Loyalty Programs – Should Retailers Re-Sign or Resign?

June 10, 2008 BI Theory, Data 1 Comment

Retail and consumer companies are reviewing customer loyalty programmes as economic conditions threaten profit margins. Analysis as to whether the retailers are getting a good return on the schemes is being undertaken before retailers commit to signing up for a further agreement term with the program provider.

Retailers who subscribe to programs that are up for renegotiation are reevaluating the merits of such schemes.

Overall, it appears that such loyalty program are still performing but analysis has found that some customers who are not profitable are being rewarded under some schemes and that some retailers are carrying a high cost of retaining. Loyalty programs need to be managed correctly to gain the full return of their value.

Some programs – such as the petrol discount vouchers issued by supermarkets are not strictly loyalty programmes but a short-term inducement to customers.

The decision for retailers is in either accepting loyalty programmes as a business overhead or dropping them at the risk of losing business.

In spite of direct marketing being somewhate expensive, data extracted from loyalty programs allows client microsegments to be identified faster and cheaper.

New BI Models Driving Pervasive BI

June 5, 2008 BI Solutions No Comments

For BI to be pervasive, it has to be affordable.

 

Conventional BI licensing models have high per-user costs—typically over $1,000 per user. This is providing opportunity for some BI solution vendors to be more creative in their pricing models.

  • Bundling – Microsoft’s entry into the BI market has driven down pricing by bundling BI capabilities at low [~$195 per user] with the PerformancePoint Server.
  • Active User Only Licence Models – Information Builders – does not require report users to have a license, licences are only required for core server and report developers. By using Ajax to deliver its Active Reports with a high degree of interactivity without requiring a connection back to a BI server makes BI affordable to deploy.
  • Open source BI – vendors such as Pentaho and JasperSoft are providing information to a greater number of users without per user licence fees.  For instance, JasperSofts   FlightStats’ program is available to travellers as well as airlines, making traditional licence models impracticable.
  • Software as a Service [SaaS] models – are slashing BI deployment and staffing costs. This model is becoming widely adopted by both established and new vendors. Business Objects CrystalReports.com provides online infrastructure for publishing and sharing reports. Specialty BI SaaS vendors such as LucidEra, PivotLink, and Oco offer pre-built, hosted applications.

BI is still a relatively immature market, and as more onDemand business solutions are becoming popular with large corporates as well as SMB, one can expect to see more radical changes in all software licencing models.