2. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
LoyaltyOne is part of Alliance Data Systems (NYSE:ADS), an $8.7 B
market cap company with global operating experience
Integrated credit and marketing
solutions that drive sales for
our retail partners.
Multi-channel marketing services
including data, database, digital
marketing and agency services.
Global leader in the design and
management of customer centric
solutions.
Retail Services
3. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
• Highly favorable
preference for your brand
• Heightened anticipation
and interest in new products
& services
• Forgiving when things don’t
go exactly right
• Evangelizing good
experiences with friends and
even complete strangers
3
“I’ve learned that
people will forget what you said,
and did, but people will never
forget how you made them feel.”
- Maya Angelou
4. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
Number of Total
U.S. Loyalty Program
Memberships
5. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
% of Active U.S. Loyalty Program Memberships
Source: 2011 COLLOQUY WOM Study and Loyalty Census: 2.089 billion program memberships;
U.S. Census data from the 2009 American Community Survey = 113.616 million U.S. Households
*Among household with income of $150,000+ (Luxury Institute 2013)
Loyalty Program Penetration
-- 76% of Total US Households
-- 72% of Wealthy Consumers*
-- 93% HH > $125K Income
Loyalty Program Usage
-- Enrolled in avg. of 21.9 programs
-- But only active in 9.5
6. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
Travel Specialty Retail Department
Stores
Wholesalers Financial Services Grocery/Drug
26.2%
28.5%
36.8% 36.9%
41.2%
42.5%
I am happy with the value I get from the program.
The degree to which respondents agreed to the statement on a 0-10 scale
with 10 being strongly agree; represents the percentage of respondents that
responded with a 9 or 10 (Top 2 Box).
7. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
• High expectations of elevated service levels,
particularly among top tier members
• Motivated by compelling soft benefits, most
notably preferential treatment and insider
access
• Feel entitled to and respond very favorably to
meaningful hard rewards (particularly among
$150,000 - $1,000,0000 HHI)
8. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
9. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
9
Exploration of Multi-Tender Programs Attainability of Rewards / Status
• Reduced time-to-reward / value
• Deliver value in 3 visits or 30-60
days
• Time-to-reward of 3-6 months
(retail)
• Lower tier / status thresholds
• Engage high potential customers
• Grow scan rates (40%-80%)
• Drive PLCC / co-brand acquisition
10. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
10
Specialty Retail Travel Grocery/Drug Department
Stores
Wholesalers Financial
Services
17.0% 17.5%
20.9% 22.5%
25.4%
26.4%
38.6% 37.2%
51.4%
48.5% 49.1% 48.0%
I am happy with the value I get from the program.
No - Did Not Receive a Reward Yes - Received a Reward
Reward redeemers are 2-2.5x more likely to rate their happiness
with the program as “high”
11. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
Unique Program
Structures
Greater Incorporation of
Experiential Benefits
Connecting with Non-
Transactional Behaviors
• Beyond points and “spend & get”
• Simplification
• Fungible currency
• Payment vehicle
• Personalized experiences
• Preferential treatment
• Pain point elimination
• Beyond the moment of purchase
• Engagement & healthy behaviors
• Cause and common purpose
12. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
12
Sharing &
Social
Shopping
Enhanced
Consumer
Experience
Facilitating social interaction as part
of the shopping and/or program
experience
Using mobile and social to enhance
the shopping experience and
program engagement
13. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
Promotion optimization
Data-driven promotional rules to drive the right
category and customer behaviors
Optimize marketing mix by customer segment
Price optimization
Pricing strategy and prices based on
importance and elasticity to priority customers
Customer-driven zones and KVCs/KVIs
Assortment optimization
Right products to maximize sales/profit based on
true item value & importance for priority
customers (localized)
Innovation to meet customer needs
Business category & customer strategy
Alignment of priorities
Segmentation, Insights & Strategy
Customer Engagement Plan
Business
& customer
strategy
Promotion
Assortment Optimization
Price
4
3
2
1
Targeted Marketing:
360°Customer Insights
Prioritize Customers/Segments
Customer Engagement Strategy/Marketing Plan
Execute & Measure Across Channels
2
4
3
5
1
Integrated Solutions Platform
5
Org. Alignment, Change Mgmt. & Tools
14. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
