Loyalty Programs

Sampling Techniques
DISSERTATION PROJECT

Loyalty Programs Probability Sampling

Techniques

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Sampling Sampling Sampling

Submitted by:- Indrani

In fulfillment of the requirements of the degree of Fashion

Retail Management
2010-2012.

19th Feb 2012

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 Loyalty Programs

Sampling Techniques
CONTENTS

I. Executive Summary 1-2

II. Hypothesis Probability Sampling
3
Techniques
III. Objectives and Sub-objectives 4

Background 5-9
1.1 India as a retail destination
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1.2 Organized Retail Snowball
Sampling Sampling Sampling
1.3 Foreign Investment in India
1.4 Plans of key players in India

Loyalty Programs 10-14

2.1 What is loyalty Program
2.2 Problems of Loyalty Program
2.3 Increasing demand of Loyalty Program
2.4 Worth of a good loyalty Program

3 Objectives 15-16
3.1 Objectives of Loyalty Program
3.2 Perception that Builds Customer Loyalty

4. Loyalty Program Management Diagram 17-19

5 Ways to retain customer loyalty 20-24

5.1 Methods of building Loyalty
5.2 Ways to show appreciation

6 Common Points in World’s best loyalty Programs 25-31

6.1 Success Factors To customer’s Loyalty
6.2 Do loyalty Programs Really work?

7. Research Methodology 32-33

8. Case Studies 34-51

8.1 Shopper’s Stop
8.2 Pantaloons
8.3 Lifestyle

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 Loyalty Programs

9 Analysis Sampling Techniques 52-81

9.1 Findings
Retailers with customer loyalty Programs
Retailers without loyalty Programs
For the customers Probability Sampling
Techniques
9.2 Conclusion
9.3 Recommendations
9.4 Limitations

10. Quota Judgmental

Bibliography Snowball 82
Sampling Sampling Sampling

Annexures 83-89
11 Questionnaires
11.1 For the Customers
11.2 For the Retailers with Customer loyalty Programs
11.3 For the Retailers without Customer loyalty Programs

ACKNOWLEDGEMENT

A project is the outcome of efforts by people involved directly or indirectly in

completing that project and it is customary to begin the report with thanksgiving
to all those who put in their sincere efforts to make this project effective.

Also I would like to thank all those people from the retail industry who helped in
the completion of my dissertation project and making it a success.

And in the end, I would like to thank all my friends, who gave their sincere advice
in improving this project.

Thanking you,

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Executive Summary

Retailing consists of the sale of goods or merchandise, from a fixed location

Probability
such as a department store or kiosk, in small or individual lotsSampling
for direct
Techniques
consumption by the purchaser. Retailing may include subordinated services,
such as delivery.
“Retailing is the industry of the future in India” but as on date most organized
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retailers Sampling
have their bottom lines in the Sampling
Sampling
negative. The reason for this can be
ascribed to the fact that the single model of retailing is not scalable across the
length and breadth of India. Retailers have to provide for variation in model
stores so as to cater to the economics of the target segment.
Retailing has gone a sea change over the past few years. In the days gone by,
traditional retailers knew all their customers personally and were able to build
bridges of friendships. In the era of growing chains and malls where the
emphasis is on promoting self service, retailers seem to be losing touch with their
customers.
For most retailers, a small percentage of their customers account for most of
their sales. For e.g., when any departmental store analyzes the customer
database for its branch outlets, it discovers that 30-40% of its customers were
responsible for 70% of its sales. In addition, research indicates that it is much
less costly to retain existing customers than to acquire new customers. Thus,
many retailers are initiating loyalty programs to target special services and
promotion to building loyalty among their best customers. The program provides
special benefits to the retailers’ most important customers and motivates them to
develop loyalty.
Loyalty program’s success has less to do with the value of points or discounts to
a customer, and much more to do with a company’s use of data mining to
improve the customer experience which should be done by the Top
management. One has all these information sitting in the database somewhere
with no one taking advantage of it. One needs to mine the information to create
not only relationships but also an optimum (purchasing) experience.

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 Loyalty Programs

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For the organization, each relationship type describes a set of activities that
should be undertaken to maintain the relationship at a particular level, as well as
the actions to be taken to take the customers to the next higher level.
Probability
There is no one, right way to market through any one channel, Sampling
but there is a right
Techniques
way to market to customers across several channels, and a loyalty marketing
program can help. A successful program assumes that all channels are included
in the customer relationship that measurable objectives have been established,
and that Quota
promises are Judgmental
kept. Snowball
Sampling Sampling Sampling
The project made an attempt to look at the prevailing organized retailing
loyalty programs.
Three case studies are also given at the start of the project to provide a means
for the reader to see what India’s organized retailing provides in their loyalty
Programs and how it is important in today’s cutthroat competition. This is also a
good method of growing awareness among those who don’t have any idea about
loyalty Programs in era of increasing competition.
Although the primary focus of this project is to state that loyalty Programs
helps in increasing the customer base and their loyalty towards the store
and in increasing the sales and profitability and to recommend certain
suggestions.
The project answers to my hypothesis and provides an opportunity to think
critically about and analyze to adopt loyalty programs. This critical thinking is a
major key to produce the best possible loyal customers and help the store to
increase their sales and earn goodwill as well.

2. Hypothesis

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Loyalty Programs helps in Sampling Techniques

increasing the customer base along with the
sales and profitability to the store, proving beneficial to both the retailers
and the customers.
Probability Sampling
Techniques

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Sampling Sampling Sampling

3. Objectives and Sub-objectives

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Samplingproject
The main objective of any dissertation Techniques
is to prove whether the hypothesis
is true or not. However, to make the study inclusive, some more issues are
focused upon. Some of these important sub-objectives are:
Probability Sampling
Techniques
● Objectives of Loyalty Programs.

● Challenges faced by Loyalty program.

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● Customer relationship pyramid.

● Impact of customer services in gaining customer retention.

● Innovative and Different ways of better customer experience

● Management stages in Loyalty Programs.

● Management influence in developing Customer Loyalty.

● Common points in world’s best loyalty Programs.

● Key considerations and critical success factors.

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BACKGROUND
1.1 INDIA AS A RETAIL DESTINATION
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Organized retailing makes up 3 percent or USD 6.4 billion. By 2010,
organized retail is projected to reach USD 23 billion and in terms of market
share it is expected to rise by 20 to 25 per cent.

The generic growth is likely to be driven by changing lifestyles and by strong

surge in income, which in turn will be supported by favorable demographic
patterns. Rapid growth in international quality retail space brings joy to shoppers
and shopping malls are becoming increasingly common in large cities, and
announced development plans project at least 150 new shopping malls by 2008.
The number of department stores is growing at a much faster pace than overall
retail, at 24 per cent annually. Supermarkets have been taking an increasing
share of general food and grocery trade over the last two decades.
Organized retail in India has the potential to add over $23billion business by the
Year 2010 generating employment for some 2.5 million people in various retail
operations and over 10 million additional workforce in retail support activities
including contract production & processing, supply chain & logistics, retail real
estate development & management etc
According to IMAGES India Retail Report 2008, of the Rs.12, 00,000 crore retail
market, food & grocery retail is by far the single largest block estimated to be
worth a whopping Rs.7, 43,900 crore, but more than 99 per cent of this market is
dominated by the neighborhood kirana stores.
Unlike the experiences in most other countries, growth of Indian retail is not
going to be a staggered and time-taking process: India has already shown the

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world how quick it can adapt to Techniques
hi-tech products and services and will again set a
record of sorts in setting up world class retail formats across the country in record
time. In the next five years India should have retail entities strong enough to
compete with the best in the world”, Probability Sampling
Techniques

As India emerges as one of the most potential markets for global brands and
retailers and retail reinvents the way modern Indians celebrate their spending
Quota by India
power. Initiated Judgmental Snowball
Retail Forum and Images F&R Research, world's some
Sampling Sampling Sampling
of the top global research & consulting firms like AT Kearney, Ernst & Young,
PWC, Technopak, KPMG, ICICI, AC Nielsen-ORG Marg, Synovate, Cushman &
Wakefield etc. contributed for the India Retail Report 2008 research.
IMAGES India Retail report 2008 sizes up the entire retail market in various
segments and consumption levels across product categories with share of the
organized segment. Profiling formats and retailers therein, the study, full of facts
and figures, is expected to reveal many interesting facets of the Indian retail
industry that could open up newer avenues of business both for the established
players and the newcomers as well.
If we see the AT Kearney's 2007 Global Retail Development Index (GRDI), India
has replaced Russia for the second time as the top retail investment destination
among the 30 emerging markets across the world. That's quite as outstanding
achievement. It speaks volumes of the potential of the country in the international
arena.

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1.2 ORGANIZED RETAIL Probability Sampling

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The organized sector accounted for Rs. 55,000 crore ($12.4 billion) business at
current prices in the calendar year 2006 increasing its share to 4.6% of the total
Indian Retail Value that stood at Rs. 12,00,000 crore ($270 billion). Moving
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forward, Sampling Sampling
organized retailing is projectedSampling
to grow at the rate of 42 per cent in
2008.
“Going by the current growth trend and considering the fact that existing
prominent players in organized retail have stepped up their expansion drive with
Reliance announcing big plans and other Indian corporate houses too evincing
keenness on investing heavily in this sector as also the linking of the joint-venture
between the world's largest retailer Wal-Mart and Bharti – The organized retail in
India has indeed gained top speed and is now on the verge of take-off.

India has largest number of outlets per capita in the world with a widely spread
retail network but with the lowest per capita retail space @ 2 sq. ft per person as
compared to 16 sq.ft per person for USA. The retailing industry in India is
expected to grow at 5 per cent per annum and is well on its way to become a Rs.
35,000 crore market by 2005. As in December 2004, size of organized retail is
estimated at Rs.28, 000 crore, making up a mere 3 per cent of total retailing
market.

India’s retail sector is deeply fragmented, dominated by the “unorganized sector”

or small family-run stores, the study points out. “Organized” large-scale retailers
account for two to three percent of the sector compared to 20 percent in nations
such as China and Thailand. Moving forward, organized retailing is projected to
grow at a rate of 25-30 per cent p.a. and is estimated to exceed Rs, 100,000
crore in size by 2010. Further its contribution to total retail sales is likely to rise to
9 per cent by the end of the decade.

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1.3 FOREIGN INVESTMENT IN INDIA

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Retailing industry in India is allowing 51% FDI in single brand outlet. The
government is now set to initiate a second wave of reforms in the segment by
liberalizing investment norms further. This will not only favor the retail sector
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develop Sampling
in terms of design concept, construction
Sampling Sampling quality and providing modern
amenities but will also help in creating a consumer-friendly environment.

Retail industry in India is at the crossroads but the future of the consumer
markets is promising as the market is growing, government policies are
becoming more favorable and emerging technologies are facilitating operations
in India. And this upsurge in the retail industry has made India a promising
destination for retail investors and at the same time has impelled investments in
the real estate sector. As foreign investors cautiously test the Indian Markets for
investments in the retail sector, local companies and joint ventures are expected
to be more advantageously positioned than the purely foreign ones in the
evolving India's organized retailing industry.

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1.4 Plans of key players in India

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•Pantaloon Retail: Expansion into all possible formats of retail Techniques
across categories
and segments. Approximately 30 million sq.ft by FY10. Turnover expected to
touch Rs.30, 000 crore ($6.67 billion) by FY10-11.

