the power of coalition loyalty marketing
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The power of coalition loyalty marketing By GABI KOOL CEO BalticMiles For once the secret recipe is shared on how BalticMiles is building the most beloved loyalty program in the Baltics region. August 26, 2011
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In the next 20 minutes a quick review of: -1 The Loyalty Marketing landscape in the Baltics -2 The benefits of coalition loyalty marketing -3 BalticMiles: the secret recipe
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In the next 20 minutes a quick review of: -1 The Loyalty Marketing landscape in the Baltics -2 The benefits of coalition loyalty marketing -3 BalticMiles: the secret recipe
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The Loyalty Landscape in the Baltics...
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In the next 20 minutes a quick review of: -1 The Loyalty Marketing landscape in the Baltics -2 The benefits of coalition loyalty marketing -3 BalticMiles: the secret recipe
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Coalition programs – How do they operate?
Operate Program Open & manage customer accounts Manage rewards portfolio & redemption Manage the database Recruit new Partners Manage retailers relationships Manage all communication channels
Sign up own customers at POS Provide Manager with transactional data Issue Base Points all customers/ all POS/ all products Issue Bonus Points as per business objectives Promote the Program
Every household spender gets a card linked to one account Collect Base Points = everyday shopping Receive Bonus points = when respond to retailers’ offers Redeem Points for Rewards
Sell rewards to Manager Fulfill rewards to Customers
Customers Manager Partners Suppliers
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Benefits of Coalition Loyalty Marketing - Partner Perspective
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Benefits of Coalition Loyalty Marketing - Member perspective in Latvia: Larger Rewards
Spending categoryAnnual spend
per HH CI% Pay out, %
'Reward money' for member
Bank € 2 132 0,40% 0,24% € 5,12Grocery € 2 765 1,50% 0,90% € 24,89Fuel € 354 1,50% 0,90% € 3,19Telecoms € 445 2,50% 1,50% € 6,67Perfume ‐ Cosmetics € 157 3,50% 2,10% € 3,30Pharmacy € 211 2,00% 1,20% € 2,53Sports € 38 2,00% 1,20% € 0,45Home and furniture € 186 3,00% 1,80% € 3,35DIY € 319 2,00% 1,20% € 3,83CE € 254 1,50% 0,90% € 2,29Restaurants € 418 4,00% 2,40% € 10,04Clothing € 413 4,00% 2,40% € 9,91Footwear € 177 4,00% 2,40% € 4,26Culture € 81 2,00% 1,20% € 0,97Books € 29 3,00% 1,80% € 0,52Car service € 121 3,00% 1,80% € 2,18Toys € 19 3,00% 1,80% € 0,34Travel ‐ (excl. Business travel) € 40 2,00% 1,20% € 0,48Insurance € 78 3,00% 1,80% € 1,41Transport services € 166 3,50% 2,10% € 3,49OTHER € 1 932 0,00% 0,00% € 0,00TOTAL € 8 404 1,77% 1,06% € 89,22
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Benefits of Coalition Loyalty Marketing - Member perspective in Latvia: Faster Rewards
Spending quintilesPotential universe
Revenue contribution,
%
Avg. annual spend /
Household
Weighted average Pay out
Avg points earned per year
Likely to earn EVERY Bonus
Annual Bonus Pts
Earned
Annual Points earned
Avg Point/ Week
Award Level 1
Award Level 2
Award Level 3
Award Level 4
Award Level 5
90 750 6 000 15 000 25 0001,06% 20% SONG CINEMA FLIGHT 2 FLIGHTS 4 FLIGHTS
Top Range HH 174 293 34,0% € 14 278 € 151,57 25 261 75% 3 789 29 050 559 1 2 11 27 45High Range HH 174 293 21,6% € 9 082 € 96,41 16 069 55% 1 768 17 837 343 1 3 18 44 73Middle Range HH 174 293 17,9% € 7 523 € 79,86 13 310 25% 665 13 975 269 1 3 23 56 94Lower Range HH 174 293 15,3% € 6 422 € 68,17 11 362 10% 227 11 589 223 1 4 27 68 113Lowest Range HH 174 293 11,2% € 4 717 € 50,07 8 346 10% 167 8 513 164 1 5 37 92 153
SPENDING BEHAVIOURS POINTS EARNING POTENTIAL AVG. WEEKS TO REACH GOAL
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Young Single
Young Couple w/o kids
Couple with
young kids
Couple with
teenage kids
Empty Nesters –
Pre Retirement
Retired Couple
Retired – Living Alone
1 2 3 4 5 6 7
Youth
TELECOMMUNICATIONS
Young persons tend to be heavy users, though there is an increasing trend of usage across all life stages
0
Benefits of Coalition Loyalty Marketing - Member perspective: Relevant throughout life
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Young Single
Young Couple w/o kids
Couple with
young kids
Couple with
teenage kids
Empty Nesters –
Pre Retirement
Retired Couple
Retired – Living Alone
1 2 3 4 5 6 7
Youth
PETROL
Heavy usage was found amongst couples with kids
Starts with young singles with strong aspirations of owning the 1st car
0
Benefits of Coalition Loyalty Marketing - Member perspective: Relevant throughout life
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Young Single
Young Couple w/o kids
Couple with
young kids
Couple with
teenage kids
Empty Nesters –
Pre Retirement
Retired Couple
Retired – Living Alone
1 2 3 4 5 6 7
Youth
GROCERIES
Starts with the ownership of a household
Heavy usage was found amongst couples with kids, especially teenage kids
0
Benefits of Coalition Loyalty Marketing - Member perspective: Relevant throughout life
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Young Single
Young Couple w/o kids
Couple with
young kids
Couple with
teenage kids
Empty Nesters –
Pre Retirement
Retired Couple
Retired – Living Alone
1 2 3 4 5 6 7
Youth
BANKING
Starts with youths – limited contact: mainly cash needs Heavy needs were found during the ‘Age of Commitment’
• Car, House, Credit Card needs/loan products
