Loyalty cards and customer clubs Growth opportunities
Scale is key Consider goals and means
Exploiting opportunities in an evermore complex sales and channel mix
Key channel challenges
Increasing consumer interest
• Difficult to identify the consumer seamlessly across channels
• Seeking attractive offers and bargains (relevance and price)
• Increasing channel complexity
• Seeking value and rewards (cash benefits, presents)
• No overview of channel effectiveness
• Seeking interaction (tips, advice, information, service)
• Customer attractiveness unknown
• Seeking exclusivity
• Fast-paced technological change
• Seeking entertainment (competitions, quizzes)
• Lots of data, but how do you structure and act on it • Insufficient capitalisation of brand assets and customer touchpoints
Increased prioritisation of loyalty cards and customer clubs Increasing number of cards and clubs in the Nordics Focus on increasing card/club effectiveness Loyalty club points and rewards are the retailer's key tool for reducing price and bargain focus Club eco-systems through partnerships (e.g. EuroBonus, Coop Plus, Club Matas, Trumf) New business models introduced (virtual currencies, linking cards, etc.)
Opportunities Increasing knowledge of customers and behaviour
Multiple touch- and data points: Indications of interests, opened and clicked mails, viewed and purchased items, wish lists, participation in events, quizzes Knowledge of customer/segment attractiveness (across channels) from both a transaction and lifetime perspective
Enabling scalable customised communication
Differentiation in timing, frequency, content, offers, look and feel, pricing and rewards Customising shopping experience (web-shop as well as in-store experience) Rules- and trigger-driven to increase effectiveness
Leading to increased, traceable sales performance
Alternative sales channel in itself (direct call- and link-to action) Ability to handle and communicate larger assortment online Drive traffic to stores through events, exclusive offers, etc Increasing loyalty through working strategically with activity levels (deflection risk) and sales funnel
Eventually enabling new business opportunities
Enabling effective introduction of new initiatives (effective communication channel) Direct lead generation through newsletters and affiliate marketing Enabling redemption of points through partners Enabling earning points through partners Sell anonymised behavioural data
Sweden
Denmark
Norway
3.1+ million
1+ million
1.6+ million
3+ million
1+ million
1.3+ million
United kingdom
15-16+ million
Increased competition among clubs
Increased focus on value of data on buying behaviour
Increased opportunities to earn and redeem points
Threat of inflation in rewards
Increased use of customer segmentation
Extending reach through partnerships
Limit to how many large clubs can exist Brands and retailers alike enter Competition for attractive partners
Increased granularity and use of algorithms in customisation Optimisation of product assortment Feedback loops on campaign and shop effectiveness
Making point-shops a destination in themselves Co-branded services (mobile, insurance, credit cards, etc.)
Does a card/club match purchase frequency/basket size? Do we want to retain, grow or attract customers?
Can it work in practice across channels?
How do we define attractive customers (basket size, frequency, loyalty, lifetime value)?
Do the right prerequisites exist (IT, ownership, etc.)?
Do we know who are attractive/whom we want to target?
How do we ensure a unified link and experience between physical stores/webshop/mobile?
How does a club coincide with current brand values? How do we want to measure success, and what are the goals?
How do we ensure competences in working structured with both creative elements as well as data-intense patterns?
Purpose
Operational consequences
Suitability of scheme (go/no go) Strategy and goals Key design characteristics Plans and organisation
Competitive situation What are competitors doing, and how big are they? How do we differentiate scheme to competitors (points, communication, etc.)? Are there non-competing clubs, where partnerships are possible?