crm-loyalty prgrms examples

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Loyalty 2.0Five Key Elements of Next

Generation Loyalty

Sean McDonald, DellScott Ekman, Rockler 

David Rosen, Loyalty Lab

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 About Dell About Dell Founded in 1984 by Michael Dell

Direct Model is the foundation for Dell¶s business

Dell maintains a consistent focus on offering the best

value and customer experience Dell is a trusted technology innovator with a

diversified, comprehensive IT portfolio

Dell is a global company committed to its customers

and employees Ranked 34 of Fortune 500 (2007)

Revenue

 ± Q2 Preliminary Revenue of $14.8 Billion

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Dell Community

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5 Customer Needs of Community

To Be Heard(Public suggestion

box, voice)

Guidance and Affirmation

(Confidence with their choices)

To Learn and

Share What TheyKnow

(³How To´information and

expertise)

Help or To HelpOthers

(Solve problems)

To BeRecognized

(Fame, Glory,Rewards)

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Community Loyalty The loyalty program at Dell is focused of the relationship betweenDell and the Community.

The 3 programs listed below allow Dell to recognize our Community contributions.

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DellCommunityLoyalty

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 About Rockler  Founded in 1954 by Nordy Rockler 

Started as a mail order woodworking supply

company; first retail store opened in 1978 Internet Retailer¶s Best of the Web ± Top 50 Web

Sites (2005)

$100M+ 2006 revenue

Publishes key trade journals, ezines

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Rockler Rewards

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 About Loyalty Lab A market leader 

 ± We are the fastest-growingprovider of loyalty programmanagement for consumer brands

A game changer 

 ± As a Software-as-a-Servicecompany we deliver best-of-breed loyalty technology over the Internet

A thought leader  ± We are seasoned loyalty

experts who build our expertise into our product andprovide ongoing hands-onservice and support

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The New Customer Loyalty ImperativeThe basic tenants of loyalty are still relevant:

 ± Learning from your customers so you can respondintelligently

 ± Aligning incentives to best protect and grow LTV

 ± Enhancing brand and strong personal feelings of your bestcustomers

Next Generation of loyalty essentially uses new tools to allowmarketers to do all these things better, in ways more alignedto the changing ways customers are interacting with you

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High Return on Investment Efforts invested in best customer management far outstrip other marketing efforts

10% increases in marketing effectiveness result in

x% increases in customer value« Acquisition Margin Retention

 Amazon 0.5% 11% 28%

 Ameritrade 1.2% 11% 30%

eBay 1.4% 11% 31%

E*Trade 1.1% 11% 30%

Gupta, Lehmann & Stuart, ³Valuing Customer´, Marketing Science Institute, No. 01-119, 2001

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The new loyalty paradigm« Broadens the definition of customer lifetime

value ± it¶s not just transaction dollars Extends the description of the customer 

relationship -- customers¶ actions influenceeach others¶ lifecycle development

Better recognizes and responds to the obviousand subtle differences in customers

Successfully rewards both purchasers andadvocates Follows the customer where she goes and

better influences who she knows

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5 Key Elements1. Identifies, Segments and Differentiates

Customers

2. Makes Boundaries Flexible and Extendable3. Enhances Your Brand Among Best

Customers

4. Aligns Directly with Company Success5. Promotes and Facilitates Two-Way

Engagement

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Identify, Segment, Differentiate

Recognizes and adapts to deeper levelsof consumer affinity

³Clubs´ join tiers as special places

Magnitude changes in:

 ± Offer targeting and eligibility

 ± Communication strategies

 ± Earning means

 ± Rewards

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MyCoke Rewards

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Flexibility and Extendibility Earning and Burning features grow by

extending program to strategic partners

On-brand partners tap into the insights,community and buying power of greatprograms

 ± The more valuable the program tomembers, the more likely they will be toengage

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Extending Loyalty to On-Brand Partners

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Marketers are Searching for Ways to Tap

into Social Loyalty

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Enhances Brand Shifts focus from ³self promotion´ of 

retail brand

To ³member promotion´ of retail brand

Recognizes and rewards members¶contribution to ³positive share of voice´

 ± Commenting

 ± Reviewing

 ± Referring

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Viral Advocacy

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Viral Advocacy

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Viral Advocacy Thru Facebook

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 Aligned to Company Success

Ties point-earning/benefits to deeper understanding of LTV

 ± Increased gross margins

 ± Lower cost to serve

 ± Lower acquisition costs

 ± Higher conversion rates ± Ratings and reviews

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Log in; come

by

Refer a friend,

sign up a

cousin, build a

wish list

Play an

Advergame

PLCC or co-

brand card

usage, 2x

points on every

purchase

Be nice to a

CSR, to a sales

associate

Any click-

through, anyweb behavior,

updating

personal

profile

Stop calling

points!

Opt-out of print

communicatio

n

Direct

booking

WOM-write a

product review,

post to a forum,

make a blog

entry

Enter or win a

sweepstakes

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The Power of Customer Reviews

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Promotes Two-Way Engagement

Loyalty 2.0 heavily focused on dynamic,two-way interaction

Drives significant consumer insightsthrough deep set of tools:

 ± Collaborative message boards

 ± Forums ± Frequent, targeted market research

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Forums

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