loyalty overviewnov

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Loyalty Management and

High Volume Marketing

in SAP CRM 7.0

Bhushan Khadpe, CRM Product ManagementSunil Dixit, CRM Product Management25th November, 2008



© SAP 2007 /

1. What’s new in Marketing in CRM 7.0

2. Loyalty Management1. Solution Overview

2. Demo

3. Features

1. Program Management

2. Reward Rule Management

3. Membership Handling

4. Processing Engine

5. CRM Integration

3. Enhanced High Volume Capabilities for Marketing1. Solution Highlights

2. Segmentation Demo

3. Segmentation Technical Details

Agenda



© SAP 2007 /

What’s new in Marketing in CRM 7.0

CRM 7.0 introduces B2C marketing capabilities focusing on:

Loyalty management

A highly functional loyalty management solution, configurable for differentprogram strategies to grow and retain existing customers

Enhanced high volume marketing capabilities applied to

Segmentation Campaign Execution

Address List Handing



© SAP 2007 /


2. Loyalty Management1. Solut ion Overv iew

2. Demo

3. Features





5. CRM Integration




Agenda



© SAP 2007 /

Loyalty ManagementWhat is it?

Impact

Loyalty programs have changed the wayconsumers interact with companies, from theway they purchase products or services, tohow much they spend.

Many consumers in the US and Europe havebecome quite accustomed to the rewardsand incentives they receive by being a "card

carrying" member of an airline, hotel, car rental or retail program – customers expect areward program for their loyalty

Source: ICLP, 2007

Loyalty marketing is an approach to marketing , based on strategic management,in which a company focuses on growing and retaining existing customers

through incentives

-Wikipedia

Benefits

Cost efficiency of customer loyalty Better understand customer value

Drive customer behavior

Generate revenue

Gain valuable customer insight

„



Unsatisfied customers

Only 4% of unsatisfied customers actually complain

75-90% of unsatisfied customers will never return inthe future

Each unsatisfied customer tells another 9 customers

Satisfied customers

Customer retention costs are 1/6 of acquisition costs

Satisfied customers are willing to pay more for products and services

Each satisfied customer tells 5 potential customers

Source: Strauss, R. E.: Marketing Planning by Design: Systematic Planning for Successful Marketing Strategy, London/New York 2008; Tiwana, 2001.

Loyalty ManagementWhy is it important?

Unsatisfied customers are usually lost forever and have a negative multiplier effect



© SAP 2007 /

Loyalty Management @ SAP

Applies across multiple industries

Travel Retail

Telecommunications

Banking

…

Enables design and execution of closed loop loyalty programs

Frequent Flyer Programs

Rewards Programs

…

Enables brand owners to promote customer participation andinfluence customer behavior with customized offers

Delivers multi-channel enabled loyalty business processes

Interaction Center Web Channel

Loyalty Management is customer centric

Forrester: SAP isn’t software; it is a religion

!



© SAP 2007 /

Loyalty Management @ SAPFunctional Overview

Program

Management

Membership

Handling

Program PartnersManagement

PointsManagement

Tier based Point

Expiration

Dynamic Attributes

Tier Management

Program Creation

Point ExpirationProcessing

Online Member Activity Processing

Batch Member

Activity Processing

Simulation of RuleProcessing

Scalable EngineComponent

Tier EvaluationProcessing

Point AccountManagement

Member Tier Management

Member Activities

Basic MembershipCard Handling

Membership Typesand Registration

Member ProfileMaintenance

Processing

Engine

Sales Order Integration

IC IntegrationLoyalty APIConnectivity

Web ChannelIntegration

Reward Rules

Management

VersionManagement

Template & Expert

mode maintenance

Partner Sponsorship

Robust RuleModeling

Rule Scheduling

CampaignIntegration

Program Design & Setup Program Execution

Integrate/Collaborate



© SAP 2007 /



2. Demo

3. Features





5. CRM Integration




Agenda



© SAP 2007 /

Demo Story Flow

This demo revolves around Pascal Roberts, who is a member of World Airwaysloyalty program World Flyer Plus.

He is booking travel from San Francisco to Frankfurt for a business trip...



