Market and Customer Management - Customer Loyalty 1 MANAGEMENT SUMMARY

2 Market and Customer Management - Customer Loyalty 01 Management Summary.ppt © MCM Switzerland Management Summary (1/5) Objectives of the PwC guide to customer loyalty The objective of the PwC Guide to Customer Loyalty is to help planning and designing new loyalty programmes or reviewing existing loyalty programmes with: A basic introduction to loyalty and its impact An assessment toolkit A structured approach how to envision a new programme Answers to frequently asked questions along a practical case of implementation Tools for financial planning, programme offering and call center capacity planning Benchmarks Citations Lots of ideas and examples The Guide is structured along four sections Overview Evaluate stage Envision stage A practical case of implementation

3 Market and Customer Management - Customer Loyalty 01 Management Summary.ppt © MCM Switzerland 6Area Management Summary (2/5) The PwC Guide to Customer Loyalty is structured along four sections and follows the steps of a typical change integration project Overview  Introduction  Change Drivers  Loyalty & Relationship Marketing  Basic Principles  Possible Loyalty Programmes  Pros and Cons  Customer Perception  Benchmarks  Citation Envision External Areas Internal Areas Existing Loyalty Programmes Evaluate  Project Plans  Call Center Capacity Simulator  Offering Simulator  Financial Business Plan Simulator  Target Group Simulator Tools A practical case of implementation Goals Targeting Customer Behaviour Positioning Programme structure Costs and Benefits Communication Assessment of the current environment in seven main areas Envisioning of a loyalty programme with the seven layer pyramid 7Area

4 Market and Customer Management - Customer Loyalty 01 Management Summary.ppt © MCM Switzerland Management Summary (3/5) In the EVALUATE stage, a loyalty assessment, helps identifying the most important issues The loyalty assessment empowers the company to find out the areas with the highest need for improvement. This assessment of the current situation has to be done before designing a new programme or changing an existing loyalty scheme. The loyalty assessment starts with an analysis of the current market structure. Based on that, the customers’ behaviour and their (future) needs are analysed. An internal assessment of the company and its products helps identifying possible loyalty programmes. External Areas Internal Areas Existing Loyalty Programmes Area 1: Market and Competition Area 1: Market and Competition Area 2: Customer behavior / needs Area 2: Customer behavior / needs Area 3: Company figures Area 3: Company figures Area 4: Products and channels Area 4: Products and channels Area 5: Marketing strategy / positioning Area 5: Marketing strategy / positioning Area 6: Loyalty strategy/ Organisation Area 6: Loyalty strategy/ Organisation Area 7: Existing loyalty programme... Area 7: Existing loyalty programme... Approach, when a company already has existing programmes Approach, when there are no existing loyalty programmes

5 Market and Customer Management - Customer Loyalty 01 Management Summary.ppt © MCM Switzerland Management Summary (4/5) The ENVISION stage is based on the seven layers of the loyalty pyramid Based on a definition of the objectives of loyalty programmes, the envisioning questions for a new or changed programme need to be identified. The envisioning is based on a customer focus. The loyalty programme will then be positioned in the mindset of the target customers. Out of these positioning, the programme will become concrete according to the offers and the cost benefit structure. The communication of the programme builds the last envisioning part. The whole envisioning process is supported by several tools, which can be used for specific questions: Target Group Simulator analyses different customer product and service portfolios in a loyalty programme towards possible target customer groups. Offering Simulator shows the impact of a changed offering in a loyalty programme on cost. Business Plan Simulator for calculating the costs, benefits, net present values as well as the payback period of a loyalty programme. Customer Behaviour Tar-geting Positioning Programme structure & offers Cost and benefit structure Communicating the Loyalty programme Loyalty programme objectives Source: Price Waterhouse 1998

6 Market and Customer Management - Customer Loyalty 01 Management Summary.ppt © MCM Switzerland Management Summary (5/5) A practical case of implementation gives answers to the most important questions during the set up of a loyalty programme The Practical case is based on a loyalty programme for the retail market in the telecommunication industry. It gives concrete answers to the most important questions and provides tools and techniques, which supported the design of the loyalty programme.  A project plan for loyalty projects  Call centre capacity simulator  Target group simulator  Point collection simulator  Financial business plan simulator Supporting Tools 1 Offering 1 Offering 7 Finance 7 Finance 2 Processes 2 Processes 8 Communication 8 Communication 3 Call Centre 3 Call Centre 5 Information Technology 5 Information Technology 4 Cards 4 Cards …/ Club Card ANNE S. MARTY Key areas of the programme Key areas of the programme 6 Structure 6 Structure