BUILDING THE BUSINESS CASE FOR A LOYALTY PROGRAMME

AUGUST 2015

5 WAYS TO MAXIMISE SALES BY REWARDING ENGAGEMENT THIS CHRISTMAS

25 WAYS TO MAXIMISE SALES BY REWARDING ENGAGEMENT THIS CHRISTMAS

We all know that the holidays and peak shopping periods are some of the most opportune revenue generating times of the year. Shoppers are out in force to spend their hard earned cash on gifts for friends or loved ones. That exchange is often sweetened when they can earn rewards for buying those heartfelt gifts and be a reason for choosing to spend with one retailer over another.

Loyalty programme members are worth two to five times more than non-members; meaning that having a solid rewards programme in place in time for the peak sales period can give you that competitive advantage at the time when it will be of great benefit – both to your customers and your business.

Whether it is increasing footfall to capture a greater share of the shopping basket during peak times or targeting members with incentives and offers pre and post the holiday season, this is an optimal time to enhance your commercial performance and drive loyalty and devotion with your customers.

Double the value of your loyal customers this holiday period

35 WAYS TO MAXIMISE SALES BY REWARDING ENGAGEMENT THIS CHRISTMAS

Be different!A rewards programme and the associated loyalty initiatives can make you stand out over and above your competition – especially during peak shopping periods in a very busy marketplace. The sooner you have one, the better your opportunity is to maximise revenues when the shoppers come in this key sales period.

What is the business opportunity for a loyalty programme?

• Maximise sales during peak shopping periods – Singapore’s

GDP was worth USD$308bn in 20141, with the retail

industry accounting for about 7% of that, at approximately

USD$20bn2

• Get customers to buy from you - with a huge 92% of

consumers3 belonging to at least one retail programme

and 84% more likely to visit the website of a retailer

with a loyalty programme

• Encourage switching behaviour - 91% of shoppers4 would

switch brands to one offering a promotion or reward

• Differentiate your brand - 70% of retailers3 surveyed

had no loyalty programme in 2013 and only 34% were

planning on running one.

Turn customers into engaged and loyal members

• Leverage an increased footfall by targeting programme

members with exclusive offers and positive experience

enhancements that further drive sales and increase

customer spend; bonus time gift periods, member

shopping evenings and double point days

• Look at sweetening the rewards during the festive

period to further entice loyal shoppers. Companies like

Fraser Shopping Malls allow shoppers to earn double

points during the festive season5

• 35% of shoppers6 who made use of loyalty programmes

will optimize their point earning opportunity, waiting

for double- or triple-point days to purchase gifts

• One in five shoppers reported adjusting gift ideas based

on which products offered significant discounts or

bonus rewards.

Sweeten the rewards during the festive period to further entice loyal shoppers.

1

Shoppers would switch brands for a promotion or reward

91%

OFFER

Shoppers wait for extra point days before purchasing

35%

45 WAYS TO MAXIMISE SALES BY REWARDING ENGAGEMENT THIS CHRISTMAS

Drive customer acquisitionThe opportunity to influence customer behaviour during the Christmas season and leverage peak shopping periods is huge in terms of acquiring new programme members and ultimately new loyal customers. Balance the incentive for sign up with the value you provide, so they don’t leave the programme or become a one-time purchaser. Giving them reasons to stay engaged – and buy from you again - is key.

Turn Christmas shoppers into repeat purchasers and loyal customers

• Acquire new customers - retailers can boost customer

acquisition up to 10% and market share up to 20%3 by

implementing a programme that rewards customers

for their purchases

• Understand your loyal customers - every guest

checkout during this peak time is a lost opportunity

to learn more about your customers. Leverage the

opportunity of increased traffic during high sales periods

with a simple and incentivised sign up process

• Reward customer engagement - use your loyalty

programme to reward customers who make a sale or

register an account. Giving bonus points will encourage

registrations and won’t reduce revenues like discounts can

• Secure more sales - half of Christmas shoppers use their

mobile devices to research gifts before purchasing

them in-store and six in 10 Christmas shoppers do some

showrooming7. Where prices are similar, the added value

of a reward programme could make you the retailer of

choice to capture that sale.

Retailers can boost customer acquisition up to 10% and market share up to 20% by implementing a programme.

Use your loyalty programme to reward customers who make a sale or register an account.

Motivate customer engagement

• There is a huge opportunity to influence customer

behaviour during the Christmas season, by engaging

with them in the run up to the peak shopping period. Use

targeted communication to learn more about what drives

their interaction and use this insight to further increase

engagement before the peak shopping period starts

• Continuing to track and analyse customer engagement

and purchase behaviour through their programme

membership provides additional insight and direction

on how to continue to maintain a relationship and

successfully market to them beyond the Christmas season.

