White Paper

Making Loyalty Social: The

Social Coupon
With every passing moment, consumers are hopping
across channels and spending more time on social
channels. Social channels provide retailers the platform
to indulge the customers in a gaming atmosphere.
The next step towards customer engagement should
be to reward and engage customer to interact with
various touch points and interplay in a periodic
manner. Businesses need to connect the dots of
current technologies with customers social media
platforms.
This paper explores the advances in Social Media
channels and trends which when intertwined with
their overall loyalty plan will profoundly impact the
ways to close the final link and increase ROI.

About the Authors

Shivani Rawat
Shivani Rawat is a Retail Consultant at Tata Consultancy Services
(TCS), specializing in Loyalty and Multi Channel. She has worked
on assignments for retailers based out of North America, Europe
and emerging market geographies in grocery, apparel,
department store and specialty formats. She holds a Masters
degree in Business Administration and Bachelors of Engineering
in IT.

Phanindra Meduri
Phanindra Meduri is a Retail Consultant at Tata Consultancy
Services, specializing in Loyalty and Multi Channel. He has worked
on assignments for retailers based out of North America, Middle
East and Asia geographies in grocery, pharmacy, department
store and specialty formats. He holds a Masters degree in Business
Administration and Bachelors of Engineering in Electronics and
Communication.

Table of Contents
The Eras of Loyalty

Closing the Gap

Making Loyalty Social: The Loyalty Module

The Social Coupon

The Value of Social Coupons

More than Another Channel

Winning the New Game of Retail means mastering emerging technologies and creating new customer
relationship models to take advantage of them. This stretches beyond transactions, marketing and
branding: beyond those areas where retailers are already digitally sophisticated. Its impact is felt across
assortment optimization, loyalty, discounting, inventory management, pricing across the entire retail
operation. To succeed, retailers must redesign, re-engineer, and re-innovate the way they do business.

The Eras of Loyalty

TCS divides the evolution of loyalty and rewards programs into three broad eras. The evolutionary driver
has always been the same: finding and connecting with existing and emerging customer touchpoints.
The Era of Anonymity included nearly a century of rewards programsfrom Green Stamps to box tops.
The retailer had no knowledge of who received the rewards. Every customer received the same ones,
regardless of their buying behavior, preferences or frequency.
The Era of Individualization began with frequent flyer programs. Loyalty was rewarded individually.
Everything was personal, from tracking to targeting to tiers. It became a highly efficient way to
communicate with customers across channels and to directly reward the customer. Rewards varied based
on purchase and frequency.
The Era of Shared Loyalty is upon us, just 30 years after the first frequent flyer program. Social platforms
turn loyalty into something that can be shared across each customers own social communities to
develop more new customers for the retailer.

Closing the Gap

The maturity of social platforms has created gaps between the full capabilities of those social
technologies and the limited way loyalty programs use them. In many ways, loyalty on a social platform
looks no different than loyalty over the telephone or on a web site.
This Retail Point of View focuses on loyalty: specifically, on using social platforms as a new way to reward
customers, and empower them to create new loyal customers for the brand. For TCS, sharing loyalty is a
New Rule in the New Game of Retail.
No Sustained Retailer-Customer Interaction
Retailers dont deploy social programs that create continual, sustainable interactions, connecting brands
to loyal customers social networks. Traditional loyalty programs, even when theyre launched from a
social platform, are event-driven: usually retailer initiated with limited-time coupons, bundled
promotions and other purchasing incentives. Less often, the member initiates it: to manage an account or
redeem a reward. Either way, its a private worldan exclusive loyalty club of one, unable to become an
engaging, active part of the members social universe.

Channels Work In Isolation

Retailers view the social world as another place to replicate their existing loyalty program. Doing so, they
miss out on the real promise of social loyalty. Airline loyalty on Facebook, to give just one example,
mirrors the web site functionality. That means it loses the much greater value and opportunity that comes
from helping customers engage their social community with the brand.
Social Media Is Just Another Channel
Retailers still view social media as just another broadcast channel. For TCS, thats like viewing an iPhone
as just another device to make a phone call. The social platform is not an alternative to a web store or an
email. Its not just another place to push promotions or post catalogs. Its where customers come to
interact. To limit its functionality to posting videos, enabling Like buttons and presenting catalogs is to
drain its power to become a critical cross-channel sales driver.

