Description
This ppt is about nectar customer loyalty and it explains the role of Nectar and how they made it successful.
www.themegallery.com
LOGO
LOGO
What does loyalty mean to businesses ?
Repeat Purchases ? Retention of Customers ? Create Profitable Customers ?
LOYALTY
Acquisition of Customers ? More Information on Customers ? Just Another Marketing Program ? Reward Loyal Customers ?
Reality …….….could be all of the above !!!!
LOGO
How did it all start – the Loyalty Program way
? Trading stamps
• Accumulate stamps every time you shop for groceries, petrol, etc • Redeem them for “ free “ gifts
• Airline Frequent Flyer Programs
• Fly and earn points • Redeem points for free flights
•
Plethora of loyalty programs in different forms across industries
Frequent buyer, frequent flyer, frequent player, frequent dining, points-at-pumps
Interesting though not surprisingly……..
1. 2. Initial objective was to collect data on customer purchase patterns Simple proposition – Earn Points for future value hence loyalty
LOGO
Some insights --- Customer & Company perspective
1. Cash value 2. Redemption options 3. Aspirational value 4. Relevance 5. Convenience ---- Immediate gratification ---- More Choice ---- Feel Good factor ---- Does it make sense ---- Ease of availing reward
Customers new perspective of Rewards ( Loyalty )
Loyalty initiatives are not short term marketing tools. They should
•
• • •
deliver tangible value in proportion to the value the customer brings to the company
offer right mix of Product, Price, Service Delivery & Relationship benefits Communication to be transparent, timely and focussed Consistent across all customer touch points
Loyalty initiatives must also be profitable
• • Treat profitable and unprofitable customers differently Get your metrics in place ---- measure costs & returns
LOGO
Enterprise approach to Loyalty
1st
:
Have a clear articulated Customer Loyalty Strategy
• Covers the entire customer experience during his lifecycle
• Covers all customer touch points
• Addresses his existing / potential relationship with the company
2nd :
Must be in sync with Business Objectives
• Customer / Segment profitability • Customer Contact strategy
3rd :
Business Process to be customer centric
• Risk, Underwriting, Operational processes • Acquisition, Customer service, Marketing
4th :
Design Customer centric & Profitable Loyalty programs
LOGO
Some successful Programs United States of America: e Bay
• •
Launched in in 2003, Teemed up with American Airlines, Hilton Hotels & eight other companies to offer called eBay Anything Points: Points can be earned from one business & swap them for points at eBay. e Bay has more than 135 million registered members across the globe Program has 44 mn items listed for sale with 4 mn added daily.
• • •
•
Success of e Bay Anything points is attributed to
• Linking online purchases with Travel & Airlines purchase. • Enabling customers to redeem high ticket size points against lower value purchases • Choice of redemption options.
LOGO
Indian Loyalty Programs
•Customer base of over 9 million •Available in 29 cities across India •National Partners : HP, ICICI, IFB, Gitanjali, Air India, Megamart. •Online Partners: Fernsnpetals, bookmyshow, tantra. •Customer base of over 1.6 million •Available in 4300 outlets across India •Rewards :LG, Ginger Hotels, Jet Airways, Amway.
•Joining Bonus 100points •4% cash back as points •1 auto point = 1 Rupee •Partner : SBI
•Enrollment Fees: Rs 200. •Exclusive cash counters. •Exclusive invite to preview sales offers. •Over 3 lakh members, constitute 50% of sales •Co-branded Citibank card.
LOGO
Nectar: Background
? Formed in Sep 02 by Keith Mills, Gierkink and a few other team members with a decade’s experience in Loyalty Programs ? One of the most expensive and most attention getting new product launches in UK marketing history with a mammoth £30 mn campaign ? Positioned to customers based on the ease of attaining rewards by attaining points into 1 common account and the simplicity of carrying 1 card ? Opening Partners: Sainsbury’s, BP, Barclaycard, and Debenhams ? Usual awareness of new product within 3 months from launch in UK was at 6% of households, whereas the same for Nectar was at 46% ? Partners by Sept 2003
? Adams, Thresher, Vodafone, Ford, all: sports, E-energy
? 1% growth in BP market share ? 4 million new customers for Debenhams ? 9% boost in Barclaycard turnover
LOGO
Nectar – Working of program
? Average rate of 2 points per pound spent ? Redemption
? Check out (POS) ? Over the phone (points update mailings)
? Costs of mailings, card, PUM shared by all sponsors ? Revenue Generation
? Spread: difference between buying and selling of points for Nectar ? Float: Interest it gained on points sold but not yet redeemed ? Breakage: Points bought but never redeemed ? Program support Fee: fixed fee levied to each sponsor
LOGO
Benefits
Earn rewards more quickly
?Sponsor Benefits
? ? ? ? Lift Acquisition Retention Up-Sell
Availability & Wider choice
? A study of BP and Sainsbury’s, both of which sold gasoline, suggested that although Nectar intensified competition between both of them, it had increased the share of each by taking share from non-Nectar gasoline retailers
Higher Value to loyalty
SUCCESS
LOGO
Sainsbury’s Looks at Nectar
? Tesco and Sainsbury’s have loyalty programs, Safeway and ASDA doesn’t have ? Senior managers think tying up with Nectar provides a strategic edge ? JV with TNS to track the product behavior of a panel of a million Nectar collectors in Sainsbury’s
Should we go solo like Tesco, or are we better off as part of Nectar?
