1 05 Loyalty Cards.ppt Market and Customer Management - Customer Loyalty 4. Cards Frequently asked questions: qWhat’s the difference between a magnetic stripe card and a smart card if it is used as a loyalty card? qWhat different cards are available in the telecommunication industries? qHow can this cards be used as an added value for loyalty cards?   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 Loyalty Cards.ppt Market and Customer Management - Customer Loyalty All customer data are stored centrally incl. the point account All data are stored in a central IT system Online transfer POS terminal Loyalty card All data relevant for customer loyalty are stored in the central IT System Offline transfer POS terminal Point account is on the chip itself ______________________________ ______________________________ offline transfer Magnetic Stripe CardSmart Card The relevant customer information is stored in a central IT-System Data relevant for customer loyalty is stored in the POS terminal and per upload transferred to the central IT- System The identification of the customer is made offline with a barcode or magnetic stripe. The PIN is stored on the chip of the card The point account is managed from the chip of the card The customer data are managed online from a central IT-System. The identification of the customer is made online via the magnetic stripe on the card (and PIN if necessary) The account information (point account, etc.) is stored on the central server and transferred online to the POS The difference between a loyalty card with magnetic stripe and a loyalty smart card 4. Cards

3 05 Loyalty Cards.ppt Market and Customer Management - Customer Loyalty Possible combination of loyalty cards with cards in the telecommunication industry 4. Cards A good loyalty card provides added value and should not just be a white plastic card with the name and account number on it (e.g. in combination with other cards like credit or debit cards) The following table shows the available cards in the telecommunication industry that can be used in combination with a loyalty card A good loyalty card provides added value Possible combination of a loyalty card with other cards in the telco industry

4 05 Loyalty Cards.ppt Market and Customer Management - Customer Loyalty Approach In order to reduce administrative costs and to offering greater convenience to the consumer by streamlining reservation, check-in and boarding procedures as Lufthansa offers to their Frequent Traveller and Senator Card holders over their affiliate Lufthansa Airplus following card options: ETIX: Electronic check-in and seat reservation, for this the card is equipped with a contact less chip. Credit card: Processed by Airplus (separate cards for VISA and Euro/Mastercard), for this purpose the cards are equipped with a magnetic stripe. Telephone card: With these cards customers can use credit card phone boxes worldwide. In Germany, card holders can use more than phone boxes of Deutsche Telekom enabled by an additional contact chip. Further more these cards can be equipped with a calling card function provided by Executive TeleCard which requires no hardware. All calls and the basic fee are charged to the credit card bill. The latter two were introduced in order to increase user acceptance by making the card multifunctional. Therefore Lufthansa adopted a hybrid card (dedicated technologies for each function, see above). The entire card processing is being conducted by Airplus (a company specialised on credit cards in the air travel industry). Results Lufthansa surveys indicate general satisfaction with the pilot smart-card project. Customers were least impressed with the multi functionality associated with the card‘s different features. Successfully implementing a multifunction card has been a problem for several proposed cards schemes. Lufthansa avoided the majority of these problems by using a hybrid card approach. Finally, the scheme can be evaluated as a success, even though the implementation is relatively unambitious technologically (as opposed to a integrated card approach). An other example - Lufthansa Frequent Traveller Card Source: Price Waterhouse, Gartner Group, Jan Cards