Marketing - Loyalty
- Juan Pablo Lopera Pelaez
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1. Scope
In every company, a customer loyalty strategy is essential to keep customers engaged, committed, and loyal to both the product and the company. The S4DS system offers multiple options to facilitate the execution of this strategy, including:
Standard product catalog
Assignment of point values to each product
Redemption of accumulated points in the general catalog
Points catalog
Exclusive catalog for purchasing with points.
Rewards
Assignment of rewards
Based on order amount
For including specific products in the order
Based on role
Offers
Optional offers
Based on order amount
For specific references in the order
Based on role
1.1. Software Coverage
Multicatalog
Standard product catalog
Assignment of point values to each product
Redemption of accumulated points in the general catalog
Points catalog
Exclusive catalog for purchasing with points.
Rules
Rewards
Assignment of rewards
Based on order amount
For including specific products in the order
Based on role
Offers
Optional offers
Based on order amount
For specific references in the order
Based on role
2. Definitions
What is a loyalty plan?
A loyalty plan is a marketing strategy established by a company with the purpose of rewarding the purchasing behavior of its customers, which creates a sense of loyalty and fidelity to the brand.
What is a points program?
It is the most common method of loyalty programs. Frequent customers earn points that they can later redeem for a reward, whether it's a discount, a gift, or special treatment. With this type of program, customers strive to reach a certain number of points to redeem their reward.
What is a standard catalog and what is a points catalog?
In the S4DS system, it is possible to configure multiple catalogs according to the country and the product portfolio for each country. You can have a catalog for each territory. However, there is also the possibility to create a points catalog, which differs from the rest of the catalogs in that the products available there can only be purchased using previously accumulated points.
A standard catalog is the catalog enabled in each country that allows purchases either with local currency or with points.
Another difference is that the points catalog is not initially visible; it is enabled in one of the order flows. In other words, once you have already selected products from the standard catalog in your shopping cart, the points catalog is displayed, generating new purchases and allowing your customers to redeem their points for surprise products.
3. Key Features
Rewards and Offers:
The S4DS system offers a powerful rule engine that enables the activation of incentives, rewards, and offers in the order flow. These rules are configured to perform validations at the time of the order and can check if the order contains specific references, then assign or enable a special offer. The rule can also check if the order meets a certain amount, and based on this, enable other offers. Similarly, this rule engine can condition the promotion, offer, or incentive based on the role of the person placing the order.
Points Program:
The S4DS system has two fields in the catalog format that allow for the activation of a loyalty/points program. It has a field that assigns points each time a product is purchased, and another field that assigns a point value to the product, allowing it to be acquired with previously accumulated points.
Multi-Catalog:
The S4DS system allows for the creation of multiple catalogs with different SKUs (Stock Keeping Units). This allows for the creation of a catalog for each territory in which the company operates. Additionally, it enables the creation of an exclusive points catalog to be offered to users in the purchase flow.
4. Conditions
For the proper utilization of the software's functionalities, it is necessary to have defined in advance the technical and/or business elements, such as:
Defining the value of products in terms of points.
Determining the value of products to be redeemed with points.
Providing photos of the products for the points catalog.
Defining the offers, incentives, and rewards to be granted:
Conditions for assigning an incentive and the reward to be given.
Conditions for enabling the offer and the product on which the offer will be applied.
5. Operation
5.1. Journey
The Marketing team of ABC LLC, led by Robert, needs to carry out various activities to foster customer loyalty towards the brand and the company's products. For this purpose, Robert is responsible for the following:
Creating a comprehensive loyalty strategy, which includes:
Organizing a points program that allows users to earn points on their purchases and redeem them later.
Defining the product portfolio for the points catalog.
Structuring the offers that will be provided to the most loyal customers, taking into account different conditions (purchase continuity, amounts, etc.).
Structuring the incentives and/or rewards to be granted to those who remain loyal to the brand and products.
6. Configurable Elements
6.1. Main Configurations
Configuration of the standard catalog with the necessary fields (points and redemption).