LOGO
What should Justin King do with the program?
?Continue with the program as it is ?Start own loyalty program
? Loose data on prospective customers ? Risk of loosing current customers due to no partners ? Increases cost of attracting customers
?Negotiate for better terms with Nectar
? Ask for better customer data including product specific. ? As 50% contributor to Nectar, negotiate better price.
LOGO
What should Rob Gierkink do with the program to keep Sainsbury’s happy?
?Provide more customized data ?Work on integrating advertisement budgets ?Present the benefits occurring to Sainsburry’s over past year with Nectar
LOGO
What should he do to keep the other sponsors happy?
?Start providing detailed customer reports, can start with a free trial program ?Enroll more partners ?Avoid conflicting partners, might work well in one of case…….but can be a loss for small players ?Try and work out integrated marketing plans, so as to save cost on similar advertisements
LOGO
What should he do to keep the collectors collecting?
?Organize parties, special events. ?Include wider list of products on which points can be redeemed. ?Introduce levels of benefits depending on the points accumulated in a month e.g. silver, gold, platinum.
LOGO
To summarise
• •
Loyalty is’nt created by a program……it can at best strengthen it. Loyalty is not about short term rewards…….it is about end-to-end customer experience with your products / services
• Companies need to have a enterprise wide loyalty strategy backed by customer centric processes to deliver value
• Co branded programs work --- Ensure you get the value proposition right
Loyalty has to be earned…..its hard work….but at the end you have a profitable customer
www.themegallery.com
LOGO
doc_588306341.pptx
This ppt is about nectar customer loyalty and it explains the role of Nectar and how they made it successful.
www.themegallery.com
LOGO
LOGO
What does loyalty mean to businesses ?
Repeat Purchases ? Retention of Customers ? Create Profitable Customers ?
LOYALTY
Acquisition of Customers ? More Information on Customers ? Just Another Marketing Program ? Reward Loyal Customers ?
Reality …….….could be all of the above !!!!
LOGO
How did it all start – the Loyalty Program way
? Trading stamps
• Accumulate stamps every time you shop for groceries, petrol, etc • Redeem them for “ free “ gifts
• Airline Frequent Flyer Programs
• Fly and earn points • Redeem points for free flights
•
Plethora of loyalty programs in different forms across industries
Frequent buyer, frequent flyer, frequent player, frequent dining, points-at-pumps
Interesting though not surprisingly……..
1. 2. Initial objective was to collect data on customer purchase patterns Simple proposition – Earn Points for future value hence loyalty
LOGO
Some insights --- Customer & Company perspective
1. Cash value 2. Redemption options 3. Aspirational value 4. Relevance 5. Convenience ---- Immediate gratification ---- More Choice ---- Feel Good factor ---- Does it make sense ---- Ease of availing reward
Customers new perspective of Rewards ( Loyalty )
Loyalty initiatives are not short term marketing tools. They should
•
• • •
deliver tangible value in proportion to the value the customer brings to the company
offer right mix of Product, Price, Service Delivery & Relationship benefits Communication to be transparent, timely and focussed Consistent across all customer touch points
Loyalty initiatives must also be profitable
• • Treat profitable and unprofitable customers differently Get your metrics in place ---- measure costs & returns
LOGO
Enterprise approach to Loyalty
1st
:
Have a clear articulated Customer Loyalty Strategy
• Covers the entire customer experience during his lifecycle
• Covers all customer touch points
• Addresses his existing / potential relationship with the company
2nd :
Must be in sync with Business Objectives
• Customer / Segment profitability • Customer Contact strategy
3rd :
Business Process to be customer centric
• Risk, Underwriting, Operational processes • Acquisition, Customer service, Marketing
4th :
Design Customer centric & Profitable Loyalty programs
LOGO
Some successful Programs United States of America: e Bay
• •
Launched in in 2003, Teemed up with American Airlines, Hilton Hotels & eight other companies to offer called eBay Anything Points: Points can be earned from one business & swap them for points at eBay. e Bay has more than 135 million registered members across the globe Program has 44 mn items listed for sale with 4 mn added daily.
