Unleashing the full potential of mobile
With smartphones accounting for 84% of the 2019 holiday season shopping, mobile loyalty programs present a clear and present opportunity for American retailers to increase sales, conversions, and overall customer experience.
Unfortunately, except for a handful of brands like Sephora, Nike & Walgreens that have employed sophisticated data gathering and analytics to personalize offers to customers’ tastes while providing experiential perks, the vast majority of US retailers have struggled to unleash the full potential of their mobile loyalty program.
This has resulted in a large number of mobile loyalty offerings that are generic, and deliver disjointed and ill-conceived approaches to loyalty
Loyalty programs with native mobile integration with omnichannel features such as messaging, location technology, beacons, real-time offers, card-linked offers, and exclusive member benefits will be the ones to garner real attention and adoption moving forward.
This article analyzes how retailers can leverage dynamic in-app loyalty programs to introduce a more responsive and meaningful approach to rewards, personalization, and customer engagement.
How mobile has changed the loyalty game
Loyalty is not merely about earning and burning points anymore.
In the world of loyalty marketing, smartphones double up as payment enablers, face recognition devices, coupon redeemers, loyalty dashboards, location identifiers, and more. These digitally powered, advanced brand-to-consumer interactions were unthinkable in card-only loyalty set-ups.
Mobile devices have drastically broadened the scope for brands and consumers to connect and engage in creative ways. They have enhanced the user experience and made loyalty benefits more real-time, personalized, and experiential. They have also made it easy for brands to measure, track, and deliver the impact of loyalty programs.
Below are some of the key trends we see in the mobile loyalty program space.
Key trends in the mobile loyalty experience
Smartphones have redefined personalization by expanding its scope and impact. Offers and rewards can be shared with customers based not merely on age, sex, past purchase data but also live location, social media interactions, and in-app activity. Having a mobile-first loyalty strategy leads the way for integrated, cross-channel data collection about every customer. This data further help retailers to craft hyperpersonalized loyalty offers in an omnichannel environment.
Example: Starbucks uses its mobile app to seamlessly blend the physical and digital worlds and offer unique experiences to every individual. Among other things, it thoughtfully notes a customer’s live location to display the music playing in the store they visit. During the 2020 holiday season, the coffee chain giant gave away free air fresheners in a surprise deal for drive-thru customers. The air fresheners come with a QR code that allows customers to access a custom Starbucks holiday playlist.
The smartphone experience is very intimate and wholly controlled by the user. These factors make it an extremely suitable platform to gamify loyalty. Many brands are tapping this potential. The idea is to use gaming psychology to get their customers hooked to your loyalty programs and make them ‘play’ to win rewards.
Example: Nike’s NikePlus offers an omnichannel loyalty program where mobile plays a vital role. Members get rewards for working out. The more active they are, the more points they earn.
Similarly, Uber uses visual progress bars, much like gaming interfaces, to motivate their frequent riders toward securing their next reward.
Since we carry mobile devices wherever we go and are always ‘in touch’ with them, they become a valuable part of delivering experiential rewards – special services, benefits, or member-only privileges. Through smartphones, brands can offer personal shopping assistance via messaging apps, let customers quickly check-in at exclusive events, or unlock in-venue benefits through OTPs.
Kohl’s Yes2You Rewards program is intrinsically linked to a mobile-first loyalty strategy. This program helps Kohl’s engage in a ‘two-way dialogue’ with their customers, send push notifications, and offer unique experiences, such as a VIP trip to the American Music Awards or an opportunity to star in a Kohl’s photoshoot.
Social media engagement has steadily been increasing, with people accessing their network of friends and family on-the-go from their mobile devices. As of October 2020, 79.9% of active Facebook users accessed the social network ‘Only via a mobile phone.’ Combining mobile loyalty programs with social media behavior is thus a recipe for a winning customer retention strategy.
SheFit regularly runs reward campaigns through their Facebook page. Recently, for the holiday season, they invited their community members to enter a contest for a chance to win a $100 SHEFIT Gift Card. Their post got 100’s of comments and dozens of shares within a couple of days. Instant engagement at such a scale is only viable through mobile.
Visual loyalty and contactless checkout
In local stores, even today, the retailer recognizes you by the face and offers benefits like purchase on credit or home delivery. For large brands with a global presence, how do you replicate these experiences? Smartphones are perfect to offer these privileges through facial recognition technology and touchless payment integrations. These can provide everyday conveniences to loyal customers like lesser wait times for checkout, skipping the queues, and priority services.
CaliBurger experimented and launched kiosks powered with facial recognition technology a couple of years back. These kiosks recognize customers as they walk towards it and automatically offer loyalty rewards via their smartphones. It also lets them choose items and pay without pulling out their wallets!
How to design a great mobile loyalty experience
Designing mobile loyalty experience requires a one-to-one loyalty platform accessible via smartphone, such as a loyalty app. It also requires that the user interface is simple to follow and guides the users towards one thing that matters the most to them – rewards and positive experiences. Below, we have listed four mantras of building a winning mobile loyalty experience.
Your loyalty program rests on personalization, as we have seen in the previous section. It requires having reliable demographic, psychographic, and behavioral data about your customers. With a mobile loyalty program, you can gradually collect this data using progressive profiling, so it doesn’t irk the customers yet enriches your customer insights and data sets.
NorthFace, an American outdoor recreation product company, collects only the bare minimum customer details when signing up and asks for interests and preferences at a later stage.
Simplify the loyalty game
If loyalty is a game, and you want customers to play it, lay out the rules. Customers operate in a noisy environment, and they quickly forget complicated things. Hence your mobile loyalty program requires you to deconstruct the ‘what’s’ and the ‘how-to’s’ of your loyalty straightforwardly. Leave nothing to the customer’s imagination.
Sephora explains its loyalty program structure, tiers, and benefits very clearly to its customers. It says that ‘Beauty Insiders’ – their term for loyal members – earn exactly ‘1’ point for every dollar spent at Sephora stores. It also shows the various membership tiers in a tabular format.
According to a 2018 research by CodeBroker, most loyalty program members find it difficult to track and access the benefits. Thus, when designing your loyalty app user interface, it is critical to keep the essential things prominent and easily accessible.
Example: Chick-fil-A One keeps its customers focussed by highlighting the total redeemable points they have and the various ways to earn and redeem them. This no-brainer display makes sure customers can realize the benefits of the program.
Keep the engagement alive
According to a Localytics study, users with push notifications enabled for apps have 53% more monthly sessions than those without them. Push notifications have become an easy and quick way to update users and connect with them on-the-go. You can use this aspect of push notifications to enhance engagement through mobile loyalty apps. Greet customers when they arrive at your stores (through live location capture), alert them about expiring offers, send festive discounts or birthday notes, or ask them to share testimonials socially to earn more rewards.
Cineplicity uses push notifications effectively to attract customers to earn and redeem rewards at the right time. As we see in the image, they have shared a code to watch a free movie early in the day, so there is a lot of time for customers to notice the notification and plan their evening leisure activities.
Chances are, you are reading this blog on your mobile phone. Or have your smartphone close by. It may even have buzzed a few seconds ago. All around us, mobile has become the connecting thread for all kinds of people-to-people and brand-to-people interactions. We also see object-to-people interactions driven by mobile devices. Just think of the popularity of the Internet of Things (IoT), Augmented Reality (AR), Virtual Reality (VR), etc. These were novelties a few years ago, and today are the norm.
The future is mobile-first, if not mobile-only!
Why brands need to adopt a mobile loyalty program
Nowadays, brand loyalty amongst customers is on the decline due to intense competition and a plethora of choices. While loyalty programs are a great way to increase brand loyalty, most brands still treat their rewards program as an excuse to get an email address instead of adding value to the customer. But when a business gets their mobile loyalty program right, they get a 13.3 million-user-strong success story like Starbucks.
