A overview of the main dimensions that should be tracked in order to demonstrate the impact of a loyalty program

1. Measuring and demonstrating
results of Loyalty Programs
Benjamin Filaferro – filaferro@yahoo.com – May 2013

2. Performance
Overview
•Number of Loyalty
Members
•Tiers Figures
•Collection &
Redemption Data
•Churn & Tenure Data
•Loyalty Growth
Members Evolution
•Number of Members
(Total & per Tier)
•New enrolments per
tier
•Tier movements
•ARPU
•Churn per tier
•Loyalty Members per
product family
•Product Penetration
per Tier
Collection &
Redemption
•Points Collection vs.
Redemption and
Expired
•Ratio
Collection/Redemption
•Collected Points per
customers per tier
•Redeemed Points per
customers per tier
•Expired Points per
Customer per tier
Redemption Behavior
•Redemption per
partner
•Redemption per
service
•Average point per
transaction
•Channel redemption
preference per tier
Sources of Points
•Sources of collected
points
•Main product
contribution in source
of collected points
Partner Overview
•Partner Redemption
evolution
•Top 3 outlets (Voucher
/ eVoucher)
Loyalty
Underperformance
•Customers Refusing to
enroll
•Customers for which
all benefits were not
implemented
•Customers who never
visited a VIP Shop
•Customers who never
benefited from a
Partner Discount
Fraud Identification
•Abnormal use of
Partner Discounts
Typical reports needed for the daily management of
a point program
2Benjamin Filaferro – filaferro@yahoo.com – May 2013

3. Loyalty NPS
Loyalty NPS should be measured both as a general
NPS enhancer and as a sub-brand or product
3
ENROLMENT EARNING BURNING
General NPS Improvements
Illustrative
Benjamin Filaferro – filaferro@yahoo.com – May 2013

4. It is crucial to always calculate the incremental
effect of the Loyalty Program over the years
4
-
1,000,000,000
2,000,000,000
3,000,000,000
4,000,000,000
5,000,000,000
6,000,000,000
7,000,000,000
8,000,000,000
9,000,000,000
Year 1 Year 2 Year 3
Customer Acquired and Saved on Y3 (Including ARPU Effect)
Customer Acquired and Saved on Y2 (Including ARPU Effect)
Customer Acquired and Saved on Y1 (Including ARPU Effect)
Existing/Planned Base (ARPU Effect Only)
Revenues of Loyalty Business Case
Since not all loyalty generated customers will be acquired or saved at the same time
during the year, we take as an hypothesis that they will generate half of the average
yearly ARPU of the concerned year
Disguised Example
Benjamin Filaferro – filaferro@yahoo.com – May 2013

5. High Level Cost/Revenue Structure of an Affinity
Loyalty Program
5
Net Present Value
1 001 M
ROI
3.97
Incremental Benefits
1 339 M
Incremental Costs
338 M
VIP
181 M
Benefits Costs
323 M
CAPEX & OPEX
14 M
High Value
1 158 M+
-
Disguised Example
Benjamin Filaferro – filaferro@yahoo.com – May 2013

6. Loyalty Impact Estimations have to be realistic
compared to the Operator Overall Budget
6
563,249
30,615
-101 995
459
5,100
5,559
491,870
450,000
470,000
490,000
510,000
530,000
550,000
570,000
590,000
Planned
HNW Base
Planed Churn
Planned Growth
Adds
Loyalty
Saved
Churners
Loyalty Additional
Growth Add
Total Loyalty Impact
End of Year without
Loyalty
Disguised Example
Benjamin Filaferro – filaferro@yahoo.com – May 2013

7. Benjamin Filaferro – Independant Customer Strategy Advisor
I have been a Strategy Consultant for
the last 10 years at first for Banks and
then for Telecom Operators, and I have
specialized myself in Customer Strategy
over the last 6 years.
I have especially assisted Fixed and
Mobile Operator CMOs on the design
and the implementation of:
• Segment Strategies
(ATL, BTL, Touchpoint
Experience, etc.)
• New products
• Retention Strategies (Loyalty
Programs, Winback, etc.)
In the specific field of Loyalty
Programs, my experience covers:
• The design, the
implementation, and the launch
of 2 Point Programs, 2 Affinity
Programs, 1 Enterprise Affinity
Program
• The supervision of an
outsourced team managing
from end-to-end
(Marketing, Communication, An
alytics, Logistics, & Partnerships)
2 Point Programs and 1 Prepaid
Stimulation Game 7Benjamin Filaferro – filaferro@yahoo.com – May 2013

8. Benjamin Filaferro – filaferro@yahoo.com – May 2013
Thank you