Our proposed solution
To help our client achieve the best possible reward programme, we took a unique and very innovative approach. We implemented a conjoint methodology on a live test market.
Two million shoppers were divided into different groups based on their previous spending behaviour. These groups were further divided to test different reward scheme combinations. The conjoint model provided us with the best possible combinations, while the wealth of historical and current data on behaviour and transactions allowed us to translate this into extra revenue and to identify the impact of different shopper profiles.
"How can we optimise our customer loyalty programme to maximise the number of card holders that will spend extra without giving too many rewards?"
Results and benefits to our client
As a result, we were able to identify the optimum ‘bonus points/extra spend’ ratio so that the cost for the retailer stayed constant (compared to their current programme expenditure) while yielding a maximum increase in revenue. We also delivered a tool which allowed our client to continually plan/optimise their reward scheme based on specific budgets and customer profiles.
This award winning study has been presented at several international industry conferences and at a number of leading European business schools.