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Benefits of Simulation
Simulation is more reliable than back-of-the-envelope calculations that make high-level assumptions or guesstimates. Additionally, simulation alleviates many common pain points felt by Loyalty Marketers when analyzing and re-designing existing loyalty programs.
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1
The Results are Based on Customer Research, Improving Program Accuracy
By simulating how each individual customer behaves based on their past behavior, the data is more accurate in projecting how each loyalty program will perform in the future. Combining primary research with customer behavior and order history provides more accuracy for how the model should behave and thus a more accurate ROI prediction.
With this simulation, Marketers can feel more confident about each loyalty program decision, including: number of orders, spend, points earned or redeemed, and more. The simulation reveals behavioral drivers or clusters of groups who may respond to a program element in a specific way.
SAMPLE SIMULATION
Estimated Program Enrollment by Various Customer Segments
Since the simulation is run on each customer, the results can be split by customer segment, decile, or any other grouping.
QUESTION
Great! Consider implementing customer simulation into the design process for the ability to target specific customer segments for greater program impact.
That’s okay! You can always incorporate simulation into your existing process to improve program impact and profitability.
SAMPLE SIMULATION
Loyalty Program Scenario Comparison
Aggregated results under different scenarios can be directly compared.
2
Different Loyalty Program Options can be Easily Compared
The simulator can analyze multiple scenarios quickly and efficiently. Each scenario can have its own set of tiers, redemption rates, rewards or benefits, and other attributes. The results between scenarios can be directly compared to find the best loyalty program outcomes.
The simulator can run multiple times under different scenarios for a detailed sensitivity analysis and a comparison of benefits.
3
Results are Targeted and Detailed
Compiling the behavior of each customer under different loyalty programs yields different insights across the company and within different clusters of customer segments. The detailed, customer-level predictions answer common questions, including how different customer groups behave, which time periods will incur the most costs, and the range of possible outcomes.
SAMPLE SIMULATION
Estimated Order Value Under Different Program Scenarios
Detailed program comparisons of order size across programs over a given time period.
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