Transcript 5. Loyalty and Information Technology

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Offering
Market and Customer Management - Customer Loyalty
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Communication
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Finance
5. Loyalty and Information Technology
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Processes
Key topics
of the
programme
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Structure
Frequently asked questions:
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Call Center
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Cards
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Information
Technology
What is a customer loyalty system (CLS)?
What are the different customer loyalty tools available in the market?
How do the current IT environment and the CLS fit together; is it possible to integrate these two systems?
What are possible vendors of CLS-Software?
How should a CLS-System be linked with a corporate IT environment?
What is the relation between loyalty systems and campaign management?
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5. Loyalty and Information Technology
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For the administration of the loyalty programme, a customer loyalty system (CLS) is required.
The CLS needs to be integrated with the operational systems of the company
For each customer retention programme three main systems should be taken into consideration: A data warehouse, a
campaign management system and a customer loyalty system.
 The Customer Loyalty
System (CLS) administers the
bonus points (collection and
redemption) and the members.
The call center and the back
office agents are working
mainly with this operational
system.
 The Data Warehouse (DWH)
is collecting the data out of the
different operational systems
and provides this data in the
required format to the
Customer Loyalty System.
 A Campaign Management
System provides a database
marketing environment and
enables the company to get
the customer information.
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User:
Club management
and marketing
Data Warehouse
(DWH)
User:
Call center and
back office
Partnersystems
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User:
Marketing and
communication
Campaign Management System
Customer Loyalty
System (CLS)
FulfillmentCenter
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Market and Customer Management - Customer Loyalty
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There are several suppliers of customer loyalty systems (1/2)
ICL
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Retail Logic/
Loyalty Logic
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Broad Vision
Clients
Public transport
Swisscom
First Direct (Bank)
Marks & Spencer
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5. Loyalty and Information Technology
Supplier
IKOSSVAN,
Aachen,
Germany
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Short Description
POSEIDON CLS, contains 3 modules:
 Card management system (CMS)
 Customer bonus system (CBS)
 Customer Information System (CIS)
 Corema Reward, Inform, Discover, Promote and Data Mart or ICL’s Data Warehouse
(Warehouse International)
 Data Capture for single customers
 Call Center and Web Support
 Loyalty transactions to data mart or data warehouse
 Management reports by file or internet
Tesco, Safeway
Marks & Spencer
Harrods Harvey
Nichols House of Fraser
National Savings Bank
Warner Bros
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UBS, Bell Atlantic,
Belgacom, Citibank,
Deutsche Bank, France
Telecom, Hewlett Packard,
IBM, Hitachi, JP Morgan,
Merrill Lynch, Telefonica,
Telstra
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Collection and savings of specific customer information collecting for direct marketing
purpose.
Administration of point collection and redemption with different parameters
Extensive customer analysis, detailed reports, segments and campaign success analysis.
Help desk
Data mining possibilities
One-To-One Commerce
One-To-One Financial
One-To-One Application
One-To-One System, a software for development and operation of large personalised
internet-, intranet and extranet applications for e-commerce and internal
Multilanguage Support
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There are several suppliers of customer loyalty systems (2/2)
xiNETix
Mercantile
Software
Systems
UpDate
Marketing
Service AG
JPMA
Clients
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No information
No information
Philips Medizinische Systeme
GmbH, DuPont Agricultural
Products, Minolta,
Reemtsma, Hengstler
Hartmann & Braun, Canon
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5. Loyalty and Information Technology
Supplier
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Short Description
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Merchandising system for loyalty marketing for retail customers
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Network based real time data transfer
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Reporting
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Electronic payment services
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Marketing database systems
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Product: IRE (Information Retrieval Engine) marketing warehouse; campaign graphics user
interface
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Combination of database cleansing, full loading capabilities, powerful indexing technology for
faster queries, best-in-class hardware and relational database software
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Visualising and analysing of data
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Product: Marketing Manager
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Industry specific solutions for marketing, distribution, customer service and management.
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Special for “Business-to-Business” (Capital goods, Construction- and Construction Supplyer
Industrial Sector, Telecommunications etc.), Pharmaceutical Industry, Banks and Insurannces,
Consum Goods/ Trade
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Data transfer via Internet
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Not known
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Pos Designer, WinStore, PCWin Point of Sale, Landmark
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Used in 27 countries
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Information over touch screens in shops.
