Loyalty programmes are the perfect retention tools for businesses. The trend of initiating various consumer loyalty programmes have taken off in a big way. India’s e-commerce industry has witnessed an increased growth in thelast few years due to the increase in internet penetration, safe and secure payment modes and due to aggressive marketing strategies adopted by the players. With increased digital penetration, every company is looking to woo their customers for building trust and loyalty. “The importance of loyalty programmes is to establish an emotional connect between the company and the customer. Through our loyalty programmes we try to achieve maximum understanding of the client’s desire beyond tangibles, so as to create brand preference. This helps in boosting sales and acquiring market share,” said Vinaya Varma, CEO, mjunction.
mjunction, India’s largest B2B e-commerce company, has recently launched a mobile loyalty application for JSW Mason. Through this application, the company’s sales can be captured on a real time basis. The data can then be transformed into points which can be redeemed as rewards.
Rahul Akkara, Vice President, Strategy & Brand-JSW Cements, told BE, “mjuntion’s loyalty programme has made a significant difference to our business. We started with 200 channel partners and now we have 8,000 happy members. With this loyalty programme, we are able to analyse their purchase pattern and reward major sales contributors.” Every time a consumer buys JSW cement, they earn reward points which in turn canbe exchanged for gifts. There are three levels in this loyalty programme.
Leading cement companies like Nuvoco India Pvt. Ltd. (previously Lafarge) was assisted by mjunction to build the dual capacity of having a comprehensive data base of contractorsand engineers and an SMS-enabled lead capturing system for data capturing. This facilitated insight collection on their trade performance and helped them in recognizing prominent contributors. The programme has the company to establish better relations with its clientele. Similarly, mjuction has been conducting loyalty programmes for dealers and masons of Tata Steel over the past few years.
The TSL Tiscon Mason loyalty programme known as Mitr was launched with 8,000 masons and grew by over 150 % in a short period of time. Masons receive reward point on the basis of their referral. Each mason has their own Mitr account which keeps track of their points and they can redeem it whenever they want. Keeping the target group in mind, masons are also given seasonal gifts like small tools, t-shirts, caps and other utility items as incentives. Since its inception, the size of the programme has increased from` 40 lakh to` 2 crore and the growth is expected to maintain a similar rate.
The US-based Wyndham Hotel Group injected a fresh twist in their loyalty programme where members can redeem the points they’ve earned by bidding in online auctions on activities, vacations, and other experiences. With mobile commerce on rise, Nike puts mobile at the top of their priorities, developing a number of appsthat complement the Nike plus programme. Indigo realized that the market for physical books is not what it used to be. This led the bookseller to expand their product catalogue to include a great variety of items apart from books. Now, Indigo is seen as a lifestyle brand with a huge market in e-commerce. Indigo’s Plum Rewards programmes offer additional points for shoppers to make purchases online where margins are higher, securing more revenue and an obvious incentive to join the programme.
If you are someone who cannot start a day without a cup of chai or coffee in the morning, My Starbucks Rewards is tailored for you. Register a Starbucks Card online or download the free Starbucks mobile app to start earning 1 “star” per purchase. One star is equal to one free drink or food on one’s birthday. You can earn five stars and garner the “green” status, meaning that on top of the free birthday reward, you will also get free refills.
Customer loyalty has been the holy grail of organisations and the loyal profitable customer has been wooed and taken care of for years. However, the entire paradigm of loyalty has been changing across industries. This is enabled by greater access and lesser information asymmetry because of increased digital penetration. A new study by consulting firm Accenture Strategy informed that traditional ‘low price’ and ‘reliable service’ mechanics are no longer as effective at driving customer loyalty as they used to be and organisations that stick to traditional approaches and don’t explore the new drivers influencing loyalty risk draining profitability and pushing customers away. Nearly 70% of Indian consumers surveyed perceived little differentiation between providers, 50% were not satisfied and 25% were awaiting a competition trigger to switch.
Vineet Ahuja, Managing Director and Lead, Advanced Customer Strategy, Accenture Strategy, said that many old customer frustrations, especially poor customer service, remain unaddressed even with new-age organisations. People are unwilling to travel a large distance and wait for after-sales services. In such cases, companies have to develop an engagement model which is feasible for the customers or risk losing customers. The research suggested that 60% of respondents in India prefer a mobile platform as the primary after-sales engagement medium and companies which ignore this trend leave open a potential entry point for competition. India is third in the list of countries most affected by online banking malware and 2016 alone registered over 10,000cybercrimes. This led to respondents raising concerns about their data being stored by organisations to create customised loyalty interventions. While still nascent in India, this trend will pick up in the coming years and provide an avenue for competitive differentiation and first-mover advantage among players. Organisations that will use digital channels to drive disruptive customer loyalty will create competitive advantage.