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India Loyalty Marketing Report

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India Loyalty Marketing Report
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When you ponder the significant growth markets for loyalty marketing over the next 10 years, the leaders would seem to reside among the BRIC countries, Brazil, Russia, India, China. At the moment, Brazil and Russia seem to be reasonably well established and understood, while India and China are two markets that are a bit more obscure. In the case of China, the lens through which we can view the market is downright opaque.

In Russia, there is at least one coalition program in play (Malina) as well as other big programs in market sponsored by retailers of various profiles. In Brazil, Dotz was the first coalition program to be launched and is now poised for another stage of growth based on last year’s investment from LoyaltyOne.

Multiplus, the spinoff of TAM’s frequent flyer program, has received investment from Aimia, so we have the two biggest players sizing up the market for dominance.

In the near future, we’ll cover each of these markets in greater detail.

For now, we can shed some early light on the Indian loyalty market by virtue of reporting received from the 5th Annual Loyalty Summit held in Mumbai, India on February 1 & 2, 2012. The event theme in 2012 was “Driving Loyalty through Customer Experience Management” which hints at how marketers in India are fully observant of the challenges faced by more mature Western markets.

Akash Sahai of Aimia was the event Chairman and in a post-event interview, he shared enthusiasm about the growth of the Indian market. “There is rapid maturation of the Indian market and growing sophistication of its loyalty managers” said Mr. Sahai, continuing “the conversation has genuinely shifted from the 101’s of loyalty management to how an enterprise as a whole must develop customer-centricity.”

The keynote address – The Rise of the Datarati – was delivered by Jan-Pieter Lips of Aimia, the title sponsor of the conference.  His call to action urged marketers to use the data they already possess in order to craft the right offer to customers. According to Jan-Pieter, the traditional loyalty mandate has now expanded to address a broader view of a customer’s brand interactions, and illustrated how loyalty programs can “connect the dots” between transactional behaviours and non-transactional online behaviours to deliver targeted relevance and value, in turn strengthening customer relationships through a foundation of permission and trust. He then shared an example of how Aimia’s UK based coalition program Nectar is delivering such loyalty excellence to its partners and consumers.

Colloquy’s Jim Sullivan followed by providing an overview of a research study covering attitudes of the Indian consumer towards loyalty programs. Citing Colloquy’s Cross-Cultural Loyalty Study and The Great Divide, Jim reported that economic optimism in emerging countries is 2-4 times higher than in developed ones, and that the customer experience in emerging markets like India, China and Brazil is characterized as “enthused, excited, engaged,” in stark contrast to the “tuned out, turned off, tired” reported in developed markets.

Counter intuitive to what some may believe, Jim reported that 42% of Indian consumers surveyed said social media is their preferred channel for receiving information from their favourite brands compared to only 32% in the US and Canada.

In the huge demographic melting pot that is India, each demographic segment exhibited distinct behaviours.

The most attractive demographic groups, known as “A’s” and “B’s” cited both the practical utility and aspirational status of rewards as reasons for joining programs, with the mantra of success being “Simple + Meaningful + Attainable.”

Groups known as “B’s” and “Cs” were noted to be price conscious with C’s less willing to recommend brands than A’s and B’s. Twice as many B’s than A’s said “privacy concerns” were a major reason for why they do not join loyalty programs, while almost twice as many A’s than B’s said “insufficient incentives” was a major reason.

Other notable speakers and panelists during the two day event included:

  • Manish Jain of SBI Cards describing the need to focus on loyalty operations company-wide
  • Kartik Jain of HDFC Bank talking about the emergence of lifecycle management and segmentation of banking customers as a key to unlocking cross-sell and rapid growth
  • Vinay Bhatia of Shopper’s Stop emphasizing the importance of using customer data and insights to drive decision making and brand relevance
  • Soumitra Sengupta of Aditya Birla’s More supermarkets described how customer segmentations by value, lifestyle, vintage and savings-orientation are critical to shaping and executing the loyalty value proposition
  • Paul Aranjo of Aimia shared good examples of how loyalty program execution can dictate the impact of the program on brand experience
  • Sudip Ghose of Samsonite shared the meaning of his customer service mantra “respond in 10 minutes, repair within 3 days, replace within 24 hours”
  • Ram Menon of TIBCO Loyalty Lab described how location-based loyalty services provide the much needed “context” for customers and “proactive social” for companies in the fragmented Indian market

There was too much news from the conference to review in just one post. Tune in later this week and we’ll share insights into how data analytics, social media, and coalition marketing may be the biggest drivers of future loyalty marketing growth in the Indian market.

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