Home Retail Creating much more than loyalty programmes

    Creating much more than loyalty programmes


    ICLP is acknowledged as a worldwide leader in loyalty marketing and customer relationship management. Gurbir Singh Gulati spoke to Mark Spicer, GM, ICLP India, to understand his plans for the Indian market and how loyalty can drive the financial success of a particular business or brand.

    With over 30 years of experience, ICLP has collaborated with leading brands across the world to help them create loyal and profitable customer relationships. The company offers complete range of B2B and B2C loyalty services determining strategies, uncovering insights, engaging customers across multiple touch-points, and delivering and operating loyalty solutions.

    ICLP has its offices in 16 key locations in 13 countries across 6 continents. With a unique mix of experience, innovation, expertise and passion, the company has helped over 300 clients in 45 countries, across multiple industry sectors, to develop greater loyalty and more profitable customer relationships.

    Spicer believes that companies must focus on building a loyal customer base by forming strong relationships with them. He is of the opinion that loyalty programmes allow one to understand who their customer is and what it will take them to maintain their loyalty, understand their behaviour and drive it towards the brand.

    How has the journey been for ICLP globally and in India?

    ICLP globally is around 30 years old and ICLP India is about to complete 10 years now. When we arrived in India, we were here for off-shoring and back office possessing. India is a good base for us, for our IT teams and operational teams. We are a British-owned company but here we source local Indian talent. We have international experience to deliver locally. So we have been here for a long time in India delivering for international offices. My role particularly is to change that and to actually start selling to the Indian businesses. So from the beginning of this year, we have taken ICLP to the market to work with great Indian brands and the great businesses around the market.

    Who are your clients internationally and what is your focus in India?

    Internationally, ICLP is serving industries like financial services and travel industry. We have the frequent flyer programmes, etc. Looking at the Indian market, financial services are very much prevalent here. We are looking at telecommunications and retail as well. We will also focus on the Indian travel industry, which is growing exponentially. We have the experiences and we will apply this to the Indian business.

    We currently have one client in India, which is the prestigious Air India. Apart from this we have done many programmers globally where there are members from India. Now we are looking at an aggressive sales mission to serve Indian businesses and brands. We can help them to understand their business and get their return on investment.

    How does a loyalty programme work?

    A loyalty programme is designed to increase your profitability but there are a number of steps that you need to take to get there. If you look at the analytics within an existing business, they typically analyse how the product goes from A to B. However, what we look at is who the customer is, what brought them to buy a product and how we can motivate or modify their behaviour.

    You talked about serving the retail industry in India. What has been your research for the Indian market?

    I think there is great tradition in the Indians that if your family runs a retail business you buy from your family. But as competition increases, where international brands are coming into the country and the even the domestic brands are emerging from where they were earlier, the consumer perception starts to change as to what they want to buy.

    Look at the social media; the Internet has increased the focus of retail. The consumer now chooses where and how they want to buy. And because of this competition, there is a lot of distraction within the consumers. They are being taken off in different directions where they become disloyal to a particular brand and shop for the other one. The Indian market is already over-sensitive when it comes to pricing. So if a consumer finds something cheaper elsewhere, they will shift their loyalty. It is very important for the Indian businesses and brands to understand that they have to recognise and engage their consumers to maintain their loyalty. There are huge challenges in the market.

    I think the challenges and competition will increase further in the country. And I am of the understanding that the new government is looking at growing the economy – that is what it is about. The business has to look forward not only to create jobs but also look at driving the consumer spending.

    Indian retail houses already have some loyalty programmes. What differentiates ICLP in this aspect?

    There is great work on loyalty being done in India already. Each retailer recognises themselves as an individual; that is where there is no happening. We need to take this to the next level. Now look at the retailers who are issuing cards where many of the customers are not using them; the shopkeeper needs to understand why. And if the customer is using them, what was their frequency. You can really make this programme work if you are able to understand who your customers are. This is where our company can really help. We can identify your customers, who they are, what they are, what they talk, think, etc. and then device a particular programme where they feel special. Then the company looks at them individually and they remain loyal to a brand or business.

    It is a journey you take to get there. The starting point would be analysis of the data that you have got. Is it the right data and is it in the right format? Are you asking the right questions, if not amend and adjust them? If this is in place, then you can get to understand your customer profile.

    The challenge about India is regarding the millions of people who live here. So if you do a cross segmentation also, you will end up analysing 10–15 million people just in one segment. With technology in place, there is still a scope that you can deal with your customers on an individual basis.

    E-commerce is a big business in India. How can ICLP help this sector?

    E-commerce is huge in India. Companies like Flipkart are quite advanced in their business. The fact that you can even pay with cash on delivery is quite encouraging for a customer. In this space, we can help companies identify who their customers are and what they will buy irrespective of how a product is sold.

    Tell us about the services that you are offering.

