Follow these nine rules when developing a loyalty programme and you cannot go wrong.

1. Nine Laws of Loyalty Marketing

2. According to a Survey by EIU, Customer Loyalty is
One of the Top 10 Business Issues of Corporate
CEOs

3. What Is Loyalty Marketing?
According to Colloquy, loyalty marketing is the effort to
identify, maintain and increase yield from best customers
through long-term, interactive & value-added relationships

4. There Are Nine Cardinal Laws To Be Followed
5. Develop Offer
6. Build Dynamic
4. Build Relationships
Programme Structure
7. Build Emotional
3. Calculate CLTV
Bond
2. Targeted
8. Align Organisation
Member Acquisition
1. Focus On
Acquiring Data 9. Involve Sr. Mgmt.

5. Harrah’s Total Rewards
1. Focus on
has developed a centralised
acquiring data
& award winning
data warehousing system
that allows
them to better understand • Collect relevant info
• Make better use of info
their customers

6. 2. Target Member
Harrah’s Total Rewards
acquisition accurately
Has built predictive tools
that reveal which customers
should be targeted for •
loyalty incentive programmes • Establish best customer profiles
• Go for quality over quantity

7. Tesco Clubcard
has developed models that 3. Calculate & increase
estimates the life time value customer LTV
and profitability of each •
customer. This allows them
Estimate value of customers
to target effectively and
over years
personalise communications
-

8. Tesco
4. Build relationships
has leveraged customer data
based on relevance
from its loyalty programme
to move into offering banking •
and financial services
• Trust, excellent service
• Design products around
customer needs

9. 5. Develop an irrefutable
core offer
•
• Plan for a differentiated offers
• Conduct research at regular
intervals

10. Hilton HHonours
programme members earn 6. Build dynamic programme
points for hotel stay and structure
airline miles for hotel stay
too. Members can choose to
earn in either currencies Vary the programme
or both. They call it benefits
‘Double Dipping’

11. Types of Loyalty Programme Structures
Affinity Discount
Programmes Programmes
Bonus &
Frequency
Programmes
Coalition User
Programmes Communities

12. Affinity Programmes
Characterised by
recognition
Strong emphasis
on recognition
& privileges

13. Bonus & Frequency Programmes
Characterised by
reward currencies
viz. points
Encourages repeat
usage behaviour

14. Discount Programmes
Characterised by
discounts
Encourages volume
purchase behaviour

15. Coalition Programmes
Characterised by
organisations offering rewards
under single banner
Enables customers
to collect rewards which
otherwise may take
longer time

16. User Communities
Characterised by
dialogue & information
dissemination
Enables customers
to network and learn
about new happenings

17. Via Rail of Canada
7. Build emotional
is using loyalty data to decide
bond with customers
- which type of wine to be
served on certain routes
and cabins which routes
needed stations -’ There should be greater stress on
for nursing mothers ‘moments of truth experiences

18. 8. Align the
organisation to create true
loyalty
Overly focus on profits
and growth may destroy
customer loyalty

19. 9. Involve senior mgmt. in
understanding customer
behaviour
Understand relationship
dynamics between acquisition,
retention, penetration & cost to serve

20. These Nine Laws will decide the success
of any loyalty marketing initiative

21. For further information please call:
Rajeev at (6)012-6301137 or e-mail: rajeev@loyalty-
matrix.com
http://twitter.com/rajinkl
http://loyaltymarketingblog.blogspot.com/