· Introduction · Loyalty's business case · Coalition loyalty · Loyalty operations · Loyalty best practices · Loyalty through engagement · Loyalty rewards · Loyalty data & analysis · Loyalty tools & innovations · Loyalty communications · Loyalty metrics · Loyalty reporting · Loyalty's human aspect · Loyalty through social media · Loyalty to brands · B2B loyalty

· Market sizing & valuation · Market trends & forecasts · What the loyalty experts say · Supermarket & grocery loyalty · Retail loyalty · Financial services loyalty · Air travel loyalty · Hotel & resort loyalty · Travel & tourism loyalty · Food, drink & recreation loyalty · Telecoms loyalty · Automotive & fuel loyalty · Non-profit loyalty · Loyalty in other sectors · Loyalty supplier directory

The Loyalty Guide 4 is a complete, comprehensive report covering every aspect of customer loyalty marketing, customer engagement, customer acquisition, customer retention, best customer marketing, customer relationship management (CRM), customer data-driven business intelligence (BI), loyalty metrics, measurement, reporting and predictive analytics.

The report provides not only detailed case studies, best practices, marketing theory, and all the latest research, but also the kind of practical know-how, up to date facts and figures, market trends, industry forecasts, expert opinions, sound advice, and sheer hard data that are needed for well informed and forward-looking business decisions.

This summary provides an overview of the report, and aims to help you quickly identify the aspects of loyalty marketing that are most relevant to you right now. Each section summarises the essence of a complete chapter of the guide, aiming to make the 1,000 or so pages and wealth of illustrations, charts, tables and graphs quickly accessible. We, the authors, welcome you to what has built up over six years to become the world's fullest and most complete report on customer loyalty, best customer marketing, and relationship management.

There are two basic points of view to be considered when discussing the business case for introducing - or keeping - a customer loyalty programme: Some industry observers have argued that a loyalty programme is often unnecessary because it's just a way of spending money rewarding customers who would probably have been loyal anyway.

Others, however, have recognised that the real benefit of a loyalty programme is not necessarily felt first by the customer, and that it is the merchant that gains the necessary insight (from detailed analysis of its loyalty programme and transactional data, for example) to be able to improve the way it communicates with and deals with its customers. The customer is actually the secondary (but still the most important) recipient of the benefits of a true loyalty programme.

To say that a loyalty programme is not useful, or is a waste of marketing budget, is to have misunderstood the real purpose of the programme. Rather than offering a simplistic discount or rebate programme, a real loyalty programme offers the customer any number of incentives to allow the programme operator to collect accurate and useful data about their lifestyle, purchase choices, motivations, interests, circumstances, and in many cases even about their household and immediate family.

The reason for gathering this data is not - as a very small minority of consumers seem to fear - to create some kind of 'Big Brother' database of peoples' personal habits, but to gain practical insights into ways in which the merchant could serve each customer more effectively, more easily, and more satisfyingly.

The best reasons for having a customer loyalty strategy...
Other key topics covered in this chapter include:

• The business benefits of a loyalty strategy
• How customer loyalty pays back, both short term and long term
• Factors affecting and driving customer loyalty
• How a loyalty initiative grows and improves your customer base
• Financial and operational aspects of a loyalty strategy
• What you need to know to run a successful loyalty programme
• Viable alternatives to traditional loyalty offerings

There are two main types of multi-partner programmes: true coalition programmes, and single operator programmes that include other partners.

For example, Air Miles and Nectar are true coalition programmes. The programme management is independent of any of the partners. The partners have contracts with the operators of the programme to issue and/or redeem the currency of the programme, and only have access to data harvested by the programme through its operator. Individual partners don't have direct access to other partners' data held in the programme, although the operators of the programme will usually market to other partners' customers on behalf of another member. For example, a supermarket member could ask for mailings to be sent to the customers (or just certain segments of the customers) of a fuel retailer partner in an area where a new supermarket is being opened.

Tesco's Clubcard is an example of a single operator programme that involves other partners. The programme is owned and run by Tesco. However, Clubcard holders can collect points when buying from various partners in the programme, such as Alders, Beefeater, Marriott, and National Tyres. Vidal Sassoon is an example of a redemption partner.

The best reasons for coalition-based loyalty initiatives...
This chapter examines the many essential goals that any coalition programme must achieve if it's going to succeed, and why they're so important. Examples of these goals include:

1. Rapid market penetration
2. Delivery of attractive rewards
3. Being the first in the market
4. Building communication channels

The key benefits of joining a coalition programme...
Supported by statistics, illustrations and expert opinions, the advantages, disadvantages and structural needs of coalition programmes (compared to, say, a non-partnered loyalty programme) are detailed, covering critical factors such as:

• Greater interest in the programme
• Members have fewer cards to carry
• Members earn points more quickly
• A greater variety of rewards
• Concentrated, coherent promotions
• Time saved in development
• Lower costs of development
• Database run by professionals
• Sector exclusivity
• Coalition marketing campaigns
• Higher penetration rates
• Real cost benefits of coalition

Detailed case studies of major coalition programmes...
This chapter also provides details and comprehensive case studies of the world's major coalition loyalty programmes, including:

1. Aeroplan (Canada)
2. Air Miles (UK)
3. Air Miles (Canada)
4. Air Miles (Spain)
5. Air Miles (Netherlands)
6. Air Miles (Middle East)
7. BonusLink (Malaysia)
8. eBucks (South Africa)
9. Fly Buys (New Zealand)
10. FlyBuys (Australia)
11. i-Mint (India)
12. iPoints (UK)
13. Malina (Russia)
14. Nectar (UK)
15. Nectar Business (UK)
16. Nectar Italia (Italy)
17. Payback (Germany)

Other key topics covered in this chapter include:

• Why a coalition?
• The essentials of a coalition
• The advantages of a coalition
• The challenges of a coalition
• Typical application areas
• Expanding into a coalition

The theory of customer loyalty is quite plain: a business that retains its customers for longer usually makes more money from them at lower cost than one that is constantly paying to acquire new customers. Actually doing that - the practice of customer loyalty - is not so straightforward. It's not a trick that can be quickly learned and performed; creating loyal customers depends fundamentally on following good and sound business and marketing practices right across the business all the time. It's a sad truth of business that customers are hard to win but easy to lose. A loyalty programme is not a quick fix that can simply be bolted on and produce measurable results immediately.

That said, the principles are quite simple: know your customers, reward them for behaving in the way that you want, and don't reward them for behaving in any other way. In order to know them, you need to collect data and then use it intelligently to identify the valuable customers and to reward them for generating more profit. Of course, there are many refinements that can be made to this broadly stated principle. Enter the loyalty programme.

But many of the so-called loyalty programmes in operation today are not really loyalty programmes at all. Perhaps 'frequent customer programme' is a more accurate term. To be loyal to a business is one thing, but to use it frequently is another (for example, it could be a result of circumstances that there is simply no other choice). Clearly, if another choice becomes available, then the distinction becomes critical. This means that most prudent businesses aim to create loyal customers, not just frequent customers. Of course, not all customers are potentially loyal customers, for a variety of reasons. So the ideal loyalty programme would be one in which already loyal and potentially loyal customers benefited, but other customers didn't. This means that the customers have first to be sorted into groups, and different approaches have to be made to each group. Or, more likely, a programme has to be designed so that it will appeal to the desired group more than to the other group.

The 3 top reasons to have a loyalty programme...
A good point at which to start is at the very beginning - when acquiring the customers. In many typical businesses, as many as 45% of direct, new, one-off purchasers do not go on to purchase a second time. In order to grow and maintain a successful business, three simple rules should be followed:

1. Acquire customers that are likely to repurchase - even though this may be at the expense of initial raw response;
2. Recognise which customers are unlikely to repurchase and limit your marketing spend for this segment accordingly;
3. Focus the marketing budget on those who exhibit the same profile as existing repurchasers but have yet to buy a second time.

The main goals of a loyalty programme...
In this chapter we detail the workings of an effective customer loyalty programme, and how to achieve several obvious goals:

• Retaining existing customers
• Acquiring new customers
• Moving customers up the RFM segments
• Deselecting or 'firing' unprofitable customers
• Win-back techniques (recovering lost customers)
• Increasing CLV (customer lifetime value)
• Best customer marketing (targeting the most worthwhile customers)
• Building long-lasting customer relationships
• Creating advocates from loyal customers
• Adjusting pricing strategy for greater profitability
• Responding to competitive challenges
• Selecting stock lines more effectively
• Planning merchandising optimally
• Cutting promotional and advertising costs
• Selecting new trading sites based on profitable customer profiles

Critical success factors for a loyalty programme...
We also go into depth on the 17 key factors that make a loyalty offering successful, both in the eyes of the customer and in terms of bottom line business results:

1. Loyalty programmes are never a 'quick fix'
2. Targeting the right people at the right time
3. Gaining customer buy-in
4. Knowing your customers and gathering intelligence
5. Not rewarding the wrong behaviour
6. Rewarding versus recognising
7. Spotting defection patterns
8. Taking advantage of customer lifecycles and trends
9. Offering attainable & affordable rewards
10. Recovering the programme's cost
11. Keeping communications relevant and well-timed
12. Keeping it simple
13. Measuring the programme's results
14. Attracting new customers
15. Providing unique, hard-to-copy benefits
16. Empowering your customer-facing teams
17. Making life easy - for you and the customer

Guidance for running a profitable loyalty programme...
Among the key topics covered in this chapter, we explain operational details including:

• Critical capabilities for customer loyalty
• The structure of a loyalty marketing initiative
• The loyalty token - what to use, if anything
• Building loyalty using prepaid/gift cards
• Pricing strategies for all occasions
• Insights into consumers' views on loyalty
• Insights into customer loyalty 'pain points'
• Addressing the myths of customer loyalty
• Building and implementing the loyalty process

Over the past few years there have been many innovations in the field of customer loyalty marketing, and many of these have come about through the earnest implementation of established best practices. For example, the idea of giving customers exactly what they expect and engaging them in a meaningful two-way dialogue is not something new - but it is the foundation of the current trend toward greater customer engagement and satisfaction.

