The project made for the class in Presentation Skills, MA Marketing Communiation proramme at the University of Finance and Administration, Prague.

1. Feelings Are Material
A Case for Loyalty Programs
by Alena Dziamidava
VSFS Marketing Communication
Presentation Skills 2
PhDr. Ladislava Knihová

2. Are you loyal?
• Show me your cards and I will tell you who you are…
• Did you know that…

3. Loyalty = loyalty program?
An average American belongs to 22 loyalty programs –
and is active in only 9!
≠ consumer promiscuity

4. Our game plan
Definition
Evolution of loyalty programs
Game changers
Gamification
Measuring the effectiveness
Controversies

5. A loyalty program…
• …is NOT only cards and points
• …is NOT about giving out free stuff
• …might NOT bring quick ROI

6. What is a loyalty program?
A way to increase the customer lifetime value (LTV)

7. Desired behavior
Points Level
Amount of
purchases (during a
period)
Cross-category
purchases
Promo purchases
Compensations
(in case of company’s
fault)
Discount
Gifts
Special events
Access to special
offers
Extended warranty
Personal info
provisioning
A
B
C
D
And many others…
A variety of custom
loyalty mechanisms

8. The systematic collection of customer data in return
for rewards or benefits, often used to give customer
additional privileges or services to best/loyal
customers
The most desired behavior

10. Frequent Flyer Programs
• American Airlines
• Tier systems
• +70 FFPs worldwide

11. Card-based loyalty
• Tesco, Visa
• Big Data & Analytics
• Personalized recommendations

12. Pay to be loyal
• Closed club
• Upfront membership fees
• Costco, Amazon Prime

13. Cause-based loyalty
• Patagonia's Common Threads
Initiative, Klíč k památkám
• Coalitions
• Built around customers’ values

14. Transition
from material exchange (hard benefits) 
to emotional/status rewards (soft benefits)

15. Beyond discount

16. Gamification
the use of game mechanics
in a non-game context to engage users

17. Loyalty program KPIs
• Customer retention rate
• Negative churn
– Cross-selling
– Upselling
• Net promoter score
• Customer effect score

18. What can go wrong?
... that’s not rewarding, that’s a
headache.
"Fourteen points equals one dollar,
and twenty dollars earns 50% off
your next purchase in April!"

19. What can go wrong?

20. So why bother?
• For clients
– Hard & soft benefits
– Exploration
– Feeling of inclusion = better
customer experience
– Easier decision-making
• For companies
– Leveraging data to inform
key decisions
– Brand building, recognition
and awareness
– Cross-selling and upselling
– Retention

21. Takeaway
Loyalty marketing means recognizing that customers
are different and acting accordingly.
You Already Do This!
Your loyalty program is simply a structure that
allows these tactics to scale.

22. Any questions?

23. References
• Loyalty Programs, ww.crmtrends.com/loyalty.html
• Customer Loyalty Statistics: 2015 Edition, Brandon
Carter www.blog.accessdevelopment.com
• 7 Customer Loyalty Programs That Actually Add
Value, Lindsay Kolowich www.blog.hubspot.com
• The Power of Loyalty: 10 Essential Steps to Build a
Successful Customer Loyalty Strategy, Roger L.
Brooks
• The Starbucks Experience, Joseph A. Michelli