I am sure you would have heard the old adage – ‘It’s is easier to get an old customer to come back than to ask a new customer to transact with you’. This is a retention strategy that every marketer worth his salt knows. This high acquisition cost is the primary factor why brands need to build relationships with existing customers and reward them. As for reason for adopting a mobile loyalty program, here are they :
Benefits of a mobile loyalty program
Loyalty programs encourage customers to align themselves with the values of your company and this could be a wonderful opportunity for you to build a long-term relationship with your customers and nurture them.
Howard Schultz, Starbucks’ CEO, once said, “If people believe they share values with a company, they will stay loyal to the brand.” Given below are a list of benefits that a mobile loyalty program offers.
Understanding customers’ behaviour and buying habits will lead to an understanding of customers’ needs, which will help you to be at the right place at the right time; that is to say, you can offer them the right offers at the right time. You can keep your customers engaged by sending them messages at just the right time along with other communication such as push notifications and newsletters that will keep them informed about special promotions and discounts. This will also benefit the business through higher sales and conversion. A mobile app-based loyalty program also fosters a larger number of brand advocates who bring in a higher percentage of profitability and revenue compared to an average customer
It is predicted that mobile payments will reach $503 billion by the year 2020 and this is partly due to mobile loyalty programs. Loyalty programs encourage customers to make purchases through mobile-based apps, even if they are reluctant to do so, in the beginning. Sweetgreen offers a free salad to its customers, but to earn this reward they first need to pay through Sweetgreen’s mobile wallet.
Staying ahead of the competition
Irrespective of how good or superior your products and services are, there will always be competitors lurking all around to pry your customers away. A good way to stay ahead of the competition is to create a differentiating niche for the brand. Ultimately, even when your competitors copy your product, your differentiators, like an effective mobile rewards program and an impeccable customer service is what will help you stand out and keep you beyond your competitors’ reach.Think smart, identify your advantages and leverage innovations to provide customers with an irresistible loyalty program.
Becoming the market leader
The best way to stay ahead of the competition is to become a market leader or a thought leader and by setting trends. If you raise the bar for the quality of your products and services and set standards for others to follow, you will not only survive in today’s customer-centric environment but also remain on the top.
“We shape our technologies and thereafter our tools shape us,” observation made by Marshal McLuhan, one of the most recognized experts in the field of communication studies, is accurate now more than ever, with 93% of business leaders worldwide saying technology has changed customer expectations in the past five to ten years.
A great customer loyalty program helps you create a moat around your brand and prevent your existing customers from jumping ship.
Customers love loyalty programs and their benefits but gone are the days of carrying around plastic loyalty cards. Cards are lost easily, they aren’t practical for carrying around in a wallet and tracking redemptions can be difficult for business owners.
86% of marketers ranked mobile loyalty campaigns as very effective or effective, even if there are many who doubt them. In addition, 72% of consumers like better access to rewards and the ability to redeem their rewards more easily on a mobile loyalty platform(78%).
A loyalty program can affect current and future customers. Sending the right offer to a current customer can generate recurring purchases (as in the Kohl’s example, where customers who are members of the loyalty program spend $80 more than those who are not) or it can attract potential customers and convert them into regular customers.
Reduced operational costs
Mobile loyalty programs are easier to maintain as compared to traditional loyalty programs. Offers can be changed instantaneously and sent to all users within seconds. The time spent is less and it works out to be economical than paper-based loyalty programs.
Analyzing, tracking and interpreting customer data is very important if you want to communicate the right messages and offers to your customers. Customers are more likely to use loyalty programs if the program is simple, easy to understand, and if the offers are exciting and relevant to them. Furthermore, brands that allocate 20% or more of their budgets to customer loyalty get a better understanding of their customers.
In order to find out what customers want, you need to decide which metrics to use and track the goals that you want to achieve. Every business has different methodologies and strategies to reach their targets and how to achieve them.
If you want to leave a strong initial impact on your customers, the number of app downloads is the best way to measure your success. If your goal is to get users to keep using the app, the percentage of active or returning users will give you an insight into your strategy’s success. In order to attract user attention, keep promoting specific feeds in the app and by keeping track of the most popular pages in your app, you can decide whether to change the contents of the app or to continue with the same content. It is also crucial to understand which pages are the most attractive to customers.
You might want to track the purchasing habits of your customers, the amount that they spend and how they deal with redemption. Based on the information collected, you can redesign your current campaign or create a new one for the future. You might also want your business to be a huge success on social media and go viral; in that case, analyzing and tracking the engagement metric for social media might be a good idea.
How to implement a mobile loyalty program?
The use of mobiles has changed the name of the game for loyalty programs; especially when it comes to creating more ROI.
Research shows “that customers who actively engage with brands and their loyalty programs make 90 per cent more frequent purchases, spend 60 per cent more in each transaction and are five times more likely to choose the brand in the future.”
A good example of this is Kohl’s. Members of the company’s mobile loyalty program are spending $80 more per transaction than those who are not. Mobile reward programs are also known to engage the younger generation a lot better compared to traditional card-based loyalty programs. Mobiles drive loyalty more than any other platform because they meet the needs of its members in the most convenient way.
Mobiles capture information such as location data, consumer preferences, app usage, attributes, purchase history like frequency, spend and more. Marketers drive customers back to the brand backed up by such rich and user-specific data, thereby ensuring an engaging and personalized customer experience.
The first step towards designing an effective mobile loyalty program is to understand what your customers want. Loyalty marketing expert Howard Schneider says, “Savvy and strategic companies are now looking beyond these reward programs to delight, create and retain loyal customers. They are looking to solve customers’ problems and soothe pain points.”
You can get to understand customer behaviour through conducting user interviews, focus groups, competitive research and third-party integration research. Your web analytics and sales metrics will give you more information on conversions. Look at past data to find out what worked and what did not. You want to make sure the program is a win-win situation for both your customers and your business.
If you build a mobile app on top of existing systems, you can manage sales entirely on the app (For example, purchasing food on the app, scheduling service appointments etc.), while using your existing back-end systems (For example, printing a ticket in the kitchen to managing operations).“Mobile will ultimately be the way you provision most of your services. The way I like to put it is, the answer should always be mobile first. You should always put your best team on your mobile app,” says Eric Schmidt, Executive Chairman for Alphabet, Inc.
Best mobile loyalty programs
Best Buy, Walgreens and Sephora are examples of brands that use mobile loyalty programs as the centrepiece of their mobile strategies. Marketers from every sector have worked hard in building loyalty, from using social media to educate consumers about mobile payments. They are using mobile apps not only during the holiday season but also in building long-term relationships with old and new consumers.Here are examples of well-executed mobile loyalty campaigns:
Best Buy’s omnichannel approach to mobile loyalty programs
Best Buy redesigned its reward program with a more comprehensive omnichannel mobile loyalty offering, as a way to increase footfalls to their showrooms. The big box retailer’s My Best Buy loyalty program replaces the previous Reward Zone and works well with the company’s iPhone and Android applications. Consumers that use the app within a certain area around a store receive points that are credited to their member accounts. In exchange for downloading and using the app, members are offered exclusive deals. Best Buy’s customers are increasingly turning to mobiles to differentiate loyalty programs with an in-store incentive.
Cosi’s social-focused mobile loyalty program
In order to increase loyalty and drive foot traffic, the fast-casual chain Cosi ran a campaign that emphasized the use of mobiles and social media, as a part of a huge multichannel program. As a part of this program, Cosi ran social and mobile display ads to attract consumers and offer them the chance to win prizes and unlock offers. The chain created a desktop as well as a mobile web experience for the campaign with the latter being geared towards social-focused such as posting pictures on Instagram. It is quite common these days to offer rewards for purchases on mobiles, but what is unique about Cosi’s program is that the brand is encouraging social actions, which is predominately taking place via mobile devices.
