August 2008
Intermediate to advanced
304 pages
8h 57m
English
Content preview from Scoring Points, 2nd Edition
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- The economics of loyalty marketing
- Playing a zero sum game
- The foundations of a loyalty scheme
- Four loyalty ‘currencies’
- Does a loyalty programme pay?
THE ECONOMICS OF LOYALTY MARKETING
The investment in cash
Loyalty schemes certainly don’t come cheap. McKinsey, in its report into loyalty in 2000, found that:
16 major European retailers had a total of some $1.2 billion tied up in annual discounts to customers, with several supermarket chains devoting some $150 million. Costs are about the same in the United States. Given large sales volumes, even programmes with modest rebates (up to 1 per cent) can cost a great deal of money.
For Tesco, that is an investment of £300 million a year in rewards, at a time when ...
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