In this chapter we detail the best practices that need to be observed when building customer loyalty, and to make sure your loyalty initiative doesn't stumble or fail, whether it's online, offline, or both. We also examine the best practices behind successful customer loyalty management techniques, and highlight the main traps and pitfalls that catch so many new programme operators. In addition, we cover best practices for best customer management (the aim of which is to look after those customers who contribute the most profit), as well as other more general marketing best practices and guidelines, including the up-and-coming issue of 'green marketing'.

Finally, we detail the latest successful innovations that have been taking centre stage in the loyalty market, explaining what works, what doesn't work, and why. We also identify the key factors that put retailers and other companies ahead of their competitors, including 'surprise and delight' strategies, kiosk solutions, in-store communications, loyalty programme interactions, gift cards, self-checkouts, new in-store applications of RFID technology, and even smart shopping carts that interact with the shopper's loyalty card data.

This chapter explains the latest best practices for customer loyalty management, including:

1. The key attitudes of successful loyalty marketers
2. Principles that create highly loyal customers
3. How to increase customer loyalty
4. How to stop a loyalty scheme from stalling
5. How to achieve online customer loyalty
6. The six P's of customer loyalty marketing
7. How to building loyalty with 'surprise and delight'
8. How to build loyalty in unconventional markets
9. Ten ways to win loyalty through customer service
10. A relationship model that predicts customer loyalty
11. How to lower the costs of a loyalty scheme
12. How to recession-proof the loyalty programme
13. How to increase loyalty through customer data insights
14. How to use supplier relationships to build customer loyalty
15. How to spot failings in loyalty management platforms

Relationship & Retention best practices...
We also explain the essential best practices and driving factors of customer relationship marketing and customer retention, including:

• Rules for retaining existing customers
• Retaining customers in non-traditional markets
• Relating customer experiences to customer retention
• How to 'clone' your most loyal customers
• How to strengthen customer relationships
• How to increase customer involvement
• Best practices for building stronger relationships
• Differentiating the loyalty scheme based on customer needs
• Best customer management
• CRM best practices

Marketing best practices...
This chapter also details other best practices that apply more widely to the whole marketing function, offering practical ideas and guidance on keeping marketing efforts not only relevant to the consumer but also financially viable with a good ROI (return on investment). For example, we explain:

1. How to stop marketing wastage
2. Keys to a true customer-centric strategy
3. How to assess marketing channel profitability
4. How retail promotions build customer loyalty
5. How cause-related marketing also increases sales
6. How to benefit from affiliate marketing strategies
7. Factors behind failed e-marketing strategies
8. Factors behind successful e-marketing strategies
9. Barriers to online retail growth

This chapter also explains best practices relating to luxury and affluent customers (i.e. the top 10% of consumers, in terms of household wealth), as well as ways of taking up the 'green cause' without being accused of 'green-washing for profit'. Examples of these best practices include:

• Lifestyle marketing for luxury consumers
• Getting the right pricing strategy for wealthy consumers
• Green marketing best practices and strategy
• Green marketing in theory and in practice
• Viable alternatives to costly 'eco-label' marketing
• Building Green customer relationships

As time passes and more loyalty programmes are launched, it is becoming increasingly difficult to actually engage the customer in the programme. Customers are now so used to handing over a card at the POS that they feel little real involvement. If there is such a thing as a hot topic in loyalty, it is customer engagement. Handing over a card when transacting and receiving a quarterly statement within a pile of other mail is not engagement. Engagement grows little by little, each time the customer has to actively think about and make a decision about the programme.

In fact, although nearly 90% of shoppers in the US participate in rewards programmes to earn points, discounts or prizes, loyalty programmes alone are not yet fostering the kind of emotional connection that is needed to develop long term customer engagement. Engagement is something that can only be built up over time, and it usually stems from mutually beneficial relationships between customers and brands. It could be argued that engagement comes not a result of a marketing campaign but from the full range of interactions between the customer and the brand, as well as brand-related interactions between customers and their peers. The key to building a real sense of engagement is to provide the consumer with something of personal value that is timely, relevant, wanted, and preferably repeatable.

Insights for true customer engagement...
In this chapter we explain why customer engagement is now seen by most marketing experts as the key to future survival, and how smart marketers are already rethinking the idea of customer engagement. Among the key insights covered in detail:

• Insights into customer engagement
• Insights into customer disengagement
• Customer engagement techniques and tactics
• Online customer engagement strategies
• How to engage consumers the Web 2.0 way
• New ways to look at digital customer engagement
• Why a customer engagement strategy goes far beyond CRM
• Why loyalty schemes must make a greater effort to engage customers
• Why loyalty without commitment is no longer possible
• The key benefits of having a customer engagement strategy
• How to drive engagement with smarter loyalty rewards
• The role of customer satisfaction in driving engagement
• How customer dissatisfaction actively negates existing engagement
• Why engagement metrics are critical to customer retention

The reward is a vital part of any loyalty programme. It is the bait on the end of the line: the bit that actually convinces the customer to sign up. It is also a complex part of the programme and usually presents a delicate juggling act: it must be worth enough to be attractive to the customer but not cost enough to make the programme unprofitable. It must appeal to consumers of the right profile and it must cater for wide variations in taste and desires among those customers.

All in all, the reward has many functions that we will look at in detail in this chapter. We will also examine the properties of a good reward, and which of these consumers think are the most important. We also look at the many types of reward that can be offered: Discounts (both targeted and untargeted), points-driven programmes, hard and soft rewards. Which do customers prefer, and why?

We also look at how, in the eyes of an expert, one should go about planning a successful and appealing reward catalogue - quite often a component that lets a reward programme down. And finally, we examine some recent research into what motivates consumers when they are faced with a choice of rewards.

Reward drives behaviour. Experiments have revealed that, while a bigger reward reinforced the desired behaviour better than a small reward, when the rewards were discontinued, those who had received the big rewards were more likely to return to the unwanted pattern of behaviour than the group who had received the small reward. So the warning is there. Never let your best customers feel that you are withdrawing privileges from them, and try to ensure that customers become loyal to the product or service, and not simply to the reward.

But, to have any effect at all, the reward must be desirable enough to actually stimulate a change in behaviour among customers. It also has to be affordable, and balancing the two sides of the desirability/affordability equation is tricky.

Structuring the rewards for optimal redemptions and member engagement...
In this chapter we cover in detail the necessary attributes and practical planning of loyalty rewards, including:

1. The value of the rewards offered
2. The function of the rewards offered
3. The properties of an attractive loyalty reward
4. How to profit from reward redemptions
5. Lowering the fulfilment budget without risking loyalty
6. Setting reward levels and tiers
7. Using different rewards to change customer behaviours
8. Types of rewards (goods, discounts, experiences or other benefits?)
9. Timing of rewards (now, soon, or much later?)
10. Rewards that consumers actually want (and what they think they want)
11. Redemption strategies (internal, outsourced, or networked)
12. How to plan a compelling rewards catalogue
13. Strategies to drive both redemptions and engagement
14. Key attributes of 'high attraction' rewards
15. Matching rewards with different point levels
16. Using coupons and vouchers as rewards
17. The rise of merchant funded rewards

Whether the data and back-end systems are managed locally or whether they're hosted, and whether the operational systems are platform-dependent or use a thin-client SaaS (software as a service) model, many of the benefits of creating and operating a customer loyalty programme, or implementing a customer relationship management (CRM) system, come from the collection, analysis, and use of data. The more data we can practically use, the better: customer demographics, preferences, lifestyle and life stage, transaction history, returns, and even customer service event history.

The loyalty programme gives us a way of identifying specific customers, and tying their demographic records to their transaction records in the back-end database (whether that be an in-house collection of databases, an enterprise-wide CRM system, or some other data warehouse that's being updated, analysed, and used across the whole business).

The uses of the resultant array of data, given all the technologies that are now available to analyse it and turn it into useful support for business decisions, are potentially endless. Everybody understands that customers' supermarket transaction data can be used to segment them for marketing campaigns later on, whether that's based on demographics, spend, or products purchased.

How customer data turns into loyalty by providing new insights...
Perhaps the most important lesson we teach in this chapter is that customer data - in almost any form - can be turned into insights, which drive continual business improvements, which translate into greater customer loyalty, satisfaction, and engagement. For example, some of the most important data-driven techniques and insights available to loyalty marketers include:

1. Customer behaviour profiling
2. Customer lifestyle & demographic profiling
3. Customer product preferences and repertoire
4. Product category relationships & cross-selling
5. Dynamic pricing strategies
6. Online shopping suggestions
7. Segmentation and customer tiering
8. Customer base analysis and trend predictions
9. Customer flow analysis
10. Share-of-wallet estimation
11. Market share estimation
12. Early defector detection and customer win-back opportunities
13. Lower cost competitive response
14. Customer targeting and differentiation
15. Advertising campaign targeting
16. Circular efficiency
17. Offer planning and promotion analysis
18. Differentiated marketing
19. Intelligent deselection of unprofitable customers
20. Green targeting to save costs (and the planet)
21. Planning and merchandising
22. Human resources planning
23. Geographical store site selection
24. Inventory rationalisation & selection
25. Planogram adjacencies & merchandising
26. Differentiation based on data analysis
27. Real-time data mining and the 'single customer view'
28. Behaviour prediction based on past events
29. Affinity marketing strategies
30. Predictive modelling

Factors involved in planning a customer loyalty database...
This chapter also details the process of planning a basic customer loyalty programme database, providing advice and guidance on usually thorny issues including:

• Data processing
• Data flow
• Data warehouses and data marts
• Data duplication
• Data accuracy
• Data cleansing
• Data ethics
• Data security and privacy
• Data analysis to support business processes
• Predictive analytics to help drive change

How much data is needed, and where and how should you get it?
Another common issue that we explain in detail is the question of how much data to collect, when, where, how, and how often it should be refreshed and 'cleansed'. The most popular data collection methods for loyalty programme operators currently include:

1. The loyalty programme application form
2. The loyalty programme web site
3. Direct mail customer responses
4. The mobile channel
5. Customer transaction records
6. Reward redemption records
7. Special offer & promotional response records
8. Customer feedback analysis
9. Third party public data sources
10. Programme partners' customer interactions
11. The point-of-sale (POS) terminal
12. Customer service agents and call centres
13. Product repair/replacement centres

A customer loyalty programme, despite having all the right rewards and engagement strategies in place, can fail catastrophically if the tools and technologies that drive it are either insufficient for the task or inadequately integrated. How could a large coalition loyalty programme ever function if the reward fulfilment function wasn't tightly integrated with the web site, or if the marketing team had to refer to and deduplicate information from several siloed data sources? The technology, the tools, and every functional back-end system must be not only scalable enough to cope with the future success of the loyalty programme but also to be adapted to every market-driven change that affects the programme's goals and direction.