• Reliance Retail: About Rs.30, 000 crore ($6.67 billion) investment to set up
Quotaformats with
multiple retail Judgmental
expected salesSnowball
of Rs.90, 000 crore ($20 billion)-plus
Sampling
by 2009-10. Sampling Sampling

• RPG: Planning IPO, 450-plus Music World stores and 50-plus Spencer's Hyper
covering 4 million sq.ft area by 2010.

• Lifestyle: Rs.450 crore ($90 million) investment in next five years to expand on
Max Hypermarkets and value retail stores, Home and Lifestyle Centre.

• K Raheja Corp.: Operates Shoppers' Stop, Crossword, in orbit Mall, Home

Stop and Hypercity. To open 55 hypermarkets across India by 2015.

• Subhiksha: 750 stores and Rs.650 crore ($145 million)-plus estimated sales by
March 2007.

• Piramyd Retail: 1.75 million sq.ft of retail space and 150 stores in next five
years.

• Trent Ltd.: To open 27 more stores across its retail formats, adding one million
sq.ft of space in the next 12 DLF malls.

• Trinethra: Recently acquired by the AV Birla Group, Trinethra (with two formats
– Trinethra and Fabmall) plans 220 stores with a projected turnover of over
Rs.300 crore ($667 million) this fiscal.

• Vishal Group: Plans include an IPO and investment close to Rs.1,250 crore
($278 million) by 2010, targeting 220 outlets, taking its cumulative retail space to
five million sq.ft and sales turnover to Rs.5,000 crore ($1 billion).

• Bharti Retail: With back-end tie- up with Wal-Mart, Bharti is pumping in

Rs.31,500 crore (US$ 7 billion) in creating a nationwide retail network, including
100 hyper malls and several hundred small supermarkets

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2. Loyalty Programs
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Loyalty programs have become extremely popular in recent times. It is not only
about retaining the loyal customers but also used to gain consumer insight and
for the accumulation of accurate data to map consumer preferences. Loyalty
ProgramsQuota
are an excellent business toolSnowball
Judgmental for any marketer to influence the head,
Sampling Sampling Sampling
heart, and purse of the customer.

Loyalty Cards were initiated in India with a single concept of "expanding

common man’s rupee”. Loyalty’ would mean different things to different people
on different occasions. But as far as retailing in the present day environment is
concerned, there can be little doubt that maintaining a loyal base of customers is
one of its most important aspects. Customer retention is in fact the bottom-line of
corporate profitability and value; it makes more business sense in investing in
building Loyalty rather than investing in trying to woo new patrons.
Customers care about themselves, their needs, their wants, and their desires. Of
course, in humanitarian terms they do, but not in business terms.
Knowing this, customers are told the story from their prospective. Tell them what
they get from being your customer, telling them how they gain, and show them
how they’re better off being your customer as opposed to the numerous
competitors vying for my business.
But the primary function of every business is to get and keep customers.
Consequently, it is also the function of every employee of every business to do
the same. Knowing how to keep existing customers happy is key to a company’s
continued success. Studies have also proven that it is much more expensive to
attract a new customer to a business than to keep an existing one.

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To build customer loyalty,Sampling

here are Techniques
six universal points.

● Create a demanding customer: Creating one means that if your customers

Probability
were to go to your competition, they would not just expect Sampling the
but demand
Techniques
same level of service that they get from you. Anything less from the
competition reinforces that the customer made the right choice to do
business with you. In other words, you have spoiled your customer.
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● Sampling
Finding Sampling
problems : Find out if youSampling
are doing a good job and if there are

problems, react quickly. Your customers are not likely to tell you if there are
problems. Numerous studies have shown that complaining customers do
not complain. TARP (Technical Assistance Research Program) was
commissioned by the White House Office of Consumer Affairs to survey
customer satisfaction. They found that an average business only hears from
4 per cent of unhappy customers. The other 96 per cent don’t complain —
at least not to the places they did business. While the study was conducted
a number of years ago, current independent studies show similar findings.
Your ultimate goal should be to try and find any problems before the
customer complains.

● Make customer happy: . Educate and reinforce that the customer have

made a good choice. If you do something different than the competition,

make sure the customer knows about it. I remember buying meat from a
grocery store. The butcher proudly held up the steak he was selling me and
said, “Look at that! Is that a beautiful piece of meat or what? Did you know
that we trim the fat around the steak to just 1/8 of an inch? You won’t find
that at the competition! Thanks for shopping with us.” It is your opportunity
to stand out.

● Guarantee your products or services : Personally stand behind everything

you do. Customers do not do business with a company; they do business

with the people who represent the company. If a customer has a problem,

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and you are the personSampling Techniques

that received it, it is your responsibility to see it
through. Do not just push it off to someone else. You may not make the final
decision, but you are there at the end when it is made.
Probability Sampling
● Make them feel privileged: Recognise that there mayTechniques
be others in the

‘buying process’ that should be made to feel appreciated. These people

might also be involved in the buying process, such as an assistant, a
secretary or even a committee, but may not be the person or people you are
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Sampling
dealing Sampling
with day to day. Even if theSampling
assistant or secretary is not involved in
the buying decision, they are still part of the team. Do not forget to show
appreciation for these people as well.

● Do not ever forget to say thanks! It can be face to face, over the phone or

via written thank you notes. Customers like to feel appreciated.

Whether the customers purchase electronics, home improvement supplies or

apparel, they usually have specific set of store features and services they look for
when they step out to shop. These features play an important role in keeping
customers loyal to one store over another.
Hectic lifestyles, increased competition, & choice limited the free time of
consumers to shop and browse, have combined to make loyalty a valuable and
hard-to-acquire commodity for retailers.
Loyalty is also defined according to the level of trust that customers have in a
particular store; where they are willing to pay more; and where they shop
regardless of prices or sales.

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2. Loyalty Programs
2.1 Problems of Loyalty Programs Probability Sampling
Techniques
Whatever way we choose to define loyalty, it is well understood that mere
anecdotal evidence or gut feel is not enough to manage complex businesses
today. Organizations the world over are encountering two major problems:
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● How toSampling
increase the brand equity; and Sampling
Sampling

● How to increase customer’s mind share rather than market share. In other

words how to create and sustain consumer equity.

The real challenge is therefore to build and manage customer relation

relationship in a way that will modify consumer behavior over time towards
strengthening the bond between customers and the retailer or brand.
Organization can relate to each and every customer as long as they understand
how the customer wishes to relate to the organization. The need is to understand
that “relating” might means different things to different customers. This implies
that it is the customers who decides and controls the nature of the interactions
with the firm, interactions that progressively lead to a relationship.

2.2 Increasing demand for loyalty Programs?

Tougher competition, breaking down of traditional barriers between products and

services and increasingly discerning customers necessitate companies to access
an increasing range and depth of expertise to sustain competitive advantage.
With a shift in focus from loyalty to customer relationship management, there has
been an increase in the importance of loyalty Cards.

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Companies are realizing that Sampling

their mostTechniques
precious asset is their existing customer
base (30% of existing customers accounts for 70% of their sales and takes 5
times more expensive to build a new customer) and among that base not all
customers are treated equal. Loyalty Marketing provides Probability
countlessSampling
benefits to
Techniques
marketers who are trying to market their best customers.

To summarize, well-designed and executed Loyalty programs can:

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● Result in a better
Sampling understanding of
Sampling what customers want across product
Sampling

and service lines.

● Drive customer behavior.

● Establish a competitive advantage, allowing companies to differentiate

without price discounting.

● Allow marketers to allocate marketing resources to those customers with

the greatest potential.

● Enable marketers to track and measure customers’ spending and services

behaviors.

● Produce profitable long-term customer relationships.

● Reduce customer attrition.

● Increase customer lifetime value and customer loyalty.

● Get a greater share of its customer’s spending.

● Make a more effective allocation of their marketing budget.

2.3 Worth of a Good Customer Loyalty

Loyalty behavior is worth almost any effort unless it is achieved by deep price
cutting or major promotional giveaways that destroy profits. Loyalty is so valuable
because it has a huge impact on market share. It is undeniable that each
customer who switches from Brand A to Brand B raises Brand B's market share
and lowers Brand A's market share.

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Established repeat customers Sampling

may oftenTechniques
generate superior profit margins. They
require less customer care, have less price sensitivity, and need fewer
advertising and promotional inducements; they refer their family and friends to
your brand and so on.
Probability Sampling
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3 Objectives of Loyalty Programme

The objective of customer loyalty program is to make the customer feel privileged
and valued. The best loyalty programs do not stop with doling out rewards, cards
and discounts. Instead, they constantly work at building a lasting relationship with
the customer through various initiatives like customized loyalty cards, newsletters
that not only help the firm and the customer stay in touch but also create a sense
of belonging; a card or a voucher on birthdays and special occasions and
organizing members-only events.

.The first step to customer loyalty is through customer satisfaction. A successful

programme assumes that all channels are included in the customer relationship
that measurable objectives have been established, and that promises are kept.
With this foundation in place, a programme can boast the following
characteristics:

1. Visibility: A loyalty programme must be highly visible regardless of the

channel. A Web site can show special offers for programme members, a
catalogue can feature the programme prominently and shoppers in the store
should be asked if they'd like to join. Cross-promotional materials should be
present and easily obtainable.

2. Simplicity: To succeed, a loyalty programme must be easy to use in all

channels. Minimize the fine print; the more the customers have to figure out, the
less they like the programme.

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3. Value: The balance of reward Techniques
and recognition must establish value in the
customer's mind and motivate incremental purchases. Programme rewards
should be credited regardless of where the customer prefers to shop. And while
Probability
the price of merchandise should be consistent across all channels, Sampling
incentives
Techniques
should be offered to encourage customers to try a new shopping experience.

4. Trust: Keep the promises made by the loyalty programme. If the promise is for
Quota highly Judgmental
a personalized, Snowball
valued service, program participants should not be
Sampling Sampling Sampling
bombarded with meaningless offers that obviously are available to everyone.

Recent studies indicate that customers who shop more than one of a retailer's
channels - perhaps looking online and buying in the store or reading the
catalogue/leaflet and buying online-spend more money with that retailer than
single-channel shoppers.

The best way to coordinate marketing objectives across channels is to build a

knowledge base of customer behaviors and preferences. Retailers cannot afford
to let legacy systems interfere with building this knowledge base. A well-
conceived and executed loyalty program can be the key to turning invisible
shoppers into hand-raising volunteers and profitable customers.

3.1 Perceptions That Builds Customer Loyalty

Availability - Specialty, Exclusivity

Authority - Affiliations with recognized brands

Value - Value for Time, Value for Money

Guaranteed Satisfaction - No-question-asked returns, free servicing, free

delivery

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Probability Sampling
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4. Loyalty programJudgmental
Quota management Snowball
diagram
Sampling Sampling Sampling

7 most important trends in loyalty marketing affecting almost every company

selling almost every kind of product in almost every marketplace. These trends

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are based on certain analyses Techniques
and using a technique called scenario mapping.
Incidentally, we have devised a proprietary tool termed, Customer Scenario Tool,
which may be used in a similar situation.
Probability Sampling
Techniques

1. Consumers are smarter, and they expect more: As the general population
becomes better educated, as is the case in this region, consumers approach
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purchaseSampling
decisions with greater scrutiny,Sampling
Sampling and they have access to more data for
comparison shopping.