2

Half of holiday shoppers use their mobile devices to research gifts before

purchasing them

1/2

55 WAYS TO MAXIMISE SALES BY REWARDING ENGAGEMENT THIS CHRISTMAS

Know your customerUse peak shopping periods to boost the intelligence you hold on your customers; build a story of them through their brand journey and optimise it to turn each individual customer from a number to a name. Turn any data you have into insight and identify the behaviours you want to motivate that will drive engagement and loyalty.

Gain more customer understanding through your programme

• Access personal information - shoppers who sign up

to a programme are more likely to give more personal

information;6 show a willingness to repeat purchase,

build trust and help establish a shared affinity and

longer term 2-way relationship

• Use rewards to understand more - research has shown

that consumers will share personal information in exchange

for tangible rewards8 whether that is loyalty points or

exclusive member discounts or bonuses

• Build comprehensive customer profiles - using an

interactive data capture strategy; starting with simple

email address sign up online or at point of sale matched

to a ‘take one’ card number, will allow customers to collect

and redeem points immediately further incentivising them

to complete their full profile to redeem

• Analyse behaviours and commercial performance -

research your customers’ loyalty drivers and their buying

behaviours and build your programme design and metrics

around these.

Consumers will share personal information in exchange for tangible rewards.

Using insight to motivate sales

• Understand who your customer segments are, not just

the top 20%. The behaviours and personality of the other

80% can give you vast amounts of attitudinal data and

behavioural analytics - use this to define strategies to

maximise engagement and sales with all segments

• Treat customers as individuals - savvy shoppers are

used to receiving a higher level of personalization; both

in your communications and programme offering. Your

programme will enable you to have the ability to serve the

right incentives, rewards and content at the right time in

the right place to the right shopper to increase sales.

3

Your programme will enable you to serve the right incentives, rewards and content at the right time to the right shopper

OFFER

65 WAYS TO MAXIMISE SALES BY REWARDING ENGAGEMENT THIS CHRISTMAS

Get the timing right…Whilst the key shopping times are obvious, the opportunity for strengthening customer relationships starts well in advance of those peak times. Implementing a loyalty platform doesn’t always need such planning or be as expensive or complex as you think and yet will provide a significant opportunity for building your customer base and increasing sales over this coming Christmas and peak shopping periods. Start investigating the possibility today.

Leverage busy shopping periods• Influence shopper behaviour - leverage the build up period

to motivate shopper behaviour, ideally using points to

create that ‘habit’ or learned behaviour of incentivisation

and gaining points way ahead of time

• Although with their favourite retailers, shoppers aren’t shy

of investing in gifts earlier in the year to benefit from the

best offers and rewards

• Maximise seasonal sales periods – loyalty programme data

means that you have specific insight into understanding

when your loyal members are likely to start their shopping

for key seasons, whether in store or online, meaning you

can put your messaging front of their mind in the run up to

the peak shopping periods

– Whilst 41% of consumers1 are keen early birds and start

their shopping before November, there are 39% who

shop in November, making it a peak shopping period.

However, 19.7% of consumers still do their shopping

right up until the end of December so there remains an

opportunity for retailers throughout the whole of Q4

– To kick start the peak shopping period, Robinsons hold

an annual gala night at the beginning of November,

exclusively for their OCBC Robinsons card members.

This gives them an evening of entertainment and parades

alongside their Christmas shopping, as well as product

demonstrations, makeup workshops and an exclusive

fashion show.9

Using points to create that ‘habit’ or learned behaviour of incentivisation.

Dates not to miss• The obvious peak days in and around Christmas

need no introduction, but the need to leverage and

achieve stand out is key, both in store and online, at these

somewhat frenzied shopping times!

– With differing levels of peak sales during Cyber Monday

and Black Friday, most Asian countries are expected

to see holiday shopping sales spikes in mid to late

December10

– In 2014, shoppers in Singapore spent more time shopping

during Chinese New Year and Christmas, than other

popular shopping periods. Footfall increased during New

Year weekend, and throughout, Saturday’s remained the

busiest shopping day, followed by Thursdays.11

To leverage and achieve stand out is key, both in store and online, at these somewhat frenzied shopping times!

4

41% of consumers are keen early birds and start their shopping before November

41%

The average order value of online sales on Black Friday increased YoY by 6.2% from 2013

6.2%

BLACK

FRIDAY

75 WAYS TO MAXIMISE SALES BY REWARDING ENGAGEMENT THIS CHRISTMAS

Beyond Christmas…Ramping up activity to make the most of the holiday period is important – but don’t let the planning, initiatives and success be JUST about the holidays. Drive initiatives forward into Q1 and beyond by ensuring you build a strong foundation for your customer relationships and an ongoing brand dialogue.

