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Though growing at 20% per annum, Indian loyalty programmmes are less compared to US

Even though loyalty programmes are growing in the country, it is still quite low compared to developed countries like the US, according to a study.

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Even though loyalty programmes are growing in the country, it is still quite low compared to developed countries like the US, according to a study.

"On an average, an engaged customer in India will have four or more loyalty cards at a time, which is still very low compared to 12 in the US," Shoppers Stop non-executive vice- chairman BS Nagesh, told PTI after releasing a report on customer service prepared by the global loyalty management firm Aimia, on January 21.

The overall loyalty spend in the country is a little over Rs 2,000 crore annually at present and it is growing at 10%. Still, it is quite low compared to the global spending through loyalty programmes, Nagesh, who is the founder of Trust for Retailers and Retail Associates of India (TRRAIN) said.

Currently, there are 500 loyalty programmes being run by various B2C retailers and brands. There are 2 crore active users, out of five crore who have enrolled themselves for various loyalty programmes, he said.

Engaging in loyalty (programmes) reduces cost of customer acquisition and retention by over 50% and therefore it is significantly profitable for companies, said Aimia managing director and its APAC (asia pacific) vice-president, Vikas Choudhury, adding: "Their return on investment for a company with loyalty was more than 100%."

Choudhary said that the number of loyalty programmes are growing at the rate of 20% per annum in the country. An engaged customer spends 2.5 times more than a normal customer.

"On an average, a loyalty programme, if used actively, can give you anywhere between 5%-10% of value back through better deals," he added. Loyalty programme refers to a rewards programme offered by a company to customers who frequently make purchases. 

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