For example, the authors of this report recently conducted a survey of retail customer loyalty and commitment strategy, and found that while 93% of retailers run a loyalty programme for their web site, stores, or catalogue customers, nearly three-quarters reported very little improvement compared to their competitors. The survey found that the main types of loyalty campaigns offered by retailers include (but are not limited to) point perks, rewards, frequent buyer offers, and private label credit cards.

Of those retailers that currently run loyalty programmes, 74% reported 'partial to no tangible improvement' in their programmes compared to their competitors. This suggests a need to review current and future loyalty processes and solutions, and that a wealth of very similar loyalty platforms may be the cause of a degree of commoditisation of loyalty offerings. Not surprisingly, the best-in-class retailers identified by the survey were found to be five times more likely than the worst retailers to be tracking, storing, and analysing customer analytics data to help identify specific customer buying insights, which logically lead to both loyalty platform and programme innovation.

Supplier-independent advice on what matters most in a loyalty platform...
This highly practical chapter provides details of loyalty tools, technologies and innovations currently in the market, offering advice on the advantages and disadvantages of these approaches. Among the technologies and tools examined are:

• Self-managed loyalty platforms
• Hosted loyalty platforms
• Hosted CRM platforms
• Platform-independent loyalty systems
• Point of sale (POS) loyalty technologies
• Mobile loyalty platforms & applications
• NFC, RFID & other contactless loyalty technologies
• Real-time location systems for in-store behaviour analysis
• Loyalty platform integration with other systems & media channels
• Business-to-business (B2B) loyalty technologies
• Affiliate loyalty platforms and techniques
• Sector-specific loyalty platforms & systems
• 'No ID' loyalty platforms
• Virtual and digital currencies
• Predictive analytics applications
• Loyalty data analytics
• Loyalty management systems
• Web-based resources for loyalty marketers
• Business intelligence (BI) marketing
• Retail 3.0 - the new definition of customer intelligence
• Loyalty kiosks and in-store service tools
• Self-service tools and techniques
• Recent developments in loyalty technologies

There are many more communication channels available today than there were before the rise of social, interactive and other electronic media. Even in the past few years marketers have found a growing number of innovative ways to reach consumers, whether at home, at work, or at play - especially through the rapidly growing social media phenomenon.

Communication with consumers and other businesses can take place by mail, telephone, fax, text message (SMS), multimedia message (MMS), computer games, television, films, radio, mobile sales units, in-store teams of brand representatives, focus groups, leaflets, newspapers, free-standing inserts, coupons, e-mail, instant messaging (IM), voice over IP (VoIP), web chat, web sites, bulletin boards, online communities, social networking platforms, and even other internet-based and mobile systems such as video conferencing and meeting sharing systems.

Clearly, each channel has different costs, social implications, complications, emotional connotations, privacy issues, and various perceived benefits and risks for the consumer. Each brings its own challenges in terms of finding the right frequency, message, tone, voice, relationship-based permission, and value proposition.

And with each comes a unique set of challenges: as a rule, consumers don't like junk mail, or 'spam' (unsolicited commercial messages), or unsolicited sales calls. They complain about their mobile phone being invaded by irrelevant advertising messages, and they don't want companies "muscling in" on their private social networks without permission. They don't want to waste bandwidth by receiving unwanted videos and sound clips by e-mail, and they don't want their instant messenger services popping up unwelcome advances from companies they've never heard of or dealt with. The list goes on.

But the good news is that there are still ways, means, laws, and ethical practices that cut through the communication barrier for all of these channels, allowing you to communicate and build relationships with existing customers and sales prospects alike. For this reason, we begin this chapter with a detailed examination of customer communication best practices that are both law-abiding and consumer-friendly.

Benefits and pitfalls of all the key communication channels...
In this chapter we explain the advantages, disadvantages, strengths, weaknesses, opportunities and threats involved in communicating with your most valuable asset: your customer base, with specific guidance and best practices for each of the major channels and communication strategies, including:

• Loyalty and the mobile channel
• Loyalty and the e-mail channel
• Loyalty and the web channel
• Loyalty and the social media revolution
• Loyalty and the impact of word-of-mouth
• Loyalty and direct mail marketing
• Loyalty and the multi-channel approach
• Loyalty kiosks and self-service channels
• Loyalty and the call centre
• Loyalty and the impact of advertising
• Loyalty and the 'will of the customer'

The business case for any loyalty programme needs to be well supported and justified, not only in the planning stages but on a continuing basis after implementation, and during development. The application of solid mathematics, statistics, and scientific measurement is the only way to prove the effect the programme is likely to have on profitability and the customer base. And the application of regular and meaningful management reporting is the only way to monitor all the factors involved both before and after implementation of the programme.

Every aspect of the creation of a loyalty marketing initiative - or of any differentiated marketing initiative - must be evaluated at all stages, and useful metrics must be implemented with proper processes and controls to help determine the success, failure, progress or stagnation using preset standards. In this chapter we examine the detail and practical workings of the necessary formulae, calculations, metrics, and management reporting tools that every marketer needs during the process of evaluating new and ongoing loyalty marketing initiatives.

A loyalty programme's results are often nebulous - hard to see accurately, usually being viewed in combination with the results of other marketing initiatives, seasonal variations in the market, and other disguising factors that make it hard to measure how successful (or not) the programme really is. Being able to monitor, measure, track, and analyse the level of customer loyalty before, during, and even after the programme, is of central importance to the financial justification of a loyalty programme. So, although the psychology and implementation of your programme may be something of an art, the only way to track its performance is through the combined sciences of logic and mathematics.

Customer loyalty itself is difficult - if not impossible - to measure accurately. Loyalty means different things to different people - there are many aspects of it and each could vary in importance depending on the viewpoint of the observer. In addition, loyalty involves emotion, and that's notoriously difficult to measure meaningfully. However, over time the necessity of measuring results has led to the development of some formulae that have become as close to standard as you get. Three of these are the patronage ratio, the switching ratio, and the budget ratio. Added to these, to complete the picture, are a range of other composite measures, such as the Enis-Paul Index and customer retention measurements.

It's probably true to say that the ultimate measure - the one that the board of directors will be interested in - is the effect on the bottom-line profit. But in order to see how well aspects of the programme are functioning, and to be able to make adjustments to it and see what difference they will make, these more specific formulae are needed.

Step-by-step calculations for loyalty, retention, profitability, and segmentation...
In this chapter we provide not only the exact formulae needed to measure and calculate customer loyalty and all its sub-parts, but this report's readers-only web site provides working versions of all of them, both online and as a downloadable Excel spreadsheet. This chapter takes you step-by-step through the calculation and interpretation of dozens of business-critical metrics and analyses, including:

• The budget ratio (share of wallet)
• Retention rates & customer churn
• Customer lifetime value (CLV/CLTV)
• Customer retention, attrition and lifetime
• Potential, existing, and defected customers
• The patronage ratio
• The switching ratio
• The Enis-Paul Index
• Customer profitability
• Drivers of loyalty and profitability
• Loyalty and profitability models
• The 'loyalty and profitability chain'
• Past, actual, and future profitability
• RFM segmentation
• Net Promoter Score (NPS)
• Attitudinal equity
• Customer-centric metrics
• New digital marketing metrics
• Examining individual customers and customer groups
• Statistical primer: the mean, median, mode, variance & standard deviation

Accountability for marketing spend is an increasing concern for every company regardless of its size, and the recent recession has brought this point home with great force. As a result, marketing departments are in ever-greater need of both tools and techniques to help them prove to the board of directors and shareholders that they are performing as well as they should, given the budget they have been given.

Moreover, marketing is a fast-developing science combined with a 'human art' that requires constant development, innovation, fine-tuning, and new technologies if the company is to stay one step ahead of the competition. This requires not only more money in the budget to cover the costs of developing new techniques but also a certain amount of money that will be 'at risk' without any certain ROI (return on investment).

While most forward-thinking FDs (finance directors) and CFOs (chief financial officers) accept that development is an ongoing and unavoidable cost of business, most will also demand that the marketing function can pay for itself in other ways - with an increasing ROI, for example.

As a result, the days of analysis and reporting for the sake of simply monitoring the success (other otherwise) of individual marketing campaigns are over, and marketers must now show not only their smaller successes but also their overall contribution to the bottom line, brand equity, and corporate well being. The importance of statistical analysis and proper management reporting cannot be understated.

