Webinar The Forrester Wave™: Loyalty Program Service Providers, Q1 2012 Emily Murphy, Researcher Suresh Vittal, Vice President and Practice Leader February 29, 2012. Call in at 12:55 p.m. Eastern time

Agenda The customer loyalty landscape Introducing the Forrester Wave™ Vendor snapshots What’s next?

Two approaches to loyalty strategy Big “L” loyalty = implicit Little “l” loyalty = explicit

Vendors of all kinds crowd the loyalty ecosystem Source: April 18, 2011, “The Customer Loyalty Ecosystem” Forrester report

Four explicit loyalty vendor categories Full-service loyalty marketing providers Loyalty technology platforms Merchant networks Niche loyalty players

Loyalty programs service providers Build and manage loyalty programs. Loyalty program service providers offer a range of strategy, technology, and program management services. Program management services include but are not limited to campaign management, creative, fulfillment, and liability management.

Service providers support the entire loyalty value chain BRAND Strategy Program management Database management Creative Analytics Campaign management Points liability Customer service Fulfillment

Marketers have high expectations for loyalty service providers Technology and technical capabilities, strategic expertise, and customer insights are key requirements from a loyalty program service provider. Differing opinions about: Reputation, cultural fit, digital capabilities, and multichannel needs. Less tangible requirements are also expected. Integrated delivery, industry expertise, flexibility, proactive service, and project management

Marketers rely on multiple providers to support loyalty Source: Q4 2011 Global Loyalty Program Service Providers Forrester Wave™ Customer Online Survey

Most relationships last more than three years “How long have you been with your current loyalty program service provider?” Base: 94 vendor reference clients Source: Q4 2011 Global Loyalty Program Service Providers Forrester Wave™ Customer Online Survey

Driven by deep integrations Source: Q4 2011 Global Loyalty Program Service Providers Forrester Wave™ Customer Online Survey

Technical capabilities are key to selection Source: Q4 2011 Global Loyalty Program Service Providers Forrester Wave™ Customer Online Survey

Users are most satisfied with reputation and business understanding Base: Vendor reference clients Source: Q4 2011 Global Loyalty Program Service Providers Forrester Wave™ Customer Online Survey *Note: Because respondents were given the option of choosing “not applicable,” the number of respondents who selected each reply is shown.

Capabilities, strategy, and execution fall lower on the list Base: Vendor reference clients Source: Q4 2011 Global Loyalty Program Service Providers Forrester Wave™ Customer Online Survey *Note: Because respondents were given the option of choosing “not applicable,” the number of respondents who selected each reply is shown.

Vendors are flexible and reliable, but they don’t go above the call of duty Base: Vendor reference clients Source: Q4 2011 Global Loyalty Program Service Providers Forrester Wave™ Customer Online Survey *Note: Because respondents were given the option of choosing “not applicable,” the number of respondents who selected each reply is shown.

Seventeen percent of buyers are net promoters Source: Q4 2011 Global Loyalty Program Service Providers Forrester Wave™ Customer Online Survey

Agenda The customer loyalty landscape Introducing the Forrester Wave™ Vendor snapshots What’s next?

Product information and selection criteria Source: February 16, 2012, “The Forrester Wave™: Loyalty Program Service Providers, Q1 2012” Forrester report

How the Forrester Wave™ graphic works Risky Bets Contenders Leaders Strong Performers Current offering Weak Strong Market presence Full vendor participation Incomplete vendor participation Strategy Weak Strong

Forrester Wave™ evaluation methodology Vendor surveys Screener to qualify Forrester Wave questionnaire Vendor strategy day Executive meeting Technology platform overview and demo Customer reference calls Customer reference online survey

Criteria and scores Source: February 16, 2012, “The Forrester Wave™: Loyalty Program Service Providers, Q1 2012” Forrester report

Refer to the Forrester Wave™ model in MS Excel for details Source: February 16, 2012, “The Forrester Wave™: Loyalty Program Service Providers, Q1 2012” Forrester report

“The Forrester Wave™: Loyalty Program Service Providers, Q1 2012” Source: February 16, 2012, “The Forrester Wave™: Loyalty Program Service Providers, Q1 2012” Forrester report

Leverage the power of custom weightings Customize the weightings according to your individual needs. Source: February 16, 2012, “The Forrester Wave™: Loyalty Program Service Providers, Q1 2012” Forrester report

Compare custom scores to Forrester’s Customized weightings will yield a custom vendor shortlist. Source: February 16, 2012, “The Forrester Wave™: Loyalty Program Service Providers, Q1 2012” Forrester report

Agenda The customer loyalty landscape Introducing the Forrester Wave™ Vendor snapshots What’s next?