2. The Internet has led to disloyalty: The Internet as a distribution channel for
product sales and information has caused many consumers to change buying
habits and methods.

3. High labor cost is squeezing customer service: As the quality labor pool cost
increases (partly due to increasing expertise and growth along the learning
curve), not many companies can afford the right people for service jobs. Many of
them end up recruiting lower quality people for these jobs. As consumers
become frustrated with poor service, longer lines and other service-related
problems, customer defection becomes a threat. The critical decline in customer
service quality also damages and severs relationships with formerly loyal and
profitable customers.

4. The global market introduces new competitors: As the global economy opens,
our companies are seeing increased competition, and many sectors are facing
foreign competition for the first time. Look at the way the local media moghuls are
reacting to Star News’ plans and FDI in media. Many use loyalty marketing
initiatives to establish stronger value propositions in the hopes of blocking foreign
threats to market share.

5. Customer-focused marketing technology is developing rapidly: The term

“customer database” is outdated. Technical giants such as Microsoft and Oracle

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Sampling
have developed, and continue Techniques
to enhance, data warehousing systems that
collect and mine valuable customer information in real time.

6. Mergers and acquisitions can upset customers: For many industries, acquire-
Probability Sampling
Techniques
or-be-acquired is the name of the game. Mergers and acquisitions can have a
significant impact on brand and product loyalty, and may cause customers to
look for alternatives.

Quota Judgmental Snowball

7. Mass media costs are
Sampling increasing: Advertising
Sampling Sampling is more expensive, and
marketing budgets are becoming tighter. Marketers need to drive increased ROI
on their marketing budgets. This trend fosters loyalty Programs, because loyalty
marketing focuses on existing customers whose behaviors and responses can be
tracked, and marketers can pinpoint response and accurately attribute
incremental revenues to marketing rupees spent.

These trends pervade every market situation, and companies are either jumping
on board with loyalty marketing, or they are watching their customers go by on
the competitor’s train.

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Sampling Techniques

Probability Sampling
Techniques

Quota Judgmental Snowball

Sampling Sampling Sampling
5. Ways to retain customers loyality

1) Quality: The first loyalty development activity is quality of services and

products which is a vital step and certainly the most difficult.

2) Customers: A customer file is usually drawn up before implementing

traditional loyalty activities. This file is usually used for writing to customers:
announcing sales, promotional exercises, etc.

3) Loyalty cards: To reward each customer for their purchases. A free card can
register consumption to a points account; this account gives the member access
to rewards. This first card, whether virtual or not, is the "loyalty card" or
"capitalisation card".

4) Subscription cards: In this card system, card is paid for and gives the
holders access to price reductions on their purchases. The idea is to largely write
off the cost of the purchase by accumulating price reductions obtained while the
card is valid. These are known as "subscription cards". The idea of extending
the "loyalty" option to subscription cards is, of course, widespread. This yields
paid-for cards that give access to price reductions when purchased and rewards
after a certain volume of consumption...

5) Measuring results: A loyalty progamme should lead to the objective for which
it was designed, i.e., an increase in the financial results of the business. Tools

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Sampling monitor
should be available to permanently Techniques
the diverse results involved in
realizing this objective.

6) Using the information: Loyalty Development engenders a rich source of

Probability Sampling
Techniques
data. When used with the right tools, knowledge of purchasing habits can be
increased and the company's offer influenced.

Quota Judgmental Snowball

Sampling Sampling Sampling

5.1 Methods of building loyalty are:

Positioning:

Positioning is a design and implementation of a retail mix to create an image of

the retailer in the customer’s minds in relation to its competitors. A retailer builds
customer loyalty by developing a clear, distinctive image of its retail offering and
consistently reinforcing that image through its merchandise and service.

Customer service:

Retailers also build loyalty by offering excellent customer service. But offering
good service consistently is difficult. Humans are less consistent than machines.
Retailers offering good customer services keep instilling its importance in the
minds of their employees.

No doubt, customer service is a valuable strategic asset, but it takes

considerable time and effort to build a tradition and reputation for customer
service. Once a retailer has earned a service reputation, he can sustain this
advantage for a long time. It’s hard for any competitor to develop a comparable
reputation in a short span of time.

Database retailing:

25
 Loyalty Programs

Sampling and
Database retailing is the development Techniques
implementation of retailing programs
to build loyalty utilizing a computerized file (data warehouse) of customer profiles
and purchase patterns.
Probability Sampling
Unique merchandise: Techniques

Typically it is difficult for retailers to develop store loyalty through merchandise

because competitors can purchase and sell the same popular national brand. But
Quota Judgmental Snowball
many retailers
Samplingrealize Sampling
a sustainable competitive
Sampling advantage by developing store
brands that are only available at their stores. For e.g. if one wants to buy a
Kenwood washer or dryer, they have to buy it only from Kenwood showroom.

Pricing and loyalty:

Heavy sales promotion can prove counter productive in loyalty-building as

consumers tend to pick up the cheapest brand in the market or the one which is
offered under some kind of sales promotion (price-off or a free gift with
purchase). Soups, toothpastes, and noodles are some examples of this.

While sales promotion is regarded as an effective tool, a brand will have to

carefully plan the objectives in any sales promotion campaign including the
considerations of the loyalty objective. This may not be feasible for most brands.

Loyalty programs must be planned using information on the various segments of

the product/product line and corresponding demographics and psychographics.
The basic underlying assumption in such programs is that the products are good.

26
 Loyalty Programs

Sampling Techniques

Probability Sampling
Techniques

5.2 Ways to Show Appreciation

● Information:
Quota The Company should
Judgmental print a supply of cards with this
Snowball
Sampling Sampling Sampling
message and attach to a newspaper or magazine article related to a
customer’s interests. Or else, they can mail or personally deliver the
information. This technique keeps the employees looking out for
customers’ best interests and gets you in front of customers in a non-sales
manner.

● Referrals thank-you gift: Every time the Company receives a referral, a

bouquet of flowers can be send or other noticeable but simple gift.

● Recognize positive feedback: Whenever the company receives a letter

from a client commending an employee’s performance, they should
always contact the customer immediately and thank him or her for taking
the time to send a positive word. Typically, most companies drop every-
thing to respond to negative feedback. The customers complain more than
they praise. When a customer takes the time to extend kind words, it is
imperative to respond and share the feedback with your entire staff.

● Special-occasion reminders: By tracking key dates for customers,

special-occasion reminder postcards can be send. One must also be able
to make purchase recommendations related to the event.

● Personalized gifts: Noting customer birthdays and sending gifts tailored

to their interests and hobbies helps The Company to deliver the personal
touch. Every contact provides an opportunity to discover preferences.

27
 Loyalty Programs

Sampling Techniques
● Customer hotlines: Provide best customers with special telephone
numbers and access channels for after business hours. Nothing is more
frustrating to a customer than not being able to get assistance after hours
Probability Sampling
when something important is at stake. Techniques
● Reward a significant order: At some companies, any purchase more
than a certain amount automatically triggers a gift with the order.
Unexpected
Quota freebies are appreciated
Judgmental all the more.
Snowball
Sampling Sampling Sampling
● Handwritten thank-you notes: Thank-You notes should be written as
orders are fulfilled.

● Customer chemistry: Simple gestures related to what one has learned

about their customers have a powerful chemistry-building effect. The
Company demonstrates that they value the relationship; they are paying
attention to personal details, and remain at the top of mind with their very
best customers. In addition, they should always look at the product and
service line to develop extra touches. The frontline team is by far the best
source for creative ideas.

28
 Loyalty Programs

Sampling Techniques

Probability Sampling
Techniques

6. What do the world's

Quota best retail
Judgmental loyalty programs have in
Snowball
common?
Sampling Sampling Sampling

Innovation and creativity are among the key factors that define a successful
customer loyalty program, particularly in the retail sector. The primary objective
of the retailer is to keep the high-potential customer from straying by offering a
loyalty program that is unique and exciting. That said, some underlying elements
set apart the world’s most successful retail loyalty programs from the also-rans.

Clear and specific objectives

Objectives are to a loyalty program what the destination is to a journey. A

successful loyalty program is based on specific measurable targets and
objectives. For instance, ‘increasing share of wallet by 10% by year-end’ is a
better objective than ‘increasing sales’. Laying down specific objectives has
several advantages. It enables the retailer to design appropriate loyalty strategies
and target relevant consumer segments. It simplifies the process of
communicating the rationale behind the program to all concerned. Once the
program is launched, the progress can be monitored against the goals and
targets, and strategic changes made if required.

Thorough research and analysis

The customer is at the core of all loyalty-building measures. Hence, gaining a

deep insight into consumer behaviour, motivation and expectations is crucial to
the success of a loyalty program. The research needs to be well balanced and
must contain data from various perspectives like demographic profile and socio-
economic status of customers, purchase patterns, behavioural drivers, reward
expectations, special interests and lifestyle factors.

The feel-good factor

If there is one single factor that can decide the fate of a loyalty program, it is the
personal touch. The raison de etre of a customer loyalty program is to make the

29
 Loyalty Programs

Sampling
customer feel privileged and valued. Techniques
The best programs do not stop with doling
out rewards, cards and discounts. Instead, they constantly work at building a
lasting relationship with the customer through various initiatives like customized
loyalty cards, newsletters that not only help the firm and the customer stay in
touch but also create a sense of belonging; a card or a voucher on birthdays and
Probability Sampling
special occasions and organizing members-only events. For instance,
Techniquesmembers
of Club West, the loyalty club of the Westside chain, receive an exclusive
invitation to the bi-annual sale. They have the privilege of starting their shopping
90 minutes before the store's regular opening hour on the first day of the sale.
The chain also pampers its loyalty program members with birthday cards, gift
vouchersQuota
and special Judgmental
discounts. To ensure that the relationship is a two-way
Snowball
affair, Westside
Sampling regularly seeks
Sampling feedback
Sampling its members and ensures that
from
complaints, if any, are dealt with promptly.

Smart rewards

No loyalty program can survive on assumptions like ‘everyone loves a discount’.

A smart reward is one that is valued by the customer and at the same time,
meets the program’s objectives. Variety, uniqueness and attainability are among
the several aspects to be considered while offering rewards. Often, an ongoing
privilege scheme such as a discount on every purchase makes more business
sense than a one-time gift, since the former encourages more footfalls and
repeat purchases. Some of the most popular loyalty programs also involve
several retailers and services as partners. This bundling of rewards creates a
perception of maximum benefit to the customer, who becomes eligible for gifts
and discounts from each of the partners. A prime example is UK’s Nectar Card,
which is jointly floated by Sainsbury’s, BP, Debenhams Stores, Ford and many
other partners. Similarly, the BonusLink Card, which is hugely popular in
Malaysia, allows members to earn points and rewards at several major retailers.

Technology

Thanks to the technology revolution, cutting-edge software and data tracking

mechanisms have emerged as a distinctive feature of the best loyalty program.
As with any strategic intervention, the operational aspects are as crucial to the
effectiveness of a loyalty program as the concept and plans. Loyalty software
that combine multiple functions like data tracking and storage, automated
transactions, updating membership details, points and churn etc. can ensure that
the loyalty initiative is well co-coordinated, efficient and hassle-free.

