Your Loyalty Program – as seen by your Customer

How many times have you been approached by a new age retailer to enroll in some membership program of theirs? How many times have you been asked to make a purchase over a certain amount to get a membership to some program/scheme? I’m sure many times or maybe every time you visit their outlets.

Well, I have this habit of asking some pertinent, some irrational but all very specific questions that irritate. In this case the  questions are:

  • Why should I enroll in a membership program?
  • What is the cost of enrolling in a membership program?
  • Who is it devised to benefit? Is there any benefit to me as a customer?
  • When am I going to get the benefits after enrollment?
Loyalty

Loyalty is earned, not bought

Have seen these membership programs since 70’s in the last century. There is nothing new about what  these new age retailers are practicing. Back then we had a Jeweler & Utensil Store in Nagpur named ‘Pethe Jewelers & Utensil Store’ in ‘Bardi’ (Name of the locality/market) he had a simple deposit scheme with various benefits attached. And believe me nearly every family in Nagpur was a member of this scheme.

Apna Bazar in Mumbai had one program where customers were given a book & all purchases at Apna Bazar entitled them to some stamps which the customer used to stick in the book & these were later redeemed at certain value. Have seen this program in 80’s.

It would be prudent to point out that in those days there were no computers to calculate, no software to track, no mobiles to call or SMS. Yet, both these schemes were extremely successful at the time & in different towns/cities with entirely different demographics.

What made these programs so successful? Indeed, its the customers’ participation that made these programs successful. Why did the customer participate in these programs? Its the simplicity of these programs, the visible gains & the trust.

Two common elements in both the schemes –

1)      Both the schemes did not charge the customer to participate in the program.

2)      Both the schemes did not write off benefits at the end of the year.

Have you noticed so far I have not used the word ‘LOYALTY’ even once!! Except in the heading. Any such programs are just programs / schemes and nothing else. One can call it Customer Benefit Schemes / Programs at the most. But to call it ‘Loyalty Program’ is a bit far fetched. I’m not at all  undermining the importance of such programs / schemes. These programs sure have their value to retailers & customers. Maybe they are more skewed to benefit the business more than the customer.

If retailers are planning for some such similar programs, I would urge them to consider the following few points very seriously.

1)      Do not ask the customer to pay for enrolling in these schemes which you call the Loyalty Programs. I’ve seen most retailers commit this mistake. Why should a customer pay for bestowing his loyalty to your store? This really doesn’t sound logical to me. In fact, shouldn’t it be the other way round? A customer should be paid for sharing his personal data like Name, Address, Contact Information & Other details that are asked while enrolling. Maybe not in cash but in kind.

2)      Do not ask a customer to carry a Plastic Card of his membership in these days of Mobile Phones. Imagine a customer carrying 10 cards in his pocket all the while & is denied any benefits of the membership just because he has forgotten to carry a card. Mobile phones are the only thing a Customer will never forget to carry.

3)      Do not write off points accumulated in the customer’s account just to make your balance sheet look good at the end of the year. Instead, send her a gift of the same value.

4)      And last thing – Do not discontinue a customer’s membership even if she does not shop with you for years together.

Retailers can start with acknowledging & greeting a customer as he walks in to the store, even couple of Eclairs will do to start with. Remember: Loyalty is Gained. A Customer who comes to your store irrespective of any such programs repeatedly is a loyal customer. Give it a thought: Why would & should a customer come to your store repeatedly? More about it later.

Prasad Deshpande

Prasad Deshpande

 

 

 

 

 

@PrasadDeshpande

Born in Nagpur, Prasad’s early life was spent in places like Kanpur, Delhi, Trivendrum before he settled down in Mumbai in 1983. He graduated in Economics from Ruia College & topped it with a management degree.

Prasad started my career in sales with a company selling Databases. And later moved on to selling media traditional ATL to non traditional BTL activities and in the process acquiring rich experience in nuances of media / activity planning, execution & budgeting for all India campaigns. He then moved to Damas Goldfields Jewelry (India) a Jewelry Retail company based out of Dubai. Taking charge of Marketing Services & PR. Later moved on to head similar division at The Bombay Store.

Currently engaged as design consultant for a Dubai based company & have completed a Brand Identity Creation of a new product range in perfumes & fragrances to be launched by ‘M S Dhoni’. Having worked and successfully delivered on the packaging for the Brand ‘M S Dhoni’ Fragrances, have been entrusted with another global Brand ‘Madonna’ on similar product lines.

Loves reading books both fiction & non-fiction & traveling. Have interest in exploring new technology as it develops & try and adopt it to solve some routine & mundane jobs. And last but not the least, have keen interest in exploring avenues which are non traditional till they become traditional.

 

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Retailers Association of India (RAI) is the unified voice of Indian retailers. RAI is a not for profit organization (registered under section 25 of Companies Act, 1956), works with all the stakeholders for creating the right environment for the growth of the modern retail industry in India. RAI is the body that encourages, develops, facilitates and supports retailers to become modern and adopt best practices that will delight customers. RAI has a three charter aim of Retail Development, Facilitation and Propagation.