MUMBAI: Loyalty programmes in India are becoming increasingly sophisticated as marketers seek to make them more relevant and tackle the past indifference of consumers.
One reason for their poor performance is that many consumers had seen little tangible reward in most programmes and had consequently not bothered to use their loyalty card.
It is not a trend confined to India, as Mignon Buckingham, managing director of ICLP, an agency specialising in loyalty marketing and customer relationship management, noted in a recent issue of Admap. She cited international research showing consumers wanted more instant and flexible rewards and the ability to redeem rewards in different ways.
"Brands need to re-evaluate the economics of their loyalty initiatives and programmes and balance their approach to deliver greater impact, results and return on investment," she said.
That is what is slowly starting to happen in India as more loyalty programmes are tailor-made. "There is a greater attempt to understand the consumer using technology," said Akash Sahai, local managing director of Aimia, a loyalty management company.
This is being deployed to gather more information about consumers – age, frequency of visit, buying patterns, items purchased. This meant, Sahai told DNA, ensuring "the promotions and discounts being offered to the consumers are relevant and can prompt the consumers to visit the respective stores".
He explained that the greatest number of consumer complaints were about irrelevant marketing emails. If you keep sending offers about baby products to a customer who is not married and has no need for them then obviously the consumer is not going to come back to the store, said Sahai.
Loyalty programmes are also set to move beyond individual chains, as coalition loyalty programmes, where a consumer can collect points from different retailers, are developed.
Vijay Bobba, chief executive of Payback, a provider of such programmes, said they would be a "game-changer" and that the offers should be accessible from anywhere – "mobile, social networking sites or the location that you are going to".
Sahai expected that loyalty marketing would expand into new areas in the future."Currently, it is limited to retail, banking, hospitality and travel, but going ahead we see it expanding to entertainment and even healthcare," he said.
Data sourced from DNA, Admap; additional content by Warc staff