1 05 IT.ppt Market and Customer Management - Customer Loyalty 5. Loyalty and Information Technology Frequently asked questions: qWhat is a customer loyalty system (CLS)? qWhat are the different customer loyalty tools available in the market? qHow do the current IT environment and the CLS fit together; is it possible to integrate these two systems? qWhat are possible vendors of CLS-Software? qHow should a CLS-System be linked with a corporate IT environment? qWhat is the relation between loyalty systems and campaign management?   1 Offering 1 Offering 7 Finance 7 Finance 2 Processes 2 Processes 8 Communi- cation 8 Communi- cation 3 Call Center 3 Call Center 5 Information Technology 5 Information Technology 4 Cards 4 Cards Key topics of the programme Key topics of the programme 6 Structure 6 Structure

2 05 IT.ppt Market and Customer Management - Customer Loyalty For the administration of the loyalty programme, a customer loyalty system (CLS) is required. The CLS needs to be integrated with the operational systems of the company For each customer retention programme three main systems should be taken into consideration: A data warehouse, a campaign management system and a customer loyalty system. Customer Loyalty System (CLS) Customer Loyalty System (CLS) xy xx yy Partner- systems Fulfillment- Center The Customer Loyalty System (CLS) administers the bonus points (collection and redemption) and the members. The call center and the back office agents are working mainly with this operational system. The Data Warehouse (DWH) is collecting the data out of the different operational systems and provides this data in the required format to the Customer Loyalty System. A Campaign Management System provides a database marketing environment and enables the company to get the customer information. Data Warehouse (DWH) Data Warehouse (DWH) Campaign Manage- ment System Campaign Manage- ment System 5. Loyalty and Information Technology User: Club management and marketing User: Club management and marketing User: Marketing and communication User: Marketing and communication User: Call center and back office User: Call center and back office

3 05 IT.ppt Market and Customer Management - Customer Loyalty There are several suppliers of customer loyalty systems (1/2) 5. Loyalty and Information Technology

4 05 IT.ppt Market and Customer Management - Customer Loyalty There are several suppliers of customer loyalty systems (2/2) 5. Loyalty and Information Technology

5 05 IT.ppt Market and Customer Management - Customer Loyalty Customer data and information A loyalty programm enables the company to get new information about the customer behaviour Customer information systems can be seen in three generations The following information categories can be distinguished when launching a loyalty programme: Basic information about the customer (eg. age, profession) Potential information about the customer (eg. customer satisfaction) Action information about the customer (eg. contacts, activities) Reaction information from the customer (eg. response; usage) 5. Loyalty and Information Technology

6 05 IT.ppt Market and Customer Management - Customer Loyalty A Data Warehouse environment is also essential to getting the information needed A Data Warehouse links the existing operational systems to into one database Best practice companies feed their transactional data into a data warehouse and use different tools and instruments for analyzing the data. The position of a data warehouse is showed below. 5. Loyalty and Information Technology SALES ETC. MARKET. Data Warehouse Quality Assurance Process Metadata Source Data Transformations EIS Query Customers Locations EXTERNAL DATA Data Integration and Cleansing Process e.g. Validity Operations OLTP Financial Systems Campaign Management Design… Select... Segment... Execute... Score... MARKET. Source: Price Waterhouse

7 05 IT.ppt Market and Customer Management - Customer Loyalty A Data Warehouse environment is also essential to getting the information needed The Data Warehouse uses customer information in an closed loop. The usage of customer information in a closed loop enables the company to improve their target marketing on an ongoing basis. Data warehouse, campaign management and customer loyalty systems play an important role in that. Segmentation & Targeting Create Offer Service Offer Measure Results Mine Data Fulfill Offer Provide Customer Service Refine Offer Optimise return on data enhancement and prospecting Capture customer and transaction data Integrate new Media Fulfill on a one to one basis Manage Inbound and Outbound Telemarketing activities Analyse data to reveal Segmentation and Targeting Opportunities Derive customer profitability & LTV, & report on marketing effectiveness Record Customer Contact Manage integrated customer database Data Warehouse 5. Loyalty and Information Technology Source: Price Waterhouse Communicate Offer

8 05 IT.ppt Market and Customer Management - Customer Loyalty A Campaign Management Tool supports a company in building up their database marketing capabilities. What is a campaign management tool A campaign management tool enables the coordination and tracking of several marketing campaigns (eg. mailing to 100’000 customers) concerning the response and the following activities for the contacted customers. A campaign consists normally of several activities and focuses on a clearly defined customer segment. The future activities for a customer in a campaign often depend from the past responses of this customer. A database support therefore is very important. Typical functionalities of a campaign management tool: Design campaign Select campaign universe Target segments Execute Measure and record Iterate 5. Loyalty and Information Technology Source: DWH Issue campaign management or leading process

9 05 IT.ppt Market and Customer Management - Customer Loyalty With a clearly structured campaign management process it is possible to properly coordinate different campaigns and to set priorities Example of a campaign management process For a campaign concept (planning and co-ordination of different campaigns) a campaign management process is needed. The campaign concept builds the basis to position the different campaigns, to set priorities and to assign budgets. 5. Loyalty and Information Technology Campaign Management Process Evaluate overall campaign Evaluate overall campaign Evaluate feedback Evaluate feedback Collect feedback Collect feedback Run campaign Run campaign Detailed planning Detailed planning Provide concept to board Provide concept to board Set targets and target groups Set targets and target groups Collect ideas and inputs Collect ideas and inputs Set priorities