© SAP 2007 /



2. Demo

3. Features





5. CRM Integration




Agenda



© SAP 2007 /

Loyalty Management @ SAPFunctional Overview

Program

Management

Membership

Handling

Program PartnersManagement

PointsManagement

Tier based Point

Expiration

Dynamic Attributes

Tier Management

Program Creation

Point ExpirationProcessing

Online Member Activity Processing

Batch Member

Activity Processing

Simulation of RuleProcessing

Scalable EngineComponent

Tier EvaluationProcessing

Point AccountManagement


Member Activities

Basic MembershipCard Handling

Membership Typesand Registration

Member ProfileMaintenance

Processing

Engine




Reward Rules

Management

VersionManagement

Template & Expert

mode maintenance

Partner Sponsorship

Robust RuleModeling

Rule Scheduling

CampaignIntegration





© SAP 2007 /



2. Demo

3. Features





5. CRM Integration




Agenda



© SAP 2007 /

Program ManagementFeatures

Program Management supports program design with flexible tier management,point management, and partner management capabilities.ProgramManagement

Use dynamic attributes to enhance the program with industry specific or program specific attributes and track customer behavior

Industry specific

enhancements

Effectively classify program members into multiple concurrent tier levels

Track and reward current and lifetime value Flexible rules to upgrade/downgrade/retain tier levels

Tier Management

Increase the value of your program to members by offering point earningopportunities and benefits with partners

Generate additional revenue by selling points to partners

Program Partners

Manage redeemable and qualifying points in program

Manage point expiration

Point Management

Feature Benefits



© SAP 2007 /

Program ManagementTier Management example - Airline

Tier Level

Tier

Group

Tier Level

Tier Level

Tier Level

Tier Level

Tier Level

Tier

Group

Basic Million Miler

Silver Gold Platinum 1 MM 2 MM 3 MM+

Tier Level

Regular

Tier Validit y

Miles Validity

M i l e s /

F l i g h t s US/Canada

Rest of world

Basic Tier Guarantee

12 monthsEOY

12 monthsEOY

12 monthsEOY

24 monthsEOY

18 monthsEOM

2 year EOY

25.000 /30

50.000 /60

100.000 /100

25.000 /30

50.000 /50

75.000/75

Gold Gold Gold

Miles never expire

Miles never expire

Never expire

Once a million miler Always a million miler

Tier Level

LoyaltyProgram

Multiple tier levels – Basic & M illion M iler

Tier-dependent points validity

Customizable tier qualification rules e.g. count ry dependent

Tier guarantees based on different conditions – e.g. lifetime tier guarantees gold

1

2

3

4

1

2

3

4



© SAP 2007 /



2. Demo

3. Features





5. CRM Integration




Agenda



© SAP 2007 /

Reward Rule ManagementExamples - Retail

Back to School Bonus

Double Bonus on Notebooks

Earn double Super Points for all notebookspurchased from June 2008 to August 2008online or in our stores!

Earn 20% bonus Super Points for all schoolproducts purchased from June 2008 to

August 2008 online or in our stores!

End of Year Bonus on orders over $500

From November 1st 2008 to December 31st 2008 earn a 1000 point bonus on all ordersover $500, and additional 1000 point bonus on all orders over $750! Online orders donot qualify. Bonus will post 6 weeks after order completion.

