Hi there, this is Zsuzsa Kecsmar, 
CMO and Co-Founder of Antavo. 
And I'm Jörn Roegler, 
the VP of Strategy and Insight of Antavo. 
When we are talking with retailers and brands 
out there, we often get the question that 
what is the ROI that you can have with a loyalty program? 
And I have a complicated relationship with this 
question because it depends on so many things! 
And please help explain how we should think of ROI, 
because when we talked about it last time, 
you gave me some very reassuring thoughts 
on how to think of these areas. 
Yes. ROI is sometimes a daunting topic, 
especially for marketing teams. 
It's not in a core that you want to do every day. 
So let me not really talk about ROI, the technicalities, 
what does it mean, how do we exactly measure it. 
Let me talk about something else. Let me say 
how does a loyalty program actually make money? 
And there's really only three ways. 
The first way is: loyalty points, to use them as a 
discount currency, so to say. 
So they are cheaper than giving cash discount, 
because of points breakage, 
because perceived benefits are bigger 
than actual benefits, etc. 
This not really sustainable. 
Customers are disillusioned 
and annoyed by points breakage,
because the points kept taken away, 
when you aren't using them. 
If you create a program just so customers 
don't use it, don't create a program. 
The second where you can make money 
is if you really change customer behaviour. 
They're more likely to buy, they buy 
more from you, they got a share of the wallet, 
and you attract new customers 
that wouldn't have come otherwise. 
The third where you can make more money is 
if you learn so much about your customers 
- through the loyalty program, by incentivising them 
to share information - 
that you feed that information to your core 
marketing, and it performs much better. 
All these areas about making more revenue. 
And what I'd like to emphasise is that 
we should expand the notion of what we think of ROI. 
Brand recognition, or just more love towards 
your brand, are these to be concidered as ROI? 
Absolutely! Because we spend money to create 
these with other means, so any money we can save 
or any money we don't have to spend is 
value created from the loyalty program. 
I want to break it down a little bit. So I say: 
you have to make more money, 
and you have to do that by changing behaviour. 
How do I do that? And how do I measure it? 
So there is a little bit more of detailing the technicality: 
Measure your KPIs. If you can move your KPIs with 
a loyalty program, it will ultimately achieve your objective. 
It's very nice to go a bit more specific, and 
think of the KPI instead of the big picture. 
It's so hard to put it together and really isolate the facts, 
As you said: how do you compare increasing brand love 
from improving open rate on an email campaign with 4%. 
Where's the trade-off? Difficult. 
So, if you know though what you want to achieve 
with your loyalty program, and say 
'that's a clear thing that thisprogram needs to do' 
and we have a target set, 
then just measure the progress that you 
do towards those your targets. 
Whether it's a retention rate, whether it's referral 
customers coming to your website, 
whether it's brand recognition, brand reach, social activity. 
Even if you measure it in, say, customer satisfaction, 
or customer Net Promoter Scores, 
these are all very valid objectives the program has.
Focus on those, make sure you achieve 
them, and the ROI will come. 
I agree. And often times it's not because of the ROI 
that you want to launch a loyalty program, 
or do any marketing initative. Often times it's 
so simple: 'because the competitor has one'. 
Or because you want to differentiate yourself. 
It's typicly true for reatailers who sell the 
same things, because they are in the same area, 
that you want to do something more 
beyond the products that you sell. 
You want to create a special environment, 
a kind of bond to your own brand. 
Since you don't have your own products, 
you need to create some kind of attachment. 
I would like to add one more reason why a lot of 
companies want to launch a loyalty program: 
Because their customers are asking for it! 
Customers love loyalty programs, and very often, 
that feedback is very direct to brands, 
'I want you to reward me for my loyalty'. 
And that's a good trigger. 
This is just what the president of Jimmy Jazz, 
the US based footwear retailer with 170 stores told us.  
That they wanted to launch a loyalty program 
because this was their demand. 
This was a demand from their customers. 
It's a very nice thing to hear. 
And you can be sure that if your customers ask for it 
and you deliver what they ask for, 
they're going to be thankful, and they're going to be 
loyal, and they're going to stay with you. 
So the ROI objective will, again, come naturally. 
Great! I hope it was useful. Thank you so much. 
If you wanted to learn more about ROI, 
about customer retention, 
about how a loyalty program can work, 
or even Jimmy Jazz, 
then head over to our blog at antavo.com. 
See you next time! 
