Brands woo consumers with tailor-made loyalty programmes

Retailers and brands have been struggling with loyalty programmes as consumers have remained cold to the concept which was introduced a decade ago.

However, the face of loyalty marketing in India is slowly beginning to change as marketeers are seeking to understand why consumers are not loyal to their loyalty programmes.

Caroline Papadatos, senior vice-president of international at LoyaltyOne, a loyalty management company, said the reasonable dividend is not very engaging and there seems to be no tangible reward for consumers in most programmes and as a result the customers generally opt out of it.

Loyalty programmes are aimed at increasing footfalls by increasing the frequency of visits by consumers.

But, on the contrary, most consumers who have a loyalty card never get around to using it because they realise it will be a long wait before they can reap the benefits.

Marketers and brands are now sweating it out to change all that.

For most brands an estimated up to 50% of the profits come from a minority group of customers and brands are upping the efforts to woo this set of consumers.

Now, loyalty programmes are getting more tailor-made, says Akash Sahai, managing director, India, Aimia, a loyalty management company.

“There is a greater attempt to understand the consumer using technology. So that the promotions and discounts being offered to the consumers are relevant and can prompt the consumers to visit the respective stores.”

A spate of irrelevant marketing emails after signing on a loyalty programme is one of the biggest complaints by consumers.

Sahai said if you keep sending offers about baby products to a customer who is not married and has no need for it then obviously the consumer is not going to come back to the store.

In order to counter this problem, marketeers are employing technology to gather more information about the consumers -- that includes details like age, frequency of visit, buying patterns, items purchase etc, so that the offers are targeted.

Vijay Bobba, CEO & MD of Payback, a provider of such programmes, said coalition loyalty programme where a consumer can collect points from different retailers is going to be a game-changer ahead.

“Moreover, the offers should be accessible from anywhere – mobile, social networking sites or the location that you are going to. Also, it has to be the same experience using different channels.”

Sahai said going ahead, loyalty marketing will also be increasingly seen in other spaces such as entertainment and healthcare.

“Loyalty marketing can be used in any industry where the customer is likely to come again. Currently,  it is majorily limited to retail, banking, hospitality and travel, but going ahead we see it expanding to entertainment and even healthcare.”

As per a survey done by LoyaltyOne, the market for loyalty cards was estimated to be Rs 5,000 crore in 2011, which is estimated to rise to Rs 8,000 crore by 2015.