• Savings, Investment
• Children’s needs
0
Benefits of Coalition Loyalty Marketing - Member perspective: Relevant throughout life
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Young Single
Young Couple w/o kids
Couple with
young kids
Couple with
teenage kids
Empty Nesters –
Pre Retirement
Retired Couple
Retired – Living Alone
1 2 3 4 5 6 7
Department Store
Similar trend to the Telecommunications industry, but spending gets less when older
DEPARTMENT STORE
0
Youth
Benefits of Coalition Loyalty Marketing - Member perspective: Relevant throughout life
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Benefits of Coalition Loyalty Marketing - Member perspective
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Coalition Loyalty Marketing – global leaders
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Coalition Loyalty Marketing: Criteria for Success
1. First to Market
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Coalition Loyalty Marketing: Criteria for Success
2. Rapid Market penetration
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Coalition Loyalty Marketing: Criteria for Success
3. An attractive partner portfolio that is dictated by the sectors in which consumers spend their money rather than any preconceived ideas of brand synergy
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Coalition Loyalty Marketing: Criteria for Success
4. Strategic partners have to convince through their sheer market size and premium image
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Coalition Loyalty Marketing: Criteria for Success
5. Very attractive rewards portfolio
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Coalition Loyalty Marketing: Criteria for Success
6. Simplicity
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Coalition Loyalty Marketing: Criteria for Success
7. Well balanced approach to branding of program and partner brands and educating the members on the concept of coalition loyalty
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Coalition Loyalty Marketing: Criteria for Success
8. Targeted and Personalised offers, executed in highly creative ways
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In the next 20 minutes a quick review of: -1 The Loyalty Marketing landscape in the Baltics -2 The benefits of coalition loyalty marketing -3 BalticMiles: the secret recipe
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• Launched in October 2009 • Vision:
– To be the most successful loyalty company in North and Eastern Europe, supporting leading airlines, retailers and financial institutions
• Mission: – To grow our coalition partner’s businesses by bringing
exceptional value to BalticMiles members by rewarding their loyalty
BalticMiles
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BalticMiles • First pan-Baltic coalition loyalty program with multiple partnerships
in service and retail industries • Large and trusted brands participate into coalition • Most advanced loyalty rewards platform in Baltic market • Affordable and attractive airline rewards • Attractive communication platform for engaging new customers,
retaining existing ones and increasing revenues
2 card swipes each minute across the Baltics
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BalticMiles members 500 000 members Stable growth each month Represented in 40 countries
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BalticMiles partnership strategy Key sectors ranking
Banking Hyper/Supermarket Petrol stations Telecom Airline Restaurants Department store Textile and sports Pharmacy Home improvement Perf. & cosmetics
Consumers spending per sector – Baltics 2010
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FINANCE
RETAIL
TRAVEL
DINING
HEALTH & BEAUTY
HOSPITALITY
BalticMiles partners (more than 10 000 POS)
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43 Targets and 34 Projects............
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Member related: Easy to earn rewards Many places to earn points towards rewards Rich reward choices Relevance in all interactions
Partner related: Partners receive great ROI Great partner business support
Image / Brand
Targets – Customer Perspective
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Business Development: Planning Prospecting Sales
Partner launch management: Planning IT design IT implementation Project Management
Account Management: Collaborative campaign management Reporting
Targets – Internal Perspective
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Member operations Points processing Applications Customer service Fulfillment Member communications Rewards management Data richness, quality and insights
Marketing Campaign management Member events PR Member acquisition
Targets – Internal Perspective
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Strategic Job families Skills Knowledge Values
Strategic systems portfolio Data warehouse Transaction system Business Intelligence and Balanced Scorecard tools Website
Organization Culture Leadership Teamwork Alignment
Targets – Resource Perspective
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A sneak preview of a few of our projects......
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Partner locator
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Brand Positioning
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Geo overlay / visualisation of data
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Trigger Based Campaigns
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Personalised coupons / My Offers