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ture bundles Improve frontline execution Create rich interactive touchpoints Surveybased improvements to value proposition to mitigate basic sources of dissatisfaction along dimensions of key buying criteria Bundles of products and features with sticky characteristics (., multiproduct relationships, addon features, crossindustry product/feature binations) Redesign of core value proposition to further differentiate along dimensions of highest importance to target customers (., store layout, merchandising, service, safety) Deployment of tools to increase and enrich frequency and quality of interaction between pany and customer (, customized web pages, ) Motivation of front line staff to favorably shape customer attitudes while seeking opportunities to build personal relationships Informationdriven marketing campaigns (., wele call, targeted value propositions, save programs) Focused and tailored, incentivebased marketing programs (., consortiums, partnerships, high impact microdesign, data usage) Perceptionshaping marketing munications (., performance, positioning, personality, presence) Enhance delivery channel Loyalty levers LAN99110437405571ZXS 18 Proper rewards program design required to drive desired behaviors Impact on migration rates Percent downward migrating per year Program participation rates Percent participating Grocery Apparel Credit card Long distance 6056192352717128173024Non member Member Key issues ? Why are participation rates so low in some industries? ? Are customers “gaming” the programs eliminating any positive program impact? LAN99110437405571ZXS 19 Select loyalty lever based on underlying behavior profiles tele Marketing programs Delivery channel Product/ service redesign Lifecycle adapters Emotive loyalists Leverage branding campaigns to reinforce emotional connection Active/ deliberative switchers Redesign core value proposition Inertial loyalists Develop sticky product/ feature bundles Dissatisfied defectors Target customers with offers tailored along key buying criteria Deliberative loyalists Develop sticky product/ feature bundles Offer differentiated rewards programs Launch proactive and reactive retention and winback efforts Leverage front line to drive emotive attitudes Leverage frontline interactions to improve satisfaction Eliminate core dissatisfiers Expand/alter offerings to match changing needs PRELIMINARY Leverage front line to drive emotive attitudes LAN99110437405571ZXS 20 Situation Enhanced channel delivery Proactive relationship marketing Rewards program “ Sticky” or other product features Eliminate dissatisfiers Leading department store retailer Cellular tele provider Leading travel intermediary Landline tele supplier Proprietary credit card Step change improvement possible IN PROGRESS Impact ? 2530% reduction in downward migration ? Expected incremental 2% p store sales growth over 5 years ? Overall churn reduced 20% ? Too early to te