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Liability and predictive analytics for loyalty programs

Evaluate your loyalty program liabilities, manage costs and maximize your program’s economic value more easily and accurately with support from our global loyalty experts via LoyaltyAdvisor.

You can drive increased customer retention and engagement with a loyalty program. The loyalty programs can also pose significant liability risks from unredeemed rewards, sometimes amounting to billions of dollars.

LoyaltyAdvisor protects and strengthens your organization by making your loyalty data work smarter. It satisfies auditor expectations and assesses the financial value of individual loyalty program members on both sides of the balance sheet more easily and accurately.

Your customers can earn points today but may not use them for years. Our advanced models accurately estimate future member redemption behaviour by analyzing member characteristics such as activity cadence, outstanding points balance, tenure etc. You can accurately predict changes in future member redemptions by monitoring recent changes in member characteristics, behaviour, trends and activity.

To unleash the value of vast amounts of member-level data, LoyaltyAdvisor brings together specialist consultants, including actuaries focused on liability estimation and data scientists using advanced predictive analytics.

LoyaltyAdvisor provides to accounting, finance and marketing stakeholders enhanced assurance and transparency on your loyalty rewards program.

Increase accuracy with loyalty program liability valuation

Help prevent volatility in your loyalty program liability that could impact your organization’s financial health by providing richer, more reliable and timely loyalty data insight.

You can increase the accuracy of the liability estimation, provide more transparency over your loyalty program’s liabilities on the balance sheet, and identify the drivers of cost. LoyaltyAdvisor can help the business manage the financial impact of customer rewards with greater precision.

Manage the cost of loyalty programs

LoyaltyAdvisor explores what-if scenarios and their associated impact in cost.

You can analyze how structural program changes like modifications in expiration rules, accrual rates or redemption rules can affect each member’s redemption behavior and the balance sheet in total.

Make optimized decisions quickly and in line with financial goals with LoyaltyAdvisor’s advanced, member-level analytics.

Stronger ROI from your loyalty program

LoyaltyAdvisor makes it easier to generate stronger return on investment (ROI) from your loyalty reward program by enabling you to:

Assess the financial impact of potential program changes and guide business leaders to make decisions they can be confident and consistent with your company’s financial strategy. Test new strategies on tiering and targeting members with the most economic value potential and manage liability risk from unredeemed points with confidence.

By applying actuarial science to customer behavior data, your bespoke LoyaltyAdvisor model provides insights to help you maximize customer lifetime value and drive revenue. When your customers can earn points today they may not use for years, our advanced models accurately estimate future member behavior using forward-looking predictors like changes in cadence of member activity. You can better predict future redemption behavior before redemptions take place. You can also uncover more opportunities by targeting the right customers with the most potential for increasing loyalty program ROI.
By supporting quicker, more efficient decision making, your loyalty program talent can focus on innovation capable of driving enhanced value.

What questions can LoyaltyAdvisor answer for auditors, finance and marketing?

  • What’s an accurate liability estimation and profit and loss (P&L) forecast for your loyalty rewards program?
  • What are the drivers of changes in the cost of your loyalty program?
  • What impact will changes in member behavior have on the economic value of your loyalty program?
  • How can structural changes in your program enhance the long-term sustainability of your loyalty initiatives?
  • What’s the impact of modifying member benefits, expiration rules or minimum redemption thresholds on your balance sheet?
  • Who are your program’s ‘power users’ and how can you maximize their value?
  • Which members should you target with bonus campaigns to boost wider engagement and overall program value?
  • What strategies can you implement to manage the costs associated with your loyalty programs more effectively?

LoyaltyAdvisor: Key features

  • Support ROI

    Support ROI

    Makes your loyalty data work smarter on both sides of the balance sheet – managing liabilities and supporting better ROI

  • Analytical insight

    Analytical insight

    Gives you analytical insight on your loyalty program alongside specialist consulting support across nine industries

  • Customizable dashboard

    Customizable dashboard

    Additional customizable LoyaltyAdvisor dashboard that provides granular insights on customer behavior

  • Accounting process

    Accounting process

    Supports faster monthly, quarterly and annual accounting processes

  • Specialist team

    Specialist team

    Our specialists have a track record of supporting loyalty programs in diverse sectors and geographies for over twenty-five years, from well-established programs to new initiatives

  • Global network

    Global network

    Calls on our long-term investment in advanced modeling and our deep consulting experience with loyalty programs globally

To discover more on how LoyaltyAdvisor can help you manage the liabilities and value-generating opportunities from your loyalty rewards program, get in touch with our specialists.

Disclaimer

WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).

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