Cumberland Farms’ payment integrated mobile loyalty program
In the last couple of years, convenience store chain Cumberland Farms has moved into mobile territory in a big way to smoothen out its payment process. The brand expanded its program with an app that opens up a checking account, in order to trigger payments. In addition to cutting down on the amount of time that consumers spend on getting gas, the mobile program also saves consumers 10 cents for each gallon bought, thereby encouraging repeat refuelling and driving the adoption of mobile payments. Cumberland Farms has also added mobile coupons to its mobile app as a way to integrate rewards into its mobile payment offering, thus encouraging their customers to go the digital way.
It has been nearly 2 years since the pandemic struck and world economies have settled in for the new normal, let alone Saudi Arabia. Consumers from the kingdom are warming up to get back to normal spending levels, to make consumption choices based on aspirations rather than necessity. But amidst this new normal, do brands have the right strategies to reach out to these newly conscious consumers?
Customer retention has become more important than ever before. And while marketers are strategizing best practices, customer loyalty has become an integral part for them. Indeed, loyalty is the best way as it enables brands to win the customers’ hearts and improve the conscious consumer’s confidence in the retail landscape. However, in Saudi Arabia, loyalty is still an emerging concept, probably due to the recent and gradual social liberalization taking place in the kingdom.
While the Saudi businesses are comprehending over the importance of loyalty in their marketing strategies, here are some brands from the kingdom that have been very successful in providing loyalty programs with a wide array of rewards, discounts and other personalized offers.
1) Nuhdeek program by Nahdi Medical Company
Nahdi Medical Company is a leading chain of Saudi retail pharmacy, and its ‘Nuhdeek’ loyalty program fits all its goodness in a one-stop mobile application. Customers can register on to the loyalty program and experience a seamless purchase journey, beginning from an advanced pharmacy locator that helps customers locate the nearest store, upto a variety of convenient digital payment options. After offline store purchases, customers can easily upload a picture of their prescription to earn points. Customers can get 1 point for each 1 SAR spent, and after collecting 1000 points, they can be redeemed at any Nahdi pharmacy. The app also provides general medical information that customers are keen to know.
2) Iktissab loyalty program by Othaim market
Abdullah Al-Othaim markets have over 200 supermarkets, hypermarkets, wholesale outlets and convenient stores across the kingdom. The company’s Iktissab loyalty program aims to provide the best shopping services to customers, by rewarding discounts and offers by Othaim markets and other third-party rewards. Special offers and discounts can go upto 50% on products like smart phones, computers, food and bakeries. The best part about Iktissab card is that it can also be used with other partner brands, restaurants, international brand stores, and Saffori Land. Loyal customers enjoy special benefits during festival seasons.
3) Al Fursan program by Saudi airlines
Members of the AL Fursan program by Saudi Airlines get access to a world of benefits including free tickets, upgrades, global lounge access, additional luggage allowance and more. Apart from these premium rewards, customers can also earn and redeem miles on a network of other global airlines. They can also get offers on banks, hotels, car rentals and telecommunication brands that have partnered with Saudi Airlines. Their three tiered loyalty program namely – Alfursan Blue, Silver and Gold offers varied benefits across different tiers.
Interestingly, Saudi Airlines also has an exclusive family membership program that enables customers to earn more rewards by nominating upto 8 family members. Members can be the customer’s spouse, children of age 2 and above, parents, adopted children and home workers. Each of them will get a separate membership ID through which families can together enjoy the benefits of the program.
4) Jarir discount card by Jarir bookstore
In an age where buying books has slowed down across the world as online reading has picked up drastically, Jarir bookstore’s loyalty program has pushed more people to buy books and stationery. The Jarir Discount Card guarantees a 10% instant discount on all school and office supplies, arts and crafts supplies, books and computer bags. The brand also offers great deals on other product range including their smartphone, laptop and tablet accessories collection. Offering convenience for customers, the card can be used both at the offline store and on their ecommerce platform.
5) Qitaf loyalty program by STC
STC’s Qitaf loyalty program aims to show gratitude to loyal customers, opening doors to a variety of exclusive and high-end personalized services. Customers can easily enroll through the mystc app and begin collecting points by paying the mobile bills through the app. STC has partnered with several restaurants, electronic stores, fashion and cosmetic stores, sports stores, travel and transportation services, petrol services, charity organizations and more to offer a wide range of benefits for their customers.
There are 4 tiers in this loyalty program namely Qitaf Classic, Tamayouz Gold, Tamayouz Platinum and Tamayouz Diamond. Differential benefits are provided based on the customer’s tier entitlement.
6) Tawasul program by Arabian Oud
While spreading sweet, timeless fragrances across the globe, the popular perfume brand Arabian Oud has a tiered loyalty program called the Tawasul program. Based on the customer’s annual purchase value, it categorizes customers into four tiers – bronze, silver, golden and diamond. With a simple registration gateway, Arabian Oud offers reward and discount points that can be redeemed at any of their offline stores. Loyal customers are also privileged to get early access to offers, discounts and other information before other customers.
What’s next in the Kingdom’s loyalty space?
From a basic earn and burn model to physical loyalty cards, Saudi Arabian brands have evidently evolved towards reward-rich digital programs. Brands are gradually maturing in the loyalty space, increasingly adopting advanced technologies to power their marketing strategies. But there’s more opportunities in the horizon – capturing the customer data. In the coming years, we may see a transformed Saudi Arabian retail landscape, where customer data will be at the center of marketing and brands will catapult accurate and comprehensive data and begin to unlock its true potential.
Looking to gear up for the untapped potential market of Saudi Arabia? Connect with our expert team today to find out more.
64% of the world’s oil reserves come from the Middle Eastern region! Ironically, when it comes to the forecourts businesses, each GCC country has a different pace. While UAE and Qatar are at par with US and European fuel stations, Saudi Arabia is lagging behind. This is especially unbelievable given that Saudi Arabia has the largest reserves in the GCC countries with more than 260 billion barrels.
This is owing to the change in Saudi Arabian consumer trends, as the kingdom has recently changed their laws allowing female drivers, and with large players like ADNOC and Saudi Aramco come into the foray. On the other hand, UAE and Qatar have more advanced fuel forecourts due to their consumers’ love for automobiles.
But, petrol stations have and will become more than just a place to fuel up cars. They would become centers of wider retail offerings, personal services, delivery pick-up points, and much more. Amid this evolution, loyalty programs have become an important part of this brand new fuel experience. Keeping in mind that the fuel brands need to build their loyalty strategies based on consumer expectations and needs, let’s look at some of the trends and how brands can incorporate them in loyalty programs.
1. Mobile apps
In this age, fuel retailers can digitize the entire customer journey via mobile app. With a single sign-up, customers can find the nearest station with the geolocator, use a variety of digital payment options, explore multiple discount offers, access the ancillary stores and services, rate the experience and finally win points and rewards for the transactions. Setting up a fuel loyalty app is essential, as brands can reach out to the 174 million Middle Eastern mobile users, who are gradually warming up to digital payments and mobile wallets.
2. EV and sustainability
The global buzz on electronic vehicles and hope for a sustainable future has spread to the Middle East too. It may seem counterintuitive that consumers from oil-rich countries are moving towards EV, but there is an increasing need for this shift in a world where resources are waning and pollution is increasing. While Middle Eastern governments have already started their search for alternative fuels, brands must also participate in this change. Apart from establishing charging stations for EVs, they can also promise a clean forecourt with proper recycling, constructing stations with environmental-friendly material to create a transparent platform via mobile app to interact with customers about sustainability.
Conversations about the future are particularly important at a time when countries are planning towards net zero carbon emissions based on the Paris Climate Agreement and global discussions at the COP26 summit.