Put the foundations in place

• Drive ongoing customer commitment - any busy peak

shopping period can be a huge opportunity for retailers, not

just during the end of year holidays. Laying the foundations

to ensure your programme and loyalty initiatives are

successful during the holiday season can be challenging,

but getting this right can then mean reaping the benefits by

rolling out during other peak shopping periods

– In the US, retail spending is still a huge opportunity

during other softer holiday periods

• Encourage continuous customer activity – supplement

the rewards that your members have built up during the

holiday period with additional points offers with a limited

redemption date to encourage activity during slower

periods such as in January. Or allow members to purchase

overstock with their points, allowing you to clear items

that would act as a liability especially after the peak

shopping periods

Actively encouraging members to redeem as early as possible in the membership.

• Targeted tailored communications - use the data you

have about your customers and programme members

beyond the holiday season and ensure communications are

targeted and personalised, with content relevant to their

demographic and purchase behaviour. Regular newsletters

to your members with the status of their points earning or

tier and personalised offers work very effectively to engage

members and drive incremental spending

• Encourage redemption behaviour – by actively

encouraging members to redeem as early as possible in the

membership, our experience shows that this accelerates

further engagement and earning activity versus a member

who has not redeemed. What’s more, redemption

behaviour often results in additional spending beyond the

points that are available to redeem

– 18 to 24 year olds planning to use points or loyalty

rewards on gifts rose by more 40% last year12

– More than 60% of 35 to 44-year-olds plan to cash in

rewards points for gifts so many will continue to spend and

save their points and redeem them in the future

• Develop an end to end customer experience - it’s key to

maintain your customer relationships as soon as they walk

out of the store or click away from your website, regardless

of whether it is a busy shopping period or not. A continual

engagement programme will ensure your brand remains

top of mind as well as keeping the dialogue going.

A continual engagement programme will ensure your brand remains top of mind.

5

More than 60% of 35 to 44-year-olds plan to cash in rewards points for gifts

60%

Valentine’s Day – $17.3 billion Easter – $15.9 billion

Mother’s Day – $19.9 billion3

85 WAYS TO MAXIMISE SALES BY REWARDING ENGAGEMENT THIS CHRISTMAS

Plan and prepare well ahead of peak season to get the foundations in place

Leverage the footfall for key sales periods

Engage customers, before and during Christmas

Establish iterative data capture techniques – start simple and build your knowledge and their profile

Continue to engage the customer across their end-to end journey with your brand

Key takeaways

95 WAYS TO MAXIMISE SALES BY REWARDING ENGAGEMENT THIS CHRISTMAS

1. Today online: 11.2% rise in MasterCard spending during Great Singapore Sale, 2015

2. Channel NewsAsia: Retailers keeping expectations in check for Great Singapore Sale, 2015

3. Loyalty360: Five holiday retail customer loyalty lessons learned from back-to-school, November 2014

4. Singapore Business Review: 9 in 10 Singaporeans admit to biting loyalty schemes of retailers, 2013

5. Frasers Centrepoint Malls, 2014

6. eMarketer: How loyal are holiday gift givers? December 2014

7. Sweet Tooth: What your loyalty program needs to do this holiday season, October 2014

8. Epsilon: Is your loyalty program naughty or nice this holiday season? December 2014

9. Robinsons: Christam at Robinsons, 2014

10. Holiday Shopping Prediction Adobe Digital Index, 2014

11. adnear, Valentine’s weekend saw 18% heavy footfall on an average in top shopping destinations across South East Asia, 2015

12. IBM: Digital analytics benchmark hub – holiday benchmark data, January 2015

References

About ICLP

We drive customer devotion. We give your customers compelling reasons to engage, spend more and become loyal advocates - whilst delivering commercial results for your business.

As a worldwide leader in loyalty marketing and CRM, ICLP builds loyalty and creates devotion. From acquiring customers and understanding them as individuals, to creating relationships that engage, reward and inspire loyalty, we turn customers into advocates and relationships into profit

– and have done for over 25 years.

We have global experience in B2B and B2C loyalty marketing in multiple industry sectors including retail, travel, financial services and technology. Our expertise is underpinned by the skills and talents of over 600 talented colleagues who work across our 16 offices for clients in over 170 countries. With customer data at its heart, together we uncover insights, determine and deliver tailored experiences that create loyal customers and improve commercial performance.

ICLP is a Collinson Group company. Collinson Group is a global leader in influencing customer behaviour to drive revenue and add value for our clients.

With a unique blend of industry and sector specialists, the group develops and delivers market-leading products and services to help build, manage and optimise customer relationships across four core capabilities: Loyalty, Lifestyle Benefits, Insurance and Assistance.

© ICLP Worldwide 2015

A COLLINSON GROUP COMPANY

For more information on how we can help you, please contact Angela Tan on angela.tan@iclp.com.sg or +65 6416 6319.

iclployalty.com