How to prove the loyalty programme's ROI and bottom-line impact...
In this chapter we demonstrate and explain - by way of practical examples, calculations, tables and charts - the most important management reports and tools in the loyalty marketer's portfolio. These calculations, comparisons and reports make the process of proving and justifying the loyalty programme's contribution to the bottom line not only easier but also more timely and accurate. Reports that we detail include:

• The Bathtub report
• The Decile report (RFM/RFS)
• The Quo Vadis Retention report
• The New Member Frequency Report
• The Cardholders' Summary Report
• Traditional RFM segmentation (125 cells)
• Reduced RFM segmentation (27 cells)
• Flexible RFM segmentation (8 cells)

It's easy to get so involved in the intricacies and technicalities of loyalty programmes that the most important part - the human aspect - gets neglected. The technology involved is a marvellous tool - without it, loyalty programmes as we know them would not be possible. But we must remember that loyalty (and its opposite, the desire to simply walk away) are both intensely human emotions. And, unless the programme generates the right feeling in people, it won't work.

We must also remember that humans aren't as predictable as technology. Actions that might make one person loyal could well turn off someone else. It gets even more complicated: something that could engender loyalty in someone on one day might do the opposite on another day.

Customers are human, and loyalty is a strong emotional link...
Who is more qualified than customers to tell us what customers want, and what they don't want? For this reason, much of the research presented here looks at the customer/supplier relationship from their side.

One thing is certain: the building of loyalty will not get any easier. While advances in technology have made loyalty programmes more effective, accurate and appealing to customers, these same advances have made it much easier for customers to switch suppliers. Comparisons of stock, prices, trading policies and delivery times and costs are now only a mouse click away from many customers. And if the item is to be sent to them, need they care from where it comes? Many suppliers are apparently equally trustworthy and reputable. It is important to have some unique property that makes you stand out from the crowd. All other things being equal, a good loyalty programme can do just that.

Because all customers are not the same, we have looked at the different ways that different groups of customers respond to marketing, at the psychology of loyalty, and the influence that different rewards have. In addition, factors such as age, gender, race, wealth, pricing policy, general satisfaction, level of service, the internet and the new 'green marketing' all come into planning a programme for a target market. All of these are examined separately.

Know-how and research to keep customers more engaged...
The customer-related human insights we explain and demonstrate in this chapter include:

• Human factors that drive customer loyalty
• Human factors that drive purchase decisions
• The relationship between employee age and customer loyalty
• Personal relationships as a model for loyalty
• How to avoid loyalty programme fatigue
• The impact of the customer experience on loyalty
• How being more 'touchy feely' can boost customer loyalty
• Why great service can sometimes beat a loyalty scheme
• Why delighted customers aren't always the most loyal
• Making and breaking emotional loyalty bonds
• The impact of social trends on customer loyalty
• The impact of social trends on customer relationships
• How to address the rising 'consumer attention deficit'

Employees are also human, and they bond emotionally with the customers...
The virtuous circle of 'customer - employee - shareholder - customer' has become well known in loyalty marketing. These groups go together and if the loyalty or even co-operation of any of the groups is lost, the chain breaks. To be completely successful, they must all work together, supporting each other, to build strong relationships. According to Frederick Reichheld, "the only way a company can build a loyal customer base is by building committed relationships with the employees responsible for serving those customers." In fact, 'loyalty leader' companies identified by Reichheld were seen to out-perform their competitors by a factor of 2.2 in the stock market.

In this chapter we discuss the reasons for the importance of loyal employees - without their support the most sophisticated and costly loyalty and CRM programmes will simply not work. Recent research supports the view that top executives are at last not only realising this, but actually doing something about it. It would seem that while there is no shortage of businesses that pay lip service to employee loyalty - even featuring it prominently in their company policy - fewer actually have procedures in place that percolate through the business right down to the bottom and exert a real effect. The days when management could expect undying loyalty simply because they have employed someone have gone forever.

Add to that the fact that in many cases, it's actually the employees near the bottom of the ladder - those who are often treated most poorly and are underpaid - that have most personal interaction with customers, and it becomes clear that there is a problem. Without loyalty to the business there won't be enthusiasm at the customer facing level, and that's enough to nullify the very expensive marketing programmes that are intended to show the customers how important they are. In this time of almost universal cost-cutting resulting in employee cutbacks, fewer employees are being asked to do more and more work and - quite understandably - are becoming demoralised and discontented. It is becoming increasingly difficult for HR managers to maintain the loyalty of their employees.

And of course, the level of employee loyalty is influenced by factors other than those within an organisation. For instance, the state of the general job market has a major effect on whether employees change jobs frequently or not. As more jobs open up, the opportunities to defect increase. So how should top management approach the challenge of increasing the loyalty of employees? We look at some of the current strategies and how they're working. And what exactly are the challenges facing these executives? Where should most money be invested for the best return on investment? This chapter explains what's needed, what works, and what doesn't work.

Know-how and research to keep employees more engaged...
The employee-related human insights we explain and demonstrate in this chapter include:

• The top ten ways to retain employees
• How loyal employees translate into loyal customers
• How employee attitude impacts customer attitude
• How employee engagement affects the bottom line
• Ways to keep good employees engaged and loyal
• The trend away from cash bonuses toward recognition
• The loyalty effect of workplace wellness and healthcare
• The power of personal messages from management teams
• The rise of corporate rewards programmes
• The increasing usage of prepaid employee incentive cards

There is no doubt that the ongoing and fast-developing social media revolution is having an enormous impact not only on the way consumers can communicate with other consumers, but also on the ways in which consumers and brands communicate with each other. For this reason, social media engagement and relationship management strategies are no longer a 'nice to have' but a 'must have' for marketers.

But marketing via social media channels is not as simple as it is through other channels because of two main factors that combined to form a two-edged sword:

1. Consumers can publicise negative experiences and ideas very widely in a matter of minutes;
2. They can also publicise positive experiences and ideas very widely in a matter of minutes.

There are also a great number of restrictions on how brands can establish contact with consumers in the world of social networking, as the idea of 'push marketing' (i.e. the ability for the brand to initiate a first-time contact with the consumer) is almost non-existent due to the stringent security and privacy policies of these services.

Almost all contact through social networks - except when individual consumers give direct permission (to other people and companies) to post entries in their personal 'wall' - has to be based on the 'pull' strategy (i.e. the consumer purposefully searches for and requests information, initiating a carefully controlled contact process without necessarily even setting up the necessary permissions for a longer-term dialogue). In essence, this means that every dialogue opened through social networking is potentially a once-only event, and every communication counts. The stakes are therefore much higher when interacting with consumers via social networking sites.

Using social media to win customers' hearts and minds...
Among the practical advice and best practices examined in this chapter:

• Social media-based loyalty strategies
• Social media ethics (the rules of engagement)
• Social media-based engagement strategies
• Social media's role in customer engagement
• Social media's word-of-mouth effect
• Social media-based marketing strategies
• Social media insights and trends
• Social media tools (sentiment analysis, Facebook linkage, tweeting, etc.)
• How to measure social media marketing
• The latest developments in the social media space

There would be no point in spending marketing dollars building brand awareness if customers don't buy the brand again after they've tried it the first time. Today's brand marketers all have the same aim: to encourage brand loyalty - the situation where consumers choose a brand over its competitors and private label equivalents because they want to.

In this chapter we focus on the successes and techniques seen most recently, and also the problems facing brand marketers and how they can be overcome. We look at the key drivers of brand loyalty, how to form a more effective brand strategy, and how to predict the impact of brand loyalty. We also detail ways to build and boost a brand, both offline and online, along with an examination of common brand threats and nationally successful brand strategies.

A good definition of brand loyalty is that given by Jan Hofmeyr and Butch Rice, in their book 'Commitment-Led Marketing':

"Brand loyalty is the tendency of someone to buy a brand again and again because they prefer it over others."

Hofmeyr and Rice developed a brand marketing tool called The Conversion Model, which enables the marketer to segment users of a brand in a market by their commitment to staying with the brand, and non-users by their openness to adopting the brand. Research shows that the brand loyalty of customers has fallen steadily over the past two or three decades. Results vary, but it's probably fair to say that today's average consumer is only 75% - 85% as loyal as the consumer of the 1970s or 1980s. So why did this happen? There are several reasons:

1. There is much more choice today: the number of products within categories has increased.
2. Many "me too" products have been launched, some looking very similar to the original.
3. The number of advertisements seen by consumers daily has increased enormously, especially since new channels like the internet, email and SMS have come on the scene.
4. Modern consumers are more sophisticated and more likely to think for themselves and to try new products.
5. There is more comparative information available, on web sites and in consumer magazines and the national press.
6. The standard of service (and of products) has in many cases improved to the stage where there is not much difference between brands.
7. Price competition has increased.

It must never be forgotten that brands exist in the minds of consumers. A brand is not a finite thing like a building, that will remain unchanged no matter what people think of it. As public perceptions change, brands change with them. A brand can change without the brand owner making any changes simply because, for some reason, public perception of it has changed. That's why much of this chapter is devoted to the consumer's perception of brands.

Brand development and brand marketing are inextricably tied to brand loyalty. And companies that tie brand development to top level corporate goals deliver better shareholder value and build stronger brands.

Strategies and best practices to create value through brand loyalty...
In this chapter we clearly explain the linkage between customer loyalty attributes and brand loyalty, and provide you with the necessary strategies and insights to increase your customers' loyalty to your brand. Key strategies and insights covered include:

• Brand loyalty strategies
• The use of brand clubs
• Factors that drive brand loyalty
• Brand loyalty's linkage with customer care
• How consumer values relate to brand loyalty
• How promotional e-mail can boost brand loyalty
• The growing battle for online brand reputation
• Brand-building strategies and best practices
• Keeping a brand healthy in a weak economy
• How to create better a brand experience
• Successful brand strategies
• Branding best practices
• Brand protection
• Brands and their reputations
• The effect of counterfeits on brand trust & loyalty
• Most trusted brands in the US & Canada
• Brand marketing insights and research

Business to business loyalty programmes and incentive schemes seem, on first consideration, to be a great idea: a way of encouraging one business to continue doing business with another. But they also come with their own pitfalls that don't occur in consumer-based loyalty programmes. For example:

• Is it ethical to reward a client's employees to make decisions based on personal gain?
• Who should be rewarded: the business owner, management, employees, the business itself, or all?
• Is the person who gets the benefits always the one who makes the actual purchase decisions?