Aimia The largest provider we evaluated with 2,000 employees dedicated to loyalty worldwide. In 2011, Aimia underwent an enterprisewide rebranding. Aimia positions itself as a global provider of loyalty management services across three categories: coalition loyalty, proprietary loyalty (including both customer and business loyalty), and loyalty analytics. Focused on enhancing its technology and global loyalty businesses Takes a very strategic approach to loyalty program management that incorporates elements of Six Sigma Aimia excels in loyalty strategy but its technology and integration capabilities need to improve. Source: February 16, 2012, “The Forrester Wave™: Loyalty Program Service Providers, Q1 2012” Forrester report

Brierley + Partners Brierley+Partners was a privately held CRM, loyalty technology, and loyalty services company founded in 1985. Focused on delivering an end-to-end solution that spans strategy design, campaign management, analytics, research, financial modeling, fulfillment, creative, interactive, and eCommerce Brings strong capabilities across all evaluated categories Very strong company vision and road map that focus on enhancing real- time capabilities and applying customer intelligence across the enterprise Customer feedback was generally positive and clients commended B+P’s strategic contribution to their businesses.

Epsilon An Alliance Data Systems company, Epsilon provides a range of strategic consulting, marketing analytics, database, email and loyalty technology, data, and marketing services. The loyalty practice and technology are designed to draw on Epsilon’s other areas of digital and data expertise. Offers a good balance of strategy, technology, services, and analytics Positions itself as both data- and system-agnostic to support integration Epsilon manages some of the largest and most complex loyalty programs of the vendors evaluated. Client feedback was very positive and clients are particularly satisfied with Epsilon’s flexibility and strategic contribution to the business.

Kobie Marketing Privately held loyalty marketing company and the smallest provider we evaluated Offers strong strategy and analytics offerings but stands out for its technology, program management service delivery, and client feedback Earned highest overall rating for technology Across the board, Kobie received the highest client feedback scores. Clients offered unsolicited praise and are very satisfied with their technology, services, and account management. Experienced solid growth in 2011 Source: May 14, 2009, “The Forrester Wave™: UK Database Marketing Service Providers, Q2 2009” Forrester report

Maritz Offers loyalty marketing services through an outsourced services model In addition to loyalty program design and execution, Maritz offers market research and learning services through their other divisions. In the past three years Maritz has acquired three companies, including evolve24. The loyalty strategy and program management services are strong. The technology, integration, and analytic capabilities need improvement. The client feedback mirrored these strengths and limitations. Maritz’s road map is focused on improving its technology stack and increasing client capability for integration. Source: February 16, 2012, “The Forrester Wave™: Loyalty Program Service Providers, Q1 2012” Forrester report

Tibco Loyalty Lab Tibco Software acquired Loyalty Lab in 2010. Leads with technology and offers some strategy and program management services Offers a self-service, SaaS technology platform None of the clients we spoke with use Tibco Loyalty Lab in a full-service capacity. Client feedback was very positive regarding technology platform and the value it delivers. Clients commented on less than responsive account managers. Tibco Loyalty Lab is growing fast and has some bumps in service that it needs to iron out. Source: February 16, 2012, “The Forrester Wave™: Loyalty Program Service Providers, Q1 2012” Forrester report

Agenda The customer loyalty landscape Introducing the Forrester Wave™ Vendor snapshots What’s next?

What do the next 12 to 24 months look like for the industry? Continued focus on: Fast and flexible technology Integration Predictive analytics and intelligence Planned investments in: Self-service tools Expanding and emerging channels like social and mobile Real time

Prepare for the next leap forward Choosing the right vendor is your responsibility. Identify where you actually want support. Strategy services Flexible technology platforms Real-time integration Fulfillment and liability management Take the long view and match your firm’s vision to your vendor’s. Evaluate alignment in road maps. Press the vendor’s technology flexibility. Schedule an inquiry!

Selected Forrester research February 16, 2012, “The Forrester Wave™: Loyalty Program Service Providers, Q1 2012” February 21, 2012, “Loyalty Program Service Providers Struggle To Delight Their Customers”

Emily Murphy +1 617.613.6686 emurphy@forrester.com www.forrester.com Thank you Emily Murphy +1 617.613.6686 emurphy@forrester.com www.forrester.com Suresh Vittal +1 617.613.6097 svittal@forrester.com www.forrester.com