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Customer loyalty cards for the retail business
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Architecture for Pos Design
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Customer data and information
Customer information
systems can be seen in
three generations
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5. Loyalty and Information Technology
A loyalty programm
enables the company to
get new information
about the customer
behaviour
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 The following information categories can be distinguished when
launching a loyalty programme:
 Basic information about the customer (eg. age, profession)
 Potential information about the customer (eg. customer
satisfaction)
 Action information about the customer (eg. contacts, activities)
 Reaction information from the customer (eg. response; usage)
First Generation
GOAL
ACTIVITIES
TOOLS
DATA
EARLY ADOPTERS
Customer Information
Repository
Direct Mail
Telemarketing
Field Sales
All Marketing Activities
Campaign Management
Market Research
Media Planning
Marketing Customer Files
Support Bureaus
Flat Files
Merge/Purge
Name & Address
Demographic Overlays
Limited Transaction Data
Airlines
Banks / Credit Cards
Direct Mailers / Catalogs
MODELING
SYSTEMS
IMPLEMENTATION
DRAWBACKS
BENEFITS
Second Generation
Enhanced List Selection
and Management Systems
Statistical Techniques
Regression
Stand-Alone PC
Mainframe
Six Months
Ease of Use / Fast Counts
Quick Installation
Externally Managed
Stand-Alone / Proprietary
Tactical
Improved Response Rates
Reduce Cost of Direct
Marketing
Relational Database
Analytical Tools
Data Warehousing
Third Generation
Enterprise-wide
Relationship Management
System
Enterprise-wide; All Contact
Customer Support
New Product Development
Finance
Manufacturing
Middleware
Scaleable Hardware
Integration
Data Mining / Visualization
Transaction History
Marketing Communications
All Customer Interactions
All Operational Data
Financial Supports
Airlines / Travel / Hotels
Telecommunications
Telecommunications
Statistical & Nonlinear
Neural Networks
Genetic Algorithms
Fractals
Unix Servers
LAN / WAN
Eight - Twelve Months
Functionality
Performance
Migration / Support
Strategic
Allocation of Marketing
Resources
Increase Marketing
Effectiveness
Self Adjusting Algorithms
Advanced Pattern
Recognition
MPP Systems
Two Years +
Interoperability
Robustness
Scalability
Cost / Complexity
Competitive Advantage
Optimize Allocation of
Enterprise Resources
Accelerate Revenue
Growth
Source: Gartner Group; 1996
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A Data Warehouse environment is also essential to getting the
information needed
Financial
Systems
Query
Data
Integration
and
Cleansing
Process
e.g.
Validity
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Design…
Select...
EIS
Data
Warehouse
MARKET.
MARKET.
Segment..
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SALES
Execute...
EXTERNAL
DATA
Source Data
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Campaign
Management
Customers
Locations
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 Best practice companies feed their transactional data into a data
warehouse and use different tools and instruments for analyzing the
data. The position of a data warehouse is showed below.
Metadata
Operations
OLTP
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5. Loyalty and Information Technology
A Data Warehouse links
the existing operational
systems to into one
database
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ETC.
Transformations
Score...
Quality Assurance Process
Source: Price Waterhouse
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A Data Warehouse environment is also essential to getting the
information needed
The Data Warehouse uses
customer information in
an closed loop.
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 The usage of customer information in a closed loop enables the
company to improve their target marketing on an ongoing basis. Data
warehouse, campaign management and customer loyalty systems play
an important role in that.
Optimise return
on data enhancement
and prospecting
Integrate
new Media
Record
Customer Contact
Segmentation
& Targeting
Create
Offer
Communicate
Offer
Manage integrated
customer database
Refine
Offer
Derive customer
profitability & LTV, &
report on marketing
effectiveness
Data
Warehouse
Service
Offer
Measure
Results
Fulfill
Offer
Mine
Data
Analyse data to
reveal Segmentation
and Targeting
Opportunities
Capture
customer and
transaction data
Fulfill on
a one to one
basis
Provide
Customer
Service
Manage Inbound
and Outbound
Telemarketing
activities
Source: Price Waterhouse
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A Campaign Management Tool supports a company in building up
their database marketing capabilities.
What is a campaign
management tool
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 A campaign management tool enables the coordination and tracking of
several marketing campaigns (eg. mailing to 100’000 customers)
concerning the response and the following activities for the contacted
customers.
 A campaign consists normally of several activities and focuses on a
clearly defined customer segment. The future activities for a customer in
a campaign often depend from the past responses of this customer. A
database support therefore is very important.
Typical functionalities of a
campaign management tool:
Design campaign
Select campaign universe
Target segments
Execute
Measure and record
Iterate
Source: DWH Issue campaign management or leading process
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With a clearly structured campaign management process it is possible to
properly coordinate different campaigns and to set priorities
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Example of a campaign
management process
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For a campaign concept (planning and co-ordination of different
campaigns) a campaign management process is needed.
The campaign concept builds the basis to position the different campaigns,
to set priorities and to assign budgets.
Campaign Management Process
Collect
ideas and
inputs
Set targets
and target
groups
Provide
concept to
board
Set
priorities
Detailed
planning
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Run
campaign
Collect
feedback
Evaluate
feedback
Evaluate
overall
campaign
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