    We offer a lot of services individually or we offer the whole concept. The whole concept would revolve around designing a programme from start to finish. So we help understand what are the matrix, what are the measurements, what are the points of earnings, businesses rules calculations, how does it look and feel, the design, the branding, the concept; the tools that get the communication out and the biggest part in this process is the collection of data and the analysis of the same. So the job is taking customer data, cleaning it, analysing it, and profiling it according to segments. This helps us to identify the profile of a consumer, their segments and their typical behaviour. It helps us to identify what we should do to make sure that they maintain their loyalty towards a brand.

    How do you define loyalty?

    Loyalty means something different to everybody. With my personal experience, I am in the loyalty business for 20 years and I am very loyal to it. This is what I know and this is what I do. This is what loyalty means to me.

    For instance, if you look at a consumer who is a frequent traveller, it would be getting those loyalty points and using them for upgrades, hotels and flights or even allowing the family to benefit from those points. If I am a loyal customer, I might get a discount or promotional offer, which really means something different for a customer.

    What loyalty programmes do is that they allow you to understand who your customer is and what is it going to take them to maintain their loyalty, understanding their behaviour, and driving it towards your brand.

    Can loyalty programmes help to push sales or improve point of sales?

    Definitely, if you are able to profile who your customer is, then you can determine the segment where they belong. This will help you to profile the right time and right offer for them. We need to get to the real personalisation of customer profiling. Thanks to digitalisation, one can get their personal offer when they enter the store saying. For example, ‘Thanks for coming in. Here is your personal offer.’ Nevertheless, any loyalty programme should run parallel to the main business; the two should work together. Any promotional campaign should be tied to the loyalty programme with segmented and profiled customer audiences. And if your business is not doing something like this, it means that it is lacking somewhere. We can make the programmes work more powerful through the technology and software that we have.

    How do you encourage a particular company to choose a loyalty programme?

    I think to motivate the marketing people of a particular company is very easy. The difficult part is their finance team, as they see the massive cost hit to the bottom line. If you decide to take a loyalty programme, it would not show returns in the first or the second year. It is only in the third year where the numbers really start to turn around. So the sales and marketing people typically look at this advantage and the benefits. If your competitors have a loyalty programme in place and you do not have it, you are bound to lose out. Doing nothing is not an option. Our business is a concept to sell processes, which are typically led by case studies. So if we are talking to a particular bank, we can use the case study of another bank that we have worked. We highlight the difference which we have made to their business, which helps getting the new client on board.

    Our skills and experience, our intellectual property allows us to get through the front door. We make a particular company understand the fact that a loyalty programme is not about just earning points. Rather, it is how you understand your customer and how you engage them.

    Loyalty programmes have been around in India for a while now but the consumer expectations have now increased. This is a bit which needs to be changed. Loyalty programmes in India have to represent international level standards and quality. If you are running a loyalty programme and if it is not up to the consumers’ expectations, it is doing more damage than good. You must make sure you change it and evolve continuously.

    Once you start the journey of an evolved quality-oriented loyalty programme, which engages and understand your customer profiles, it would start paying and build up your brand image. One you get this model right, you will get to earn the profits.

    What is the kind of investment that your company is making in India?

    We do not have physical products to sell; our investment is on people. One of the investments is me being here to take the business to the market. We are creating a client servicing team. So in the next few months there will be a huge recruitment phase that we will go through. Realistically, by the end of this calendar year, we will probably have a presence in Delhi and in Bengaluru. Our sales are typically coming out of Delhi, as our client Air India is based there.

    Who would be your competitors?

    Our biggest international competitor would be AIMIA. They are specialists in collation programmes. There are a lot of players in the marketplace. We need to see the international global players, which have presence in India. We are already an established company in India. We look at any competition in a healthy way.

    What is the future outlook for your company working for India?

    We have very strategically looked as to who are the clients that we would like to work with in India. That is not being arrogant about it and we have seen through our research what are the business which really need a loyalty programme. We have identified some 330 such businesses in India, where we feel that we can genuinely help. We are looking broadly at four business sectors in India, which are financial services, telecommunications, hospitality and travel.

    Our biggest mission in this calendar year is to transform our own business, as we have been very much behind the scenes. We are emerging as a full-service marketing agency and the goal for the next 2–3 years is to work for great Indian businesses and help them. We want to expand strategically and sensibly. We want to become the best service provider as far as loyalty business is concerned.

    What are the other countries that are in focus for business expansion?

    China will be a big focus for us. We are based in Shanghai at the moment and we have big focus there. We have been in the US market for a good few years now, mainly San Francisco. We have recently set up an office in New York as well to cover the East Coast, as the West Coast is already covered. We have launched in Brazil and we are making aggressive progress now.

    Our expansion in the Middle East is also growing. This year, our focus is to go to Africa. So ICLP is looking at a global footprint.