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Loyalty Programs Improve Bottom Line
MINNEAPOLIS | April 17, 2009
New research conducted by Aberdeen Group once again demonstrates the importance of well-planned and well-executed
loyalty programs to the financial success of retail companies. The best retailers improved repeat customer orders by
21.8 percent. Best companies increased net profits 50 percent more than their peers.
The entire report - "Cutting Edge Customer Loyalty: Retail Best Practices for Acquiring, Retaining, and
Re-engaging Customers" - is available free of charge on line at Complimentary
Report from Aberdeen Group.
"We believe that having the capability to build relationships with customers is a critical driver of success in
today's tough business environment," said Luc Bondar, vice president, Loyalty, Carlson Marketing. "We
sponsored the report because we believe in its core message."
During the first quarter of 2009, Aberdeen surveyed 165 retailers to discover key customer loyalty attributes in
The best companies were defined as the top 20 percent with the best financial performance. Year
over year they generally increased the average sale by 19 percent, increased customer retention by 16 percent, and
decreased customer attrition by 5 percent.
Key findings include:
Ninety percent of the best companies indicated successful results from their loyalty programs compared to less than a third of other companies.
Best companies' compound annual growth rate is 96 percent greater than their peers (2003-2008 data).
Best companies are 1.8 times more likely than the bottom 30 percent of companies to develop customer behavior-based promotions (that drive improved loyalty).
Best companies are five times more likely to be tracking, storing and analyzing customer data ... and creating promotions capitalizing on insights derived from the analysis.
Best companies are 70 percent more likely to develop multi-tiered rewards plans for their most profitable customers.
While the study has different recommendations for companies at different levels of success, it recommends that for
companies to achieve the "Best in Class" status, they should:
Create a customer loyalty roadmap including multi-tier programs for the most profitable customers
Apply rules-based and point-of-sale/service integrated customer loyalty systems
Conduct customer wallet share and market basket analyses
Measure the net profit margin impact of customer loyalty programs
Upgrade loyalty infrastructure on an annual basis.
"Everyone knows that it is easier to retain customers than it is to acquire new ones," said Bondar.
"And in these tough economic times, it's more important than ever to build relationships with your valuable
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Carlson Marketing helps global Fortune 1000 clients increase their ROI by designing and delivering sales and
marketing programs that drive measurable results. Carlson provides its clients with cool new marketing concepts,
coupled with rock solid delivery across its two global service offerings - Brand Loyalty and Engagement & Events -
supported by six core capabilities: Strategy & Planning; Creative, Interactive & Media; Incentive & Event
Management; Award Services; Technology Services; and Decision Sciences.
Carlson Marketing employs 2,500 marketing professionals in 44 cities across 15 countries. www.carlsonmarketing.com
About Aberdeen Group, a Harte-Hanks Company
Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen for insights that drive decisions.
As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market.