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Copyright 2007 Cartesian Consulting 1Copyright 2007 Cartesian Consulting, www.cartesianconsulting.com
Building
Customer Loyalty
A tale in 7 steps
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Copyright 2007 Cartesian Consulting 2Copyright 2007 Cartesian Consulting, www.cartesianconsulting.com
1. The Shape Shifter
Lawrence of Arabia didnt always ride a camel!
Your customers will constantly surprise you
Customer Knowledge is competitive advantage
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Scoring andsegmentation,
propensity models,
churn analysis,satisfaction scores,
lifetime value
metrics,
Store scoring,
market basket,
exceptions
Leveraging Customer Knowledge
Notes:
Theres a load of
analytical approaches
beyond RFM for retailers
wishing to leverage
customer knowledge. Notall of these appear to be
easy to adopt and
marketers shun analytics
more out of a lack of
understanding of what it
can do for them. Get the
experts in, listen to them
youll find that theres
ROI in it for you.
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2. The Painter
Customer flight is inevitable unless you can paintyourself into their picture
Build fences, increase their switching cost
Bottomline: Get your concept right
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Objectives,metrics, software,
membership,
tiers, rules &processes, earn-
burn, rewards,
benefits,
communication,helpdesk,
partners, ROI,
budgets
Getting the concept right
Notes
Building a loyalty
program concept
requires not just sound
strategic thinking, but
loads of rigor. Thesuccess lies in being
able to detail out
solutions to over 100
decision points that a
loyalty program conceptneeds to cover. You
cannot be reacting to
situations as they
happen!
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3. The Card Magician
Its more than a card trick Loyalty programs are a proven way to capture
customer data and prevent customer flight
Its about building relationships and increasing LTV,not just launching a card
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Smart card,RFID, Mag
stripe, bar code
card, affinitycards, card
variants, co-
branded cards,card readers,
carding
The Loyalty Card
Notes
The loyalty card is the
most familiar face of a
loyalty program. There
are many options here as
well, but the key point isthat launching a card
does not a loyalty
program make. This
space is littered with
failed programs that werelaunched as a card and
little else.
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4. The Neuromancer
If marketing and IT dont shake hands, you
might as well hang up your loyalty boots
Technology integration is crucial to success
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Loyalty software,CRM software,
analytical CRM
software,marketing
database, POS
integration,
liability tracking,points banking,
campaign
mgmt
IT and the Prorgam
Notes
The software on which
your program depends
needs to be designed
carefully, and should
handle all aspects ofyour program. Retail
POS solutions often offer
a basic loyalty module
these are usually
inadequate! The point:Dont design your
program to fit the
software.
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5. The Band
You need superheroes skilled in marketing,
technology, and analytics
It takes teams that are nurtured and last
It takes patience and top management buy in
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Loyalty manager,loyalty agency,
CRM
consultant, ITteam, Software
developer,
events &
promotionsteam, rewards
team, creative
agency...
The Loyalty manager
Notes
The team that drives the
program internally needs
to be composed of skills
that are difficult to find in
any market. Directmarketing, CRM and
Loyalty skills need to be
nurtured and the team
needs top management
support. Importantly, youwill need to rely on the
right partners to come in
with specific skills.
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6. The Campaigner
Loyalty programs throw up a wealth of data drivencampaigns
Good campaign management allows you to handlehundreds of segments and communications
simultaneously
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Campaigncalendar,
welcome kit,
statements,coupons, day-
part based, cross
sell, activation,
churn prevention,win-back,
relationship
building
Campaign Management
Notes
Campaign management
practices are better
established amongst the
banks than retailers, but
here is where the realpay-off is. Leverage
campaign management
tools as they will allow
you to run hundreds of
targeted campaigns
which really do pay off,
as compared to a few
festival offers and
generic promotions.
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. The Timekeeper
Building loyalty takes money, time and patience
Assume it will take you 2-3 years to truly reap
benefits
Youre in it for the long run, arent you?
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Points liability,breakage, ROI,
enrolment,
member base,activity levels,
satisfaction
scores,
incrementalrevenues, wallet
share, referrals
A matter of patience
Notes
Set expectations right.
To launch a program
AND expect a jump in
sales within 6 months is
pushing it. Building up aquality member base (no
mass enrolments),
setting up the back end,
campaign management
these all take time andeffort, and the metrics to
measure success take
time to show the returns.
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To Summarize
1. Customers shape-shift
2. You need to paint yourself into their world
with a good concept
3. Loyalty programs are more than card magic4. You need to get marketing and IT in sync
5. The team needs top management buy in
6. The pay off is in the data led campaigns
7. The pay off comes with patience
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Cartesian Consulting
www.cartesianconsulting.com
Sandeep Mittal (BE - Pune Univ, IIM-Cal):
The Business Head of Cartesian, Sandeep has 7 years ofvaried experience spanning CRM, analytics, loyalty program
management, direct marketing and website development.With past stints as an entrepreneur heading a technology
startup and a music portal, Sandeep spearheads theCartesian practice.
Sandeep can be reached at [email protected]