• There is power in a balanced value proposition (meaningful
hard rewards + compelling soft benefits)
• Demonstrate value early in the relationship and evaluate your
benefit attainability
• Think beyond traditional structures and benefits to meet
your customer needs and to amplify your brand
• Aggressively explore opportunities to truly impact the customer
experience through Mobile and Social integration
• Unleash and infuse the power of your data throughout your
organization … with prioritization and patience
15. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
16. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
Notas do Editor
LoyaltyOne is part of Alliance Data Systems (NYSE:ADS), an $8.7 B market cap company with global operating experience
-I view and define “loyalty” differently than “repeat transactions/visit or retention” … the latter are examples of potential measures of loyalty
Advocacy is increasingly becoming an importance topic and element of loyalty strategies
Cite COLLOQUY data point
Example of brand who offered benefit based upon KLOUT score (Fred – Watercooler)
Drivers of growth are:
-
Areas/consumer with most growth are:
-
70% of those with at least $1 million in assets that are invested or available to invest, excluding home values, don't consider themselves to be wealthy, according to a survey of 4,500 affluent investors by UBS. Rather, it's only when they hit the $5 million mark that millionaires begin to feel "wealthy." - 2013
he Fidelity survey found that 42 percent of millionaires still do not feel wealthy, compared to 46 percent, who said they didn’t feel wealthy in 2009. In fact, among those who classified themselves as not feeling wealthy, the investable asset level needed to begin to feel wealthy is $7.5 million.iii
Of the 58 percent of millionaires who say they feel wealthy -- up slightly from 54 percent in 2009 -- they began to feel so at $1.75 million in investable assets, which is consistent with 2009 and up from $1.5 million in 2008.
“Our survey reinforces that the feeling of wealth is relative, based on factors such as the current market environment, a person’s age, lifestyle, and so on,” said Durbin. “Regardless of what the market does, these factors are likely to change and, therefore, millionaires will continue to reassess what it really means to feel wealthy.”
Competition
Point of Reference
Tuning out
Value in this case isn’t limited to the financial value
See Dennis’ data points on Engagement
Key point is hard rewards can be a powerful motivator, however should be delivered in combination with compelling soft benefits
Our research supports the stronger appeal of a balanced value proposition
NEED SAKS research findings
Four particularly interesting areas that we are seeing loyalty program innovation include:
Extending the reach / casting a wider net
The structures of programs themselves, including Increased incorporation of elements that enhanced the customer or guest experience, largely powered by new technologies
Greater utilization of social channels and networks – less siloing of approaches
Moving toward a more enterprise approach
Bloomingdales MyLoyalty (early 2012)
Nordstrom Fashion Rewards. Early 2012 With the new fashion rewards program, Nordstrom cardholders will be given a pre-selected amount of credit towards Nordstrom’s tailoring services.
Now, tailor-service credits start at $100 for level-one cardholders and go up to an unlimited amount of free tailoring for top-level cardholders.
Cardholders are also able to choose days on which they would like to earn triple reward points.
Based on their level, a fashion rewards program member will be given one to four “personal days” on which they will earn three times the bonus points.
These will come in addition to the previously-offered days selected by Nordstrom each year.
Shoppers will also be able to earn bonus reward points when they shop at Nordstrom Rack. The outlet line was previously not included.
Nordstrom has also decreased the amount of dollars a customer needs to spend to reach top-level status.
According to the new policies, when shoppers spend $5,000, they will be promoted to level three. Afer $10,000, they will be promoted to level four.
The level entries were previously $10,000 and $20,000, respectively.
Organizations are now trying new structural approaches, for a variety of reason
Some have eliminated formal program structures, such as mypanera – which helps limit financial liability and drives anticipation of value
Others have pooled together, in formal or informal coalitions, to accelerate earning velocity, diversifies fixed costs of operation, introduces financial benefit associate with cross-organization customer acquisition
Facilitating social sharing and interactions are increasingly at the core of program design and driving customer engagement.