The list of problems grows or shrinks depending on the industry sector involved, and on how well the relationship between supplier and client is defined and controlled. For example, there is little point in a CPG manufacturer rewarding the product buying clerks at a supermarket's head office when the decisions on product range, quantity, and shelf space allocation are taken by others (such as marketing and merchandising managers). This represents a tightly controlled buying environment in which direct rewards for employees are fruitless.

However, in a more flexible (and typically smaller) business environment, buyers often have authority over stock control, product range, quantities, and even merchandising arrangements. In these cases, a B2B loyalty programme that rewards the buyer would probably work - even if it stands on unsteady ethical ground.

There is another situation where B2B loyalty schemes work very well: channel sales partner programmes. These are where a manufacturer directly rewards the sales staff of companies that resell its products. This kind of selling incentive is very constructive because it benefits both businesses equally, in terms of greater sales and profit.

By generating strong engagement between channel partners' sales people and the products themselves, the resultant increase in product knowledge and familiarity means that a more authoritative line can be taken in the sales process when dealing with end users. A fine example of this kind of programme's success is the Indian networking specialist Nortel, which achieved 40% growth in channel sales after one year of running such a programme.

Four main B2B loyalty strategies...
This chapter explains several different B2B loyalty strategies and describes the situations and circumstances under which each should be used, along with practical ideas on which job roles can be most effectively targeted within the client company. The main B2B loyalty marketing strategies are:

• The two-link chain
• The three-link chain
• The four-link chain
• Targeting the SME owner-manager

Five attitudes of the most successful B2B marketers...
We also explain, step-by-step, the five key attitudes that make a B2B client loyalty initiative successful:

1. Understand the clients. Learn about them, and make good use of what you learn.
2. Deliver flawless results. Always fulfil every benefit and promise made.
3. Just let the customer buy. Don't put any unnecessary obstacles in their way.
4. Develop a proactive plan, then execute it thoroughly and completely.
5. Don't assume the client is loyal, and don't give up when they seem to stray.

We also detail the key drivers of B2B loyalty, strategies for channel loyalty and reward schemes, a new channel engagement strategy, the major factors that drive channel partner loyalty, the link between business intelligence (BI) and successful channel marketing, and how word-of-mouth travels between businesses.

Case studies of successful B2B loyalty programmes...
The detailed case studies in this chapter drill down into some of the world's best B2B loyalty success stories, what they did, how they did it, and what the results were, including:

• Nectar Business (UK)
• Argos Business Solutions (UK)
• Nortel (India)
• ARBL (India)

In this section we explore, on a country-by-country basis, global consumer market sizes and statistics, providing breakdowns of population structure, numbers of households, household income distributions, consumer age groups, gender bias, and other commercially useful facts and figures. The data has been researched through and gathered from a number of trustworthy sources, including the American CIA World Fact Book, and various annual consumer-oriented and marketing fact books and tables.

In terms of accuracy and recency of data, the information for a very few countries was not updated by government or other authoritative sources since late 2007, in which cases the most recent and reliable figures available have been used and adjusted based on previous growth or decline patterns for each of those countries. The result is an overall snapshot of each country's key marketing statistics, up to date as of January 2010.

Figures & forecasts for loyalty schemes, worldwide...
Among the new facts, figures and market forecasting tools provided in this chapter:

• How to estimate a loyalty scheme's potential market size and future penetration rates

• Current customer loyalty market sizes, values, demographics, and development of major loyalty markets, including the USA, Canada, United Kingdom, Australia, South Africa, and China.

• Key data about each country covered - plus totals and averages for North America, Europe, the Middle East, and the Whole World - including:

  1. Consumer age breakdowns
  2. Consumer gender breakdowns
  3. Household sizes, population count, and number of households
  4. Household income share breakdowns (highest and lowest earners)
  5. Communication infrastructure (internet connections, mobile phones & fixed lines)

In this chapter we examine the current and future trends for customer loyalty, customer engagement, online loyalty and marketing, social media marketing, brand loyalty marketing, green marketing, luxury and affluent consumer marketing, and integrated marketing.

In terms of customer loyalty trends, retailers are acknowledging that their key efforts in future have to revolve around managing existing loyal customers rather than acquiring new ones, and the highest level of customer loyalty programme involvement is seen among affluent consumers. The basis of brand loyalty marketing is changing rapidly. In this chapter we explain the major trends that are set to impact both luxury and mass-market brands during the next few years.

E-mail marketers are expected to concentrate more on dynamic content, win-back campaigns, and transactional message marketing strategies over the next two years. The online advertising market is set to expand significantly as new tools and methods are developed to help make the technique more measurable and effective.

At the same time, a new consumer identity - the 'networked self' - is expected to emerge, with each individual seeing themselves as a small-yet-significant part of the overall community, and feeling a responsibility to understand and engage with other consumers. Consumers will also greatly increase their spending on green products and services, and green issues will increasingly influence not only consumer choices in-store but also in politics.

Consumer life stage will continue to be a significant segmentation tool for marketers. Internet activity will increasingly multiply the 'pester power' of children, with parents being subjected to growing demands for toys and gadgets seen in online stores and web site adverts.

What's just around the corner: New trends and forecasts...
In this chapter we detail the new trends that are shaping the marketing landscape, as well as forecasts and predictions about not only the shape and direction of things to come but also the size, including:

1. Customer loyalty trends
2. Loyalty marketing trends
3. Consumer engagement trends
4. Loyalty reward redemption trends
5. Online loyalty marketing trends
6. Internet retail trends
7. Digital consumer trends
8. Online coupon marketing trends
9. 1to1 marketing trends
10. Brand loyalty trends
11. Brand switching trends
12. Brand marketing trends
13. Green marketing trends
14. Luxury marketing trends
15. Luxury customer loyalty trends
16. Luxury retail trends
17. Marketing trends
18. Marketing media trends
19. Integrated marketing trends
20. Card marketing trends
21. The future of customer loyalty

If you could have a hour-long personal interview with the world's leading experts on customer loyalty, retention marketing, customer win-back, retail operations, and marketing operations management, what would you ask them?

We've done exactly that, and asked a selection of thought leaders from around the world to share with us their thoughts on customer loyalty marketing. They were given the freedom to comment and expound upon any subject that they think matters most today, and their honest opinions, advice, answers, practical guidance, predictions, and solutions are detailed for you in this chapter.

We hear from more than twenty world experts on customer loyalty, including:

• Don Peppers and Martha Rogers of Peppers & Rogers Group
• Tim Keiningham of Ipsos Loyalty
• Brian Woolf of the Retail Strategy Center
• Robert Passikoff of Brand Keys
• Phil Hawkins of FlyBuys
• Dominic Hofer of Loylogic
• Luc Bondar of Carlson Marketing Worldwide
• Barry Kirk of Maritz Loyalty
• Richard Cuthbertson of Said Business School
• Terry Vavra of Customer Experience Partners
• Stuart Evans of ICLP
• Michael Lowenstein of Harris Interactive
• Peter Wray of Loyalty Matters
• Carlos Dunlap of Kobie Marketing
• ... and more than a dozen others.

With consumers becoming ever smarter about prices and product options, countries of origin, 'food miles' (i.e. how far an item actually travels before reaching the shelf), green and organic foods, and healthy lifestyle options, it is no surprise that supermarkets are finding it more difficult to satisfy all of the customers all of the time. But the problem is worse still, with competition having really opened up on the internet over the past two years, and even greater price pressure being applied by discount supermarkets such as Wal-Mart in the US and Asda in the UK. No consumer market is safe from this intensively competitive atmosphere, it seems.

When Sir John Cohen, founder of the UK-based Tesco empire, brought the idea back to the UK from the US soon after World War II, the model for supermarkets was to "pile it high and sell it cheap". Many of the original supermarkets were like glorified market stalls. Then came the concept of self service, and the distant ancestor of the modern supermarket was born. But today, the leading supermarkets (such as Tesco) are among the most sophisticated retailers in the world. They lead every other sector in terms of customer data collection and analysis, stock management, customer service, and pure retail innovation. Metro Group in Germany continues to push forward with new automation technologies (such as RFID-based tracking of goods throughout the supply chain, self-checkouts, and 'intelligent' shopping carts), and is steadily marching forward with its Future Store initiative.

And as supermarket groups and traditional grocery retailers diversify rapidly into other markets and sectors, they are strengthening not only their hold on the consumer's monthly household budget but also on insurance, communications, banking, loans, credit cards, household maintenance, car maintenance, travel and holidays, health and well being, and a vast array of other aspects of daily life.

This, of course, means that their loyalty card programmes can now collect even more valuable data, gaining a much wider and more general view of each household's lifestyles and life stages. These 'mega retailers' are now the leaders in customer segmentation based on purchases in multiple categories and sectors, and are the ones to watch to find out how to target both meaningful and appropriate offers at specific customers.

With respect to customer retention strategies, supermarkets can be broadly divided into three groups:

1. Those that rely on every-day low prices (EDLP) to keep their customers;

2. Those that rely on loyalty programmes for best customer marketing;

3. Those that rely on excellent service and ranges of products.

Of course, there are many shades in this spectrum and some supermarket chains adopt all three methods to varying degrees.

Just as there is no such thing as an average customer, there are no definitely 'right' or 'wrong' approaches to customer retention. EDLP will appeal to one group of consumers, better service and choice will appeal to another, and loyalty programmes will appeal to another.

