The document discusses coalition loyalty marketing programs. It provides an overview of the loyalty marketing landscape in the Baltics, the benefits of coalition programs from both partner and member perspectives, and criteria for success. It then details BalticMiles, a pan-Baltic coalition loyalty program, including its vision/mission, partners in various industries, targets from customer, internal, and resource perspectives, and examples of projects to achieve its goals.

2. The power of coalition loyalty marketing
By GABI KOOL
CEO BalticMiles
For once the secret recipe is shared on how BalticMiles is building
the most beloved loyalty program in the Baltics region.
August 26, 2011

3. In the next 20 minutes a quick review of:
-1 The Loyalty Marketing landscape in the Baltics
-2 The benefits of coalition loyalty marketing
-3 BalticMiles: the secret recipe

4. In the next 20 minutes a quick review of:
-1 The Loyalty Marketing landscape in the Baltics
-2 The benefits of coalition loyalty marketing
-3 BalticMiles: the secret recipe

5. The Loyalty Landscape in the Baltics...

6. In the next 20 minutes a quick review of:
-1 The Loyalty Marketing landscape in the Baltics
-2 The benefits of coalition loyalty marketing
-3 BalticMiles: the secret recipe

7. Coalition programs – How do they operate?
Customers Partners Manager Suppliers
 Sign up own customers at POS  Operate Program
 Provide Manager with transactional data  Open & manage customer accounts
 Issue Base Points  Manage rewards portfolio & redemption
 all customers/ all POS/ all products
 Manage the database
 Issue Bonus Points
 Recruit new Partners
 as per business objectives
 Manage retailers relationships
 Promote the Program
 Manage all communication channels
 Every household spender gets a card linked to one account  Sell rewards to Manager
 Collect Base Points = everyday shopping  Fulfill rewards to Customers
 Receive Bonus points = when respond to retailers’ offers
 Redeem Points for Rewards

8. Benefits of Coalition Loyalty Marketing
- Partner Perspective

9. Benefits of Coalition Loyalty Marketing
- Member perspective in Latvia: Larger Rewards
'Reward
Annual spend money' for
Spending category per HH CI% Pay out, % member
Bank € 2 132 0,40% 0,24% € 5,12
Grocery € 2 765 1,50% 0,90% € 24,89
Fuel € 354 1,50% 0,90% € 3,19
Telecoms € 445 2,50% 1,50% € 6,67
Perfume ‐ Cosmetics € 157 3,50% 2,10% € 3,30
Pharmacy € 211 2,00% 1,20% € 2,53
Sports € 38 2,00% 1,20% € 0,45
Home and furniture € 186 3,00% 1,80% € 3,35
DIY € 319 2,00% 1,20% € 3,83
CE € 254 1,50% 0,90% € 2,29
Restaurants € 418 4,00% 2,40% € 10,04
Clothing € 413 4,00% 2,40% € 9,91
Footwear € 177 4,00% 2,40% € 4,26
Culture € 81 2,00% 1,20% € 0,97
Books € 29 3,00% 1,80% € 0,52
Car service € 121 3,00% 1,80% € 2,18
Toys € 19 3,00% 1,80% € 0,34
Travel ‐ (excl. Business travel) € 40 2,00% 1,20% € 0,48
Insurance € 78 3,00% 1,80% € 1,41
Transport services € 166 3,50% 2,10% € 3,49
OTHER € 1 932 0,00% 0,00% € 0,00
TOTAL € 8 404 1,77% 1,06% € 89,22

10. Benefits of Coalition Loyalty Marketing
- Member perspective in Latvia: Faster Rewards
SPENDING BEHAVIOURS POINTS EARNING POTENTIAL AVG. WEEKS TO REACH GOAL
Avg Likely to Annual
Revenue Avg. annual Weighted points earn Bonus Annual Avg
Potential contribution, spend / average earned EVERY Pts Points Point/ Award Award Award Award Award
Spending quintiles universe % Household Pay out per year Bonus Earned earned Week Level 1 Level 2 Level 3 Level 4 Level 5
90 750 6 000 15 000 25 000
1,06% 20% SONG CINEMA FLIGHT 2 FLIGHTS 4 FLIGHTS
Top Range HH 174 293 34,0% € 14 278 € 151,57 25 261 75% 3 789 29 050 559 1 2 11 27 45
High Range HH 174 293 21,6% € 9 082 € 96,41 16 069 55% 1 768 17 837 343 1 3 18 44 73
Middle Range HH 174 293 17,9% € 7 523 € 79,86 13 310 25% 665 13 975 269 1 3 23 56 94
Lower Range HH 174 293 15,3% € 6 422 € 68,17 11 362 10% 227 11 589 223 1 4 27 68 113
Lowest Range HH 174 293 11,2% € 4 717 € 50,07 8 346 10% 167 8 513 164 1 5 37 92 153

11. Benefits of Coalition Loyalty Marketing
- Member perspective: Relevant throughout life
0 1 2 3 4 5 6 7
Couple Couple Empty
Young with with Nesters – Retired –
Young Couple young teenage Pre Retired Living
Youth Single w/o kids kids kids Retirement Couple Alone
TELECOMMUNICATIONS
Young persons tend to be heavy users, though there is an
increasing trend of usage across all life stages

