The document discusses customer loyalty in the digital age. It notes that the rise of disruptive technologies has challenged brands to engage consumers. To maintain loyalty, brands must redesign programs to suit connected consumers who value relationships, authenticity, and novelty. The consumer decision journey has changed, requiring brands to enhance the customer experience. Successful loyalty programs address consumer expectations, build trust, ensure satisfaction, and foster a sense of belonging with the brand. They must balance what consumers want from programs with business objectives like increased revenue and customer retention.

1. CUSTOMER LOYALTY IN THE DIGITAL AGE
Prepared by: Alok Ranjan

2. THE LOVE IS EPHEMERAL
The rise of disrup-ve technologies has completely baffled brands in reaching out to their consumers. To
keep the consumers engaged, it is important for brands to revisit and redesign their loyalty programs to
suit the needs of the connected consumers.
Picture courtesy: Tom Fishburne, Marketoonist.com

3. CONSUMER 2.0 – THE CONNECTED CONSUMER
3
Research &
purchase on
smartphone
41%
Research on
smartphone, but
purchase in-store
46%
Research on
smartphone, but
purchase on
computer
37%
Research on smartphone,
visited store to check the
product but purchase on
computer
19%
Research on
smartphone, visited
store to check the
product but purchase
on smartphone
18%
Visited the
store first, then
purchased on
smartphone
8%
MulP-Screen Purchase
Behavior
Source: Google ZMOT, 2012
73%
71%
69%
68%
67%
64% 63%
63%
61%
60%
60%
51% 53%
49%
52%
53%
33%
37%
22% 34%
55%
Learn about new
products
General InformaPon
Submit Opinions
Exclusive informaPon
Reviews and product
rankings
Feel Connected Customer Service
Be a part of a community
Event/promoPon
parPcipaPon
Purchase
Discount
Brands Consumers
What Consumers Wants vs. What Brands Offer?
Source: IBM InsPtute of
Business Value, 2013
The technologically empowered consumer now values rela-onship, authen-city and novelty in a brand.
Increase in number of touch points have created a challenge for brands to retain the customers. Further,
the gap in delivering value proposi-on has an adverse impact on brand loyalty.
80%
8%
Companies
Companies that
believe they
provide superior
value proposiPon
Companies whose
customer agree
Delivery
Gap
Consumer-Brand Delivery Gap
Source: Bain ConsulPng

4. CONSUMER DECISION JOURNEY – ADAPTING TO THE NEW NORMAL
4
Awareness
Familiarity
ConsideraLon
Purchase
Loyalty
Old School of Purchase Decision
Moment
of
Purchase
EvaluaLon/InformaLon
Search
Brand
Loyalty
AUer Purchase
Experience
Trigger IniLal
ConsideraLon
New School of Purchase Decision
Old model of purchase decision is no longer valid. The new decision journey makes it impera-ve for
brands to enhance customer experience in order to retain their customers.

5. PURCHASE TRIGGERS FOR CONSUMERS
5
Abundance of available product informa-on, near-perfect price transparency, special deals, filling the
in-store informa-on gap, product recommenda-ons, and smarter store experience (customized
recommenda-ons) trigger brand loyalty in the digital age.
87%
Before visiLng a
store
79%
While visiLng a
store
35%
AUer visiLng a
store
Consumers looking for product informaLon
35%
36%
39%
70%
71%
75%
Coupons/Deals
Online Videos
Social Network
Physical Stores
E-commerce firms
Search Engines
Sources of Product InformaLon
Myth Reality ExplanaLon
Search results send consumers to e-commerce sites
Search results are powerful way to drive consumers to
stores
Online informaPon fills in gap and moPvates store visits
Once in-store consumer begins looking at their
smartphones, store looses aeenPon
Stores grab aeenPon through retail apps/mobile sites
42% consumers research product on mobile while shopping
in-store
Consumers visit stores to transact
Consumers now expect customized in-store experience
than just transact
69% consumers prefer physical store for informaPon during
different phases of purchase process