It is important to choose the method that will appeal to the chosen market sector: if the culture of the business revolves around quality (up-market premises, exclusive ranges of premium goods and a superior shopping experience) then EDLP is probably not the way to go. However, for an enterprise geared toward attracting and retaining the bulk of the population as customers, EDLP may be the answer. Once the decision is made, it has to be whole-heartedly applied. All decisions should be made with the culture of the business in mind.

Key insights into the success of supermarket loyalty schemes...
This chapter explains why supermarket loyalty programmes usually succeed where other retailers' loyalty programmes risk stalling, as well as other insights such as:

• Why supermarkets are usually the best at understanding their customers;
• What drives grocery shoppers' choices;
• Why private labels are growing despite perceived quality issues;
• Why food discounts can boost sales but not loyalty

Case studies showing how the best loyalty schemes work - and why...
In writing this chapter we researched, explored, summarised and explained every aspect of what we believe are the world's 15 most exemplary supermarket loyalty programmes, and we present details of the programme and rewards structure, the programme operator, and programme developments over the past few years, along with membership counts and redemption figures wherever possible. Case studies include:

1. Asda, UK (EDLP)
2. Big Y, USA (Express Rewards)
3. Canadian Tire (Canadian Tire Money)
4. Coles Group, Australia (FlyBuys)
5. Co-op, UK (Dividend Card)
6. Foodtown/Woolworths, New Zealand (OneCard)
7. Giant Foods, USA (BonusCard)
8. Iceland, UK (Bonus Card)
9. Meijer, USA (EDLP)
10. Price Chopper, USA (AdvantEdge Card)
11. Safeway, USA (Clubcard)
12. Sainsbury's, UK (Nectar)
13. Tesco, UK (Clubcard)
14. Ukrop's, USA (Golden Gift)
15. Wal-Mart, USA (EDLP)

In general retail, today's key need is to focus on what drives loyalty programmes, what customers actually prefer, and what the future is likely to bring. Most retailers accept that they need to know more about their customers, and that the knowledge should be centrally recorded so that it is available to employees when they need it.

In this chapter we examine what makes consumers shop the way they do, what makes them choose one retailer over another, and illuminate the dynamics of loyalty programmes in the general retail sector, looking in detail at some of the leading programmes, operators, and developments in the field.

We also examine the effectiveness of loyalty programmes, their myriad benefits to the retailer and customer, and we examine both current and future shopping trends. Also highlighted are the many problems of customer retention strategy planning in the supermarket and general retail sectors. (Loyalty to supermarkets is specifically and comprehensively covered in Chapter 20.)

Most retailers accept that they need to know more about their customers, and that the knowledge should be centrally recorded so that it is available to employees when they need it. The days when it was enough for 'Mary in Haberdashery' to know all about which lace sells and which one doesn't, or who the best customers are and what they like, have long gone. Loyalty programmes enable that information to be recorded and so are an essential part of retail. The retailer judges the usefulness of a loyalty programme by how it can help run the store more efficiently and profitably.

But customers have a different view of loyalty programmes. To the customers, the programme exists solely to reward them for their custom. If they think that they would prefer to be rewarded in some other way, they dismiss the programme as being unnecessary. The people on opposite sides of the counter assess the usefulness of loyalty programmes in totally different ways. With that in mind, it's not surprising that many customers, when given the choice, opt for simple discounts instead of a loyalty programme - they are not taking into account the hidden benefits that a programme provides for them - the more effective stock control, the better merchandising and the greater personal relevance of marketing messages.

However, it's what the customer thinks of the programme that really matters. That's why it's important to listen to their views and to do whatever is possible to correct their misapprehensions. It must also be understood that loyalty cards are not a substitute for getting the basics right, even though they do add value to the retail proposition.

Strategies and insights for a successful retail loyalty scheme...
In this chapter we examine the latest insights, strategies, and 'pain points' affecting retail customer loyalty, including:

• Retail loyalty strategies
• The top retail loyalty pressures
• How promotions can build loyalty
• Gaining insights into the retail customer
• The effect of the increasingly anonymous customer
• The effect of the retail customer experience
• Consumers enthusiasm for new retail technologies
• Other retail strategies
• Retail spending patterns

Case studies showing how the top retail loyalty schemes have succeeded...
For this chapter we researched, summarised and explained every aspect of what we believe are among the world's finest retail customer loyalty programmes, and we present details of the programme and rewards structure, the programme operator, and programme developments over the past few years, along with membership counts and redemption figures wherever possible. Case studies include:

1. Barnes & Noble, USA (B&N Member)
2. Best Buy, USA (Reward Zone)
3. Boots, UK (Advantage Card)
4. Borders, USA (Borders Rewards)
5. CVS/Pharmacy, USA (Extra Bucks)
6. Hbc, Canada (Hbc Rewards)
7. Home Ideas Centre, Australia (AdvantageCard)
8. Jet, South Africa (Jet Club)
9. LG, UK (brand loyalty)
10. Neiman Marcus, USA (InCircle)
11. Nordstrom, USA (Fashion Rewards)
12. Pigsback, UK (retail rebates)
13. Staples, USA (Staples Rewards)

We also detail the latest customer loyalty developments at other retailers, including A.C. Moore, JCPenney, Jeanswest, Jewel-Osco, Kmart, LL Bean, Macy's, Newegg, Office Depot, OfficeMax, QVC, Shoppers Drug Mart, Sam's Club, Sears, Sobeys, and Talbots, among others.

Customer acquisition and retention costs a lot in the financial services sector, and that calls for deeper relationships to help keep customers loyal over time. With a growing ease of switching, relying on inertia is no longer an option to keep customers tied in, so financial service institutions in every country have identified the need to adjust their customer loyalty strategy to suit today's highly competitive marketplace.

It's often said that it can cost up to seven times more to acquire one new customer than to retain an existing one. But in the financial industry, the costs reach a whole new level: acquiring one new customer can exceed US$350. As a rule, of these 20% will be very profitable, 20% will cost money to retain, and the middle 60% will pay for themselves while generating marginal revenue, according to Harvard Business Review. With statistics like these, a customer engagement and retention plan based on extensive data collection and analysis is imperative for the long-term health of companies in the financial industry.

Financial institutions must therefore find a way to retain profitable customers, make marginally unprofitable customers into profitable ones, and reduce the marketing budget spent on the most costly customers. To do that, and to increase customer loyalty, financial industry firms need to constantly monitor their customer portfolio and actively manage their marketing efforts based on the changing behaviour of their customers.

In this chapter, we examine not only the latest thinking on how to do so, but also the many customer retention, loyalty and CRM initiatives that have been launched during the past two years.

Best practices and insights to grow financial customer loyalty...
Among the practical insights and best practices detailed in this chapter for financial service providers:

• Drivers of customer loyalty and churn
• The effect of consumer trust on loyalty
• How e-mail messaging can improve customer loyalty
• How reward redemptions boost customer satisfaction
• Barriers to banking loyalty
• How banks can grow customer loyalty
• How banks can earn younger customers' loyalty
• How banks can gain from Web 2.0 technologies
• Debit card and credit card loyalty insights
• Credit and debit reward card preferences
• Monitoring financial customer engagement
• The need for an 'at risk' customer detection strategy
• The critical importance of customer data security
• Rewards platforms for financial institutions

This chapter contains 24 detailed case studies and programme summaries of major financial institutions around the world and their loyalty offerings, including:

1. American Express (Global)
2. BabyMint (USA)
3. Bank of America (USA)
4. Barclays Bank & Barclaycard (UK)
5. BMO (Canada)
6. Chase (USA)
7. Citi (Global)
8. Discover (USA)
9. Futura Rewards (Canada)
10. HSBC (Global)
11. Lloyds TSB (UK)
12. MasterCard (Global)
13. MBNA (Global)
14. MoneyGram (US, Canada & Europe)
15. NestEggz (USA)
16. RBC (Canada)
17. Scotiabank (Canada & USA)
18. TD Bank (Canada)
19. US Bank (USA)
20. Upromise (USA)
21. Visa (Global)
22. Wells Fargo (USA)
23. Zions Bank (USA)

The traditional long-haul and domestic airlines and their frequent flyer programmes have faced increasing competition over the past few years, not only from each other but also from a vast array of smaller start-ups and low cost, budget carriers. An increasing number of 'business class only' airline operators has added extra pressure to a market that relies heavily on business and first class fares to subsidise operations. And business growth has been made even harder to achieve by increasing numbers and complexities of security checks and updated airport procedures, all of which have conspired against the humble passenger and caused many people to seriously re-think any plans they have for air travel.

The simultaneous rise of internet-based phone calls (such as Skype), online meeting and presentation services, and of course video-conferencing has provided many business people - who would previously have had to travel by air - with an alternative way of conducting business without the cost or inconvenience of leaving the office.

These factors have combined to spur airlines across the board into ever-more clever and innovative frequent flyer programme developments. Some of the new features focus on the airport and its associated services, while others focus on the flight itself.

Almost all focus on passenger comfort and convenience, with almost all higher tiers (the so-called 'elite' frequent flyers) being offered faster ways of getting through check-ins, security checks, baggage collection, and transfers. There has also been a mass move among the larger airlines into online loyalty malls and new mileage redemption options that start at lower levels than the traditional 25,000 or 35,000 miles-per-seat award ticket.

The higher classes of travel (business class, premium class, first class, and half a dozen other names describing non-economy classes) are clearly the focus of airlines' attention. This report's authors predict that this trend will continue to grow, driving a significant wedge between airlines that carry economy passengers (for whom personal service can be expected to decline in line with decreasing prices) and those that carry business and luxury passengers (for whom personal service will increase thanks to the lower financial and staffing overheads caused by the loss of economy class).

There is, however, a consumer-facing problem that is common to many of today's airline loyalty programmes: excessive complexity. While airlines are complex enterprises with many hundreds of variations of tickets, seats, classes, routes, destinations, customers, and even baggage and security rules, the customer should not have to understand and negotiate all of these complexities in order to work out what reward they can get for flying from Point A to Point B next month.