3. Non-Fuel Retail Category
Imagine your customer is off on a long trip. At some point along the way, they are bound to stop for refreshments and refill their vehicle’s fuel at one place. This is not a new concept for fuel brands to partner with QSR joints or convenient stores. However, relevant offers can closely tie the two products together and create more customer touchpoints. For example, a customer can get discounts on certain packaged foods based on fuel transactions and vice versa.
With the boom of the electric vehicles market, fuel retailers need to diversify into providing innovative non-fuel offerings and services. In a recent survey by Deloitte, around 60% of the respondents said that they buy food, groceries, fast-food meals and other non-food items apart from filling petrol at a forecourt. In terms of ancillary services, fuel retailers can offer a variety of vehicle-related checkups and cleaning, act as a pick-up point for deliveries, laundry services, bill payments and so on.
4. Fuel delivery
Contactless experiences have taken center stage since the COVID-19 pandemic. In this light, home deliveries have been extremely prominent in all sectors, and recently, the trend has hit fuel retail as well. This service is especially helpful when the customer finds their tank empty and would need petrol in an emergency situation. Several players especially in the UAE have revolutionized this trend. Apart from fuel, food, beverages and other grocery items can also be delivered. Retailers can easily integrate these services within their app to offer a seamless experience to customers.
5. Data-driven marketing
Reports suggest that customers from the Middle East are far more open to sharing data, knowing that it would lead to hyper-personalized offers and experiences. Therefore, fuel retailers may want to focus on capturing this data, creating a comprehensive view of the customer to understand their needs and reward them accordingly. Brands can then administer discounts and rewards on frequently purchased items and nudge customers to try new products or services, through notifications when they typically visit the fuel station.
Are Middle Eastern forecourts future-ready?
The future of fuel retail is closely linked to the future of transport, and in this regard, all roads lead to electric vehicles. In fact, transitioning to sustainable mobility could unlock a $400 billion opportunity for GCC countries in the next 2 decades. While Middle Eastern fuel retailers currently enjoy the high ratio of private vehicles at 91%, consumers could gradually move to EVs and shared mobility. Therefore, brands need to be prepared to reshape their forecourts with non-fuel offerings.
Get in touch with our experts to find out more about how your fuel brand can stay future-ready and improve your customer retention.
Imagine when your brand’s network of distributing partners and customers is sprawled across 6000 islands! Reaching out to them isn’t really a welcoming task by marketers. And now imagine the mammoth task of CPG brand marketers who not only have to navigate through the populous Indonesian region but also ensure that their marketing strategies work well leading to an increase in overall brand revenue. Did you know that the Indonesian landscape was once largely dominated by small-time retailers? However, with larger CPG brands foraying into the region, the need to establish a strong partnership with distributing retailers became an ideal for marketers.
Amid customers, an instant-gratification culture is now on the rise, thanks to the influence of the internet and social media that addresses their needs with just one swipe. Given that CPG products are purchased frequently, brands offer several rewards, through targeted channels at regular intervals. Therefore, loyalty programs have become the right medium to catch up with this fast-paced trend and meet customer expectations.
In our previous blog, statistics revealed how CPG loyalty has now become a space ripe with opportunities for brands to explore. We also witnessed that brands could run loyalty programs for both customers and distributing retailers. In this blog, let’s take a look at what brands have wowed Indonesians with their loyalty programs, and how brands in the CPG industry have experimented in both D2C and B2B loyalty programs in Indonesia.
1. Nestle Indonesia
To promote the use of Lactogrow, a nutrient supplement powder for toddlers, the multinational CPG company started a loyalty program called the Gro Happy Club, targeted at parents. Through the Grow Happy website, the customers can register and win 250 welcome points. Nestle has enabled online purchases where customers can collect ‘Happy’ points every time they purchase Lactogrow since it’s a frequent purchase by parents. While redeeming their points, customers can choose gifts from a large collection of items including vouchers and toys for children. The website also includes educational and other articles about childcare.
Nestle offers another loyalty program called DANCOW Parenting Rewards. Similar to the Gro Happy Club, the program is built to reward parents who are regular buyers of DANCOW, a milk powder fortified vitamins and minerals for children. Parents can redeem points to get rewards such as home appliances and toys, and even get free pediatrician consultation. Customers can claim points on customer microsite or Whatsapp by submitting codes found in the product.
2. Frisian Flag
Frisian Flag, a legacy dairy brand in Indonesia, hosts several activities that engage customers of all ages. While recipe contests are directed towards adults, the company encourages teenagers and young adults to participate in selfie contests on social media. For younger children, the brand offers e-comic and games based on two beloved characters called Zhuzhu and Zhazha. All these contests and games give customers the opportunities to win rewards and stay connected to the brand.
Frisian Flag also has a loyalty program called ‘Primagro Points Mothers and Toddlers’ that offers points and rewards to mothers buying nutrition and milk products for toddlers. Targeting customers who are keen on buying sustainable products, Frisian Flag provides many articles on their websites describing their pledge towards sustainability. In this portal, the brand transparently shares its processes starting from the grooming of cows up to the production of various dairy products.
While launching their chicken-flavored instant noodles Pop Mie, Indofood had chosen to ride the mobile gaming wave. They launched 2 gamified advertisements that involved short and simple games leading customers to win vouchers to buy the new product. The vouchers were easily redeemable and the game was sharable on social media to expand the engagement to more mobile users.
Indofood has also built a tiered B2B loyalty program called Grow Together that supports SME businesses that are particularly dependent on the brands’ products. The members of this program enjoy exclusive benefits including monthly rewards, health insurance, exclusive promotions and a portal to help them with bank funding. The program also assists the SME partner with halal certification that helps their business grow. The loyalty program named the Grow Together program has three tiers – silver, gold and platinum. Members can also use their Boasari Mitra loyalty cards while shopping for Indofood products.
4. Wardah Beauty
One of the country’s top cosmetic brands, Wardah Beauty encourages the women doing business with the brand to join the Wardah Womenprenuer Community. This B2B loyalty program promises an 18% discount on the highest retail prices on products and free delivery even on minimum purchase. Members can get 1 point for every purchase at IDR 150,000 and 2 points by selling 30 news products. The points can be exchanged for attractive prizes and vouchers. 4 lucky members of the community also stand a chance to win a home appliance or a smartphone through an end-of-year raffle contest.
With almost 85% of Indonesia’s population being Muslim, Wardah is also known to be one of the biggest halal beauty brands in Indonesia. Through its latest marketing campaign ‘Beauty Moves You’, the cosmetics brand has launched a line of products made from sustainable processes. On the D2C front, Wardah has an ecommerce channel where customers can make online orders and receive loyalty points on their transactions. The points can be redeemed in a tender mode on the next transactions.
To strengthen the partnership with more than 400,000 sellers of Coca Colas’s beverages, the CPG giant started a new loyalty app called ‘Klik Toko’. The app enables points’ collection and redemption by B2B partners for distributing Coca-Cola products. The initiative was started to stay in touch with all the distributors, especially during the Covid-19 pandemic. The app gives the partners real-time information and updates from Coca-Cola. The company hopes to introduce newer features on the app to attract more distributors across the country.
Nutricia’s MyNutriclub loyalty program completely focuses on providing a lot of information to parents of young children including immunity, nutrition, growth and development. While enabling points’ redemption for every purchase of Nutrilon, the program also provides other exclusive services for mothers and babies like consultations with experts and access to webinars, podcasts and videos on the early child growth period. The loyalty program portal also offers quizzes to detect the child’s allergies, learning stages, tools like budget calculators and so on to keep customers thoroughly engaged.
