customer loyalty dimensions

1. CUSTOMER LOYALTY DIMENSIONS
Deepanjali
Msc 1st yr

2. LOYALTY PROGRAMME
 Mechanism for identifying and rewarding loyal
customers.
 It includes a rewards program by the company to
customers who frequently make purchases.
 A loyalty program may give a customer advanced
access to new products, special sales coupons or
free merchandise.

3. HISTORY
 The first programme for awarding loyalty
 was launched in 1981
 American Airlines initiated the Frequent Flyer
Programme “AAdvantage”
 The Holiday Inn was the first to initiate such a
programme in the hotel industry.
 Followed in 1983 by the Marriott hotel corporation
with its Honoured Guest Programme.
 Awarded points for overnight stays in the hotel
 It was the first programme that awarded its guests for
spending by giving points for each dollar spent on any
service inside the corporation.

4. GOALS OF LAUNCHING LOYALTY
PROGRAMMES
 Improving customer knowledge
 Undersold product or services
 Highly profitable products/services
 Increase customer retention and purchase
frequency
 Improved profitability

5. REQUIREMENT OF LOYALTY PROGRAMME
 Today’s customers are more informed, better
educated and more discerning.
 Greater expectations - more value for less money
 To attract potential guests and to retain loyal
customers.
 Key source of competitive advantage
 Can be a powerful driver of company growth
 Research conducted by Bain & Co has shown that
retailers with a loyalty programme are 88% more
profitable, on average, than competitors without one.

6. ADVANTAGES OF LOYALTY PROGRAMME
FEATURE DISCRIPTION
INDIVIDUALITY Each guest needs to see him/herself
in the loyalty programme
COMPETITIVENESS It must provide an answer to the
question: Why should a guest
want to join a loyalty programme?
The benefits of a loyalty programme
need to be easy to explain,
simple and easy to remember
INTERESTING A hotel has only a few seconds at its
disposal in which to make an
impression on a guest
EFFECTIVENESS A loyalty programme should provide
true value to guests.

7. ADVANTAGES OF LOYALTY PROGRAMME
FEATURES DISCRIPTION
FLEXIBILITY Points can be redeemed in a wide
variety of ways (for example,
points can be exchanged to pay
for services, or there is a
possibility
of exchanging points with the
longest possible redemption
period)
PROMOTABILITY The programme needs a
resounding name and motto

8. LOYALTY TRENDS
 Volume
 Earlier restricted to the
number of products
customer has bought.
 Value
 Earlier restricted to the
transactional value.
 Volume
 But now also with the number
of product improvements
they’ve suggested, the reviews
they’ve posted.
 Value
 But now also with the value
they have in influencing people
within their networks to
purchase your products.
 Also the additional value that
the customer get by helping in
improving the product and
customers.
Past Current

9. REASONS FOR FAILURE OF A LOYALTY
PROGRAMME
 Not a powerful driver
 Forrester research shows that nearly two thirds of loyalty
programmes for retailers are ineffective, and
 Aberdeen Group research shows that 74% of retailers report
‘partial to no tangible improvements’ from their loyalty
programmes.
 Measuring the wrong things in their attempts to identify
loyal customers
 Unable to link customer loyalty to firm performance
measures
 Rewarding the wrong customer behaviours or attitudes
when designing loyalty programs
 Companies aren’t making the most of the potential
because of poor execution.

10. CHANGES IN THE LOYALTY PROGRAMME
 What is the requirement for a change in loyalty
programmes:
 The proliferation of new technology
 Shifting consumer behaviour
 Changes in the trend
 Competition
 The result
 Companies are able to drive previously untapped value
and volume from their customer base across multiple
dimensions.

11. CURRENT DIMENSIONS- LOYALTY AS 3D
1. Transactional loyalty – a customer demonstrates
transactional loyalty if they buy your product and keep
buying your product (and others in your product range)
over time.
2. Social loyalty – a customer is socially loyal if they’re
willing to advocate your product to their networks,
either on or offline.
3. Collaborative loyalty – a customer is collaboratively
loyal if they’re willing to invest time and effort in
improving your product or experience.

12. BRAND HARNESSING THE POWER OF 3D
 Brands as diverse as KFC, Estonian Air, Starbucks
have all created social loyalty programmes where
they reward a customer’s social behaviour with
points that can be redeemed for products.
 Starbucks MyIdea is a popular example of a brand
trying to harness collaborative loyalty in order to
improve its customer experience, one such crowd-
sourced innovation being wifi availability in coffee
shops.

13. ESTONIAN AIR
 AirScore
 The first-ever airline virtual loyalty program.
 Share Estonian’s offers on their Facebook wall,
including airfares, cultural and sport events taking place
in Estonia.
 Supporters of the airline are rewarded with discounts for
social media advocacy, without even having to fly the
airline.
 Works as a business deal – you distribute Estonian Air’s
ads and they reward you with points of various use.
 The program reached over 1 million wall impressions in
less than ten days and continues to grow

15. CHECK-IN DEAL
 When customers check-in,
Deals are offered in exchange :
 Individual: Offer a discount to an
individual for simply checking in.
 Loyalty: Offer a discount or
freebie for checking in a certain
number of times.
 Friend: Offer a Deal to groups of
friends who check-in together.
 Charity: A check-in results in a
donation to the specified charity

18. IBIBO – REFER AND EARN
 Earn Rs 1000 while
installing the application
 Earn Rs. 200 while
referring it to friends

19. STARBUCKS MY IDEA

20. THANK YOU