The 5 c's of loyalty strategy

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THE 5 C’S OF
LOYALTY
STRATEGY
By Caroline Cannon | May 2020

THE EVOLVING
LOYALTY
LANDSCAPE

3 © 2020 Epsilon Data Management, LLC. All rights reserved. Proprietary and confidential.
Increasing customer expectations
Advancement in the “tech of
tomorrow”
Global disruption and uncertainty
Significance of data and privacyRise in social engagement
BRANDS ARE FACING
NEW WORLD CHALLENGES
Importance of hyper-
personalisation

COMMUNICATING
WITH YOUR
MEMBERS IS NOW
MORE IMPORTANT
THAN EVER

RELEVANCE,
TRANSPARENCY
& AUTHENTICITY
ARE CRITICAL

LOYALTY IS
ABOUT PEOPLE
LOYALTY IS
MORE THAN POINTS

1:1 1:YOU
DELIVER PERSONALISED
HUMAN EXPERIENCES
THAT MATTER

FOCUS ON YOUR
LOYALTY VALUE
PROPOSITION

UTILISE A FRAMEWORK SUCH AS EPSILON’S
LOYALTY EVALUATION AND DESIGN (LEAD)
PROCESS
EVALUATION DESIGN/PLAN PILOT/LAUNCHDISCOVERY
What makes this process so unique is it infuses a blend of data, insights, analytics,
experience and, creativity to help brands develop a unique loyalty experience that’s
right for the customer…and the brand.

The 5 C’s of
the Loyalty
Strategy
Loyalty members can spend up to
3x more with your brand than non-
members.
So how do you create a loyalty
experience that keeps your
members engaged, happy and
coming back for more?
CUSTOMER
COMPETITION
COMPANY
COST-BENEFIT
CULTURE
THE 5 C’S OF THE
LOYALTY STRATEGY

Connect on an emotional level
Create programmes that win trust and connect on an
emotional level, while rewarding customers with emotional
benefits as well as functional ones
1: Competition“CONSUMERS WHO ARE
LOYAL TO A BRAND
ARE MORE THAN
WILLING TO REFER
THAT BRAND (59%) TO
THEIR FRIENDS AND
FAMILY, JOIN THEIR
LOYALTY PROGRAMME
(59%) AND SPEND
MORE (36%).”
(Source: Yotpo)
Differentiate yourself
When devising your loyalty strategy, focus on:
• Evaluating your brands’ loyalty competitive set
• Identifying the loyalty “white space” opportunities within
your sector
• Understanding your brands’ competitive advantage
Machine Learning, Artificial Intelligence,
and Data Augmentation
Use your data the right way, to learn more about your
customers, with machine learning, artificial intelligence, and
data augmentation. Similarly, understanding your customers’
behaviour and potential for growth (through insight like our
VAP - Value, Attrition, Potential segmentation)

Success starts from within
For a company to succeed, they must have happy
employees, a top-notch product/solution supported by the
right technology stack. Add to this, a customer-centric and
privacy-protected culture that’s focused on satisfied loyal
customers, who in turn will remain loyal and make repeat
purchases
2: CultureFEDEX – A BRAND THAT
HAS TAKEN “CULTURAL
TRANSFORMATION” AND
OVERALL FOCUS ON
LOYALTY TO A NEW
LEVELS.
A “Top-Down” “Cultural Transformation”
approach
To ensure programme success, “cultural transformation”
needs a “top-down” approach across every department and
role and needs to be embodied into the DNA of every
employee. “Cultural Transformation” will not happen
overnight and communication will be key
Within Epsilon, we recommend a “crawl, walk, run” approach
for brands and their “cultural transformation” journey

CX is King
The key to success lies in customer satisfaction, and a
consistent end-to-end omnichannel customer experience
(CX) (which has emerged as the key driver for growth and
sustainability across industries)
3: Company“84% OF CUSTOMERS
FEEL THAT
EXPERIENCES ARE AS
IMPORTANT AS THE
ACTUAL PRODUCTS AND
SERVICES”.
REINFORCING THE NEED
FOR A 1:YOU
EXPERIENCE.
(Source: Salesforce)
Personalisation
This should be integrated into the entire customer
experience—including your loyalty programme. Loyalty
marketing goes far beyond rewards and offers and should be
about 1:You—the ability to have conversations and deliver
powerful, human experiences
Key “Company” Considerations
Key considerations for the loyalty strategy “company” element:
• Identifying the brand imperatives that must be brought to life
• Creating or expanding strategic partnerships to enhance the
customer experience
• Determine whether your technology stack is helping or
hindering a seamless customer experiences?
• Identifying operational gaps that need to be addressed

Engagement and Value
A loyalty programme should provide real engagement and
value to your loyal members. With the right loyalty strategy,
you can transform that relationship and supercharge your
revenue
4: Cost-Benefit“82% OF RETAILERS
NAMED LOYALTY AS
VERY IMORTANT FOR
THEIR BOTTOM LINE”.
(Source: LoyaltyOne)
Financial Projections
Understand the financial projections for the recommended
strategy and whether it will deliver a profitable return-on-
investment. Similarly, have you considered the probability of
exceeding the minimum threshold set?
Key “Cost-Benefit” Considerations
Additional “cost-benefit” elements to keep in mind:
• Programme cost versus return, customer satisfaction,
retention and lifetime value
• Cost of servicing customers, acquiring customers,
redemption costs and loyalty liability
• What about the technology, that will store and process the
data and deliver the technical functionality for the
programme?

Relationships
I believe “employees are the lifeblood of an organisation”, and
I also believe the most important relationship a company has
is with its customers. At Epsilon, we are pioneers in the belief
that, to create authentic loyalty, a brand must put customers
at the center of everything, to create emotional connections
that count.
5: Customer“ONLY 37% OF
RESPONDENTS
IDENTIFIED POINTS AND
REWARDS AS ONE OF
THE MOST EFFECTIVE
WAYS TO SECURE THEIR
BRAND LOYALTY”.
(Source: KPMG)
Additional “Customer” Considerations
To understand your customer and the value they derive from
your loyalty programme, you must understand your data and
how to use it. Consider the following:
• Prioritise your customer engagement strategy, ensuring it’s
flexible and adaptable
• Is there existing customer research and insights that can be
leveraged to define your customers’ needs and attitudes?
• From there, determine what additional customer research
needs to be carried out to inform your value proposition
• Finally, perform customer segmentation and modelling to aid
the customer benefit and analysis
• Use this analysis and insight to grow and retain your
customer relationships and increase spend, visits, tenure,
and loyalty

CREATE
MEANINGFUL
EXPERIENCES
WITH EPSILON

WE’VE SPENT OVER
50YEARS
POWERING LIFETIME CONNECTIONS

A Leader
in Email
The Forrester Wave™:
Email Marketing Service
Providers, Q2 2018
According to Forrester Research,
Epsilon demonstrates ''an unmatched
balance of strong technology and
professional services.''
The ONLY Leader in
both Loyalty Waves
Loyalty Technology
Platforms, Q2 2019
Epsilon “has a wealth of
experience in powering
loyalty for retail, travel and
hospitality, restaurant, and
financial services.”
Loyalty Service
Providers, Q3 2019
Reference clients comment
on Epsilon’s deep and
expansive knowledge of the
loyalty space, excellent
execution capabilities, and
impact: “all of their work drives
incremental business.”
AND ARE A LEADER IN
LOYALTY

WANT TO KNOW
MORE ABOUT
PEOPLECLOUD
LOYALTY?

EMEA.EPSILON.COM/LETSTALKLOYALTY

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