Gifts! Now who does not like receiving gifts? In retail, the moment you reward your customer with a freebie or a gift, chances are you shall be tying him down to your brand for a good amount of time, or, at least till your competitor manages to outdo you. Loyalty to your brand is quite dependent on the rewards you offer to your customers.
But then, in today’s day and age, when freebies, gifts and discounts have become a norm with most brands, what really constitutes loyalty? Here’s a quick look into how brands are reinventing the loyalty wheel to excite their patrons.
The Raymond Story
With each brand having its exclusive loyalty programme, it still remains unclear whether the concept of loyalty marketing is well understood and the understanding taken into consideration before designing the programme.
Director Retail, Raymond, Mohit Dhanjal, says “Loyalty for Raymond has flown through generations. A father induces their children to the Raymond store and this we have seen over a period of time. When we rolled out the premier club circle some years ago, we realised that 40 per cent of our transactions actually happen through customers who have shopped with us before.”
Consumer Engagement Programs
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.
Founder, SeaSoul, Manisha Chopra says, “Apart from the loyalty programs, creating the service experience is also equally important. Creating an experience with the loyalty helps the customer to stick to the brands.”
Building Consumer Engagement
Consumption of a product or service is lead by the experience, availability and several other factors like that. And loyalty just gives you a nudge in that direction. Choice of more than 70 per cent consumers is driven by a discount or a deal or a loyalty card.
MD, AIMIA Inc, Vikas Choudhury says, “Deals, discounts, gift cards, loyalty cards are actually various different means to meet the same end. All the retailers and service providers are trying to engage the customers better and trying to know their customers better. Loyalty is an excuse that is offered to a consumer, in order to get more data about the consumer and then to be able to establish a credible channel of communication back to the consumer. So, it more like offering something with a purpose to get something in return. And that return is not buying their 100 per cent loyalty.”
The loyalty programme market in India is pegged at about Rs 5,000 crore; retail accounts for two-thirds of that, and travel and financial services for 10 percent each. The rest comes from other sectors including hospitality and also channel loyalty initiatives etc.