Data mining

30
 Loyalty Programs

A major advantage of implementing Sampling Techniques

a loyalty program is that the company gets
access to a wealth of customer-related data. Successful retailers realize that the
utility of this data is not restricted to the loyalty program. They use the information
to foster better relationships with the customer, improve the product or service
delivery process, from new product development to the nitty-gritty of the
Probability Sampling
marketing strategy, and enhance the quality of business intelligence. A smart firm
Techniques
realizes that the first step to customer loyalty is through customer satisfaction.

Ongoing communication
Quota Judgmental Snowball
Many firms make the Sampling
Sampling mistake of launching a loyalty program with great fanfare,
Sampling
and then letting it drift. A loyalty program is not a one-time affair, and definitely
cannot run on its own steam. It needs a push now and then to enliven it, and to
get the customer enthused once again. The best programs maintain an active
relationship with the customer by informing them of new developments, offers
etc. and seeking their feedback. This last bit is tricky, for customers also expect
firms to act on feedback and let them know they are taking the communication
seriously.

Organizational commitment

Customer loyalty programs need complete support and commitment from the top
management in order to be successful. The program should also secure buy-in
from all employees concerned by involving them in formulating the program
strategy and implementation plan. Nothing could be more disastrous than a
disgruntled employee lackadaisically administering a loyalty program. A final
word – a loyalty program reflects the values and culture of a company. The truly
successful loyalty programs are not just short-term measures to expand the
customer base. By aligning with the organization’s strategy, mission and vision,
they contribute significantly to long-term profitability, growth and competitiveness.

6.1 Success Factors to customer loyalty

� Customer Understanding- The success of the communications plan

depends on how closely the message hits customer target. Gaining

knowledge about the targeted customers’ demographics, behaviors and
attitudes is critical to developing and delivering effective messages and
rewards.

31
 Loyalty Programs

Sampling Techniques
� Measurement- The objective of Loyalty Marketing is to increase revenue

via retention and increased purchases, therefore, measures must be

implemented to monitor how effectively the program generates return on
Probability Sampling
investment. In order to effectively track program results,Techniques
the design must
stem from clearly defined objectives tied to key performance measures.

� Long term commitment- Customer Loyalty takes time as loyal

Quota
relationships Judgmental
are Snowball
not built overnight. A company needs a minimum of 2-3
Sampling Sampling Sampling
years to thoroughly understand its customers, deliver on evolving
customer expectations and build sufficient brand equity in the customer’s
mind.

� Testing-What customers say and what they actually do often, differ

significantly. Testing enables companies to try various programs and

communications options on smaller customer segments to obtain actual
vs. research based results. Key learning’s can then be incorporated before
being launched to the larger target population.

� Flexibility- Since Loyalty program is an ongoing effort, the program

design and structure must be allowed for flexibility. There are lots of
examples of competitors in an industry which introduce comparable offers
within 6-9 months after a new program launch. Marketers may need to
enhance their program with a new award offer, new bonus opportunity or
other value adds to react to competitive threats.

� Investment- the investment in a Loyalty Marketing initiative is cyclical. In

the first six months, the majority of the investment is for progam set-up
and communications. Award redemption and customer participation begin
to accelerate between the 12th and 16th months, as customers begin to
respond to the motivational drivers and gradually become more profitable.
At this point, the majority of the investment switches to redemption and
program management costs, making the investment commensurate with

32
 Loyalty Programs

the resulting increase inSampling Techniques

profitability. This causes the ROI to climb steadily
and maximize throughout the 2nd and 3rd years.

� System/Database Management- The database is the engine that drives

Probability Sampling
marketing activity. Questions that are to be considered are:
Techniques
1. What information needs to be captured?
2. What is the database supposed to do?
3. How will the information be used?
Quota Judgmental Snowball
Sampling Sampling
4. What system Sampling
enhancements will be required to perform these
functions?

6.2 Do Loyalty Programs works?

Customer loyalty programs have become an essential component of big retail

stores, which have realised the importance of retaining their customers, not just
attracting new ones. But do customer loyalty programs actually work and how
can you use such plans in your own business?

In October 1999, McKinsey & Co. conducted a study of consumers in 16 product

categories. They discovered that loyalty programs did little to increase sales. In
fact, 82% of the members of loyalty programs at casual apparel stores and 52%
at grocery stores said they would spend no more, or even less, at such stores.

33
 Loyalty Programs

Sampling
Bad news indeed but this raises Techniques
an important issue. Most retailers want to do
everything possible to satisfy their customers. The problem occurs at the front
level. "Free Riders" - customers who enjoy benefits without increasing spending -
Probability
may constitute up to 50% of all loyalty program membership Sampling
and those are the
Techniques
ones that need to be satisfied immediately (refer exhibit - Value buying). If
satisfying the customer in the short-term results in decreased profits, most
retailers do a quick about-face. Driven by the profit motive alone, decisions are
Quota
made in the interest ofJudgmental Snowball
the bottom line only, ignoring the long-term implications of
Sampling Sampling Sampling
satisfying the customer.

As customer satisfaction levels rise, what will happen to the profit level in the mid
and long term? Undoubtedly, profit is bound to go up. And conversely, as
customer satisfaction decreases, profit levels will also decline. So customer
satisfaction should be ahead of your profit motive. S Dasgupta, general manager,
Akbarally's says, "We have a database of 40,000 satisfied customers and are
looking at various ways in benefiting them. VALYOU (Akbarally's loyalty program)
is one of our steps in satisfying our valued customers, because satisfaction
means profits for us."

One of the big retailers, Ebony Retail Holdings, the company that owns and runs
all seven Ebony outlets in India was one of the early retailers to launch a loyalty
program. Its CLP - Ebony Elite Club, which offers discount to loyal members, has
more than 42,000 active members. BS Narula, managing director, Ebony Retail
Holdings says, "The key factors for the success of Ebony have been the
understanding of the customer needs and customizing accordingly. We have
understood that 'customer is king' and on the basis of that worked on different
policies, including our CLP, which has benefited us to a great extent."

A loyalty program is a blend of science and art. It is an art in the sense that the
program is truly designed around customer loyalty drivers - benefits and awards -
that will make them loyal. That art extends to the conversations a loyalty program
has with customers. The greatest program design will fall flat if the retailer

34
 Loyalty Programs

Sampling
doesn't adequately train customer Techniques
service reps to respond appropriately to
program members. Likewise, it will fail if communications don't intrigue and
persuade customers. Shoppers' Stop, for example, keeps sending mailers to its
Probability
members and continuously keeps communicating with them. This hasSampling
enabled
Techniques
the retailer to understand its existing customers and satisfy them by meeting their
demands.

On the Quota
other hand, Judgmental
loyalty program design is a science in the sense that
Snowball
programsSampling Sampling
must be designed to generateSampling
a positive ROI and not cannibalise on
sales through redemptions. Implementing a point program that is so attractive
that point redemption levels soar at 200% of forecasted redemption levels can
bankrupt a program quickly. The reverse is true when retailers only offer a one
per cent reward and can't understand why sign-ups are well below forecasted
levels. The forecasting metrics of loyalty program design unfortunately cannot be
found in books. But most retailers in India are actually following the one per cent
reward system to increase loyalty.

35
 Loyalty Programs

Sampling Techniques

Probability Sampling
7. Research Methodology Techniques

Market research is an integral part of every dissertation project. It is done to

prove hypothesis and to fulfill the objectives and sub-objectives. Market research
Quota Judgmental Snowball
Sampling
in this project includesSampling
primary as well asSampling
secondary research. Some telephonic
interviews were also conducted and the questionnaires were filled by both
consumers and the retailers.

SAMPLING TECHNIQUES
Sample is a subgroup of the elements of the population selected for participation
in the study.
Sampling design begins by specifying the target population. The target
population is the collection of elements or objects that possess the information
sought by the researcher and about which inferences are to be made.

Nonprobability Sampling
Techniques
To conduct my survey, I have used:
Non-Probability Sampling:
Any sampling procedure that does not satisfy the chance of selecting any
universe element is a non-probability sampling method no matter what else is
Convenience
Sampling
included in the specification. This method of sampling I have used Judgmental
Sampling Technique. In this method, the population elements are purposively
selected based on the judgement of the researcher.

Primary research

36
 Loyalty Programs

Sampling
Questionnaire method is adopted in thisTechniques
project to conduct primary research. A
sample size of 25 retailers and 100 consumers is taken to whom questions were
asked in form of a questionnaire. The questionnaire has multiple choices,
Probability Sampling
dichotomous and open ended questions. Although, it is recommended that open-
Techniques
ended questions should never be asked in a questionnaire but looking at the kind
of information required, some of the questions were kept open ended.
Survey was conducted in Delhi/ NCR with retail stores like Westside, Shoppers
Quota etc. andJudgmental
Stop, Lifestyle also with some ofSnowball
the renowned.
Sampling Sampling Sampling

Secondary Research
Secondary research includes information from books, articles, journals,
magazines, internet etc. Articles from Images Retail & Images-Business of
Fashion were very helpful in getting the information about loss prevention issue.
Besides books & magazines, internet is the most ubiquitous tool for researchers
which provides bundle of information without many efforts and in very less time.
The websites visited are given in bibliography.

37
 Loyalty Programs

Sampling Techniques

Probability Sampling
Techniques

Quota Judgmental Snowball

Sampling Sampling Sampling

8.1 SHOPPERS' STOP

The foundation of Shoppers' Stop was laid on October 27, 1991 by the K. Raheja
Corp. group of companies. Being amongst India's biggest hospitality and real
estate players, the Group crossed yet another milestone with its lifestyle venture
- Shoppers' Stop.

From its inception, Shoppers' Stop has progressed from being a single brand
shop to becoming a Fashion & Lifestyle store for the family. Today, Shoppers'
Stop is a household name, known for its superior quality products, services and
above all, for providing a complete shopping experience.

With an immense amount of expertise and credibility, Shoppers’ Stop has

become the highest benchmark for the Indian retail industry. In fact, the

38
 Loyalty Programs

Sampling
company’s continuing expansion plansTechniques
aim to help Shoppers’ Stop meet the
challenges of the retail industry in an even better manner than it does today.

Vision Probability Sampling

Techniques
To be a global retailer in India and maintain its No. 1 position in the Indian market
in the Department Store category.

Values Quota Judgmental Snowball

Sampling Sampling Sampling
The following are the values that help Shoppers' Stop in achieving their mission
and vision:

� They do not take what is not theirs.

� The Obligation to dissent (against a viewpoint that is not acceptable)

� They shall have an environment conductive to openness.

� They believe in innovation

� They shall have an environment conductive to development.

� They shall have the willingness to apologize and/or forgive.

� They respect their customers’ rights.

� The value of trust

� They shall be fair.

Accomplishment

Shoppers' Stop in the only retailer from India to become a member of the
prestigious Intercontinental Group of Departmental stores (IGDS). The IGDS
consists of 30 experienced retailers from all over the world, which include

39
 Loyalty Programs

Sampling
established stores like Selfridges Techniques
(England), Karstadt (Germany), Shanghai No.1
(China) , Manor (Switzerland), to name a few.

Shoppers' Stop won "The most admired Appeared Retailer of the year 2000"
Probability Sampling
Award at the Images Fashion Awards. Techniques

Mr. B.S. Nagesh won the "Annual Award for Excellence as Top CEO for 2001" at
the Institute of Marketing Management.
Quota Judgmental Snowball
Mr. Nagesh was also nominated
Sampling Sampling for the Ernst & Young "Entrepreneur of the year
Sampling
2000" Award.

