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Customer understanding – Key to sustainable loyalty programmes!


Day 3 of India Fashion Forum 2012, being held in Mumbai, saw an interesting debate on the viability of loyalty programmes in a session titled “The Low-Down on Loyalty Programmes and Customer Engagement”. What constitutes customer loyalty, does it actually work, and what are the ways to measure loyalty? These and other aspects of loyalty programmes were debated by an eminent panel that comprised Ashok MS, COO, Accentive India; Rathin Lahiri, CMO and Business Head, LoyaltyOne India; , Entreprenuer (former Jt. CEO, Future Value Retail); , Head of Marketing, ; and Vineet Narang, CEO, Mobiquest. The session was moderated by Amit Mahajan, Associate Vice President, IRIS.

There is an urgent need to engage with the customer to understand what excites him/her felt Ashok. “It has to be a long-lasting relationship and not a one-night stand,” he stressed. There is a market shift from the trend to collect data to a more sustainable and deeper engagement. According to Narang, the core objective of loyalty programmes is to drive behavioral change. He said: “In a highly competitive environment like the one we are living in today, customers have a plethora of choices. So merely dishing out reward points won’t work. We need to make them feel valued. We need to build emotional loyalty.”

The panelists were unanimous in their opinion that customer data was at the core of the loyalty programmes. But what does one do with the data? Sharing his perspective on the same, Bhatia said: “Data is the oil of the economy. You need to analyse the data by keeping a check on frequency of visit, the category of shopping, time spent, ticket value, and so on. What are the categories that he is not shopping at? What can be done to lure this customer to that category? The data should be used to build a bridge between the customer and the brand.”

Further, on the topic of customer analysis, Narang mooted the suggestion of tagging the bills to the customers. “It should be an ongoing exercise. Analyse each bill to study the customer. What is he buying? Once you know him better, engage in precision marketing and not random mailers sent to hundred others. It should be a one-to-one engagement,” said Narang.

Agarwal said that retailers need to act selfless to buy customer loyalty and see the returns coming eventually. A lot of loyalty programmes in India fail as they don’t address the pain points of the customers. “The return policy is one of the many pain points in retail. The least we can do is to make it cleaner and simpler. This spreads the good word and brings the customer back to the store again and again,” he added.

Treating the loyal customers as individuals and not as a group, engaging social media, recognition and specific marketing initiative were identified as some of the key differentiators for effective loyalty programmes.

-Nivedita Jayarm Pawar