Every transaction matters…
We can clearly see how some of the top brands in Indonesia have given importance to customers and partner relationships alike. While digital channels have given brands the opportunity to dive into D2C rewards programs, a fragmented landscape like Indonesia certainly requires companies to nurture their distributors and incentivize them to boost sales growth. In fact, Capillary’s Loyalty+ has been upgraded with additional new features to provide brands more opportunities to reward their partners. Get in touch with our experts to find out more and transform your brand’s digitization journey.
The challenging dynamics created by COVID-19, has destabilized the demand in oil and gas industry, along with the supply shock due to Saudi Arabia and Russia’s disagreement on production costs which has initiated a price war, further reducing the prices. This could negatively impact countries such as Iran and Venezuela, who are economically and financially dependent on oil production and export. India’s fuel consumption declined by 9.1% in the FY 2021 because of plummeted demand of around 40-60%.
Other factors like crude availability, high transportation costs, price fluctuations, government norms, etc. are beyond control, and does affect the supply chain and demand. 197 countries have signed the Paris Agreement, to curb the Greenhouse Gas Emissions by 33-35% by the year 2030. And to add to that, the current fuel retail market is largely moving from a vehicle-centric market to a customer-centric one. This radical shift is disrupted by 3 key drivers:
- Evolving Consumer Expectations: Putting forth customer convenience
- Advent of EVs: Incorporating charging stations at fuel stations is leading to advance mobility options
- Alternative Fuels: Enabling a shift towards greener fuel consumption
Fuel retail market: then and now…
The core offering of the oil and gas industry is an undifferentiated product, with similar price range, thus making it a convenience-based commodity. Customers expect a differentiated and personalized buying experience, hence fuel retailers need to invest in creating a value proposition which will know the customer, create affinity, and thus embark on a long term relationship. Businesses are implementing a customer insights platform to identify and create interlinkages. This can not only aid in consumer retention but also acquire new customers. The fuel stations in the future, would be set up to drive consumer experience and aim to build customer relationship and convenience. The evolution of Gas stations is poised at a transition that requires consumer centricity driven by analytics and multi-brand and retailing competencies to enhance their business models. Gaurav Mehta, VP and Global Head – Alliances and Analyst Relations, Capillary Technologies adds, “Market dynamics expect fuel companies to transform themselves to energy institutions and leverage the available opportunity. The desire to know and improve the consumer awareness is going to keep the fuel companies busy for the next 5 years.”
Challenges faced by marketers while designing fuel retail loyalty programs
- Disconnected consumer journeys: Fuel retail in the past has focused more on earn and burn loyalty without factoring customer journey flows. In order to build a seamless customer journey experience, it is important that brands focus more on enabling convenience than basic fuel needs. For instance, triggering push notifications though mobile loyalty programs for your customer while they are in the queue to fill their tank has higher probability of customer making a non-fuel purchase than a promotional offer which was shared a week before to the same customer.
- Meet strategic objectives: Many fuel brands step away from implementing a dedicated loyalty program. However, knowing that fuel retail is moving to customer-centric model and fuel brands can generate revenue from fuel as well as non-fuel commodities, a well-laid out loyalty program can assure higher ROI and eventually build brand loyalty over a period of time. Capillary’s Loyalty Delivered Sales (LDS) framework has the unique potential to offer up to 20% topline revenue to brands.
- Digitized offerings: Moving away from a card-based loyalty program to a digital loyalty program is the first step towards embracing digital transformation in fuel retail loyalty. It offers customer convenience by giving a varied purchase options in fuel and non-fuel commodities like selling lubricants, giving car-washing facilities, etc.
Enhancing fuel retail experience with loyalty programs
The effect of fuel loyalty programs appeared to have been evaporating as a result of the inevitable consumer shift following in the current pandemic scenario. Lesser movement of vehicles has further decelerated the fuel consumption patterns across the globe. Fuel retailers thus need to take a step back to reshape their customer strategy and attract loyalty, especially in these trying times. Emergence of new business models to induce loyalty is quite evident from following trends.
- Fueling and other services: Fuel is no longer the only commodity in the fuel retail market. Non Fuel Retail (NFR) is gaining prominence in fuel retail loyalty programs because it promises a reasonable basket value size. Convenience store purchases like ordering a cup of coffee, a tea-time snack, shopping daily grocery items; leveraging real estate for car washing, parking facilities are fast catching up in this segment.
- Increasing NFR contribution through C-store: Fuel retailers can either partner with food and product offering companies or introduce their own private labels of regularly purchased items by the consumer thereby building on their convenience store offerings.
- Treating fuel shoppers, one at a time: As the loyal consumer base differs – from a hurried driver to a group of college-goers setting out on a road trip, tiered loyalty programs offer benefits based on diverse demographics, facilitating omnichannel engagement at different touch points for different customer journeys. This also allows fuel brands to stay top of the mind as it builds a positive experience for customers.
- Leveraging digital technology: Moving to an app-based loyalty program with digital payment platforms not only assures increase in profitability but also enables customer convenience. These days, gamification features incorporated in loyalty programs assure high customer engagement.
- Other promotions – Fuel retailers are now roping in other retailers within the premise such as coffee shops or pizza outlets through cross-pollination of traffic to these outlets by offering coupons, discounts and a reason to visit again for fuel requirement or earn loyalty points if they are part of the partner eco-system.
Building fuel retail loyalty through hyper-personalized experiences
Fuel retailers have a huge potential to not only offer beyond fuel products but also create a remarkable shopping experience at their forecourts. Sushant Rabra, partner with a leading consulting firm shares his thoughts on the same, “For the fuel retailers, consumer experience is an upcoming competitive milestone. Fuel being an undifferentiated product, retailers need to come up with a strategy and opt digitalization techniques to stand out in the crowd by catering to upgraded forecourt experiences and benefits for customers.”
Since fuel is also a geo-based commodity, chances of customers returning to the same fuel brand are sometimes frugal. This is where hyper-localization has the ability to tilt the scales. With a comprehensive fuel retail loyalty program, a customer is more likely to return owing to numerous rewards offered by the brand. As brands engage and participate with their customers constantly, it builds up a credible data source encompassing behavioral patterns over a period of time and foresee customer trends. A data-driven loyalty program is the plugin that fuel retailers would need to enhance their overall customer engagement.
The revolutionary Promo Engine by Capillary for enhancing fuel retail loyalty
At Capillary Technologies, we closely reviewed the purchase behavior of a group of fuel shoppers to understand their core buying patterns over a period of time. As our experts analyzed and distilled the findings, 3 consumer traits were called out in the customer decision buying process: (a) Rewards that enable agility (b) Rewards that allow convenience (c) Rewards that offer instant gratification
Keeping these traits at the forefront, an agile framework for fuel retail loyalty was created that enables fuel shoppers to avail the next best offer on their next transaction by auto-applying coupon codes. This agile framework enable customer convenience by giving them rewards in real-time. The need to introduce this framework stems from the fact that customers have lesser time to shop, a reason why, they would prefer an automated system which can pull the next best offer based on their recent transaction as well as their past purchase behavior.
Fuel retail experience: The road ahead
Keeping these traits at the forefront, an agile framework for fuel retail loyalty was created that enables fuel shoppers to avail the next best offer on their next transaction by auto-applying coupon codes. This agile framework enable customer convenience by giving them rewards in real-time. The need to introduce this framework stems from the fact that customers have lesser time to shop, a reason why, they would prefer an automated system which can pull the next best offer based on their recent transaction as well as their past purchase behavior.
As buyer requests and patterns change, fuel retailers need to essentially change the way they perceive customer loyalty. With forecourt experiences building up from strength to strength and data-driven personalization enhancing fuel shopping experience, fuel brands must look outside the basic earn and burn model from their exiting loyalty programs. Fuel retail loyalty programs no longer restrict to rewards, but they are a potential source to shape customer behavior and gain brand advocacy. It is increasingly becoming pertinent to drive consumer retention, and drive revenue for organizations over the world. While the 2020 pandemic posed many challenges for the fuel, oil and gas companies; it also laid a path for the industry to seek newer opportunities and create a frictionless world for loyalty programs.
