An overview of the size and state of the loyalty and incentive program market in North America/USA in 2013/2014. Included in the deck are statistics and facts about market size, membership data, effectiveness, demographics and a section on mobile loyalty programs and digital rewards.

1. STATS & FACTS:
LOYALTY AND INCENTIVE PROGRAMS
DATA FOR 2013-2014

2. THE
LOYALTY
&
INCENTIVES
MARKET
IS
HUGE
• The North American Loyalty market is estimated to be $54 billion and
growing at 20% per year (Raymond James)
• US companies spent $76.9 billion on incentives and promotions in
2012-2013. $22.7 billion is spent on incentive and loyalty gift cards alone
(Incentive Marketing Association)
• There are over 2.5 billion loyalty memberships in the U.S. (Colloquy)
• Loyalty programs generate $48 billion in annual loyalty currency
issuances which customers can redeem for goods or services (Colloquy)
2

3. LOYALTY
MEMBERSHIP
IN
THE
U.S.
CONTINUES
TO
GROW
RAPIDLY
• Nearly
90%
of
Americans
parDcipate
in
some
type
of
rewards
program
(BusinessWeek)
• The
average
U.S.
household
belongs
to
~22
loyalty
programs
–
not
all
acDve
though
(Colloquy)
• 71%
of
Loyalty
Members
have
room
for
more
cards
in
their
proverbial
loyalty
card
wallets
(Maritz)
3

4. LOYALTY
PROGRAMS
ARE
EFFECTIVE…
…IN
INFLUENCING
PURCHASE
DECISIONS
Source:
Maritz
Source:
Nielsen
4

5. LOYALTY
PROGRAMS
ARE
EFFECTIVE…
…IN
INCREASING
CUSTOMER
ENGAGEMENT
“Reward
program
members
are
70%
more
likely
to
be
WOM
champions
(defined
as
those
who
are
"ac@vely
recommending"
a
product,
service
or
brand)
than
the
general
popula@on”
(Colloquy)
Source:
Maritz
5

6. LOYALTY
PROGRAMS
ARE
EFFECTIVE…
…IN
IMPROVING
MARGINS
“Loyalty
programs
can
increase
a
brand’s
market
share
by
20%
and
improve
customer
acquisi@on
by
up
to
10%”
(Aimia)
when
done
right!
6

7. WHAT
THEY
WANT
OUT
OF
A
LOYALTY
PROGRAM
Customers
Businesses
Ease
of
redeeming
rewards
55%
Monetary
rewards
51%
Ease
of
earning
points
51%
Access
to
exclusive
deals
and
coupons
Easy
enrollment
op@ons
Source:
Mintel
36%
22%
More
revenue
34%
Customer
reten@on
Customer
engagement
70%
64%
BeHer
customer
14%
experience
60%
of
firms
consider
loyalty
to
be
a
top
three
strategic
priority
Source:
Forrester
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8. Choose Digital has EXIST Signed Partnerships with
Already ACROSS COMPANY
LOYALTY PROGRAMS
II. Market Overview
the Leading Loyalty and Incentives Programs in the
III. Financial Overview
World
I. Business Overview
Program
SIZE
Member Base
90 MM members
34 MM members
22 MM members
12 MM members
5 MM members
4.7 MM members
1.2 MM members
7
Confidential – Do not copy or redistribute.
2

9. – United has been generating on average 26 MM digital impressions per month for its Choose Digital-enabled Digital Media Store
among a sub-segment of its members during this beta period
•
The quality of Choose Digital’s content library and software interface has resulted in significant sales conversion rates
(above 10%) once a United customer visits the Digital Media Store
– MileagePlus members are becoming more familiar with the service, resulting in decreasing bounce rates, down from 30.0% in
August 2012 to 15.5% in March 2013
DEMOGRAPHICS FOR LOYALTY CARD OWNERS VARY
•
Going forward, the Choose Digital team is working toward a full launch with MileagePlus that will include:
– (i) demographic tuning of marketing outreach, (ii) trigger targeting around decision points (e.g., an email five days before flight),
(iii) marketing of different mixes of media, (iv) finalizing the content library and (v) increasing the frequency of monthly emails
Sales Demographics by Gender
Reward Redemption Demographics by Age Group
55 - 64
12.2%
Over 65 Under 25
5.6%
8.0%
Female
36%
25 - 34
21.6%
45 - 54
24.0%
Male
64%
35 - 44
28.5%
15
dential – Do not copy or redistribute.
2

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CUSTOMER
LOYALTY
ACROSS
PRODUCT
CATEGORIES
(1/2)
35%$
%age
of
North
Americans
Who
Say
They
Are
“Completely
Loyal”
To
A
Brand
30%$
29%$
25%$
23%$ 22%$
20%$
15%$
20%$ 20%$ 19%$ 19%$
18%$
16%$ 15%$
14%$ 13%$ 13%$ 13%$
11%$ 11%$
10%$
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0%$
Source:
Nielsen
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CUSTOMER
LOYALTY
ACROSS
PRODUCT
CATEGORIES
(2/2)
%age
of
North
Americans
Who
Say
They
Are
“Not
Loyal”
To
Any
Brand
45%$
40%$
35%$
30%$
25%$
41%$
38%$
37%$
37%$
36%$
34%$
34%$
34%$
32%$
32%$
31%$
31%$
30%$
28%$
23%$
Source:
Nielsen
21%$
20%$
15%$
10%$
5%$
0%$
11

12. MOBILE
IS
BECOMING
AN
INCREASINGLY
EFFECTIVE
CHANNEL
FOR
LOYALTY
The
preferences
for
loyalty
func@onality
on
a
mobile
device
include:
• Managing
points
• Redeeming
points
• Receiving
mobile
alerts
(Maritz)
Source:
Maritz
12

13. DIGITAL
REWARDS
ARE
AN
INCREASINGLY
ATTRACTIVE
OPTION
• Digital
media
is
in
great
demand
• Digital
sales
of
music
albums
are
growing
at
double
digit
percentages
each
year,
now
accoun@ng
for
one
out
of
every
three
albums
sold
and
1.3
billion
digital
music
tracks
per
year,
according
to
Nielsen
• Mobile
devices
are
feeding
the
demand
for
digital
rewards
• Nearly
70
percent
of
Smartphone
Users
listen
to
music
on
their
phones,
and
of
those
who
do,
64 percent of those who listen to music on
their smartphone do so daily or several times a day according to Paradigm
• Digital
media
rewards
are
easy
to
redeem
• 55%
of
users
list
ease
of
redemp@on
as
the
most
important
criteria
for
rewards;
digital
media
is
always
redeemable
and
not
scarce
like
other
reward
op@ons
• Digital
media
rewards
appeal
to
all
demographics
• Books,
music
and
movies
are
consumed
by
all
demographics
and
all
geographies;
with
a
good
selec@on
you
can
easily
appeal
to
everyone
• Digital
rewards
increase
customer
engagement
• Digital
rewards
allow
for
“micro”
redemp@ons,
ensuring
customers
can
enjoy
the
fruits
of
their
loyalty
sooner
and
more
oWen
than
if
they
only
offered
big
@cket
physical
items
• Digital
media
rewards
can
be
cost
effecDve
for
companies
• Unlike
physical
rewards,
digital
media
rewards
have
no
shipping
costs;
licensing
and
setup
fees
for
digital
rewards
stores
are
usually
also
aHrac@ve
13

14. CONTACT INFORMATION
Atul Sabharwal
Founder, Snipp
atul@snipp.com
415.595.7151
http://www.snipp.com
@snippinc
14