Most frequent flyer programmes offer different tiers or statuses (which are clearly necessary to differentiate between high-end benefits for profitable customers and low-end rewards for occasional passengers), but programme members are understandably confused by a wealth of tier points, elite status qualifying miles, qualifying segments, qualifying miles, partner points exchange rates, redemption mechanisms, vouchers, class upgrade options, and so on.

Now compare this situation to a supermarket retailer's "points means rewards" loyalty card programme, in which shoppers understand that every US$1 they spend earns them 1 loyalty point, which equals US$0.01 in rewards, and in which redemption is as simple as walking up to a checkout counter. If frequent flyer programmes are really aiming to differentiate their respective airlines in the mind of the time-pressured traveller, airlines must surely take a step back and re-examine their loyalty offerings with a view to simplifying them and making them more predictable and comparable.

Among the hundreds of facts, figures, insights and consumer research detailed in this chapter:

• Up-to-date FFP membership figures for 28 major airlines
• Air travel loyalty best practices
• Strategies to reinforce the value of FFP miles
• Key factors for building strong FFP relationships
• How commoditised FFPs can still find value in data
• Why airlines' main business challenge still lies with their loyalty efforts
• The ten major trends governing the future of FFPs
• The business benefits of an FFP in tough economic times
• How airlines can generate more income from their loyalty offerings
• The growing problem of frequent flyer 'breakage' (unredeemed miles)
• The potential spread of FFPs to airports

Case studies of 25 major FFPs, and their strategies, structures and developments...
In this chapter we also present detailed case studies and programme summaries for 25 major airlines, with programme developments and membership figures in all cases, including:

1. Air Canada (Aeroplan)
2. Air France/KLM (Flying Blue)
3. Air New Zealand (Airpoints)
4. Alaska Airlines (Mileage Plan)
5. American Airlines (AAdvantage)
6. British Airways (Executive Club)
7. Brussels Airlines (Miles&More)
8. China Southern Airlines (Sky Pearl Club)
9. Continental Airlines (OnePass)
10. Delta Air Lines (SkyMiles)
11. Emirates (Skywards)
12. Etihad (Etihad Guest)
13. Frontier (Early Returns)
14. Jet Airways (JetPrivilege)
15. JetBlue Airways (TrueBlue)
16. Lufthansa (Miles&More)
17. Malaysia Airlines (Enrich)
18. Northwest Airlines (merged with Delta)
19. Qatar Airways (Qmiles)
20. South African Airways (Voyager)
21. Southwest Airlines (Rapid Rewards)
22. United Airlines (Mileage Plus)
23. US Airways (Dividend Miles)
24. Virgin Atlantic (Flying Club)
25. Virgin Blue (Velocity Rewards)

And the latest FFP developments among the other airlines...
This chapter also charts the latest developments and loyalty offerings for more than a dozen other airlines around the world, including Aeromexico (Club Premier), Air China (Companion), AirTran (A+ Rewards), bmi (Diamond Club), EgyptAir (Aeroplan), Flybe (no loyalty scheme), Kulula (Jetsetter Club), Porter Airlines (VIPorter), Qantas (Frequent Flyer), Scandinavian Airlines (EuroBonus), Spirit Airlines (Free Spirit), TAM Brazil (Multiplus Fidelidade), Turkish Airlines (Aeroplan), Virgin America (Elevate), and WestJet (Air Miles Canada).

In today's competitive hospitality market, many hotel operators are adding frequent guest loyalty programmes to foster customer relationships, attract new customers, and encourage longer stays, which suggests that rewards programmes are seen as being more effective in creating loyalty to hotel brands than simple discount-based promotions and incentives.

In the past two years, hotel and resort operators have also made significant efforts to expand the 'pampering' and luxury options available to their most frequent guests. Many hotel groups have also found value in providing extras and perks for every guest, regardless of membership of a frequent guest programme.

But by far the most valuable rewards offered to travellers who frequent the same hotels time after time are the personal touches that provide a feeling of consistency, familiarity, and home-like comfort - such as having their preferred newspaper delivered each morning, having their preferred type of pillows and bedding, or having the hotel staff know their preferences in advance.

While there is still a lot of progress that can be made in this respect - for example, with the use of technologies such as RFID, NFC, and even biometrics - many upscale hotels have already taken active steps to get this aspect of their service right.

Case studies, programme summaries, and up-to-date membership figures...
In this chapter we provide not only the latest membership figures of each of the major hotel frequent guest programmes around the world, but also complete case studies and programme summaries for each of the following:

• Accor (A-Club)
• Best Western (Best Western Rewards)
• Carlson Hotels (Goldpoints Plus)
• Cendant Hotels (TripRewards)
• Choice Hotels (Choice Privileges)
• Hilton (Hilton HHonors)
• Hyatt (Gold Passport)
• InterContinental Hotels (Priority Club Rewards)
• Marriott (Marriott Rewards)
• Starwood Hotels (Preferred Guest)
• Wyndham (Wyndham Rewards)

This chapter looks into recent developments and innovations in the general travel and tourism sector that are not directly associated with airlines, frequent flyer programmes, hotels, holiday resorts, and frequent guest programmes. It includes loyalty and customer satisfaction-related developments throughout the sector, worldwide, and the findings of surveys and research concerning cruises, travel sellers, travel incentives and loyalty schemes, rail operators, regional and national tourism initiatives, and car rentals.

Clearly, the loyalty market has reached a state of maturity in the airline, hotel and car rental industries, with very few such loyalty programmes today being able to claim genuine competitive differentiation. Simply matching the proposition offered by the competition is not enough to create lasting customer loyalty. When all programmes within a sector are basically the same (e.g. they all have online enrolment, an award chart, a welcome bonus, double miles promotions, and so on), customers tend to react with indifference.

With this in mind, true differentiation is the best way (and arguably the only way) to maintain interest and increase consumer awareness, for the simple reason that customers tend to notice new products and services that stand out from the crowd.

So how can travel-related loyalty programmes differentiate? To gain that competitive advantage, the marketing team responsible for the loyalty programme must:

1. Use their member data to garner true customer insights;

2. Use all their market know-how to enable better market positioning on a strategic level.

Only by using this knowledge - and using it before the competition does - can a travel sector loyalty programme create a sustainable, differentiated proposition.

Indeed, loyalty schemes cannot afford to stand by and watch new schemes and approaches develop among their competitors. Indeed, along with some methods for measuring differentiation, some best practices, and some future trends, the white paper shows that:

1. Despite significant competition in the travel sector, there is still plenty of room for differentiation;
2. Smart positioning and innovative techniques can make the difference between successful differentiation and being "just another travel programme".

There are still many opportunities for travel loyalty programmes to lead the way, but having the "great idea" is just part of the success equation: putting them into action before the competition does (and creating a barrier to entry wherever possible) is what completes the equation.

Case studies and summaries of the major car rental loyalty schemes...
In this chapter we provide detailed case studies and programme summaries of car rental companies' loyalty programmes and incentive schemes, including:

1. Avis (Avis First)
2. Budget Rent A Car (RapidRez)
3. Dollar Rent A Car (Dollar Express)
4. Enterprise (Enterprise Plus)
5. Europcar (Privilege)
6. Hertz (#1 Club)
7. National Car Rental (Emerald Club)
8. Thrifty (Blue Chip Rewards)

Passenger loyalty developments among the major cruise lines and travel agencies...
Apart from providing new insights into consumer attitudes to travel and the sector's loyalty offerings, this chapter also details the latest developments in terms of passenger loyalty offerings and booking incentives among the world's major cruise lines and booking agencies, including:

• Carnival Cruise Lines (cruise operator)
• CruisesOnly (cruise booking agent)
• Celebrity Cruises (cruise operator)
• CruiseShipCenters (cruise operator)
• Holland America Line (cruise operator)
• MSC Cruises (cruise operator)
• SeaMiles (cruise loyalty programme)

Food and drink providers - whether they are diners, quick service restaurants, pizzerias, snack bars, or full service restaurants - have all had a hard time differentiating their offerings during the past few years. The over-abundance of these establishments in every town in almost every country has had a profound effect on customer loyalty, with many consumers now viewing the task of choosing a place to eat or drink as being insignificant and irrelevant. The nearest place is often the first choice.

But there have been many innovative efforts to combat this undifferentiated and often lack-lustre market, including the use of new technologies such as mobile phone loyalty programmes, new and more convenient payment methods, programmes to drive greater emotional engagement, internet-based and mobile phone-based coupons and vouchers, and a host of partnerships between food service providers and major brands in other sectors.

Other recreational sectors have also seen great strides in terms of customer loyalty innovation over the past few years, with new programmes, rewards, and engagement tactics appearing in family entertainments, film and video, sports (of just about every kind), and of course the ever-popular casinos and gaming markets.

The latest recreational loyalty initiatives, innovations and developments...
In this chapter we examine the best of the best among these initiatives, and explore how their mechanisms work, and what effect they have had on customer loyalty, repeat business, and overall customer retention and engagement, including specific and detailed examinations of several sectors, including:

• Restaurant loyalty insights and recent developments, including the latest changes at T.G.I. Friday's, Arby's and other dining rewards programmes
• Loyalty insights and developments from quick service restaurants and cafes
• The loyalty offerings of drinks brands, including Starbucks, Guinness, Miller, Budweiser, The Drink Shop, Jordan's Vineyard, wine clubs, and soft drink makers
• The ongoing development of golfing loyalty programmes and the benefits they provide
• The efforts of football clubs to keep supporters as fiercely loyal as they were in the past
• Loyalty initiatives in the entertainments industry, including rewards at the movies and on Broadway
• Other loyalty schemes involving campgrounds, theme parks, casinos, and even fly fishing.

