Market and Customer Management Customer Loyalty External Areas

Market and Customer Management - Customer Loyalty External Areas Internal Areas Overview of the Evaluate Stage for Loyalty Programmes (1/3) Area 1 Area 3 Existing Loyalty Programmes Area 6 Area 2 Area 4 Area 5 Area 7 The evaluate stage for loyalty programmes is based on an assessment of the current situation n An assessment of the current situation concerning customer loyalty has to be done before designing new programmes or changing existing loyalty schemes. This assessment empowers the company to find out about the areas with the highest need for improvement and the case for change. The assessment has internal and external areas to look at n The loyalty assessment starts with an analysis of the current market structure. Porter defines the five forces in the industry, which affect the development of an industry. Based on the industry structure, a detailed analysis of the customers behaviour and their (future) needs are necessary to find out the level of importance of loyalty programmes in the mind of the customers. n Based on that external view, an internal assessment of the company and its products helps identifying the business case for loyalty programmes. It also includes an analysis of the distribution structure and the current positioning of the company to their customer segments. The assessment approach is slightly different, when a company already has loyalty programmes n When a company already has specific loyalty programmes, the approach is slightly different. In addition to the areas above, several other areas must be taken into consideration; the current programme structure, the offerings, the loyalty organisation, the IT environment, the financial aspects and the communication of the programme. 03 Introduction. ppt 11

External Areas Internal Areas Overview of the Evaluate Stage for Loyalty Programmes (2/3) Internal Areas Existing Loyalty Programmes Area 1: Market and Competition Area 2: Customer behaviour / needs • • • Industry figures Change driver Barriers of entry/ exit Rivality and competitive forces Area 4 Area 6 Customer figures Customer segmentation Customer buying behaviour Customer needs Future trends Area 3: Company figures Area 4: Products and channels Area 5: Marketing strategy / positioning • Overall figures • Financial figures • Loyalty specific figures • Product lines • Customer touchpoints • Service business • • Target groups Positioning strategy Loyalty awareness Future issues Area 6: Loyalty strategy/ organisation Area 7: Existing loyalty programme. . . • • • Objectives and target groups • Offering/ programme structure • Cost and benefit Loyalty strategy Loyalty structure/ organisation Loyalty and finance Loyalty and IT Loyalty and communication Area 3 Existing Loyalty Programmes Area 2 03 Introduction. ppt Area 5 Area 7 Approach, when a company already has existing programmes External Areas Area 1 Approach, when there are no existing loyalty programmes Market and Customer Management - Customer Loyalty 22

Market and Customer Management - Customer Loyalty External Areas Internal Areas Overview of the Evaluate Stage for Loyalty Programmes (3/3) Area 1 Area 3 Existing Loyalty Programmes Area 6 Area 2 Area 4 Area 5 Area 7 The assessment can be done by interviews or workshops with members of the executive board n The assessment of the current situation concerning loyalty can be done by interviews or workshops with members of the executive board. In addition, a detailed understanding of the industry and the buying behaviour is crucial for success. n Interviews with customers can also be very powerful, when analyzing the current loyalty situation. These pre-tests can be done before envisioning the programme and built the basis for the future offering. One has to count between 2 -4 weeks when conducting the assessment seriously n There is no exact time frame conducting the assessment. Nevertheless it takes 2 -4 weeks for a detailed analysis of the current situation and for developing a change plan. n During this time, it‘s very important to have a direct contact with several company employees as well as with customers of the company. In addition, the company has to secure a lot of important performance measures, which provide an insight about the performance of the future loyalty programme. 03 Introduction. ppt 33

Market and Customer Management - Customer Loyalty External Areas Internal Areas Area 1 Area 3 Existing Loyalty Programmes Conclusions and Change Plan Area 6 Area 2 Area 4 Area 5 Area 7 Possible conclusions out of the assessment n The results of the assessment offers several answers to the following questions: n Is there a need/ case for a new/ renewed loyalty programme? n How will the market and customers respond to loyalty programmes? n What is the level of knowledge and awareness for loyalty programmes? n What are the most important areas for customer loyalty programme? n How good are loyalty programmes structured today and what might be levels for improvement? One key result out of the assessment is a change plan for the envisioning stage n The assessment of the current situation enables the structuring of the next activities. A change plan for a new or redesigned customer loyalty project might cover the following topics: n Loyalty strategy, segmentation, targeting and positioning n Loyalty structure, organisation and processes n Loyalty programmes and offerings n Financial calculations and estimations of costs and benefits n Loyalty IT environment (including data warehouse, campaign management and loyalty software developments) n Loyalty communication, fulfillment, internet involvement and cards n An example of a project plan designing a new loyalty programme (point collection and redemption programme) is listed in a separate MS Project File. 03 Introduction. ppt 44