Customer Loyalty St. 6  Objective: Students will Evaluate, Develop, & Measure customer loyalty & Satisfaction

Customer Loyalty  Faithful to a cause, ideal, custom, institution or product.  Unswerving allegiance to specific brands or products.  Having the nerve or courage to stand behind a product, brand, or service in both good times and bad.

What do Loyalty Programs do?  Provide a competitive advantage  Are a “hook” to keep customers coming back  Identify most profitable customers  Positively alter purchasing behavior  Help lead to more profitable customers

Why do business’s need to have a loyalty program?  Build awareness  Build brand equity  Build customer approval  Build customer appreciation  Build a competitive advantage  Build a greater knowledge or products/services

Why should a company embrace loyalty programs?  Customer has an incentive to be loyal.  Customer buys from you.  Company receives more business than before.  Customer receives their reward.

10 Popular & Highly Successful loyalty programs across a variety of industries.  1. CVS/pharmacy ExtraCare  2. Southwest Rapid Rewards  3. Dick’s Sporting Goods ScoreCard  4. American Express Membership Rewards  5. Saks Fifth Avenue SAKSFIRST  6. Kroger Plus  7. Barnes & Noble Member Program  8. Speedway SuperAmerica Speedy Rewards  9. T.G.I. Fridays Give Me More Stripes  10. Marriott Rewards

Quick Loyalty Test  List 10 products or brands you’re most loyal to. (example list on next slide)  Make your own list of the 10 products you are most loyal to.

Quick Loyalty Test  This simple exercise can define the essence of the products & brands you are most loyal to. It defines the person you are as a consumer & most likely represents the ten products or brands you obviously think of first and most often.

Top 10  1. Miami Dolphins  2. iPhone  3. Nike  4. Starbucks  5. New York Yankees  6. Zappos.com  7. Titleist  8. Tom’s Shoes  9. Nordstrom  10. Entrepreneur Magazine

The Loyalty Cycle  1. Identify Customers  2. Track Spending  3. Motivate Behavior  4. Reward Performance  5. Measure Results

Loyalty Cycle – Step 1 Identify Customers  Initiate a process to identify your customers and assign a unique identifier to each (i.e., loyalty card, payment instrument, addresses, etc).

Step 2 – Track Spending  Once an identifier is in place, you now have the means to track spending.

Step 3 – Motivate Behavior  Identifying your customers and tracking their spending provide an ideal platform for motivating customer behavior. After compiling a minimum of two to three months of data, you can start to analyze the data, market directly to your loyal customers, and aim to change their purchasing behavior.

Step 4 – Reward Performance  People like to be rewarded for their performance. If the reward has a high perceived value, then your customer will more likely take action.

Step 5 – Measure Results  Loyalty programs evolve based on the success of individual promotions and campaigns within your strategy. Once you can measure the results of each promotion, you can measure the success of your loyalty strategy.

My Starbucks Rewards  Membership is free for My Starbucks Rewards; however, in order to participate you have to purchase a gift card for $5 or more and register your Starbucks Card online.  3 levels of membership & members can earn 1 Star for every purchase made with the card. The more stars you earn, the greater the rewards.  0-4 Stars puts you at the Welcome Level.  Free drink on your birthday.  2 hours free Wi-Fi daily  5 Stars puts you at Green Level. Besides your free birthday drink, here’s what you get:  Free Birthday Drink  Add a syrup or swap in soy milk at no extra charge.  Free refills while you’re here  Buy a pound of beans & get a free tall drink.  30 Stars puts you at Gold Level.  Get all the Green Level Benefits  Free Drink for every 15 Stars  Your own personalized Gold Card  Special Member offers and coupons via .

Card Rewards Program Card Rewards Program  Customers earn 1 point for each $1 spent on SUBWAY restaurant menu items. The points can then be redeemed for free menu items.  10 points = 1 Cookie  15 points = 1 Bag of Chips  20 points = 21 oz. Drink  50 points = Regular 6” Sub  75 points = Regular Foot long Sub

Dick’s Sporting Goods Dick’s Sporting Goods  Free Membership  Rewards Certificate for every 300 points  Product Previews  Periodic Friends and Family Discounts  ScoreCard Rewards Insider News  Members-Only Savings Events  Scorecard Rewards Hotline at

 Use points for any seat, any time – no blackout dates.  6 points for every $1 spent.  Points don’t expire  JetBlue continues to thrive in providing excellent customer loyalty. In addition to providing everyday perks such as additional legroom, satellite television for every seat, and more snacks & no blackout dates.

Zappos  Customer Interaction has been the ultimate marketing took since Zappos began.  75% of business is repeat customers.  Zappos goes the extra mile by sending handwritten thank you cards to customers, sending flowers or “WoW” package (book, stickers, zappo items).  Use Twitter to reach customers who may not ever call in. Also use Facebook & a Zappos blog that allows customers & employees to post comments.  If you are hired to work for Zappos you go through a 4 week training session and then spend a week in the Kentucky fulfillment center to understand the shipping process. When the training period is over, new hires are paid for the time they trained, plus they receive a $2000 bonus to quit. Why? The company feels it is less expensive to pay a new employee to quit early on if they don’t have the passion to be long-term.

Reward Options  Points  Instant Discounts, Rebates, or Promotional Codes  Cash Back  Gift Cards  Partner Gift Cards  Travel Vouchers  Frequency Programs  Redemption Catalog

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