Shoppers' Stop was awarded the "IT user award for best IT practices in Retail
Category" for year 2003-2004.

Shoppers' Stop won the "Best Retail Chain of the Year award" & Mr. B. S.
Nagesh won the "Best Retail Professional of the Year" award at the 4th annual
Image Fashion Awards, 2004.

Shoppers' Stop has been conferred upon with the coveted "Superbrand" status.

“Most admired Fashion Shopping Destination of the Year” at the Images

Fashion Forum, 06 in January, 06.

“Certificate of Merit” from the Council for Fair Business Practices (CFBP) for
our contribution to the promotion of the Code of Conduct laid down by CFBP.

“Retailer of the Year” at the Images India Retail Forum in Sep, 06

“Best Annual Report and Accounts for 2006” by The Institute of Chartered
Accounts of India for the accounting practices adopted by Shoppers’ Stop.

“Amity Corporate Excellence Award” by the Amity International Business

40
 Loyalty Programs

School. Sampling Techniques

“Shopper’s Stop is awarded the second position in the Consumer Loyalty

Probability
Survey conducted by the CSMM – Business World Consumer Sampling
Loyalty
Techniques
Survey”.

About First Citizens

Quota Judgmental Snowball

ShoppingSampling
becomes rewarding
Samplingwhen one is a First Citizen at Shoppers' Stop.
Sampling

The name "First Citizen" reflects the commitment to offering for the ultimate
shopping experience.

Citibank and Shoppers’ Stop announced in Hyderabad in October 2002, the

launch of India’s first retail co-branded card, First Citizen Citibank card with
Master Card International. The First Citizen Citibank members will have the
added advantage of availing of a gamut of financial advisory services at
Shoppers' Stop through the state-of-the-art Citibank Financial Centre, a first by
Citibank at any major retail store in India.

As a First Citizen, one’s shopping experience becomes even more enjoyable

with:

 Reward Points for every time one shops at Shoppers' Stop.

 Exclusive benefits & privileges.
 Exclusive offers ever so often.
 Updates on what one can look forward to shop for at Shoppers' Stop.
 Exclusive cash counters at Shoppers' Stop so one can spend more time
shopping than waiting in a line.
And a host of other benefits, all of which are provided by the First Citizen
Program.

41
 Loyalty Programs

Sampling
First Citizen Program Membership Techniques
and Privileges
As a First Citizen Citibank Card member, one automatically gains membership to
Shoppers' Stop's loyalty program, First Citizen Program. Every time one renews
Probability
their card, their First Citizen Program membership is renewed as well.Sampling
Techniques

Special Offers:
The First Citizen Program membership entitles to exclusive privileges such as
Quota
product previews, Judgmental
priority billing and otherSnowball
special benefits. Add to this the
Sampling Sampling Sampling
fabulous experience of shopping at the premier Shoppers' Stop outlets across
the country. There will be special offers or discounts awaiting from time to time.

Exclusive Payment Counters:

With the First Citizen Citibank Card, members have an exclusive payment
counter to pay their bills at ease. So now they don’t have to wait in long queues..

Upgrade to First Citizen Citibank Golden Glow Card membership:

Make purchases over Rs. 40,000 at Shoppers' Stop' during the first year and
gain automatic upgrade to the First Citizen Citibank Golden Glow Card
membership.

0% EMI Scheme:
Shop at Shoppers' Stop and pay for the purchases in easy 3-month 0% interest
Equated Monthly Installments with your First Citizen Citibank Card.

Peace of mind:
Have your existing balance on any credit card (not issued by Citibank),
transferred to your First Citizen Citibank Card at an incredibly low interest rate of
just 1.49% for six months.

First Citizen Citibank Debit Card

The First Citizen ATM/Debit Card is India's first co-branded ATM/Debit card in

42
 Loyalty Programs

Sampling
the retail sector. While it can be used asTechniques
a regular debit card and also at an ATM
to withdraw cash, this card helps to collect reward points every time one
purchases merchandise at any Shoppers' Stop outlet.
Probability
As a First Citizen of Shoppers' Stop, one stands to gain in any Sampling
of its three
Techniques
membership categories:

 Enjoy Classic Moments- 1points for every Rs.100 spent.

 Flash your
QuotaSilver Edge – 2+ 1 point (if customer
Judgmental Snowball buys in-house brand) for every
Sampling
Rs.100 spent. Sampling Sampling

 Revel in a Golden Glow – 3+2points (if customer buys in-house brand) for
every Rs.100 spent.

The First Citizen Loyalty Program

Proposition:

� The First Citizen Program is one of the largest retail Loyalty Programs in

the country, having more than 3,10,000 Active First Citizens, and with
12,000 to 14,000 members added every month for the last two months.

� It has unique benefits like Exclusive Shopping Festival every year.

� Free parking where applicable.

� Points equivalent to Re.1 both for earned and redeemed.

� Exclusive preview to sale.

� Exclusive lounge in selected stores.

General shopping pattern of Club members:

� Golden Glow First Citizens shop 6 times a year.

� Silver Edge First Citizens shop 5 times a year.

43
 Loyalty Programs

Sampling Techniques
� Classic Moments First Citizens shop 3 times a year.

Profile: 25-45 years of age. Probability Sampling

Techniques
� Overall average spend per First Citizen Rs 8,700 (depending on the tier,

the highest being the Golden Glow First Citizens).

� Average
Quota revenue contribution to overall
Judgmental sales per promotion is 55-65%.
Snowball
Sampling Sampling Sampling
� Have a high propensity to spend.

(Source: Images retail, September’03)

44
 Loyalty Programs

Sampling Techniques

8.2 PANTALOON
Pantaloon Retail (India) Limited, is India's leading retail company with presence
across multiple lines of businesses. The company owns andProbability
managesSampling
multiple
Techniques
retail formats that cater to a wide cross-section of the Indian society and is able
to capture almost the entire consumption basket of the Indian consumer.
Headquartered in Mumbai ( Bombay), the company operates through 5 million
Quota
square feet Judgmental
of retail space, Snowball
has over 331 stores across 40 cities in India and
Sampling Sampling Sampling
employs over 17,000 people. The company registered a turnover of Rs 2,019
crore for FY 2005-06.

Pantaloon Retail forayed into modern retail in 1997 with the launching of fashion
retail chain, Pantaloons in Kolkata. In 2001, it launched Big Bazaar, a
hypermarket chain that combines the look and feel of Indian bazaars, with
aspects of modern retail, like choice, convenience and hygiene. This was
followed by Food Bazaar, food and grocery chain and launch Central, a first of
its kind seamless mall located in the heart of major Indian cities. Some of it's
other formats include, Collection i (home improvement products), E-Zone
(consumer electronics), Depot (books, music, gifts and stationary), aLL (fashion
apparel for plus-size individuals), Shoe Factory (footwear) and Blue Sky (fashion
accessories). It has recently launched its etailing venture, futurebazaar.com.

The group's subsidiary companies include, Home Solutions Retail India Ltd,
Pantaloon Industries Ltd, Galaxy Entertainment and Indus League Clothing. The
group also has joint venture companies with a number of partners including
French retailer Etam group, Lee Cooper, Manipal Healthcare, Talwalkar's, Gini &
Jony and Liberty Shoes. Planet Retail, a group company owns the franchisee of
international brands like Marks & Spencer, Debenhams, Next and Guess in India

45
 Loyalty Programs

Future Group Sampling Techniques

Pantaloon Retail is the flagship enterprise of the Future Group, which is

positioned to cater to the entire Indian consumption space. The Future Group
operates through six verticals: Future Retail (encompassingProbability Sampling
all retail businesses),
Techniques
Future Capital (financial products and services), Future Brands (management of
all brands owned or managed by group companies), Future Space (management
of retail real estate), Future Logistics (management of supply chain and
Quota
distribution) and FutureJudgmental Snowball
Media (development and management of retail media).
Sampling Sampling Sampling
Future Capital Holdings, the group's financial arm, focuses on asset
management and consumer finance. It manages two real estate investment
funds (Horizon and Kshitij) and consumer-related private equity fund, Indivision.
It also plans to get into insurance, consumer credit and other consumer-related
financial products and services in the near future.
Future Group's vision is to, "Deliver Everything, Everywhere, Everytime to Every
Indian Consumer in the most profitable manner." One of the core values at
Future Group is, 'Indianess' and its corporate credo is - Rewrite rules, Retain
values.

Vision
Future Group shall deliver Everything, Everywhere, Everytime for Every
Indian Consumer in the most profitable manner.

Mission
We share the vision and belief that our customers and stakeholders shall be
served only by creating and executing future scenarios in the consumption space
leading to economic development.
We will be the trendsetters in evolving delivery formats, creating retail realty,
making consumption affordable for all customer segments – for classes and for
masses. We shall infuse Indian brands with confidence and renewed ambition.
We shall be efficient, cost- conscious and committed to quality in whatever we
do.

46
 Loyalty Programs

We shall ensure that our Sampling Techniques

positive attitude, sincerity, humility and united
determination shall be the driving force to make us successful.
Core Values
1. Indianness: confidence in ourselves. Probability Sampling
Techniques
2. Leadership: to be a leader, both in thought and business.
3. Respect & Humility: to respect every individual and be humble in our
conduct.
4. Quota
Introspection: Judgmental
leading to purposefulSnowball
thinking.
Sampling Sampling Sampling
5. Openness: to be open and receptive to new ideas, knowledge and
information.
6. Valuing and Nurturing Relationships: to build long term relationships.
7. Simplicity & Positivity: Simplicity and positivity in our thought, business
and action.
8. Adaptability: to be flexible and adaptable, to meet challenges.
9. Flow: to respect and understand the universal laws of nature.

Awards and Recognition

National Retail Federation

International Retailer of the Year - Pantaloon Retail (India) Ltd. The National
Retail Federation is the largest retail trade association with over 1.4 million
member organisations in the US and across the world. Some of the past
recipients of this award include Metro AG, Carrefour, Ito-Yokado, Zara and
Boticario.

Retail Asia, Retail Asia Pacific Top 500 Awards

International Retailer of the Year - Pantaloon Retail (India) Ltd. The National
Retail Federation is the largest retail trade association with over 1.4 million
member organisations in the US and across the world. Some of the past
recipients of this award include Metro AG, Carrefour, Ito-Yokado, Zara and
Boticario.

47
 Loyalty Programs

Images Retail Awards 2006 Sampling Techniques

● Mr. Kishore Biyani – Retail Face of the year

● Big Bazaar – Best Value Retail Store

Probability Sampling
Techniques
● Big Bazaar – Best Retail Destination

● Food Bazaar – Best Food and Grocery Store

●
Quota Judgmental Snowball
Sampling Sampling Sampling
Readers Digest Platinum Trusted Brand Award

● Big Bazaar - Earning a trusted Place in the everyday lives of consumers.

CNBC Awaaz Consumer Awards

● Big Bazaar: Most preferred store

Retail Asia Publishing

● PRIL – Numero Uno Retail Organization of India

About green card

Green Card is the passport to a whole new world of exclusive benefits and
privileges.

● Instant discounts* for every time you shop at Pantaloons.

● Exclusive shopping days to get hold of latest merchandise.

● Regular updates on collections and promos via catalogues, sms and

email.

● Special invites to the most happening events.

