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Proposed reduced loyalty mileage plan for pharmacy is halted by analytics results

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Analyzed last 12 months of transactions and identified the potential spend deficit

 

The Business Challenge

  • A pharmacy in the Middle East was reviewing its loyalty program, and wanted to propose a reduction on the number of miles that its customers earned on each dollar spent from 3 to 2.
  • The objective of this project was to forecast the commercial impact of this reduction in miles earned

 

The Solution

Fractal implemented a 12-month analysis on transactional data and merged it with the Program Engagement (ES) score to correlate with the value of the pharmacy’s loyalty program.

This Engagment Score:

  • Reduced proportionally by volume of miles collected at the pharmacy.
  • Identified the potential spend deficit.

The Results

Using transaction data from the last 12 months and merging it with the Program Engagement score, Fractal discovered that the loss projection was equivalent to three times the program savings.

Insight

  • Fractal realized that reducing the generosity of the miles issued posed a high risk to future client revenue which could lead to damaging the customer engagement.
  • Fractal then recommended that the client continue its existing structure of three miles per local dollar spent.

Impact

  • The revenue loss projection was equivalent to three times the program savings.
  • Therefore, the pharmacy decided to postpone the decision and continue with its existing points structure