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LOYALTY AS A KEY WORD OF CURRENT EUROPEAN

MARKETING

Louis Delcart

Chairman of the Supervisory Board

EMC - European Marketing Confederation

www.proximedia.com/web/cardone.html

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Britannia to offer £40m loyalty bonus

Calling All Loyal Fans Sep 26 2002

 

                                    

Coventry City are set to introduce a ground-breaking loyalty scheme that could change the face of football fandom forever.

           

           

                                                                                          

March 2000

CUSTOMER LOYALTY CARDS

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Components of a loyalty system

• The right customers

• Lifetime products and services

• Loyal employees

• Measures of loyalty

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The Service-Profit Chain

Internal Service Quality

Internal Service Quality

Employee Satisfaction

Employee Satisfaction

Employee Retention

Employee Retention

Employee Productivity

Employee Productivity

External Service Value

External Service Value

Customer Satisfaction

Customer Satisfaction

Customer Loyalty

Customer Loyalty

Revenue Growth

Revenue Growth

ProfitabilityProfitability

Operating Strategy and Service Delivery System

� workspace design

� job design

� employee selection & development

� employee rewards and recognition

� tools for serving customers

� service concept results for customers

� service designed and delivered to meet targeted customers’ needs

� retention

� repeat business

� referral

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extremely dissatisfied

2somewhat dissatisfied

3slightly

dissatisfied

4satisfied

5very satisfied

Satisfaction Measure

Loy

alty

(R

eten

tion

)

100 %

80 %

60 %

40 %

20 %

Zone of defection

Zone of indifference

Zone of affection

Apostles

Terrorists

Mercenaries

Indifferents

The Heskett-scheme

Hostages

-- monopoly

__ normal competition

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The Virtuous Circle of Loyalty

Deliver Superior Value

Continuous investment in hard-to-match capabilities

Increase customer loyalty

Tighten connections

Demonstrate trustworthiness

Increase customer satisfaction

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Two Trends in Loyalty Programs

21. Rewarding Loyalty use rewards to foster their loyalty

                                                                                                                              

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Two Trends in Loyalty Programs

21. Rewarding Loyalty

•Loyalty demonstrated through accumulated purchases

• Lock-in strategies achieved with the active participation of the customer

• Flexibility van be adjusted over time, e.g. through cross-promotions

• Some firms may buy into a share of the loyalty program

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Vous découvrirez dans notre catalogue et nos magasins une foule d'articles sympas ; allant de DVD à des jouets épatants. Mais comment les obtenir?

 

  

> la société Artis d'hier et d'aujourd'hui

   

                                                        

                 

  

> etape 1: épargnerRien de plus simple, en fait: les points Artis sont présents sur une foule de produits (découvrez la liste ici ou dans votre magazine Artis). Il vous suffit de découper les points et de les conserver. Vous constaterez bien vite que le nombre de vos points ne cesse d'augmenter (surtout quand toute la famille s'y met!). 100 nouveaux points Artis équivalent à une réduction de 1 Euro. Vous l'aurez compris: plus vous épargnez de points et plus vous pourrez choisir d'articles à prix doux. C'est là que réside d'ailleurs le principal avantage de ce système: vous ne devez même pas attendre d'avoir suffisamment de points, car vous pouvez également payer toute votre commande ou une partie en argent comptant (voir étape 3).> etape 2: choisirVoici venu le moment de sélectionner un article. Furetez à loisir dans notre site (ou dans nos magasins) pour découvrir notre choix des plus larges en DVD, cd-rom, jeux de société, livres, CD, … Ceux-ci abordent les thèmes les plus variés: culture, nature, animaux, histoire, art, cuisine, jardinage, voyages,... Les petits loustics seront eux aussi à la fête. Artis Zone est un lieu de découvertes proposant des dizaines de jouets amusants, d'histoires à lire, de jeux de bricolage, de CD à reprendre en chœur,... Bien sûr, leur conception a été mûrement réfléchie afin que tous conviennent aux enfants. Artis s'en porte garant.

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Two Trends in Loyalty Programs

1. Rewarding Loyalty threshold marketing

2.

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Two Trends in Loyalty Programs 3

1. Rewarding Loyalty behavioral change

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When are loyalty programs successful?

1. Use rewards to strengthen the value proposition

2. Change customer behaviour

3. Learn more about your customer: the learning relationship

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The Relationship Spectrum

Transactional exchanges

Value-adding exchanges

Collaborative exchanges

Anonymous transactions/ Automated purchasing

Complete collaboration and integration of supplier with customer or channel partner

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Devising a Relationship StrategyUnderstand the sources and consequences of customer retention

“What is loyalty?”

Identify the reasons for defections

“Why do customers switch?”

Select the customers to retain

“Which customers are valuable?”

Design programs to enhance the value proposition and create barriers to imitation

“How can we gain an advantage?”

Align the organisation to retention as a top priority

How will we implement the strategy?”

Monitor performance and collect feedback for continuous improvement programs

“How are we doing?”

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Striving for Interactivity

2 wayActive database marketing

Fully Interactive

Communications

Addressability

Value Proposition1 way

Tailored to micro-segments

Mass Micro-segmentsOne-for-all

Individuals

Personalised

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The Price of Loyalty

• The programs are expensive

• Loyalty programs take on a life of their own once they start

• Despite their number and apparent popularity with customers, these programs often fail to increase customers’ loyalty

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Loyalty and customer satisfaction

1 Satisfied customers will spread the word

Service is the key to customer loyalty

Customer service beyond the sale

Make a difference with an extra-special touch

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Loyalty and customer satisfaction

2

Satisfied customers will spread the word

Service is the key to customer loyalty

Customer service beyond the sale

Make a difference with an extra-special touch

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Loyalty and customer satisfaction

3 Know your products

What your customers want

Discover customers' buying styles

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Loyalty and customer satisfaction

4 Discover customers' buying styles

• Adversary buying styles

• Protective buying style

• Acceptance seeker

• Pragmatic style

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Loyalty and customer satisfaction

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Not all satisfied customers stay with their supplier

Solution: go beyond customer satisfaction

Develop the rapport that will make that your customers adore you.

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CASE STUDIES

• Tesco

• Happy Days

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PARTNERS

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