Loyalty Truth

In this second installment of reporting on the state of the Indian Loyalty Marketing industry, we turn to Data Analytics, Social Media, and Coalition marketing  – three themes that ran deep during the 5^th Annual Loyalty Summit held in Mumbai, India on February 1 & 2, 2012. The report is made possible through our interview of event Chairman Akash Sahai of Aimia.

Data

Several talks punctuated the keynote speech titled The Rise of the Datarati, delivered by Jan-Pieter Lips of Aimia on the first day of the event. Ajay Kelkar of Hansa Cequity emphasized the importance of data analytics citing a Gartner study which reported that by 2017 the CMO will spend more than the CIO on this discipline.

He shared that today’s consumer does not want to be known as a market segment, but as an individual. Therefore, brands must listen well, anticipate needs, and address them quickly or risk rapid attrition. Addressing the organization’s approach, he suggested the investment in data must involve building analytical capability and should leverage the internet as a training ground for “customer pull” channels. In addition, he shared his opinion that behaviour changes must be spotted as they happen through avenues such as event-based marketing and by transforming marketing into a service. By doing both, analytics will be linked to the ‘last mile’ to generate intelligent recommendations and good business decisions.

Social

Delegates agreed that digital and social media represented key enablers for loyalty best practices in India.  According to Susan Doniz of Aimia, digital media has created a visible shift in customers as they thinly slice their time and attention, seek personalization in everything, are increasingly community oriented, and more digitally literate.

She put forth the idea that interactions now count as much as transactions ,and consumers have pulled brands into an “on demand” loyalty landscape. Digital touch-points are transforming customer loyalty as we know it, and companies must pay special attention to “Millennials” – the first generation to come of age in the new millennium, who will drive economies for the next 30 years.

There was also much discussion during the conference concerning the ways brands can craft a social media and digital strategy allowing them to engage in a transparent and responsive dialogue with customers. While devising these new ways to engage and delight customers, brands will discover ways to prevent being held hostage by the whims of increasingly vocal customers.

Coalition

Vikas Choudhury of Aimia India described how the heterogeneous retail market in India is ripe for a few broad-based coalition loyalty programs, much like Payback.  As a testament to the coalition model working globally and delivering high ROI and “Coalition Effect” for brands, Vikas stated that Aimia’s coalition programs now cover 126 million households globally, include 50% of the entire UK population as active members, and deliver $10 billion worth of rewards in Canada alone.

Consumers in India, whether value conscious or aspirational, are tired of their loyalty benefits being diluted across a spread of purses, and are seeking greater value and recognition.  Dip-stick research by Aimia indicates that an overwhelming majority of urban customers are interested in joining a large coalition loyalty program and would spend more at participating brands.

Vikas pointed out the need to tailor the coalition construct to India’s largely fragmented and cash-based retail environment and stated his opinion that an effective coalition currency is often a much better value for consumers than cash discounts.

Retail Case Example

Documenting a practical application of loyalty strategy, Sandeep Kulhalli of Titan (which incorporates the foremost brands for watches, jewellery and eyewear in India) shared a case study on the award-winning Tanishq jewelery Anuttara program. Anuttara competes with more than 500K traditional jewelers across India and goes to great lengths to broadly analyse customer transaction data and uncover “specific delight factors” with which to create special relationships with its customers.

Anuttara aims to build brand ambassadors, create community associations, celebrate personal moments such as birthdays, and of course incentivize incremental footfalls. At the moment, the program boasts 2 million members which contribute 55% of total sales for the company and an impressive 19% increase in repeat contribution for Tanishq.

Rewards

Ms Ashok of Accentiv, a leading rewards supplier in India, commented that India is witnessing a shift from transactional gift giving to tapping into the customer’s lifetime experiences to create brand engagement.  Ashok cited Van Heusen’s “Coffee and Conversations” feedback forum and Tanishq’s in-store Valentine’s Day promotions as best practices in this regard.

Ashok offered a few mantras for a successful rewards program in India –

• Include exclusive experiential rewards
• Find the right balance between points and cash discounts
• Use new age technology such as mobile and social media to better target and listen to customers
• Reinforce communications on a regular basis
• Keep the redemption process simple, move to e-vouchers, and regularly track redemption experiences

Ashok’s thoughts were echoed the next day by Girish Khare of RewardPort, who added that “privileges will win over discounts” and “customer experience will beat points and rewards.”

To sum up, the conference content and tenor presented a good barometer for the direction of the Indian Loyalty market. Clearly, the level of sophistication in program planning is growing quickly and marketers are focused on the right ingredients of the “loyalty puzzle”.

The privilege of those working in growth markets such as India is the ability to learn from more mature markets and implement plans that leapfrog current practices, in the process triggering a faster growth curve for brands that participate.