● Extended exchange periods and complimentary drops for alterations.

48
 Loyalty Programs

Sampling Techniques
● Exclusive billing counters and much more.

*Categories valid for Green Card Discounts:

Apparel, perfumes & cosmetics, toys, Bluesky, aLL, Depot, Probability Sampling
Planet Sports, &
accessories. Valid on categories within Pantaloons only. Techniques

Also valid at standalone Bluesky and all stores.

Quota Judgmental Snowball

How Green card works:
Sampling Sampling Sampling

Present your card for the swipe every time you make a purchase at Pantaloons.

Membership & 12 month Purchase-based Upgrading System

Three Star Card - Upgrade to a 3 star status by shopping for Rs. 7500/-
immediately preceding 12 months of current shopping date.

Five Star card - Upgrade to a 5 star status by shopping for Rs. 15000/-
immediately preceding 12 months of current shopping date.

Seven Star - Upgrade to a 7 star status by shopping for Rs. 40000/- immediately
preceding 12 months of current shopping date.

12 month Purchase-based Upgrading System

When you shop at Pantaloons and your total purchase (including that day) in the
previous 12 months totals to the criteria value of the next tier, you upgrade to the
next status

Membership Validity

1 Star card is valid for a period of 2 years from the date of enrolment.

3, 5 and 7 star cards are valid for a period of one year from the date of upgrade.

49
 Loyalty Programs

Sampling Techniques

Membership Renewal

● Purchase worth Rs. 7500 within 2 years of card issue date and retain a 1 star
Probability Sampling
status Techniques
● Purchase worth Rs. 7500 within 1 year of card issue date and retain a 3 star
status

● PurchaseQuota
worth Rs. 15000 within 1 yearSnowball
Judgmental of card issue date and retain a 5 star
Sampling Sampling Sampling
status
Purchase worth Rs. 40000 within 1 year of card issue date and retain a 7 star
status

New Features of Green card

Now you can upgrade to even higher privileges by becoming a 7 star member.

The new improved Green Card has a 7 star upgrade status, which will offer
higher privileges to this exclusive group of members.

When you shop with green card you get rewards instantly

1Star Members
Gift Voucher worth Rs. 150 on enrolment
3 Star Members
5% discount on every purchase
5 Star Members
An exclusive 7.5% discount on every purchase
7 Star Members
A whopping 10% discount on every purchase

50
 Loyalty Programs

Sampling Techniques

Benefits of green card

Probability Sampling
Green Add on Cards Techniques

Your Green Card benefits can now be shared with members of your family. Apply
for an Add-on card today. Let your family also be entitled to direct discount and
Quota Judgmental Snowball
other privileges
Samplingthat weSampling
have to offer. A 1Sampling
and 3 star member is entitled to have 1
add-on card. However a 5 and 7 star member is entitled to have 2 add-on cards.

Green Days

Exclusive Green Card shopping day give you a preview of End Of Season Sale,
so that you are first to get hold of the latest merchandise.

Green Channel

Our special billing counter is open to all Green Card members during End of
Season sale. Now you can avoid the rush at the regular billing counter.

Green Offers & Promotions

These are exclusive shopping offers sent to you on a regular basis. Just flash
your Green Card and claim the special offers and promotions. At times, offers
open to all customers are further enhanced for our esteemed Green Card
members.

Green Service Desk

For all your queries, information and services, contact the Green Service Desk at
any Pantaloon Store.

Green Exchange
Relax! Now you can exchange your products within 60 days of purchase. (90

51
 Loyalty Programs

days for Seven Star members)Sampling Techniques

Green Drop
Probability
Your busy schedule may not permit you to collect your alterations Sampling
or purchases.
Techniques
Just ask for the Green Drop Service and purchases will be home-delivered to
you. This service is exclusively available to the 7 star members all round the year
and also to the 5 star members except for end of season sale period.
PrivilegeQuota
at a glance Judgmental Snowball
Sampling Sampling Sampling

Benefits 7 star 5 star 3 star 1 star

Discounts on all Gift Voucher worth

subsequent 10% 7.5% 5% Rs. 150/- on new
Purchases enrolment

Upgrade Enrolment Upgrade Kit Upgrade Kit Upgrade Kit Welcome Kit

Add-on Card to Family

2 2 1 1
Memberst

End of Season Sale

Yes Yes Yes Yes
Preview

Yes - Yes - during

Yes - around
Free Car Parking around the End of No
the year
year Season Sale

Green Channel Yes Yes Yes Yes

Yes - around
Yes -
the year except
Green Drop around the No No
End of Season
year
Sale

Green Exchange 90 days 60 days 60 days 60 days

Green Service Desk Yes Yes Yes Yes

Green offers &

Yes Yes Yes Yes
Promotions

52
 Loyalty Programs

8.3 LIFESTYLE Sampling Techniques

Headquartered in Dubai at the Oasis Mall, The Landmark Group, founded in

1973, was started with the mission of becoming the foremost retailer in the
Probability Sampling
Techniques
Middle East, by providing customers with a large variety of high quality products
at exceptional value under one roof.

From a single children’s store in Bahrain, the Landmark Group has expanded
Quota Judgmental Snowball
exponentially today with
Sampling 300 Stores inSampling
Sampling the Gulf and Middle East and staff
strength of over 4,000.

The main proposition of the Landmark Group is its product and concept
innovation.

The entire retail experience revolves around its “Concept” stores, which have
been designed and engineered to suit evolving customer needs and lifestyles.

The five Concepts of the Landmark Stores are Baby Shop, Splash, Shoe Mart,
Home Centre and Lifestyle.

Multi-branded retail outlet model has been adopted by The Landmark Group in
the Indian market. Lifestyle’s retail outlets in India are mostly known and
preferred by the availability of a numerous variety of merchandise under each of
its five concepts.

The foundation of Landmark Group is built on the philosophy that the 'Customer
comes first'.

The 3 pillars on which the Landmark Group continues to grow exponentially,

ventures into new markets and Captures greater market share are- Carefully
listen. Constantly adapt. Always deliver

53
 Loyalty Programs

Sampling
LIFESTYLE runs its programme underTechniques
the name “The Inner Circle”. It is an
exclusive club, where privileges are the order of the day. When the rest of the
world get what they pay for, The Inner Circle members get more.
Probability Sampling
One get privilege points, which turn into gift vouchers for them,Techniques
to buy whatever
they please from the stores across the country. Also, it is your entry into a
private, exclusive world of bounties such as special offers, discounts, movies &
special invites,
Quota get-together events etc. Snowball
Judgmental
Sampling Sampling Sampling
HOW CAN YOU BECOME AN INNER CIRCLE MEMBER?

♦ Anyone can become a part of this privilege club by shopping goods worth

Rs.2500 in any of the lifestyle stores.

♦ One can also subscribe to membership by paying a nominal fee of

Rs.150.

♦ If you Shop goods worth more than Rs.2500, you have to present your

invoice at The Inner Circle desk, fill up the application from and you can
then instantly become a member.

Benefits to Inner Circle Members.

As a preferred customer of Lifestyle and a distinguished member of Inner Circle,

the following benefits can be enjoyed.

� For an Inner Circle member, shopping with lifestyle is both fun and
rewarding. Earn points every time you shop at Lifestyle. These points can
be exchanged against subsequent purchases made in the store. For
every Rs.50 purchase, Inner Circle member will be rewarded with 1 point.
1 point is equivalent to Re.1. Once a member will accumulate 100 points
in his/her account, he/she can convert it as Rs.100 worth gift voucher
and use it to buy anything at all from lifestyle.

54
 Loyalty Programs

Sampling Techniques
� A dedicated Inner Circle’s desk for a member's assistance at each of the
stores

� Periodic special offers / discounts from in store brands.

Probability Sampling
Techniques
� Invites for exclusive preview of Merchandise and OFF Sale.

� Exclusive shopping hours only for members during sales.

� Quota
Personalized Judgmental
updates Snowball
& information on in store promotions, marketing
Sampling Sampling Sampling
events, new arrivals, launch of merchandise / product etc.

Exclusive additional discounts from various eat outs / restaurants in India,

pubs, discothèques, hospitals, health clubs / gym / theme parks, Hotels, travel
and entertainment.

Loyal members’ enrollment

As seen from above, loyal members of Shopper’s Stop ranks the highest in 2007-
08 compared to pantaloons and lifestyle.

55
 Loyalty Programs

Sampling Techniques

Probability Sampling
9 Analysis Techniques

9.1 Retailers with Loyalty Programme Scheme

Quota Judgmental Snowball

Q1) Has your sales increased after optingSampling
Sampling Sampling Loyalty Programme Scheme?
□ Yes
□ No

The question when asked has the retailers sales increased after opting Loyalty
Programme Scheme:
Out of 10 retailers,
□ 10 (100%) said Yes
□ 0 (0%) said No

The findings are summarized in Graph 2:

Graph 1

From the above graph, I got to know that 100% of the retailers’ sales increased
1
after opting Loyalty
8 Programme Scheme.
6 N Y
4 N
2 Y
Q2) How your 0 loyalty programme is different from other retailers?
When asked
retailers has their
increased after
� This question was kept as an open ended question, and I got the following
loyalty
replies: if anyone purchases merchandise of Rs. 5000 and above any time
cumulative in a year, they become a member.

56
 Loyalty Programs

Sampling Techniques
� Loyalty programme is basically four 3 types of customers, classic, silver

and golden glow(shoppers stop)

� Requirement register is maintained Probability Sampling

Techniques

� Separate bill counter for card holders.

� Lucky draws for the customers.

Quota Judgmental Snowball
Sampling Sampling Sampling
� Personal updated information. About the various happenings in the store.

� Self expression of the customers.

Q3) Has the loyalty programme helped in increasing the customer base and
goodwill of your store?
Yes
□ No

57
 Loyalty Programs

□ Samplinghas
Somewhat Techniques

:
Out of 10 retailers,
□ 10(100%) said Yes Probability Sampling
Techniques
□ 0 (0%) said No
□ 0 (0%) said somewhat has

Quota Judgmental Snowball

The findings are summarized
Sampling in Graph 4:Sampling
Sampling

Graph 2

From the above graph, I got to know that 100% of the retailers’ Goodwill and
customer base of the store increased substantially, after opting Loyalty Program
Scheme.

Q4) Are you able to cover your expense on Loyalty Program Scheme, by the
margin of increased sales/profitability?
□ Yes

58
 Loyalty Programs

□ NoSampling Techniques
Out of 10 retailers,
□ 10(100%) said Yes
Probability Sampling
□ 0 (0%) said No Techniques

The findings are summarized in Graph 5:

Quota Judgmental Snowball

Sampling Sampling Sampling

Graph 3

From the above graph, I got to know that 100% the retailers are able to cover
their expenses on Loyalty Program Scheme, by the margin of increased
sales/profitability

Q5) How many loyal customers do you have?

□ <5000
□ 5000-20000
□ 20000-50000

59
 Loyalty Programs

□ Sampling Techniques
>50000
The question when asked, as to how many loyal customers the retailers have:
Out of 10 retailers,
□ 5(33%) said <5000 Probability Sampling
Techniques
□ 2(25%) said 5000-20000
□ 2(25%) said 20000-50000
□ 1(17%)
Quota
said >50000
Judgmental Snowball
Sampling Sampling Sampling

The findings are summarized in Graph 6:

Graph 4

From the above graph, I got to know that 33% of the retailers’ said that they have
<5000 loyal customers, 25% said that they have 5000-20000, 25% said that they
have 20000-50000 and the remaining 17% said that they have >50000 loyal
customers.