Reward Rules

Management

Reward Rule Management enables the brand owner to design and model the

program rules, conditions, and offers using the flexible CRM Rule Builder

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© SAP 2007 /

Tier Bonus

Flight Miles

Tier Rules

Reward Rule ManagementExamples – Airline Program Rules

0%0%X I ONo Mileage Credit

100%100%M H Q V WDiscount Economy150%100%Y BEconomy

150%125%C DBusiness

150%150%F A PFirst

QualifyingMiles*

RedeemableMiles

BookingClass

Service Class

100%Platinum

50%Gold

25%Silver

Bonus*Program Status

*Only on flights operated by World Airways

*Only on flights operated byWorld Airways, Europe Air

Rest of WorldUS/CanadaTier Level

100

60

30

Flights*

7575,000100,000Platinum

5050,00050,000Gold

3025,00025,000Silver

Flights*MilesMiles

Reward Rules

Management



*Only flights operated by World Airways count towards tier qualification flights

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© SAP 2007 /

Reward Rule ManagementExamples – Airline Offers #1 – A new segment promotion

Reward Rules

Management





© SAP 2007 /

Reward Rule ManagementExamples – Airline Offers #2 – A frequency reward offer

Reward Rules

Management





© SAP 2007 /

Reward Rules

Management

Reward Rule ManagementFeatures



Design rules to encourage recurring member participation and interaction

Schedule rules to execute on a periodic basis to reward recurring activity

Rule Scheduling

Sponsor program offers with program partners

Generate additional revenue by selling points to partners

Partner Sponsorship

Integrated marketing campaign execution

Segmentation based on loyalty specific member attributes

Target members with customized offers

Campaign Integration

Maintain commonly administered rules using pre-defined templates Model complex rules using rule builder and formula editor

Template & Expert-modemaintenance

Feature Benefits

Robust Rule Modeling Efficiently manage program rules

Design and model rules using Rule Builder

Version Management Ensure error-free deployment by simulating rules before releasing

Maintain multiple versions for different time periods



© SAP 2007 /

Membership

Handling

Membership HandlingFeatures

A flexible membership model with robust point management, tier management,and card handling capabilities across multiple channels

Robust point account management to track point balances as well asindividual transactions

Supports earning, redemption, expiration, transfer/donate processes

Point Account Management

Maintain membership profile in web channel and interaction center Member Profile Maintenance

Track member participation in loyalty program in a single view

Process member activities against program rules to determine rewards

Member Activities

Track member tier history Manual as well as automated tier transitions


Feature Benefits

Membership Types &

Registration

Flexible membership models for individual and group memberships

Fully integrated with standard Business Partner

Registration via various channels, and fast entry via Response Recording

Basic Membership Card

Handling

Basic card handling capability to track membership cards

Data linkage for integration with external card service provider



© SAP 2007 /

Membership HandlingMembership Types

Member: An Individual Account registered to a loyalty program through a membership

LoyaltyProgram

Membership

Personal Membership Shared Account Membership Group Membership

LoyaltyProgram

Membership

LoyaltyProgram

Membership

LoyaltyProgram

Membership

SharedOwnedOwnedTier Levels

FamilyFamilyIndividualExample

SharedOwnedOwnedQualifying Points

SharedSharedOwnedRedeemable Points

Many/MembershipOne/MembershipOne/MembershipMembers



© SAP 2007 /

Processing

Engine

Processing EngineFeatures

A highly scalable component to process high volumes of member activities andtier transitions against the program rules

Point Expiration based on inactivity period or point validityPoint Expiration Processing

Member tier processing for potential changes against program rulesTier Evaluation Processing

Processing of high volume of member activities in batch job

Report for importing member activities from external applications

Batch Member Activity

Processing

Processing of member activities from CRM Web Client or InteractionCenter Online Member ActivityProcessing

Feature Benefits

Scalable Engine Component New component for processing member activities against program rules

Simulation of Rule

Processing

Supports simulation of reward rule processing before releasing intoproduction



© SAP 2007 /

CRM IntegrationFeatures

Register and manage membership

Campaign self-registration

Earn, redeem, and buy points

Web Channel Integration

API to access loyalty data for integration with external applicationsLoyalty API Connectivity

Register and manage membership Campaign self-registration

Earn, redeem, and buy points

Transfer and Donate points

IC Integration

Feature Benefits

CRM Sales Order Integration Earn, redeem, and buy points using standard CRM Sales order

Enabled across web channel and interaction center





Program

Management

Membership

Handling

Processing

Engine

Reward Rules

Management




© SAP 2007 /

Loyalty Management in CRM 7.07 Key Points to Take Home

Highly functional loyalty management solution

Configurable for different program strategies

Applicable across multiple industries

Easy-to-use, robust rule modeling capability

Multi-channel enabled

Integrated in CRM

Designed and optimized from the ground-up for mass processing



© SAP 2007 /

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