Telecoms operators across the world have tried a number of different techniques to nurture customer loyalty and reduce the inevitable churn produced by number portability and mobile handset subsidies. Some operators have paired up with existing loyalty programmes while others have set up their own schemes. Yet others have chosen to run shorter-term promotions in their bids to both acquire and retain customers.

As has been the case for at least the past three years, much of the loyalty-related activity has come from the mobile telecoms sector, while fixed line providers - particularly in the USA - seem to have been concentrating more on the bundling of services, internet and cable broadband services, VoIP (voice over internet), and improvements in both customer service and satisfaction.

In particular, the mobile phone has become increasingly associated with customer loyalty, not only because mobile network operators and handset manufacturers are desperate to find ways of 'locking customers in' to their brands but also because the mobile phone itself has become a worthy target for all kinds of new loyalty-enabling concepts and technologies.

For example, loyalty marketers are now - as we predicted in The Loyalty Guide 3 - looking at the consumer's mobile phone as not only a potential replacement for plastic loyalty cards, but also as a replacement for payment cards and as a mechanism for direct, personalised, one-to-one marketing communications.

And with the addition of contactless technology to many mobile phones (in the form of 'near field communication' or 'NFC' chips), our next prediction is that personalised, opt-in, event-based marketing will increasingly take place through contactless consumer interactions with anything from POS systems to 'smart posters' in the High Street.

In this chapter we examine customer loyalty to both mobile telecoms providers and fixed line telecoms providers, charting the telecommunications industry's progress in terms of earning greater loyalty and reducing the churn levels that have for so long characterised the market.

Mobile network customer loyalty explained...
This chapter's coverage of developments and insights into mobile customer loyalty include:

• Mobile customer loyalty insights and research
• Drivers of mobile network loyalty and churn
• Who's not loyal to their mobile service, and why
• The importance of relationships to mobile network users
• Factors that can increase loyalty to a mobile network
• Factors contributing to the loss of mobile retail sales
• How mobile relationships are affected by poor CRM efforts
• How mobile network loyalty rewards drive satisfaction
• Why European mobile operators have the highest loyalty
• Loyalty offerings from mobile network operators around the world

Fixed line telecoms customer loyalty in a nutshell...
And our coverage of developments and insights into fixed line customer loyalty include:

• Fixed line customer loyalty insights and research
• How billing issues can add 10% to a provider's customer defection rate
• Customer loyalty offerings from around the world, including VoIP incentives, B2B loyalty rewards, and an elite customer loyalty club

There are two key areas involving customer loyalty in the automotive sector: automotive sales, and fuel sales. In this chapter we examine both areas, showing how each is being handled by manufacturers and suppliers.

Cars are now almost a commodity, and car manufacturers have a problem. It might almost be fair to say that the most noticeable point of differentiation between competing, similar marques is the dealer who sells the car. Certainly, that seems to be the area where most can go wrong, and most complaints arise. So much depends on the way the car is sold and particularly the way that the after sales contacts and service are carried out. It's quite possible that it's for this reason that research shows less loyalty to dealers than to manufacturers.

To build loyalty to the marque, the manufacturer has to produce an attractive, desirable, reliable vehicle at the right price. Most of them would seem to be very good at doing that. It is essential that dealers - the potential weak link in the chain - are single pointed, focusing on finding out what their customers want, why they want it, and work out ways of meeting these needs as closely as possible. And, while new cars with very lengthy service intervals may be very convenient for the customer, they make it even less likely that the dealer and customer will have many opportunities to build a relationship. Every contact - rare as they are becoming - must be treated with great care and delicacy if any loyalty is to be built.

And the fuel retail market (that is, 'petrol' to the Briton or 'gasoline' to the American) was one of the first to become involved in loyalty programmes. In fact, in the early 1990s, many people equated loyalty programmes with forecourt programmes. Many of the initial programmes were quite rudimentary and collected no useful customer data. Some gave a gift when a certain amount was spent on fuel - for example, a free drinking glass for each £5 spent. Not even the customer's name was collected. Others issued stamps or coupons for each purchase. And when these were redeemed, the customer was only sometimes identified. Another problem with forecourt loyalty programmes is that they tend to eat into already-slim profit margins, and usually contribute very little to lucrative non-fuel sales in forecourt shops.

However, the market has changed significantly over the past few years, and fuel companies have been quick to change their tactics accordingly. Loyalty card and token-based initiatives on the fuel forecourt have become far less common. Today, the most common types of reward seen on fuel forecourts are undoubtedly the 'cents off per litre' discount offers (tied to various minimum supermarket spend levels) such as those operated by Coles Myer and IGA in Australia, and fuel retailer branded credit cards that offer rebates against future fuel purchases (such as the Shell MasterCard).

Factors driving vehicle buyer loyalty, and how the market has responded...
This chapter details all the latest customer loyalty research, insights and developments in the automotive field, including:

1. Vehicle-buyer loyalty research and insights
2. Factors that drive car owner loyalty
3. How discontinued models damage car-buyer loyalty
4. How engine trouble damages loyalty to car brands
5. How 'Cash for Clunkers' damaged car owner loyalty
6. Why behavioural science holds the key to luxury car owner loyalty
7. Why Americans seem happier with imported vehicle brands
8. Developments in automotive loyalty strategy and technology

How rewards and incentives are being used to drive vehicle sales...
We also provide case studies and programme summaries of the major vehicle purchasing loyalty initiatives (while most are in fact incentive-based offerings), including:

• Chrysler Group (USA)
• Kenworth Trucks (USA)
• Kia (USA)
• Kia (Canada)
• Mercedes-Benz (USA)
• Toyota (Canada)

How fuel retailers keep motorists coming back to their pumps, again and again...
In addition to detailing the latest loyalty and reward programme developments in the fuel retail market, this chapter provides detailed case studies and programme summaries of 9 major fuel retailer loyalty programmes around the world, including:

1. BP, UK
2. Coles Myer, Australia
3. Esso, Canada
4. Exxon, Singapore
5. FuelPerks! & Fuel Rewards, USA
6. Indian Oil, India
7. Petro-Canada
8. Shell, UK
9. Texaco, UK

There are several market sectors that are increasingly becoming involved in loyalty and relationship management initiatives, despite many not having "customers" in the usual sense of the word. For example, charities and non-profit organisations (NPOs) around the world are increasingly turning their attention to donor relationship management to either stabilise or increase their flow of donations. During the past two years, many NPOs have discovered what they believe to be flaws in traditional charity marketing strategies and have set about creating new strategies, often employing the latest customer loyalty ideas and technologies.

At the same time, a number of everyday retail and coalition loyalty programmes have found favour with consumers by offering charitable donation facilities among their other redemption options. Many consumers appear to feel that, while their loyalty points do not accumulate quickly enough to provide them with worthwhile personal rewards, their loyalty points could be better used by donating them (or their cash value) to deserving charities or local community non-profit initiatives.

Governments have also become far more involved in rewards programmes to drive citizen behaviour changes, including the use of emerging technologies and complex rewards platforms to encourage, for example, waste recycling efforts.

Case studies and recent developments in non-profit loyalty marketing...
With many examples of non-profit organisations that have begun using the techniques and principles of retail customer loyalty programmes, this chapter offers insights into the workings of charitable loyalty donations, recycling reward initiatives, and fundraising programmes.

Of particular note in this chapter is the comprehensive case study of South Africa's anti-poverty rewards programme, The Broccoli Project, which has enlisted several major organisations and consumer brands to help educate and feed the country's poorer citizens while also teaching them - and rewarding them for using - the skills and social behaviour patterns needed to continue to support themselves.

Many media publishers and channels (particularly magazines and radio stations) have recently found that, with an increasing number of non-traditional entertainment options (such as internet video and radio, and online daily journals and blogs), the battle for the loyalty of listeners, viewers and readers has become more intense than ever before. Many forward-thinking newspapers and magazines have begun rewarding subscribers and re-subscribers with luxury or aspirational rewards and services. Radio stations are increasingly using web sites and the mobile channel to encourage listeners to engage with them and earn rewards. Marketers have also come to realise that today's youngsters are tomorrow's mature consumers, and a number of youth loyalty initiatives have also been implemented to make brand advocates out of students. And, with the rise of online booksellers (for both new and second hand books), a number of bricks-and-mortar book retailers have implemented loyalty programmes to help them keep customers coming into their stores. Technology suppliers and the healthcare sector have also begun to experiment with customer loyalty, behavioural rewards and incentives, along with pet shops, energy utilities, house builders, event organisers and companies from a diverse range of other sectors.

How loyalty is changing in diverse and niche markets...
Among the topics and insights examined in this chapter are:

• Loyalty to the printed media
• Book store loyalty
• Newspaper & magazine loyalty
• Radio station loyalty
• Loyalty to technology suppliers
• Loyalty to healthcare providers
• Eco-loyalty initiatives
• Other loyalty initiatives, including pet stores, home builders, city cards, and many others

This appendix provides a detailed, categorised directory of customer loyalty related businesses and service providers, created to provide a quick reference and access to market-leading suppliers, whether they are potential suppliers, clients or strategic partners. Each company is listed along with contact details, company background (where available), a summary of its usual activities, service provision categories (as determined by the company itself), and a list of countries or territories in which the company usually operates.

The appendix is split into two sections. The first section lists the 17 service provision categories (each company is associated with up to five such categories). For each category the relevant suppliers are listed in groups according to their country of origin. The service provision categories are:

• Customer loyalty systems
• CRM/BI systems
• Customer experience management
• Call centres
• Developers & integrators
• Application hosting
• Loyalty scheme operators
• Point of Sale (POS) technology
• Data warehousing & data mining
• Consultancy & advice
• Couponing
• Gift certificates & incentives
• Internet marketing
• Direct marketing
• Research and analysis
• Public relations/media/events
• Industry associations

The second section includes a complete listing of all 190 customer loyalty and service suppliers in strict alphabetical order.