Hi, Habr! My name is Maxim Meleshko, I have been working with loyalty programs for more than 10 years, now I am the head of the center of competencies for loyalty programs in Technoserv Consulting. It was our team from Technoserv Consulting that implemented such projects as Aeroflot Bonus, Gazpromneft “We are on the way”, “Mvideo bonus” and many other solutions. With your permission, I will periodically write here my thoughts about loyalty programs, the problems of introducing platforms, and how these platforms will help make business. Today I’ll start with why, in my opinion, SMBs do not need loyalty programs in the form in which they are presented on the market, why large companies need them and analyze a beautiful example.

A few words about loyalty programs

First I want to express my point of view on what the loyalty program is and why it is needed. If you remove the "water", the loyalty program - is a marketing tool to increase company profits . This tool increases profits by increasing the base of regular customers, the frequency of purchases and the average check.

If you are a small or medium business owner and decide to implement a loyalty program, you should clearly understand how and by what means this program will affect the listed indicators.

Now there are a lot of different systems on the market, positioning themselves as loyalty platforms. They can be found even inside the cash register software. As a rule, these systems are able to perform the following functions:

• collect and store customer and purchase data
  
• give bonuses and discounts
  
• do sms and email
  
• build reports
  

7 reasons

So, let's go straight to our 7th reasons why SMBs do not need loyalty programs. In fact, by running such a system, the SMB receives something like the following:

1. Spend money on the system itself, integration, support;
   
2. Spend on employees who will be engaged in the loyalty program;
   
3. Increase the service time at the checkout;
   
4. Spend on issuing cards, or developing a mobile application;
   
5. On discounts and bonuses we will lose part of the margin;
   
6. We give the cashiers additional tools for their own enrichment at the expense of the owner;
   
7. The storage of personal data and mailing will also bring costs, complaints, and sometimes legal actions.
   

A source

What will a business owner get in return? Most often - slogans about the emotional attachment of customers to the brand and other things, which, unfortunately, have little effect on profits.

And what about big business?

Here the question arises: why loyalty programs are so popular in large businesses, because large players spend tens of millions of dollars on the implementation, maintenance and development of such programs. There are not fools sitting ...

In fact, a loyalty program earns money when the following three conditions are fulfilled, and in large businesses, they are, as a rule, actually fulfilled:

1. Large players have highly functional industrial systems that allow them to flexibly segment the base, quickly test hypotheses, personally communicate with customers through all possible channels of communication, and personally encourage them with bonuses and discounts.
   
2. Large players in the state have expensive, experienced analysts who know how to make money on loyalty programs, such cadres are often too expensive for small and medium businesses.
   
3. Large players have a large knowledge base of successful marketing campaigns, accumulated over the years, which continues to be enriched and adapted to change.
   

Let's look at the possibilities of the loyalty program on the example of a business case in the network of gas stations. One of the highest margin products in the network of gas stations - coffee. In turn, the fuel is a low margin product, and to increase its passage is not a simple task, the tank is not rubber. Therefore, we will earn a coffee.

A source

Thanks to the analytical module of the loyalty program, we discover that among the customers of the gas station there are customers who buy coffee and cherry puffs during the filling. Clients of this segment do not always do this, and in 40% of cases of arrival at the gas station. But if they buy cherry puff, then 100% of the time they buy coffee. Select this segment and call it "lovers of cherry puffs".

We are launching a campaign: at the time of visiting the “lover of cherry puffs” refueling, it is reported that from now on he will personally receive a 20% discount on his favorite product and that we will be happy if he buys his favorite product more often.

The table below shows the results of such an action.

	Before the launch of the promotion		After launching the promotion
	Coffee	Puff	Coffee	Puff
Cost of 1 pc.	20	40	20	40
Price 1 pc.	80	60	80	48
Sold pieces per day	20,000	20,000	40,000	40,000
Total product revenue	1600000	1,200,000	3.2 million	1920000
Total cost of the product	400,000	800,000	800,000	1600000
Product Margin	1,200,000	400,000	2,400,000	320000
Total margin	1600000		2720000

This action began to bring more than one million rubles of net profit per day for only one client segment. The loyalty program of such actions can run dozens and even hundreds per week. Impressive, right?

To achieve maximum results, the analyst had to sweat a little. Many different tests were performed. The customer segment has been divided into many sub-segments. One subsegment, for example, was sent an SMS message with one text and a 10% discount, another - a push notification with slightly modified text and a discount amount, etc.

Each parameter affects the response: the text of the message, and the channel, and the delivery time, and, of course, the size of the discount or bonus. Sometimes, you have to spend dozens of tests to identify maximum profit. The loyalty system should give such opportunities to the marketer and display the results online, otherwise the effect will be much lower or it will not exist at all.

That's all for now. If any other topics on loyalty and CRM are interesting - write. I will write a separate material, but for now I have plans to tell you how loyalty programs can earn in the medium and small business segment.

I will be glad to answer your questions on the topic. Wellcome!