Making Loyalty Social: The Loyalty Module

Loyalty delivered across a social platform empowers and rewards customers not just for responding to a
reward or a promotion, but for sharing it across their social universe. Consider what a social loyalty
module on a retailers fan page can accomplish:
Reward customer purchases (for instance, with a social coupon like the one described below). Allow
brand fans to not only redeem that coupon, but to upload and share it with friends.
Let retailers engage the customers in a gaming atmosphere and invoke location based, contextual and
group-based behavior.
Award customers points for coupons downloaded by their Facebook friends.
Motivate those friends to visit the brands store, redeem the shared coupon, and get their own social
coupons to be further shared.

The Social Coupon

Using Facebook as the model, lets look at how the social coupon works. When loyalty program members
go to the retailers fan page, they log in to their loyalty module. The first time members log in, the loyalty
module asks permission to access their public Facebook account information, and to include it in their
loyalty account information.
After that, when members make purchasesno matter where the purchases are madea social coupon
is generated, and is displayed as part of the members loyalty module, available to be redeemed.
Its available for something else now as well: its available for sharing. When the social coupon is
generated, members are given the option of posting it on their friends walls. Friends can then redeem
their version of that coupon.
5

How retailers administer and regulate social coupons is up to them. They can create incentive-to-redeem
by limiting the number of friends who can use the coupon on the wall: the first n number of friends can
redeem the coupon. They might time-constrain it as well. The customer whose friends receive the coupon
will be rewarded themselves for every coupon downloaded by their friends. They can allow sharing to
continue indefinitely, ormore likelyprohibit friends from further sharing the coupon.
Ofcourse, Membership Still Has Its Privileges:
Only a program member can share a social coupon.
Members earn points every time a social coupon is used by a friend.
Members can transfer points to other members (for instance, if they see something on a friends wish list).
Members can convert points to Facebook credits.
Purchasing doesnt have to be the only way to generate a social coupon. The retailer can create tasks and
activities that, when completed, reward members with additional points, coupons or both.
Now the member is not rewarded just for purchases, nor or even for bringing in new customers; now
theyre rewarded simply for interacting with the brand.

The Value of Social Coupons

The value of the social coupon is broad and extensive.
Increased Incremental Sales: The social coupon reaches many times the number of Facebook fans or
loyalty program members, driving high incremental sales.
Loyalty Reach: Once members friends download the social coupon, retailers have an opportunity to
enroll them as new loyalty program members.
Loyalty Spread Through Customers: Shared loyalty empowers customers to drive campaigns by
pushing the content across their social networks.
Gaming In Retail: Retailers can create game-like activities, designing tasks and functionalities that
customers complete to earn additional points.
Points Exchange: Members can transfer points to their friends whenever they come across a wish list on
friends walls.
Points Conversion: Retailers can target social gamers, by letting them convert loyalty points into
Facebook credits.
Private Label Marketing: Retailers can promote private labels by offering social cupons coupons (in
selected categories) and designing campaigns around them.

More than Another Channel

The social platform is no more another channel than web sites proved to be another brochure. It
possesses unique capabilities, unique functionalities andfar and away most importantlya unique
dynamic among its users. Here the New Rule is a simple one: Share
Loyalty. Using techniques like the social coupon weve described here, retailers can expand the reach of
their brand, increase the engagement of their Fans, and drive new revenue.

Contact
To find out more about how the social coupon is part of the New Game
of Retail, contact us at retail.solutions@tcs.com
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About Tata Consultancy Services (TCS)

Tata Consultancy Services is an IT services, consulting and business solutions organization that
delivers real results to global business, ensuring a level of certainty no other firm can match.
TCS offers a consulting-led, integrated portfolio of IT and IT-enabled infrastructure, engineering
and assurance services. This is delivered through its unique Global Network Delivery ModelTM,
recognized as the benchmark of excellence in software development. A part of the Tata Group,
Indias largest industrial conglomerate, TCS has a global footprint and is listed on the National
Stock Exchange and Bombay Stock Exchange in India.

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