(The quotes provided by authors in this blog have contributed in their personal capacity. The views expressed by the authors are their own and do not reflect the views of the organizations they represent.)
In the first part of this two-part blog series, we touched upon why CPG loyalty is important and what are the latest trends to keep in mind for CMOs while executing brand marketing strategy. In this part, we take a deeper look at the challenges that marketers must address while building a loyalty program.
Imagine a customer walking into a grocery store. Their eye catches colorful packaging embossed with not just brand names but offers and prizes.… In this intense battleground, how is your brand going to stand out in the aisle?
CPG loyalty programs: Challenges faced by marketers
One thing that stands out as the biggest hurdle when implementing loyalty programs for CPG brands is that brands in this sector often lack direct relationship with customers. They are mostly reliant on retail stores for inputs. This dependency leads to several challenges. Some of them are stated as below:
- Limited Customer Database: CPG manufacturers have no physical avenue to capture customer information (transaction data) since it is heavily reliant on the Point of Sales (POS) integration. This creates a vacuum between the brand and the customers and limits customer acquisitions and data capture. Capturing data will go a long way for companies to stay consistently relevant to consumers.
- High Marketing Cost: Consumers are regularly bombarded with ads and billboards on a daily basis. While it’s no cakewalk to come up with catchy content, the engagement through these mass campaigns and advertisements is limited, with no personalization. Generic promotions and offers may not be relevant to every customer, leading to low engagement and redemption.
- Quickly evolving customer preferences: Customer preferences change more rapidly in the CPG space than any other industry. Take the apparel industry, for example – fashion trends change quite frequently in a span of just few months. CPGs are typically low cost items with various competition products available in markets. This contributes to low customer retention with the brand, as customers are inclined to make compromises in their purchases if the preferred products are not available.
- Heavy reliance on retailers: Over the decades, there has been massive seismic shifts in the CPG landscape, in terms of advertising and promotion. While manufacturers wielded this power in the 1980s, the power shifted to the retailers in the 1990s, as they had full access to the POS and scan data. In the current scenario, the power lies in the hands of the customers. The consumers’ choices are heavily driven by social media and information. Therefore, it is important for companies the embrace these shifts and let it drive retail strategies.
- Difficulty in predicting profit: Due to the lack of direct communication between brands and customers, it becomes extremely difficult to measure cumulative customer value over time, to increase the customer loyalty necessary to maximize the Customer Lifetime Value.
- The inevitable competition: While competition exists in all sectors, but it is far more intense when compared with other industries, given that CPGs are fast moving products with the risk of customers switching brands at any moment. It’s challenging for companies to break away from this clutter with brands offering same products and prizes.
CPG loyalty program: How to design an effective CPG loyalty program
- Data is the key ingredient: To stand out in the grocery store and build brand loyalty, data becomes the key pillar for engagement strategies. Today’s consumer is constantly researching, shopping, and engaging with brands online, producing new data sets every minute. CPG brands can collect this data, unify data silos across all such touchpoints using platforms and solutions. The unified data should contain omnichannel consumer interaction, data from supply chain, marketing, and secondary research data, resulting in an all-encompassing view of the touchpoints. This holistic customer data management strategy is a prerequisite to build a valuable loyalty program that maintains dialogue between brand and customers, leveraging customer feedback on products and offering discounts to tailor better engagements. This also sets a platform to share information on product benefits and new product launches, apart from hyper-personalizing messages. Brands can also incentivize customers who share personal information in exchange of rewards and an overall transparency from the company, given that consumers have become increasing intentional about the data they share.
- Digital strategy brings customers closer to brands: CPG brands are now looking to stay relevant with the digital transformation, investing in direct-to-consumer models. Brands must then focus on leveraging digital channels for an optimum loyalty program, and cultivate the desirable behavior of purchasing online. Mobile applications and Microsites serve as the primary interface of interaction between brand and customers, thereby reducing reliance on retailers and trade partners. This creates a win-win situation for both consumers and brands – while consumers experience ease-of-use through digital channels, customer acquisition, data and reward redemption can be easily facilitated for brands.
Several large CPG brands have taken their first steps in this digitized journey. For example, Colgate dove in to a digital-first marketing campaign for their new electric brush that is targeting millennial users. Paired with innovative messaging, this push for ecommerce sales has given the company an edge over competitors, and hopes to deepen its bond with consumers.
- Focusing on brand values and ethics: After several months of intense research, Nestle recently launched the vegan KitKat. The company came up with the 100% plant-based alternative to the popular chocolate bar after huge consumer demand. Veganism is just one of the recent trends in the consumer landscape that CPG brands must incorporate in their brands. As we have already seen that 40% of the global consumers are Gen Z, and it has become an important marketing strategy to align products based on their needs. As the newer variants of products get launched, it is paramount to use loyalty programs to boost sales. Consumers can be incentivized to use these new products. Brands can also introduce personalized offers for consumers based on previous purchases and preferences.
Capillary’s pioneer in CPG sales, Kunwar Keshav emphasizes on observing the new generation’s needs, saying: “The era of conscious consumption is here, and the newer generations are watching brands more closely for sustainable packaging and marketing. While these new-age concerns need to translate into the present production strategies, brands can use loyalty programs as a medium to transparently communicate about such process changes and messaging.”
- Incorporate Gamification elements– Gamification is especially useful in increasing customer engagement for CPG brands. Brands can apply games like spin the wheel as a way of unlocking rewards, providing incentives to customers to stick to your brand via awarding of badges and stickers. Gamification can boost non-transactional interactions and drive short-term behavior change like product awareness and trials. When Kellogg’s launched Krave, they hoped to direct the marketing at younger consumers. So, the breakfast cereal company made it a point to launch the product in social media channels for the first time. The brand launched a Facebook treasure hunt game that offered daily prizes and giveaways.
Let’s future-proof your brand with agility…
In a recent Harvard Business Review article, Janet Balis (Partner at EY Consulting) writes 10 sharp marketing truths that emerged after the pandemic. While many of them reiterates the importance of customer-centricity, one of the pointers discusses about how agility has become a marketing approach rather than a technology process. In terms of building CPG loyalty, this requirement to implement agile marketing strategies is an advantage.
What was that one thing that most brands focused most during last year?
Indeed, it has come a long way. In the world of retail, loyalty was often considered as an underdog. The broadcast commercials, promotional offers and print advertisements ruled the roost. Cut to the millennial century, brand promotions continued but marketing honchos worldwide realized that it is time to hold on to their existing customers, their loyal brigade. Marketers worldwide are waking up to the myriad benefits of a loyalty program, there are some Superbrands who found their way to the buyer’s heart. While offering customer loyalty programs consistently, these companies gradually formed brand advocates like no one’s watching. So, let’s take a closer look at brands who got it right, really right with their loyalty programs that their customers swear by the products and services offered by them.
Talk about brand loyalty in any part of the world and Apple tops the list. On 16th March 2021, it was noted that Apple’s brand loyalty reached an all-time high of 92% in comparison to 90.5% in 2019. While they bank largely on product innovation, what works for them is their products and services are conceived from the customer insights they capture. One of the 2019 surveys revealed that 90% of iPhone users look out for next iPhone as an upgrade or buying option. And that is some loyal community to be proud of!
When it comes to buying nearly anything online, Amazon really heard its customers. Given the pandemic paralyzed the world last year, Amazon’s delivery options were highly valued. The brand has come a long way to embrace the ideology, ‘customer is the king.’ Their new membership plan, Amazon Prime not only offers free and timely shipping but special offers, entertainment options, ad-free music, that customers can blindly rely on.