Configuration of the points catalog.
Configuration of rules: offers, incentives, and rewards.
6.2. Related Module Configurations
Configuration of customer types.
Configuration of system roles.
Configuration of order flows.
6.3. Module Configuration
6.3.1. Standard Catalog Configuration
After creating a catalog by country and by cycle, from the second tab (catalog) of the catalog administrator, you will proceed to associate products with it from the first tab (Catalog Products) of the catalog administrator.
In the second tab (Additional Information) of this "Add a Product to a Catalog" module, there are two fields called "Points" and "Redeemable Points" which are used to set how many points will be earned from the purchase of this product and how many points can be redeemed when purchasing this product.
6.3.1.1. Points Catalog Configuration
The configuration of the points catalog is almost identical to that of the standard catalog, which means:
You create or reuse a catalog for a cycle and country.
You add products to the catalog.
However, there are some differences:
The catalog price and distributor price should be set to zero.
You fill in the values in the redeem points column.
You check the checkboxes for "Hidden on the web" and "Hidden" in the back office.
Then, from the "Offers" administrator, you search for the "Points Catalog" offer to "configure the products" from the "Actions" menu, entering the new SKUs.
Finally, from the "Strategies" administrator, you verify that the "points catalog" offer is enabled.
6.3.2. Rule Configuration
To foster user loyalty within the system, S4DS offers options to evaluate certain conditions in the user's order and reward them for meeting these conditions. Through the rule engine, you can configure product-based rewards, discount-based rewards, or even offer free shipping.
The creation of rules, in the categories of offers and incentives, is done from the rule administrator. It is parameterized as follows:
In the "IF" condition, it specifies whether the user has one or more products of a certain reference (or other references that are being configured).
In the "THEN" conclusion, an offer is associated. In this example, offer 338 is associated, which determines that the user will be offered the option to purchase a specific swimsuit at a reduced price of $150,000.
There is also the possibility of creating rules that, when a condition is met (e.g., being the user's first order or including a specific product in the order), grant a specific product as a reward.
In the example, you can see that the condition being checked is whether the incentive from this rule has not been previously granted. If the condition is met, the product with reference 83015, named "VERONICA GOLD CHAIN," will be added at no cost.
7. Detailed Scope
7.1. Points Catalog
Next, we will examine an example that illustrates when, where, and how the earning and redemption of points take place in an order process.
Before initiating the order placement process, where the earning and redemption of points will occur, it is possible to check how many points the user has at the beginning. This can later be compared with the remaining points.
There are two options for viewing a user's points from the "360 Inquiry" module. The first option is found in the dropdown modal "More Actions" in the user's information, under the "Business Information" tab, specifically in the "Commercial Information" section.
The second option is located in the "My Results > Points" accordion, where you can not only check the total number of points but also the history of points earned and redeemed, along with detailed information such as the date and time, the order associated with the earning or redemption of points, and the amount of points earned or redeemed.
In the example, our user starts with 4548 points.
In the second step of the ordering process, we notice that below the name and price of each product in the "product catalog" the number of points to be awarded upon purchasing that product is displayed. This represents the earning or acquisition of points.
In the third step of the ordering process, we notice that below the name and price of each product in the "points catalog", the number of points required to redeem for purchasing that product is displayed. This represents the redemption of points.
This catalog is different from the previous one, which is why we differentiate it by calling it the "points catalog," while the previous one is referred to as the "product catalog."
The "points catalog" is configured as indicated in section 6.3.1.1. Points Catalog Configuration of this document, and the products listed in this catalog can only be acquired through the redemption of points, aiming to make it a user loyalty strategy.
7.2. Award Allocation to an Order
There is the possibility to configure a rule so that when a specific product is selected in an order, another specific product is provided for free.
In this example, we see how initially a product called "PLATINUM PACKAGE" is added to the order. Then, when reaching the payment step, a product called "VERONICA GOLD CHAIN" is displayed with a price or value of zero. This product was not manually added by the user but was automatically granted by the software when executing a rule.
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