This presentation was delivered at the Luxury CRM Association breakfast September 2013 - Achieving Premier Status with Your Loyalty Strategy

1. FRONT ROW: ACHIEVING
PREMIER STATUS WITH
YOUR LOYALTY STRATEGY
SEPTEMBER 19, 2013
LUXURY INSTITUTE BREAKFAST

2. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
LoyaltyOne is part of Alliance Data Systems (NYSE:ADS), an $8.7 B
market cap company with global operating experience
Integrated credit and marketing
solutions that drive sales for
our retail partners.
Multi-channel marketing services
including data, database, digital
marketing and agency services.
Global leader in the design and
management of customer centric
solutions.
Retail Services

3. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
• Highly favorable
preference for your brand
• Heightened anticipation
and interest in new products
& services
• Forgiving when things don’t
go exactly right
• Evangelizing good
experiences with friends and
even complete strangers
3
“I’ve learned that
people will forget what you said,
and did, but people will never
forget how you made them feel.”
- Maya Angelou

4. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
Number of Total
U.S. Loyalty Program
Memberships

5. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
% of Active U.S. Loyalty Program Memberships
Source: 2011 COLLOQUY WOM Study and Loyalty Census: 2.089 billion program memberships;
U.S. Census data from the 2009 American Community Survey = 113.616 million U.S. Households
*Among household with income of $150,000+ (Luxury Institute 2013)
Loyalty Program Penetration
-- 76% of Total US Households
-- 72% of Wealthy Consumers*
-- 93% HH > $125K Income
Loyalty Program Usage
-- Enrolled in avg. of 21.9 programs
-- But only active in 9.5

6. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
Travel Specialty Retail Department
Stores
Wholesalers Financial Services Grocery/Drug
26.2%
28.5%
36.8% 36.9%
41.2%
42.5%
I am happy with the value I get from the program.
The degree to which respondents agreed to the statement on a 0-10 scale
with 10 being strongly agree; represents the percentage of respondents that
responded with a 9 or 10 (Top 2 Box).

7. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
• High expectations of elevated service levels,
particularly among top tier members
• Motivated by compelling soft benefits, most
notably preferential treatment and insider
access
• Feel entitled to and respond very favorably to
meaningful hard rewards (particularly among
$150,000 - $1,000,0000 HHI)

8. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.

9. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
9
Exploration of Multi-Tender Programs Attainability of Rewards / Status
• Reduced time-to-reward / value
• Deliver value in 3 visits or 30-60
days
• Time-to-reward of 3-6 months
(retail)
• Lower tier / status thresholds
• Engage high potential customers
• Grow scan rates (40%-80%)
• Drive PLCC / co-brand acquisition

10. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
10
Specialty Retail Travel Grocery/Drug Department
Stores
Wholesalers Financial
Services
17.0% 17.5%
20.9% 22.5%
25.4%
26.4%
38.6% 37.2%
51.4%
48.5% 49.1% 48.0%
I am happy with the value I get from the program.
No - Did Not Receive a Reward Yes - Received a Reward
Reward redeemers are 2-2.5x more likely to rate their happiness
with the program as “high”

11. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
Unique Program
Structures
Greater Incorporation of
Experiential Benefits
Connecting with Non-
Transactional Behaviors
• Beyond points and “spend & get”
• Simplification
• Fungible currency
• Payment vehicle
• Personalized experiences
• Preferential treatment
• Pain point elimination
• Beyond the moment of purchase
• Engagement & healthy behaviors
• Cause and common purpose

12. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
12
Sharing &
Social
Shopping
Enhanced
Consumer
Experience
Facilitating social interaction as part
of the shopping and/or program
experience
Using mobile and social to enhance
the shopping experience and
program engagement

13. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
Promotion optimization
 Data-driven promotional rules to drive the right
category and customer behaviors
 Optimize marketing mix by customer segment
Price optimization
 Pricing strategy and prices based on
importance and elasticity to priority customers
 Customer-driven zones and KVCs/KVIs
Assortment optimization
 Right products to maximize sales/profit based on
true item value & importance for priority
customers (localized)
 Innovation to meet customer needs
Business category & customer strategy
 Alignment of priorities
 Segmentation, Insights & Strategy
 Customer Engagement Plan
Business
& customer
strategy
Promotion
Assortment Optimization
Price
4
3
2
1
Targeted Marketing:
 360°Customer Insights
 Prioritize Customers/Segments
 Customer Engagement Strategy/Marketing Plan
 Execute & Measure Across Channels
2
4
3
5
1
Integrated Solutions Platform
5
Org. Alignment, Change Mgmt. & Tools

14. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.
• There is power in a balanced value proposition (meaningful
hard rewards + compelling soft benefits)
• Demonstrate value early in the relationship and evaluate your
benefit attainability
• Think beyond traditional structures and benefits to meet
your customer needs and to amplify your brand
• Aggressively explore opportunities to truly impact the customer
experience through Mobile and Social integration
• Unleash and infuse the power of your data throughout your
organization … with prioritization and patience

15. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.

16. All information contained herein is confidential and/or proprietary information of LoyaltyOne, Inc. and any unauthorized use and/or any disclosure is strictly prohibited.