Heard about the IKEA Effect? The psychological phenomenon is derived from the adulation Americans had towards their self-assembled furniture. In short, feeling joyful for an otherwise frustrating experience. From an American brand to a global furniture name, this brand too puts customer needs first to design their products accordingly. This brand brought a cultural change in people’s minds and its customers are definitely not complaining.
In the 2019 retail loyalty report by InMarket, it was revealed that Walmart topped the list given its consistent customer engagement initiatives. Over the years, this multinational entity takes brand loyalty seriously by adopting digital strategies and expanding on their offering. Another notion that Walmart believes in that brand loyalty is not restricted to just the products they offer but to the larger audience they cater to.
Come to think of it, it’s just a cup of coffee? Knowing that a Starbucks coffee would cost you much more than coffee at a regular café. But ask a Starbucks rewards program member and they’ll tell you it’s beyond that. Their ‘order and pay’ feature on the mobile app allows customers convenience, pairing suggestions, free refills, discounts and earn stars for every transaction they make. More stars, more rewards – it’s that simple and effective.
There are some brands that are built on their product innovations, some like NIKE are built on their messaging, their brand image. NIKE has done that! It doesn’t matter whether you are a sport-fanatic or not, this footwear brand adds personality to their consumer wardrobe by offering ability to customize color options on its website. You wear them like you own them and never to ditch them.
The beauty marketplace is as huge as it is competitive. So while other brands would vie for consumer attention, Sephora packs it all under one roof which works as their biggest USP. It caters to delighting customers by giving them a one-stop shop experience. They don’t pause there, in fact, their much-acclaimed and loved tiered loyalty program offers its members invite to exclusive events, favourite brand offers, birthday specials and countless freebies on point accumulation.
It’s not just any athleisure brand but it’s a brand with a purpose. And their loyal consumers are well-aware of that. The driver and promoter of healthy living and mindfulness, this is a proud parent of over 1400 ambassadors who speak for their brand across the globe. Organizing free fitness sessions and festivals, Lululemon is indeed an inspiration for its customers educating them living a good life.
According to the Brand Keys Annual Loyalty study of 2020, Dominos climbed up ten spots to reach the fifth position leading the pizza category in customer engagement and loyalty index. Launching their loyalty program in 2015, the brand offers new and varied pizza options to different customer segments based on their purchasing behavior. The brand has witnessed a definitive increase in its loyal customer base and overall purchase frequency.
This carbonated drink pretty much taste the same like its competitors but for its loyal customers it does taste different. With over 50 million Facebook fans across the globe, there is something definitely that they did right, from time to time. Building a SuperBrand image and retaining it for long, it is not the sheer promotions that makes this drink grab the top shelf in stores today, but its loyal fan base.
Rome was not built in a day, neither can be brand loyalty. When you venture the loyalty program path, remember: Customer loyalty is offered, Brand loyalty is earned. So, focus wisely. If you haven’t tread that path yet, take a step forward and talk to our loyalty experts who will build one exclusively for your brand.
We are about halfway into 2021.
For most of us, this year too seems like a reflection of last year. The Lion City is not an exception too. Of course, the changes that pandemic has brought were inevitable and Singaporeans are now adapting to the post-pandemic habits. It was noted that last year 31% of Singaporeans actually shopped online for the first time during the pandemic! The same study also predicts that even when the pandemic ends, half of Singaporeans would prefer shopping from large online marketplaces. This sudden surge in ecommerce shopping activities have brought a twist to the current retail arena in Singapore.
Retailers and marketers are thus focusing more on creating a loyal customer base. Combating the sky-rocketing shop rental costs and reduced store footfall, loyalty programs could be the hook retailers are looking at. The importance of having an omnichannel loyalty program has gained more momentum than ever. A report by FIS (payment software) claims that 81% of Singaporeans prefer shopping with the retailer who has a loyalty program. Sadly, 48% of Singaporeans feel that they have very limited engagement with the loyalty programs. So before we distill the fine practices of a loyalty program, let’s take a closer look at some of the top loyalty programs in Singapore that have been there and done that, and that too exceptionally well.
1. The GrabRewards – Cashless First, Loyalty Program
Leading with the changing environment around is Grab Rewards. A leading public infrastructure provider, Grab is now home to the popular App offering hyper local services as well. Their loyalty program has gain more precedence in the last year owing to its consistent intent and endeavor of promoting cashless, contactless payments by offering more rewards. They have a 4-tiered membership where the members can climb from Member to Silver to Gold and finally Platinum by adding more points. As they have introduced GrabPay Wallet as the mode of payment, it allows its members to earn more points through the same tier benefits if they pay through Grab wallet. The best part is its point expiration policy. As long as you make 1 Grab cashless transaction within the next 6 months of your last transaction, your points will continue to accumulate.
2. TungLokFirst – Instant Gratification Loyalty Program
With over 35 restaurants across Asia, the TungLok Group is a delight for the Singaporean diners offering both traditional Chinese fare as well as the Modern Chinese cuisine in Singapore. TungLokFirst, their loyalty program enables multiple touch points by offering members to redeem their points across different restaurants under the group. It provides personalized offers, vouchers, discounts and other delectable privileges to extend an unparalleled dining experience to its loyal customers. Besides new sign-up bonus, online sign-up bonus, birthday month special offers; members can also get more rebate during non-peak hours from Monday to Thursday on a-la-carte orders and set menus. One of the unique privileges that its members can avail is the dynamic rebates on their bill instantly.
3. CapitaStar – 24/7 Loyalty Program
Hailed as Singapore’s leading lifestyle and shopping rewards program, CapitaStar is a 24/7 app-based loyalty program that offers members to spend across CapitaLand Malls, eCapitaMall and Capita3Eats. Part of the CapitaLand Rewards program, members earn stars and rewards for every transaction they make in the above outlets. This multi-store cardless rewards program is also available in China and Malaysia besides Singapore. With over 1.1 million members, this program has no membership fee or expiry date. It also offers additional rewards for the birthday month as well as event invitations and promotions to its exclusive member-only events at the participating CapitaLand Mall. It issues a car parking e-voucher that could be used with all the participating CapitaLand malls.
4. NTUC FairPrice Group’s Plus – Coalition Loyalty Program
Introduced by the NTUC Link Private Limited, Plus is Singapore’s most popular coalition loyalty program. With a member count touching 2.3 million, it partners with 1000 outlets and allows members to earn LinkPoints which can be earned online as well as in-store purchase. These points can be redeemed for instant savings or exchanging points. In 2020, NTUC collaborated with Kopitiam and NTUC Foodfare to form FairPrice Group. Created for its members, the Plus App offers a feature – Stamp Your Way which allows members to check-in every time they visit a store and collect a reward on completing a certain number of visits. Members can also review their LinkPoints as they shop with different brands in one single-view.
5. Healthy 365 – Health First, Loyalty Program
Spearheaded by the Ministry of Health and Health Promotion Board Singapore, this app-based loyalty program aims to inculcate healthy living habits. Given the pandemic has further highlighted the importance of health and immunity, this app is gaining traction amongst Singaporeans these days. Users can maintain a log of routine activity like counting the total number of steps per day, exercising time, etc. It also offers a wide array of health articles, go-to health directory of the region and interesting challenges. When a user signup for these health programs and challenges, they earn Health points which can be redeemed to purchase healthier food options, groceries and drinks.
The Future of Loyalty Programs in Singapore
As Singaporeans stay merry with the freebies attached to the loyalty programs, a recent survey states that non-expiring points, cashbacks and rewards with multiple retailers have proven to be the sure-shot way to encourage members to sign up for a new loyalty program. With new innovations like- Friends and Family (group loyalty) and partner programs making inroads; it’s time brands rethink their loyalty strategy and implement the right mix suited to their loyal customer needs.
