customers who might become valuable

C S O


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CUSTOMERRECOGNITION

Customer Recognition is an important aspect of anybusiness or for any Organization.

With each loyalty programs Recognition aspect comes intopivotal role.

Each customer wants an attention or recognition whomhe/she enters into relation with.

The recognition can be Tangible or Intangible.

Dont underestimate Customer recognition.


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ECONOMIC VALUE OF A LOYALCUSTOMER

Understanding loyalty program economics is essential.

A loyalty program incurs a cost to an organization which is of primeimportance as running these programs is isnt cheap.

According to a study by Mckinsey & Company estimated for anyFortune 500 organization a programs 1 st year cost makes up for alarge amount simultaneously costing in marketing and maintenance.

Understanding the economic value of your customers, not just your

loyal customers can save tremendous amounts of revenue and effort .

EXAMPLES OF LOYALTY


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EXAMPLES OF LOYALTY PROGRAMS

o Star Alliance Frequent Flyer Program

o Taj Innercircle Loyalty Program


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FUTURE OF LOYALTY PROGRAMS

Companies should look for ways to differentiate theirloyalty programs while balancing the revenue and thecosts.

Focus should be made more specific or segmented liketargeting life-style, or interests.

Concentrating resources on high potential and highvalue customers.

Organization's focus should be on broadening customerrelationship rather than rewarding.

Coalition programs a new trend will be seen as newconcept in the loyalty programs .


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CONCLUSION

Thus we have seen that loyalty programs are of immense value to any organization irrespective of geographical distribution.

Providing a better product an impeccable serviceshould be the major objective for any organization.

Recognizing the customer and his spending behaviorcan enable to make more specific rewarding structure.

Loyalty programs should not be limited to Rewarding but to broaden relationship with the customer andoffering them more liberty.

loyalty marketing & loyal customers

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