9.2 Retailers without Loyalty Programme Scheme

Q1) Do you have a separate customer service desk at the store?

□ Yes
60
 Loyalty Programs

□ NoSampling Techniques
The question when asked, do the retailers have a separate customer service
desk at the store:
Out of 10 retailers, Probability Sampling
Techniques
□ 2(20%) said Yes
□ 8(80%) said No

Quota Judgmental Snowball

The findings are summarized
Sampling in Graph 1:Sampling
Sampling

Graph 5

From the above graph, I got to know that 20% of the retailers have a separate
customer service desk at the store and 80% don’t have.

Q2) Do you maintain a customer database?

□ Yes
□ No
The question when asked, do the retailers maintain a customer database:

61
 Loyalty Programs

Out of 10 retailers, Sampling Techniques

□ 3(20%) said Yes

□ 7(80%) said No
Probability Sampling
Techniques
The findings are summarized in Graph 2:

Quota Judgmental Snowball

Sampling Sampling Sampling

Graph 6

From the above graph, I got to know that 30% of the retailers maintain a
customer database at the store and 70% don’t.

Q3) Do you think customer service is necessary to retain customers?

62
 Loyalty Programs

When interviewed 10 retailers,Sampling

100% of Techniques
the retailers say that customer service is
obviously necessary to retain customers. (It was an open ended question)

Probability Sampling
Techniques

Quota Judgmental Snowball

Sampling Sampling Sampling

Q4) What benefits do you offer to you loyal customers?

□ Home Delivery
□ Discounts

63
 Loyalty Programs

□ Sampling Techniques
Both

The question when asked, what benefits the retailers offer to their loyal
customers: Probability Sampling
Techniques
Out of 10 retailers,
□ 7(70%) said Home Delivery
□ 2(20%) said Discounts
Quota Judgmental Snowball
□ 1(10%) both
Sampling Sampling Sampling

The findings are summarized in Graph 4:

Graph 7

From the above graph, I got to know that 70% of the retailers offer home delivery
facility, 20% said warranty and the rest 10% said they offer both home delivery
and discounts.

Q5) Would you prefer new customer service being offered that makes you
different from others?
□ Yes

64
 Loyalty Programs

□ NoSampling Techniques
The question when asked, do the retailers prefer new customer service being
offered that makes them different from others:
Out of 10 retailers, Probability Sampling
Techniques
□ 10 (100%) said Yes

The findings are summarized in Graph 5:

Quota Judgmental Snowball
Sampling Sampling Sampling

Graph 8

From the above graph, I got to know that 100% of the retailers prefer new
customer service to be offered that will make them different from others

Q6) Why don’t you offer Loyalty Programme to your regular customers?
□ Very costly
□ Not needful
□ No regular customers

65
 Loyalty Programs

□ Sampling
Already Techniques
meeting the expected sales
The question when asked, why the retailers don’t offer Loyalty Programme to
their regular customers:
Out of 10 retailers, Probability Sampling
Techniques
□ 5 (50%) said that it’s very costly
□ 2(20%) said that they don’t need it at all
□ 0 (0%) said that they have no regular customers
Quota Judgmental Snowball
□ 3(30%)
Sampling
said thatSampling Samplingtheir expected sales.
they are already meeting

The findings are summarized in Graph 6:

Graph 9
From the above graph, I got to know that 50% of the retailers don’t offer Loyalty
Programme Scheme to their regular customers because it is very costly, 20%
say that they don’t need it at all and the rest 30% said they are already meeting
their expected sales..
Q7) In future, do you plan to offer any Loyalty Programme Scheme to your
customers?
□ Yes
□ No

66
 Loyalty Programs

□ Sampling
Can’t say Techniques
The question when asked, do the retailers plan to offer any Loyalty Programme
Scheme to their customers:
Out of 10 retailers, Probability Sampling
Techniques
□ 6 (60%) said Yes
□ 2 (20%) said No
□ 2 (20%) said can’t say
Quota Judgmental Snowball
. Sampling Sampling Sampling
The findings are summarized in Graph 8:

Graph 10

From the above graph, I got to know that 100% of the retailers plan to offer
Loyalty Programme Scheme to their customers.

67
 Loyalty Programs

9.3 For the Consumers Sampling Techniques

Q1) Are you a regular customer to this store?

□ Yes □ Probability Sampling
No
Techniques

The question when asked, are the respondents regular customers of the
particular stores:
Quota Judgmental Snowball
Out of 100 respondents,
Sampling Sampling Sampling
□ 80 (80%) said Yes
□ 20 (20%) said No

The findings are summarized in Graph 1:

Graph 11

From the above graph, I got to know that 80% of the respondents are a regular
visitor of Lifestyle, Shoppers Stop and Pantaloons and 20% of the respondents
are visiting these stores for the first time.

68
 Loyalty Programs

If Yes how regular? Sampling Techniques

□ Weekly
□ Monthly
□ Yearly Probability Sampling
Techniques
□ Occasionally

The question when asked, to the 80% of the respondents as to how much regular
they are:Quota Judgmental Snowball
Sampling Sampling Sampling
Out of 80 respondents,
□ 10 (12%) said Weekly
□ 15 (18%) said Monthly
□ 20 (25%) said Yearly
□ 35 (45%) said Occasionally

The findings are summarized in Graph 2:

Graph12

From the above graph, I got to know that 45% of the regular respondents go to
the stores occasionally, 25% yearly, 18% monthly and the rest 12% weekly.

69
 Loyalty Programs

Sampling Techniques

Q2) Usually how much do you spend on your every visit?

□ <100 □ 1000-
□ 100-500 Probability Sampling
5000
Techniques
□ 500- □ >5000
1000
The question when asked, how much do the respondents spend on their every
visit: Quota Judgmental Snowball
Sampling Sampling Sampling
Out of 100 retailers,
□ 5 (5%) said <100
□ 33 (33%) said 100-500
□ 42 (42%) said 500-1000
□ 14 (14%) said 1000-5000
□ 6 (6%) said >5000

The findings are summarized in Graph 3:

Graph 13

70
 Loyalty Programs

Sampling
From the above graph, I got to Techniques
know that 42% of the respondents spend around
Rs.500-1000, 33% around Rs.100-500, 14% around 1000-5000, 6% above
Rs.5000 and a minority of 5% less than Rs.100 on their every visit.
Probability
Q3) Will you be motivated to visit more frequently, if given prioritySampling
along with
Techniques
discounts?
□ Yes
□ No
Quota when asked,
The question Judgmental Snowball
Will the respondents be motivated to visit more
Sampling Sampling Sampling
frequently, if given priority along with discounts:
Out of 100 retailers,
□ 99 (99%) said Yes
□ 1 (1%) said No

The findings are summarized in Graph 4:

Graph 14

From the above graph, I got to know that 99% of the respondents said that they
be motivated to visit more frequently, if given priority along with discounts.

71
 Loyalty Programs

Sampling Techniques

ProbabilityScheme
Q4) Do you think that it’s important to have a Loyalty Program Samplingin a
Techniques
store?
□ Yes
□ No
Quotawhen asked,
The question Judgmental Snowball
do the respondents think that it’s important to have a
Sampling Sampling Sampling
Loyalty Programme Scheme in a store:
Out of 100 retailers,
□ 94 (94%) said Yes
□ 6 (6%) said No

The findings are summarized in Graph 5:

Graph15

From the above graph, I got to know that 94% of the respondents think that it’s
important to have a Loyalty Program Scheme in a store.

72
 Loyalty Programs

Sampling Techniques

Probability Sampling
Q5) How does a good Loyalty Program affect your buying decision?
Techniques
□ You buy more
□ You are loyal to the store
□ Do not Affect
Quota Judgmental Snowball
Sampling Sampling Sampling
The question when asked, how does a good Loyalty Program affect the
respondent’s buying decision
Out of 100 customers,
□ 32 (32%) said they become loyal to the store
□ 58 (58%). said that they buy more
□ 10 (10%) said that it does not affect at all.

The findings are summarized in Graph 6:

Graph 16

From the above graph, I got to know that 32% of the respondents become
loyal to the store, 58% buy more and to the rest of 10% it does not affect

73
 Loyalty Programs

their buying decision even Sampling Techniques

if a good Loyalty Program is provided.

Q6) Are you aware of our Loyalty Program Scheme?

□ Yes Probability Sampling
Techniques
□ No

The question when asked, are the respondents aware of the stores Loyalty
Program Quota
Scheme: Judgmental Snowball
Sampling Sampling Sampling
Out of 100 retailers,
□ 93 (93%) said Yes
□ 7 (7%) said No

The findings are summarized in Graph 17:

Graph 17

From the above graph, I got to know that 93% of the respondents are aware of
the stores Loyalty Program Scheme.

74
 Loyalty Programs

Sampling Techniques

Probability Sampling
Techniques

Quota Judgmental Snowball

Sampling Sampling Sampling

75
 Loyalty Programs

Samplingregularly?
a) Do you receive offers and schemes Techniques

□ Yes
□ No
Probability Sampling
Techniques
The question when asked, to the 54% of the respondents if they receive the
stores offers and schemes regularly:
Out of 54 respondents,
□ 52Quota Judgmental
(96%) said Yes Snowball
Sampling Sampling Sampling
□ 2 (4%) said No

The findings are summarized in Graph 18:

Graph 18

From the above graph, I got to know that 96% of the respondents receive
the store's offers and schemes regularly.

76
 Loyalty Programs

b) If No, would you like to be? Sampling Techniques

□ Yes
□ No
Probability Sampling
Techniques
The question when asked, to the 44% of the respondents if they would want to
be a member of the stores Loyalty Programme:
Out of 44 respondents,
□ 40Quota Judgmental
(87%) said Yes Snowball
Sampling Sampling Sampling
□ 6 (13%) said No

The findings are summarized in Graph 19:

Graph 19

From the above graph, I got to know that 87% of the respondents would
want to be a member of the stores Loyalty Programme and the rest 13%
don’t want to be.

77
 Loyalty Programs

Q7) What motivates/motivatedSampling Techniques

you to become a loyal customer of this store?
□ The discounts and schemes it offers
□ Services it offers
□ Probability
The status of priority by giving prior Sampling
information
Techniques
□ Self- expression

The question when asked, what motivates/motivated the respondents to become

Quota of theJudgmental
a loyal customer store: Snowball
Sampling Sampling Sampling
Out of 100 respondents,
□ 12 (12%) said the discounts and schemes it offers
□ 25 (25%) said that the services it offers
□ 42 (42%) said the status of priority by giving prior information
□ 21 (21%) said Self- expression

The findings are summarized in Graph 20:

Graph 20
From the above graph, I got to know that 42% of the respondents get motivated
to become a loyal customer of the store by the status of priority by giving prior
information, 25% by the services it offers, 21% for Self- expression and the rest
12% said the discounts and schemes it offers.