• • •
•
Success of e Bay Anything points is attributed to
• Linking online purchases with Travel & Airlines purchase. • Enabling customers to redeem high ticket size points against lower value purchases • Choice of redemption options.
LOGO
Indian Loyalty Programs
•Customer base of over 9 million •Available in 29 cities across India •National Partners : HP, ICICI, IFB, Gitanjali, Air India, Megamart. •Online Partners: Fernsnpetals, bookmyshow, tantra. •Customer base of over 1.6 million •Available in 4300 outlets across India •Rewards :LG, Ginger Hotels, Jet Airways, Amway.
•Joining Bonus 100points •4% cash back as points •1 auto point = 1 Rupee •Partner : SBI
•Enrollment Fees: Rs 200. •Exclusive cash counters. •Exclusive invite to preview sales offers. •Over 3 lakh members, constitute 50% of sales •Co-branded Citibank card.
LOGO
Nectar: Background
? Formed in Sep 02 by Keith Mills, Gierkink and a few other team members with a decade’s experience in Loyalty Programs ? One of the most expensive and most attention getting new product launches in UK marketing history with a mammoth £30 mn campaign ? Positioned to customers based on the ease of attaining rewards by attaining points into 1 common account and the simplicity of carrying 1 card ? Opening Partners: Sainsbury’s, BP, Barclaycard, and Debenhams ? Usual awareness of new product within 3 months from launch in UK was at 6% of households, whereas the same for Nectar was at 46% ? Partners by Sept 2003
? Adams, Thresher, Vodafone, Ford, all: sports, E-energy
? 1% growth in BP market share ? 4 million new customers for Debenhams ? 9% boost in Barclaycard turnover
LOGO
Nectar – Working of program
? Average rate of 2 points per pound spent ? Redemption
? Check out (POS) ? Over the phone (points update mailings)
? Costs of mailings, card, PUM shared by all sponsors ? Revenue Generation
? Spread: difference between buying and selling of points for Nectar ? Float: Interest it gained on points sold but not yet redeemed ? Breakage: Points bought but never redeemed ? Program support Fee: fixed fee levied to each sponsor
LOGO
Benefits
Earn rewards more quickly
?Sponsor Benefits
? ? ? ? Lift Acquisition Retention Up-Sell
Availability & Wider choice
? A study of BP and Sainsbury’s, both of which sold gasoline, suggested that although Nectar intensified competition between both of them, it had increased the share of each by taking share from non-Nectar gasoline retailers
Higher Value to loyalty
SUCCESS
LOGO
Sainsbury’s Looks at Nectar
? Tesco and Sainsbury’s have loyalty programs, Safeway and ASDA doesn’t have ? Senior managers think tying up with Nectar provides a strategic edge ? JV with TNS to track the product behavior of a panel of a million Nectar collectors in Sainsbury’s
Should we go solo like Tesco, or are we better off as part of Nectar?
LOGO
What should Justin King do with the program?
?Continue with the program as it is ?Start own loyalty program
? Loose data on prospective customers ? Risk of loosing current customers due to no partners ? Increases cost of attracting customers
?Negotiate for better terms with Nectar
? Ask for better customer data including product specific. ? As 50% contributor to Nectar, negotiate better price.
LOGO
What should Rob Gierkink do with the program to keep Sainsbury’s happy?
?Provide more customized data ?Work on integrating advertisement budgets ?Present the benefits occurring to Sainsburry’s over past year with Nectar
LOGO
What should he do to keep the other sponsors happy?
?Start providing detailed customer reports, can start with a free trial program ?Enroll more partners ?Avoid conflicting partners, might work well in one of case…….but can be a loss for small players ?Try and work out integrated marketing plans, so as to save cost on similar advertisements
LOGO
What should he do to keep the collectors collecting?
?Organize parties, special events. ?Include wider list of products on which points can be redeemed. ?Introduce levels of benefits depending on the points accumulated in a month e.g. silver, gold, platinum.
LOGO
To summarise
• •
Loyalty is’nt created by a program……it can at best strengthen it. Loyalty is not about short term rewards…….it is about end-to-end customer experience with your products / services
• Companies need to have a enterprise wide loyalty strategy backed by customer centric processes to deliver value
• Co branded programs work --- Ensure you get the value proposition right
Loyalty has to be earned…..its hard work….but at the end you have a profitable customer
www.themegallery.com
LOGO
doc_588306341.pptx