12. Benefits of Coalition Loyalty Marketing
- Member perspective: Relevant throughout life
0 1 2 3 4 5 6 7
Couple Couple Empty
Young with with Nesters – Retired –
Young Couple young teenage Pre Retired Living
Youth Single w/o kids kids kids Retirement Couple Alone
PETROL
Starts with young
singles with strong Heavy usage was found amongst
aspirations of owning couples with kids
the 1st car

13. Benefits of Coalition Loyalty Marketing
- Member perspective: Relevant throughout life
0 1 2 3 4 5 6 7
Couple Couple Empty
Young with with Nesters – Retired –
Young Couple young teenage Pre Retired Living
Youth Single w/o kids kids kids Retirement Couple Alone
GROCERIES
Heavy usage was found amongst
Starts with the
couples with kids, especially teenage
ownership of a
kids
household

14. Benefits of Coalition Loyalty Marketing
- Member perspective: Relevant throughout life
0 1 2 3 4 5 6 7
Couple Couple Empty
Young with with Nesters – Retired –
Young Couple young teenage Pre Retired Living
Youth Single w/o kids kids kids Retirement Couple Alone
BANKING
Starts with youths –
limited contact: mainly
cash needs Heavy needs were found during the ‘Age of Commitment’
• Car, House, Credit Card needs/loan products
• Savings, Investment
• Children’s needs

15. Benefits of Coalition Loyalty Marketing
- Member perspective: Relevant throughout life
0 1 2 3 4 5 6 7
Couple Couple Empty
Young with with Nesters – Retired –
Young Couple young teenage Pre Retired Living
Youth Single w/o kids kids kids Retirement Couple Alone
DEPARTMENT STORE
Department Store
Similar trend to the Telecommunications industry,
but spending gets less when older

16. Benefits of Coalition Loyalty Marketing
- Member perspective

17. Coalition Loyalty Marketing – global leaders

18. Coalition Loyalty Marketing: Criteria for Success
1. First to
Market

19. Coalition Loyalty Marketing: Criteria for Success
2. Rapid Market
penetration

20. Coalition Loyalty Marketing: Criteria for Success
3. An attractive partner
portfolio that is dictated
by the sectors in which
consumers spend their
money rather than any
preconceived ideas of
brand synergy

21. Coalition Loyalty Marketing: Criteria for Success
4. Strategic partners
have to convince
through their
sheer
market size and
premium image

22. Coalition Loyalty Marketing: Criteria for Success
5. Very attractive
rewards
portfolio

23. Coalition Loyalty Marketing: Criteria for Success
6. Simplicity

24. Coalition Loyalty Marketing: Criteria for Success
7. Well balanced
approach to
branding of program
and partner brands
and educating the
members on the
concept of coalition
loyalty

25. Coalition Loyalty Marketing: Criteria for Success
8. Targeted and
Personalised
offers, executed
in highly
creative ways

26. In the next 20 minutes a quick review of:
-1 The Loyalty Marketing landscape in the Baltics
-2 The benefits of coalition loyalty marketing
-3 BalticMiles: the secret recipe

27. BalticMiles
• Launched in October 2009
• Vision:
– To be the most successful loyalty company in North and Eastern
Europe, supporting leading airlines, retailers and financial
institutions
• Mission:
– To grow our coalition partner’s businesses by bringing
exceptional value to BalticMiles members by rewarding their
loyalty

28. BalticMiles
• First pan-Baltic coalition loyalty program with multiple partnerships
in service and retail industries
• Large and trusted brands participate into coalition
• Most advanced loyalty rewards platform in Baltic market
• Affordable and attractive airline rewards
• Attractive communication platform for engaging new customers,
retaining existing ones and increasing revenues
2 card swipes each minute across the Baltics

29. BalticMiles members
500 000 members
Stable growth each month
Represented in 40 countries

30. Partners Members BM web
Member service

31. BalticMiles partnership strategy
Key sectors ranking Consumers spending per sector –
Baltics 2010
Banking
Hyper/Supermarket
Petrol stations
Telecom
Airline
Restaurants
Department store
Textile and sports
Pharmacy
Home improvement
Perf. & cosmetics

32. BalticMiles partners (more than 10 000 POS)
FINANCE
RETAIL
TRAVEL
DINING
HEALTH
&
BEAUTY
HOSPITALITY

33. 43 Targets and 34 Projects............

34. Targets – Customer Perspective
Member related:
Easy to earn rewards
Many places to earn points towards rewards
Rich reward choices
Relevance in all interactions
Partner related:
Partners receive great ROI
Great partner business support
Image / Brand

35. Targets – Internal Perspective
Business Development:
Planning
Prospecting
Sales
Partner launch management:
Planning
IT design
IT implementation
Project Management
Account Management:
Collaborative campaign management
Reporting

36. Targets – Internal Perspective
Member operations
Points processing
Applications
Customer service
Fulfillment
Member communications
Rewards management
Data richness, quality and insights
Marketing
Campaign management
Member events
PR
Member acquisition

37. Targets – Resource Perspective
Strategic Job families
Skills
Knowledge
Values
Strategic systems portfolio
Data warehouse
Transaction system
Business Intelligence and Balanced Scorecard tools
Website
Organization
Culture
Leadership
Teamwork
Alignment

38. A sneak preview of a few of our projects......

39. Partner locator

40. Brand Positioning

41. Geo overlay / visualisation of data

42. Trigger Based Campaigns

43. Personalised coupons / My Offers