DNP Launches new Consulting Service
Unique survey approach
M's Communicate (M's,) a Dai Nippon Printing Co., Ltd. (DNP) subsidiary engaged in consulting operations related to communications with clients has fundamentally reviewed its corporate loyalty points service and on October 13 launched a new consulting service aimed at revitalizing those services.
This new service takes advantage of the in-depth track record built up to date. In addition to improving present data analysis and cost performance, the new service will support the development of new points services, while also aiming to improve the quality and profitability of corporate loyalty points services.
[Background to New Service]
At present, many companies run a variety of loyalty points services as a way of capturing new customers and enhancing sales promotions to existing customers. However, service contents have come to closely resemble those of other companies, and as a result, it is difficult to discriminate specific services. It has also been pointed out that increased costs for those financial reserves reported as the source of funds for discounts, and in maintaining services, is now pressuring business. The value consumers place on loyalty points services is diversifying, the objective in accumulating points is also changing, and companies are being forced to review loyalty points strategies. In order to resolve these issues, M's has capitalized on the know how used in supporting the adoption and improvement of loyalty points services by a broad variety of industries, such as retail, mail order and manufacturing and has launched a new service supporting the developing of more attractive loyalty points services and improve cost effectiveness.
[New Service Features]
The new service is made up of 2 phases, the first uses M's unique survey approach to improve present data analysis and cost effectiveness, while the second supports development through all the stages needed to create a loyalty points service.
1. Assessment and diagnostics phase
- Assessment of the client company's loyalty points service brand power using the loyalty points brand power assessment, a unique survey method developed by M's combining 7 indicators (*1), original questioning and algorithms, from the standpoint of what type of loyalty points services consumers want. The service also uses the points prize, a point brand ranking related survey executed once a year against 8,000 consumers throughout Japan, to carry out an analysis and comparison between competitors, and extract issues, such as the merits and demerits of client company loyalty points services.
- And using the points cluster indicator (*2), an indicator unique to M's that categorizes points service users into 7 types, M's surveys client company points services on a points service basis, helping narrow down noteworthy targets.
- The new service also identifies customer attributes such as frequency of use and usage amounts, and investigates measures to lower points service costs, such as setting points capitalization rates based on those attributes.
(*1) Loyalty points brand power indicators:
1, use and holding (cover) power
2, shopping draw power,
3, monetary merit
4, merits other than those of a monetary nature
5, notification and depth of campaigns
7, Degree of appeal
(*2) points cluster indicator
1, Shop till you drop! - Consumers with detailed knowledge of loyalty points programs, and who are skilled users
2, We love loyalty points! - Consumers who select stores and products based on the existence of programs and their execution
3, Everyday is Xmas! - Consumers for whom the thrill is to exchange loyalty points for actual products.
4, Show me the money! - Consumers who like to save by recycling their loyalty points as cash at mass merchandisers etc.
5, Consumers looking for ways to use loyalty points more frequently
6, Consumers who use loyalty points when the mood suits them
7, Use it or lose it!
2. Phase to support revitalization measures
A phase designed to propose concrete improvement measures, such as new loyalty points service architectures, and the optimum systems for data base analysis and CRM analysis based on the issues extracted during the assessment and diagnostic phase and from analytical results. For example, methods to discriminate loyalty points service from other companies, such as reviewing capitalization rates and increasing loyalty points during campaign periods. In combination with measures designed to revitalize customers, the new service aims to rejuvenate loyalty points services. (*3)
[Changing Consumer Sense of Value Regarding Loyalty Points Services]
Surveys conducted by M's so far reveal that consumer senses of value regarding loyalty points services have altered in the following manner. The effect of the new points service has been heightened by responding to these changes.
- Consumers are attracted to the extent of the opportunities granted by loyalty points and not the capitalization rate. Consumer communication frequency was found to be an important element, with consumers valuing the granting of points related to their independent or proactive activities, such as visiting stores, accessing websites, replying to surveys and participating in socially relevant activities, and not just for purchase frequency.
- Consumers are hoarding points in a playful manner as a in a secret piggy bank.
- There has been a decline in the number of consumers who emphasize thrift or cash-back purposes as their reason for saving points, and an increase in those who enjoy the sensation of exchanging loyalty points for a variety of goods and services, such as receiving premium products and gifts, travel or making contributions to socially relevant causes and organizations.
[Offer Price and Forward Looking Events]
The newly developed service is being offered from a pre-tax price of 3.0 million yen.
(*3) This price does not include operational support in the post-improvement stage, the formulation of effect indicators, and individual services, such as CRM analysis. Estimates for these services will be provided on a case-by-case basis.
M's aims for first year sales of 100 million yen to 20 companies running loyalty points services.