78
 Loyalty Programs

Sampling
Q8) Has your frequency of visit Techniques
increased after becoming member of any Loyalty
Programme Scheme?
□ Yes
□ No Probability Sampling
Techniques

The question when asked, has the respondent’s frequency of visit increased after
becoming member of the Loyalty Programme Scheme:
Quota
Out of 100 Judgmental
respondents, Snowball
Sampling Sampling Sampling
□ 73 (73%) said Yes
□ 27 (27%) said No

The findings are summarized in Graph 21:

Graph 21
From the above graph, I got to know that 73% of the respondent’s frequency of
visit has increased after becoming member of the Loyalty Programme Scheme.

9.1 Findings

79
 Loyalty Programs

Sampling Techniques

Retailers with Loyalty Program Scheme

▪ 100% of the retailers’ sale has increased after opting Loyalty Program
Probability Sampling
Scheme. Techniques

▪ 100% of the retailers’ Goodwill and customer base of the store has

increased substantially, after opting Loyalty Program Scheme.

Quota Judgmental Snowball
▪ 100% the retailers
Sampling are able to cover
Sampling their expenses on Loyalty Program
Sampling

Scheme, by the margin of increased sales/profitability.

▪ 33% of the retailers’ said that they have <5000 loyal customers, 25% said

that they have 5000-20000, 25% said that they have 20000-50000 and the
remaining 17% said that they have >50000 loyal customers.

Retailers without Loyalty Program Scheme

▪ 80% of the retailers have a separate customer service desk at the store

and 20% don’t have.

▪ 92% of the retailers maintain a customer database at the store and 8%

don’t.

▪ 100% of the retailers say that customer service is obviously necessary to

retain customers.

▪ 70% of the retailers offer home delivery facility, 20% said discount and the

rest 10% said both.

▪ 54% of the retailers prefer new customer service to be offered that will

make them different from others and the rest 46% said that they prefer
any new customer service to be provided.

80
 Loyalty Programs

Sampling Techniques
▪ 50% of the retailers don’t offer Loyalty Program Scheme to their regular

customers because they are already meeting their expected sales, 20%
say that they don’t need it at all and the rest 30% said that it’s very costly.
Probability Sampling
Techniques
▪ 77% of the customers feel that they should be provided with Loyalty

Programme Membership and the rest 23% said that it is not necessary
that they should be provided with Loyalty Programme Membership.
Quota Judgmental Snowball
▪ 54% of the retailers
Sampling plan to offerSampling
Sampling Loyalty Programme Scheme to their

customers, 23% don’t plan and the rest 23% can’t say in advance if they
will be providing any Loyalty Programme Scheme to their customers.

For the Consumers

▪ 80% of the respondents are a regular visitor of Lifestyle, Shoppers Stop

and Westside and 20% of the respondents are visiting these stores for the
first time.

▪ 45% of the regular respondents go to the stores occasionally, 25% yearly,

18% monthly and the rest 12% weekly.

▪ 42% of the respondents spend around Rs.500-1000, 33% around Rs.100-

500, 14% around 1000-5000, 6% above Rs.5000 and a minority of 5%

less than Rs.100 on their every visit.

▪ 99% of the respondents said that they be motivated to visit more

frequently, if given priority along with discounts.

▪ 94% of the respondents think that it’s important to have a Loyalty Program

Scheme in a store.

▪ 58% of the respondents become loyal to the store, 32% buy more and to

the rest of 10% it does not affect their buying decision even if a good
Loyalty Program is provided.

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▪ 93% of the respondents are aware of the stores Loyalty Program Scheme.

▪ 54% of the respondents are member of the stores Loyalty Program

Probability Sampling
Scheme and 46% of them are not. Techniques

▪ 96% of the respondents receive the stores offers and schemes regularly.

▪ 87% of the respondents would want to be a member of the stores Loyalty

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Program and the rest 13% don’t want to be.

▪ 42% of the respondents get motivated to become a loyal customer of the

store by the status of priority by giving prior information, 25% by the

services it offers, 21% for Self- expression and the rest 12% said the
discounts and schemes it offers.

▪ 73% of the respondent’s frequency of visit has increased after becoming

member of the Loyalty Program Scheme.

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9.2 Conclusion:

By analyzing the findings of Q3, Q4 & Q5 of the consumers, it can be concluded

that the customers gets motivated to visit more frequently, if given priority along
with discounts. They even think that it’s important to have a Loyalty Program
Scheme in a store. Accordingly, 58% of the respondents become loyal to the
store, 32% buy more and to the rest of 10% it does not affect their buying
decision even if a good Loyalty Program is provided (according to my survey
done).
Even in the stores which do not have loyalty Programs say that customers do
want that they be made members of the store. They should see the success ratio
of the stores which provide their customers with loyalty program. Initially, it might
increase the stores cost, but they should see the benefits for the long run and not
for the short span of time. With lots of competition developing up, each and every
store should think of retaining its existing customers and in making new
customers.
The statistics also shows that customers go to those stores the most where they
are recognized and are given priority. And these existing customers help the
store by advertising the stores benefits through words of mouth.
Employee training and education is a must for attracting the customers and
making them aware of the benefits it provides.
Last but not the least; one should always remember that “Customer is the King”.

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9.3 Recommendations Snowball
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At the end of this project, I would like to recommend some points which can be of
some help to those who think that loyalty program is not beneficial and to those
who think that loyalty program is beneficial:

� From surveys made since long, it is proved that store with loyalty

Programs are doing well are ranking at the top.

� Even though they do not provide with such a service, they should give

special services to their regular customers, so as to retain them for the

long run.

� The customers should be allowed to fully express whatever suggestions

they have in mind, and the management should look upon it seriously and
take immediate actions to rectify the same. By doing this, the customers
would become loyal to the store as they would have the feel of priority.

� If the store is a complete family store, care should be taken that there

should be a kid’s play room, so that the parents shop at ease and would
want to come again and again to the same store, so that they shop without
any tension.

� The balance of reward and recognition must establish value in the

customer's mind and motivate incremental purchases. Programme

rewards should be credited regardless of where the customer prefers to
shop. And while the price of merchandise should be consistent across all
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channels, incentives should Techniques
be offered to encourage customers to try a
new shopping experience.

� Keep the promises made by the loyalty programme. If the promise is for a
Probability Sampling
personalized, highly valued service, program participants should not be
Techniques
bombarded with meaningless offers that obviously are available to
everyone.

� The best way to

Quota coordinate marketing
Judgmental objectives across channels is to
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build a knowledge base of customer behaviours and preferences.
Retailers cannot afford to let legacy systems interfere with building this
knowledge base. A well-conceived and executed loyalty program can be
the key to turning invisible shoppers into hand-raising volunteers and
profitable customers.

� Customer-focused marketing technology is developing rapidly: The term

“customer database” is outdated. Technical giants such as Microsoft and

Oracle have developed, and continue to enhance, data warehousing
systems that collect and mine valuable customer information in real time.

� Every time the Company receives a referral, a bouquet of flowers can be

send or other noticeable but simple gift.

� Noting customer birthdays and sending gifts tailored to their interests and

hobbies helps the Company to deliver the personal touch. Every contact
provides an opportunity to discover preferences.

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7.5 Limitations: Sampling Techniques

⮚ Sample size of 25 retailers was too small a sample and no universal

Probability Sampling
conclusion can be drawn out of such small sample. Techniques

⮚ Study was not comprehensive due to limited time and recourses.

⮚ Some
Quotaof the retailers were not entertaining
Judgmental Snowball all the questions which made
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me deduct some of the questions from the questionnaire.

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10. Bibliography Sampling Techniques

 www.indiainfoline.com
 www.indiadaily.com
 www.thehindubusinessline.com Probability Sampling
Techniques
 www.iclployalty.com
 www.pantaloon.com
 www.shopperstop.com
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 www.lifestylestores.com
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 http://www.moneycontrol.com/india/news/OTHER%20NEWS/the-
powerloyalty/18/28/281484
 http://www.direxions.co.in/learning_curve/show_learning_curve.php?
newsid=7
 www.loyaltyPrograms.com
 Images Retail, January ’06
 Hindu Business Line - 6 May 2006

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ANNEXURE

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11 QUESTIONNAIRES Sampling Techniques

11.1 Questionnaire for the Consumers

Q1) Are you a regular customer to this store?

□ Yes □ Probability Sampling
No
Techniques
If Yes how regular?
□ Weekly □ Yearly
□ Monthly □ Occasio
nally
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Q2) Usually how much do you spend on your every visit?
<100 500-1000 >5000
100-500 1000-5000

Q3) Will you be motivated to visit more frequently, if given priority along with
discounts?
□ Yes □ No

Q4) Do you think that it’s important to have a Loyalty Programme Scheme in a
store?
□ Yes □ No

Q5)How does a good Loyalty Programme affect your buying decision?

□ You buy more
□ You are loyal to the store
□ Do not Affect

Q6) Are you aware of our Loyalty Programme Scheme?

□ Yes □ No

Q7) Are you a member of our Loyalty Programme Scheme?

□ Yes □ No
a) If Yes, since how long?
________________________

b) Do you receive our offers and schemes regularly?

□ Yes □ No

c) If No, would you like to be?

□ Yes □ No

Q8) What motivates/motivated you to become a loyal customer of this store?

□ The discounts and schemes it offers
□ Services it offers
□ The status of priority by giving prior information

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□ Sampling
Self- Techniques
expression

Q9) Has your frequency of visit increased after becoming member of our Loyalty
Programme Scheme?
□ Yes Probability Sampling
□ No Techniques

PERSONAL INFORMATION
Name: _______________________________________________________
Address: ____________________________________________________
____________________________________________________
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Age: ____________years
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11.2 Questionnaire for the Retailers Techniques
Loyalty Program Scheme

Q1) Has your sales increased after opting Loyalty Program Scheme?
□ Yes □ No
Probability Sampling
Techniques
Q2) What is your most distinct scheme/program in comparison to other
Programs?
______________________________________________

Q3) Do Quota
you think that your Goodwill and
Judgmental customer base of the store have
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increasedSampling
substantiallySampling
after opting Loyalty
Sampling Scheme?
Program
Yes No Somewhat has

Q4) Are you able to cover your expense on Loyalty Program Scheme, by the
margin of increased sales/profitability?
□ Yes □ No

Q5) How many loyal customers do you have?

□ <5000
□ 5000-20000
□ 20000-50000
□ >50000

PERSONAL INFORMATION
Name: _______________________________________________________
Designation: ____________________________
Address: ____________________________________________________
____________________________________________________
Age: ____________years

11.3 Questionnaire for the Retailers without Loyalty Program Scheme

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Q1) Do you have a separate customer service desk at the store?

□ Yes □ No
Probability Sampling
Q2) Do you maintain a customer database? Techniques
□ Yes □ No

Q3) Do you think customer service is necessary to retain customers?

______________________________________________________
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Q4) What benefits do you offer to you loyal customers?
Home Delivr Discounts Warranty

Q5) Would you prefer new customer service being offered that makes you
different from others? Kindly mention
______________________________________________________
□ Yes □ No
Q6) Why don’t you offer Loyalty Program to your regular customers?
□ Very costly
□ Not needful
□ No regular customers
□ Already meeting the expected sales

Q7) Do your customers feel that they should have Loyalty Program
Membership?
□ Yes □ No

Q8) In future, do you plan to offer any Loyalty Program Scheme to your
customers?
□ Yes
□ No
□ Can’t say
PERSONAL INFORMATION

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Name:_______________________________________________________
Designation: ____________________________
Address: ____________________________________________________
Probability Sampling
____________________________________________________
Techniques
Age: ____________years

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