A recent article in imint estimated the loyalty market in India at Rs. 8000 crore by 2015. Little wonder then that a host of companies offering loyalty solutions have entered India.
In the last five years, all retailers, irrespective of size have begun offering loyalty programs. This is a change from years past, when loyalty programs were designed with the intention of customer acquisition alone. Today, retailers look to their programs as a source of behavioral data – whether the program is in-house or outsourced.
Discussing the current dynamics of loyalty programs in India were panelists -Devrajan Iyer, Vice President – Marketing, Lifestyle International Pvt. Ltd.; Kaushal Satam, Head – JetPriviledge, Jet Airways; Madan Mohapatra, Head Media – Marketing, Future Group; Manisha Lath Gupta, CMO, Axis Bank; Uma Talreja, Head- Marketing, Westside Trent Ltd.; Vinay Bhatia, Customer Care Associate and Senior Vice President, Marketing and Loyalty, Shoppers Stop Ltd. and Vikas Choudhury, Chief Operating Officer and Chief Financial Officer India, AIMA Inc. at the ReTechCon 2013 panel discussion titled – Super Sizing Customer Loyalty.
Choudhury kicked off the discussion with the link between data and behavioural. He said, “We all have data. If you do not do anything with it, someone else will. Today, the loyalty space is more about ‘interaction’ and no longer just about ‘transaction’.”
“60 per cent of loyalty programs are now based on interaction – i.e. these programs are driven by analytic engines which can profile behavior. He went on to cite Google as a cease in point – where the click pattern on a page (or the swipe pattern in the case of touch devices) are used to customize ad-feeds. An extension of this is “Google Now” which uses predictive analytics to customize ads and offer-feeds. – Vikas Choudhary
The panelists unanimously agreed that for each retailer the concept of ‘loyalty’ differs. Iyer pointed out the case of fashion retailers where ‘price’ is not a driver for the customers who shop at a fashion store like Lifestyle. According to him, customers expect more of a personal touch in form of being informed about fashion / trends in vogue and whether or not it is apt for him / her. “For us loyalty means having a meaningful engagement with our customers. It is a platform we use for communicating directly with our customers. Points are just like sweeteners – good to have, but they are not the primary purpose of the meal.” – he said.
Satam spoke about the Jet Airways experience – where they have created a broader loyalty program which offering benefits, rewards and discounts across product categories.
“We understand that our customers don’t fly 24 x 7. So, we’ve evolved our frequent flyer program to allow the customer to use the privileges even when he is not flying with us. It is no longer a travel centric loyalty program.” – Kaushal Satnam
Mohapatra focused on why Future Group opted for outsourcing their loyalty program rather than having one in-house. According to him this offered them better data mining capabilities, and provided their customers access to a “horizontal” aggregated progam managed by Payback. “We are in the business of retail – it’s better if we get a specialist to design and manage our loyalty program”.
Gupta pointed out that, as a banker, acquiring a customer was an expensive proposition but keeping him engaged was a bigger challenge. “That is where offering loyalty programs come into play”.
For a customer, banking transactions are not a “fun” activity – unlike shopping. So there is an element of surprised pleasure when our customers are able to earn and burn points from banking. For us, the key is giving them a basket of option to choose from”. – Manisha Lath Gupta.
Bhatia spoke about the flagship First Citizen Club (FCC) program from Shoppers Stop – one of the longest running and most valuable programs in Indian retail today. FCC accounts for about 75% of the total topline of Shoppers’ Stop.
The FCC program has helped Shoppers design targeted marketing and promotional programs, “Through data mining we get to know details of our customers and it helps us entice them to plan their next purchase. For e.g. we have observed that if someone buys a formal suit from us, he is likely to return to the store to buy a shirt, a belt and accessories to complement the suit. Likewise, we have observed that in South India, half sleeve shirts work better than full sleeve shirts.” – he said. Shoppers has been able to use these insights to design specific direct mailer campaigns which have higher than normal conversion rates because of their targeted relevance.
The session ended on an unanimous note: All panelists felt that having a loyalty or reward program was now a “hygiene” factor.
“The name of the game today is about being loyal to the customer and meeting his expectations from the retailer in terms of service and experience.”
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