It is an open secret that brands invest significant revenue to nurture loyal customers (research shows over 70% of brands invest more than 2% of total revenue)— after all, a 5% increase in customer retention can increase a company’s profitability by 75 percent. Today more companies than ever have loyalty programs, estimated to be growing at 9% a year.
But there is another elusive type of customer that brands vie for even more – the advocate.
The term ‘customer advocacy’ should make brands lean in with rapt attention. They are the people who evangelize your brand to their family, friends, and colleagues. Customer advocates contribute to a higher CLV (Customer Lifetime Value), improve brand awareness, and they grow your revenue when they share the incredible experiences they had with your brand. Sound familiar? You might be wondering — aren’t all loyalty programs supposed to be driving higher sales and boosting brand affinity through positive reviews and word of mouth marketing?
In an ideal world, the answer is ‘yes’. A strong loyalty program must also drive customer advocacy. Even though there are more loyalty programs now, the number of customers who actively participate in them continues to remain at only about 50%, highlighting that there is scope for improvement in most programs.
Overwhelming evidence shows that Customer Expectations have changed in the last decade or so. Customers’ behavior and purchase journeys have become increasingly complex and non-linear, but unfortunately retailers are still stuck with a one-dimensional view of customer loyalty. According to research from a global tech consultancy, 97% of loyalty programs rely on transactional rewards, but 77% of transaction-based programs fail in the first two years. The harsh truth is the loyalty programs from the by-gone era simply don’t cut it anymore. To go beyond discounts, brands need to reward loyal members with memorable experiences. This creates an emotional loyalty to your brand far more often.
What Is Experiential Loyalty— and why does it work?
An ‘experientially loyal consumer’ is one who finds personal symbolic meanings in the act of consuming and investing in a brand, and engages around these meanings individually or as a community— in the pursuit of identity (as defined in a research paper by SAGE publication).
Experiential loyalty should go beyond transactions to focus on the larger customer experience and values. Its application can be found across various industries, from supermarkets to high-end fashion brands. For example, the popular American wholesale-retailer Costco charges an annual membership, but helps their die-hard loyalty customers make wise financial decisions beyond just groceries, by offering their own pharmacy, eyewear store, liquor store, fuel stations, and so much more. In more recent years, they’ve successfully been offering ecommerce options. Similarly, Indian companies like ‘Big Basket’ flourish by combining great price deals with the convenience of creating and delivering your grocery list.
Of course, not every grocery store can imitate Costco or Big Basket. But remember your favorite corner store as a college student, the one you could spend hours at with your friends? The memorable ones value their customers, and create experiences— whether it is by serving hot meals when we need it, or delivering groceries when we’re a desperate tied-up parent. Some brands, like US-Canada-based QSR ‘Panera Bread’, state their values clearly in their restaurants and online— making fresh healthy food, with emphasis on high-quality ingredients locally sourced from farmers. Recognizing the importance of omnichannel experiential loyalty, Panera offers a card-based loyalty program (an impressive 50 percent of company transactions occur on MyPanera cards) and a mobile app, and rewards its customers with free food items, tasty nutritious meal recipes, invitations to special events, and more.
The goal of experiential loyalty is to create a unique bond with your best customers by allowing them to enjoy exclusive experiences that are hard to replicate anywhere else. This could include anything from concerts, backstage passes, private events, celebrity meet and greets, personalized products, exclusive training workshops, and so much more. Experiential loyalty boils down to activities, not mere items.
In many cases, experiential rewards rely on FOMO — people’s “fear of missing out.” When people share their best experiences with their friends and family, either in person or through social media, it can powerfully motivate other consumers to learn more about your brand and experience it for themselves, driven by the fear of missing out or the yearning to be part of something exclusive. This grows your market reach by leaps, and your program instantly becomes more valuable. While transactional rewards and dollar savings attract consumers most frequently, it’s the experiential rewards that create long-term impact. The transactional rewards that most loyalty programs offer are rarely unique, but that’s not the case with experiential rewards. The experience your brand provides loyal customers must be different from what other brands can provide.
Combining transactional benefits and experiential benefits is the best way to engage the most consumers with your brand. And keep in mind that excessive transactional and discount-based rewards can have the opposite effect of experiential rewards— it will dilute the perceived value of the brand. Good transactional rewards make your customers feel smart, where experiential rewards let them feel special.
Here are some of the key points of experiential loyalty:
- Emotional Rewards: Create remarkable non-discount rewards, such as personalized experiences, value-driven engagement and exclusive services, to help customers feel appreciated and valued.
- Reflect your brand’s value: Align your brands values while creating experiences to attract the interests and passions of your customers. Understand the interests of consumers by leveraging relevant transaction history and a single view of the customer across all channels of interaction
- Unique Experiences: Unique brand experiences spark heightened customer engagement and build advocacy that permeates throughout a customer’s network, allowing you to build deeper relationships with your customers. Today, many customers (including 72% of Millennials today) choose to spend money on experiences over products
- Keep it exclusive, Optimize costs: Depending on how elaborate your reward is, experiential rewards can rack up a heavier cost than traditional transactional rewards. It may make financial sense to offer the high-end perks only to your very best customers — which also lends exclusivity to the experience. Less expensive experiences can be offered to lower tier groups, and the rewards steadily grow for each loyalty tier. Consumers who participate in top loyalty programs are 80% more likely to choose that brand over its competitors, and two times more likely to recommend it to others.
- Perfect Timing: Although often overlooked, timing in marketing (just like in comedy) should be perfected— especially by those with small teams and smaller budgets. Brands must be aware of any social movement affecting their products or their customer segments, and modify their message and product accordingly. Additionally, by leveraging digital data and engagement trends, brands must understand when their customers pay the most attention, engage, and make purchases. Marketers can also utilize technologies like geofencing, and send coupons, push notifications or engage when customers enter a certain location area.
Examples of Experiential Loyalty
Sephora: Although the beauty retailer Sephora began as a simple points-based loyalty program, it has now expanded to a community that motivates members to share tutorials, and engage with other makeup enthusiasts and professionals. Sephora’s mobile app even uses augmented reality so members can virtually test products on themselves. Sephora offers free samples of beauty products to loyalty members of all tiers, which strengthens their own loyalty program while promoting other brands. But perhaps the best aspect of Sephora’s experiential loyalty program? For higher-tiered members, they offer one-on-one makeup consultations with professionals.
The North Face provides their loyalty members with tailored rewards for their lifestyles. As part of their VIPeak program, customers can earn points through traditional methods like making purchases, as well as through less traditional ways like attending events, checking-in at certain locations, downloading the company’s app, and more. However, the most captivating factor of The North Face’s experiential loyalty program is the vast array of choices they offer when members redeem their reward. Customers can use their points toward unique travel adventures like mountain climbing in Nepal or excursions in Alaska.
Sony uses their Ultimate Rewards and ShowStoppers rewards program to take their customer experience to the next level. These rewards are larger than life experiences that allow customers to use their points to bid on various exclusive experiences, from Hollywood premieres, to sporting events, to sold-out concerts. Sony allows their customers a shot at making their dreams come true— if they bid the highest! This added level of gamification empowers the consumer to define their own value of an experience. All these factors have set Sony’s Loyalty Program a class apart.
Experiential loyalty really comes down to the fact that when you give customers a positive memorable experience, you create an emotional tie that keeps customers coming back for more. Experiential loyalty programs should offer tailored unique rewards to make customers feel important. This can evoke a much stronger and longer-lasting connection with your customer than transactional benefits— one that gets them to relive their happiness with friends and loved ones, and turn into an advocate for your brand.
The above study is jointly contributed by Maninder Singh (Business Head – Retail & CPG at Tech Mahindra), Suman K Shantaram (Store Consultant RCG Vertical Tech Mahindra), Gaurav Mehta – VP and Global Head, Alliances and Analysts Relations at Capillary Technologies and Rebecca George (Executive Copywriter at Capillary Technologies)