Client Results

Discrete Choice Model

Producing a Blockbuster Loyalty Program

The client, a global movie theater chain, wanted to add a free loyalty program to expand the business, but was concerned about cannibalizing its current paid program. It needed to model the impact of the free loyalty program on overall sales, as well as the impact on the existing paid program. The client also wanted to look at options to improve customer experience with features and pricing.

Why settle for just one loyalty program when two programs could offer double the impact?

Using custom-designed discrete choice and MaxDiff models, we determined the optimal offerings and targets for both the new free and older paid loyalty programs. The discrete choice model’s custom design determined not only the take rate at a particular price point, but also the share of sales that would go to the theater vs. key competitors based on the addition of the free program. The MaxDiff model also narrowed down a long list of potential features outside of the discrete choice model for a more focused product feature analysis.

Through our research, we determined which targets/sub-groups were most likely to subscribe to the free and optimized paid loyalty programs. We furnished a business decision tool (BDT) so the client could simulate various scenarios for executives, including among specific sub-groups. The client ultimately released a new free loyalty program and a revised paid program to great success.

successful rollout

No Cost Loyalty Program

Client successfully implemented free loyalty program

price of admission

The Price of Admission

Increased revenue by raising price point on paid loyalty program

good customer exp

Improved Customer Experience = New Perks

Introduced popular new incentives for paid loyalty members

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