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CRM CASE ANALYSIS: CINEPLEX ENTERTAINMENT: THEtoLOYALTY PROGRAM Click edit Master subtitle style

VIDISHA MOHAPATRA PGP/15/123 Customer relationship management

2/3/13

DECISIONS TO BE TAKEN

Recommendations for Loyalty Program Development

Reward structure Tie-in partner


Flight Miles Scotia bank

Type of promotional campaign

In-theater advertising Newspaper/Radio advertising

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TRIGGERS

Inconsistent revenue yield per year

Variable attendance dependant on movie genre Sharp drop in Net operating Income

Weak box office attendance(2005)

How to link individual customers to targeted movies and concession purchases?


No reliable database yet of customer preferences 2/3/13

CINEPLEX CORPORATE STRATEGY AND RESULTS

Chain of movie theaters

Mergers and acquisitions

Galaxy Entertainment Inc,Famous players(2005)

Conglomeration of various brands

Cineplex Odeon Galaxy Famous Players City

Cinema 2/3/13

STRATEGY FOR THE REWARD PROGRAM

Regarding the loyalty program

Data control and ownership Resource requirements

Cost and labor

Length if time to establish the database

Min 500000 members

Robust execution Firms image to customer

Value 2/3/13

1.EVALUATION OF POTENTIAL PARTNER

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DEVELOPMENT $5.5mn and diminishing thereafter $15 mn + $0.9 /transaction+ Near about $6.51 mn data access cost

st incurred

netration Rate 16.56% (5.3 mn unique visitors) 21.87%(7 mn database) Complete 1.Unlimited data access and control 2.Would know ones brand the best None

21.25%(6.8 mn custom served) None

ta Ownership

vantages

1.Immediate entrance to data 1.Leverage on earlier of 7 mn people and other corporate sponsorships Flight Miles partners 2.One of the Big 5 ban 2.Offer of $250000 by Flight in Canada Miles towards marketing 3.Ready to share campaign Cineplexs financial risk 3.Easy reach to large number proposed to share 50-5 of Canadians already cost widespread awareness 4.Prior experience with built(exhibit 3) data management 4.No need to carry multiple companies cards 5.No requirement to op bank accounts but each debit/credit card holder issued Cineplex loyalty card.

advantages

1.Face financial risk of 1.Lenghthy commitment of 3 unredeemed points yrs 2.Difficult to divest the program 2.No easy exit option 3.New department and database 3.Would lose all access to required accumulated data on exiting 2/3/13 4.Lenghthy time of development 4.Extra cost incurred in

1.Naming rights on 3 m theaters 2.Exlusitivity agreemen on bank machines in all theaters 3.Customers wouldnt li

RECOMMENDATION:

Opt for partnership with Scotia bank Advantages:

Cheapest and easiest way for Cineplex to grow its customer base benefit from dual strategy Financial and data management risks would be shared No barriers for contractual exits a single card/cardless strategy

Modifications:
2/3/13 Execute

2.EVALUATION OF POINTS SCHEME


OPTION 1
Membership fee

OPTION 2

OPTION 3

OPTION 4

None incentive 1 time Annual fee of $5 None incentive enough for membership fee of customers might enough for customers to join just $2 very low be deterred from customers to join but still joining questionable None no incentive for customers 10% customers 15% - too high 10% customers tempted to join discount ;costly for tempted to join the company 250 adequate points to tempt customers to join; no incentive yet but motivation exists $62.22 good enough benefits for customers and none too costly for company $32.14 moderate cost for the company

Concession discounts

Sign up points

500 too many 100 too low None customers points;1 free child points; might not not tempted to admission be attractive join enough

Value sum of benefits on reaching highest point level

$51.77 too high a value for benefits; costly to support for company

$68.37 moderate No benefits no value at 2500 incentive for points but still customer to join prove to be costly

Value per point /Will it be too costly for the 2/3/13 company?

$28.97 lowest $36.56 highest but not justified at but justification no membership questionable fee

0 no cost at all but no customer gained at all

RECOMMENDATION:

Moderate cost for the company

Choose option 4 as the suitable reward structure

Attractive enough for customers


No upfront membership fee Adequate sign up points(250) no incentive yet but motivates customers to earn more points Permanent discount for concessions
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Enhance share-of-wallet for Cineplex (reference link)

But at higher level of points (2500-

3.SELECTING THE MARKETING COMMUNICATION CAMPAIGN


OBJECTIVE: Reach 500000 customers per year for 1st 3 years with a budget constraint of $300000 By partnering with Scotiabank,increase the customer reach while decreasing cost with dual strategy.
NEWSPAPERS National newspapers dont have reach to every targeted segment. Regional newspapers do have reach but they are very costly to insert In and develop ads. RADIO Significant overage in key markets. Low advertisement and development costs. Free advertisement space on many radio stations websites. ONLINE ADS GRASS ROOT INITIATIVES

To target the young Engage in WOM publicity audience (16-24) online in a big way for young advertisements audience. Develop more especially on music promotional campaigns websites like mtv.ca and for universities and more muchmusic.ca as well as in campus offers for Google could be done. special events. Target young working adults too by corporate sponsorships.

Rather than relying on Helpful in targeting the Low advertisement costs Engage in mobile newspaper ads, look out young segment(16-24) per thousand advertisement and for other media . impressions(25 Canadian couponing out for Rather than relying on just traditional advertisement media ,lookto target dollars) young Smartphone more cost effective and non traditional ,mobile and online media that can users. 2/3/13

enhance reach.

4.WEBSITE VENDOR SELECTION

Opt for Gamma company.

Lowest initial investment costs $200000 Vast experience in IT strategy and in developing CRM programs for leading organizations Program proposals

Manage marketing platform and all aspects of e-communications Track members on -going basis through different promotional media

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5.NATIONAL OR REGIONAL ROLLOUT

Opt for a national rollout

Having partnership with one of Canadas important national bank would help in

Sharing financial risk Boost cost efficiency Increase program coverage via branches

Accrue revenues faster

2006s new PoS installation had the technical capability of supporting the 2/3/13 national roll out.

DECISION SNAPSHOT

Opt for partnership with Scotia bank Opt for option 4 in reward program Opt for online, radio and non traditional media to target the youth segment Opt for a national roll out in partnership with Scotia bank.
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THANK YOU

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