6. LOYALTY PROGRAMS – FACILITATE BRAND ADVOCACY
6
92%
72%
87%
82%
76%
Asia Pacific
Europe
Middle East/Africa
LaPn America
North America
57% 46%
Consumer Purchase
behavior influenced by
loyalty program Ped to a
retailer
Consumer Purchase
behavior influenced by
loyalty program Ped to a
brand
80% 70%
Programs are worth
parLcipaLng
Programs are part of
relaLonship with the
company
2X
Visitor
Increase
4X
Spending
Increase
88%
Higher
Profit Source: Maritz
Source: Maritz
Source: Nielsen
Loyalty Programs facilitate purchase decisions to a greater extent thereby influencing customer
engagement and improving margins.
Consumers are more likely to purchase when offered loyalty program
Loyalty Programs Increase Margins Consumers Agree to Loyalty Programs

7. BEST PRACTICES – ANALYZING WHAT IS RIGHT
7
55%
51%
51%
36%
22%
Ease of redeeming rewards
Monetary rewards
Ease of earning points
Access to exclusive deals and coupons
Easy enrollment opPons
What Customers Want?
34%
70%
64%
14%
More revenue
Customer retenPon
Customer engagement
Beeer customer experience
What Businesses Want?
60% firms consider loyalty to be a strategic priority (Forrester). It is necessary to strike a balance
between what consumers demand and what is offered, keeping firms expecta-ons in sync with their
business objec-ve.
Source: Mintel
Source: Forrester
Define program objecPves Offer cross – channel customer experience
Engage with consumers Innovate with new channels
Create value through
personalized experience
Provide value beyond tradiPonal
No customer is equal Use gamificaPon
Communicate effecPvely Believe in data
Happy
Customer
CriLcal Success Factors for a Perfect Loyalty Program

8. DESIGNING THE LOYALTY PROGRAM
8
The connected consumer demands a unique, transparent and customized loyalty program from
organiza-ons that aids the purchase decision. It is impera-ve for firms to leverage strategic direc-on
adopted by the industry leader to design a tailor made loyalty program to their compe--ve advantage.
The Successful loyalty program addresses customer expecta5ons, builds trust, ensures
sa5sfac5on and develops a sense of belongingness for the brand.
IdenPfy consumer
touch points
Map business
processes
Define program goals
& business outcomes Segment target group
Define profitability
drivers
Define measurable
analyPcs
Formulate partnering
strategy
Design incenPve
structure
Devise
integrated markePng
& communicaPon
strategy
Tools & vendor
idenPficaPon

9. VALUE DRIVERS OF THE LOYALTY PROGRAM
9
Customer touch points &
Business process mapping
Define program goals &
Business outcomes
Target group segmentaLon
Profitability drivers
Define data & analyLcs
Partner strategy
Design incenLve structure
Integrated markeLng strategy
Tools & vendor idenLficaLon
˃ Define conLnuum of touchpoints for consumers
˃ List processes and idenLfy value integrators
˃ Develop/Maintain program specific strategies
˃ Manage program communicaLons
˃ IdenLfy expiring inventory and purchase frequency
˃ Manage governance for most valued and inacLve customer
˃ Manage technology limitaLons and program inerLa
˃ Move beyond Lered segmentaLon and idenLfy profitability drivers
˃ Risk miLgaLon
˃ Perform profitability planning
˃ Manage service usage levels
˃ Perform gap analysis
˃ Manage data from disparate systems
˃ Set parameters to draw insights from available data
˃ Define loyalty analyLcs
˃ Integrated markeLng & loyalty analyLcs
˃ Define partnering format (Single, MulL-partner)
˃ Financial viability of partnership
˃ Brand adracLveness
˃ IdenLfy incenLve areas
˃ Define consumer behavior for each incenLve areas
˃ RedempLon rules
˃ Manage regulatory compliances
˃ Devise cross-channel markeLng strategy
˃ ReacLve & proacLve markeLng communicaLon strategy
˃ Loyalty markeLng lifecycle management
˃ Gap analysis of exisLng resources vs tools desired
˃ Requirement mapping available services
˃ Set criteria for technical & funcLonal evaluaLon
Firms should evaluate drivers of the loyalty program to gain compe--ve advantage. Tailoring offers,
providing ancillary services and increasing switching cost will add to the compe--ve posi-oning of the
firm.

10. Feedback/QuesPons?
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