By Rahul Rana, Chief Operating Officer, PAYBACK
Headquartered in Bangalore, India, PAYBACK India is a loyalty service provider. The company partners with market leaders in consumer segments covering daily needs, ranging from food to travel and entertainment.
Every business aims at sustainable revenue growth and one of the keys to achieving this is building and nurturing customer relationships. Loyalty programs have been in existence for years as part of the business strategy mix, and all industries from airlines to restaurants use loyalty programs designed to engage and delight customers and ultimately increase sales for themselves. In the last few years, we have seen many retailers in India launch different forms of loyalty programs and the trend is here to stay.
The retail industry has always been the bellwether for the economy and a big contributor to economy of the country through upstream and downstream impacts. This dynamic sector constantly undergoes transformation defining newer trends to engage with its customers. For the health of the business, attracting customer walk-ins is challenging the retailers to introduce smart ways of engaging with the consumers. Loyalty programs are created to support the retailers in effectively attracting, engaging and nurturing consumer relationships. It also helps in establishing a better understanding of customer behaviour that can be used by retailers to retain customers and increase sales.
When a consumer is in the process of making a purchase, there are a series of steps that one encounters in this “decision journey’. These steps include gathering information about the products, then evaluating available options. Loyalty programs can assist a merchant in narrowing down the options and thereafter, influence a customer's choice.
An ideal Loyalty Marketing solution delivers the right offer, to the right customer, at the right time and place.
According to published customer research reports, the most preferred form of rewarding loyalty is through ‘loyalty points’ that a customer accumulates from transactions, and their fungible nature makes them universally acceptable across the network of partner brands, of a multi-brand loyalty program. Having a common denomination as a loyalty reward maximizes the relevance of shopping for consumers by recognizing individual preferences, providing targeted offers, and delivering unique benefits to ensure repeat purchase. Besides retaining customers based on incentivized shopping, a loyalty program employs consumer transaction data to better cater to their varying needs. Multi brand coalition programs are like a club where coalition members are able to better understand their customers through multiple interactions across different spend categories, communicate and market to a larger group of customers, often much larger and create a great experience for the customer where accumulation of rewards is faster and more meaningful, thereby ultimately creating a win for all!
For the participating retailers, the consumer transaction data gives useful insights about consumer lifestyle and preferences which allows the creation of sophisticated consumer segmentation matrix, in turn enabling an enterprising retailer to deliver relevant, specific and targeted offers to their loyal customers. Each subsequent interaction helps to sharpen the understanding of the customer and thereby putting in place a virtuous cycle. These transactions may not necessarily be only purchase related, but also includes all interactions with the program including redemptions, coupon activation and social network messages.
The role of loyalty programs in retail cannot be over emphasized. The customer interactions with the program help in identifying best-customers and communicating a compelling and differentiated value proposition. An ideal name to quote as an example would be the Future Group. Within a short span of one year, PAYBACK driven loyalty program of Future Group is India’s largest in the retail category. Over the course of this partnership, PAYBACK facilitated recurring usage among members, enhanced cross-partner brand activity and contributed towards the overall increase in the average ticket size of Future Group customers. The loyalty program further equipped the retail major with data about consumer purchasing pattern; enabling usage of statistical and analytics tools to segment consumers, implement customized marketing campaigns to attract repeat footfall and thereby increasing sales and customer loyalty.
Smart utilization of highly focused multi- partner loyalty programs not only helps to boost the consumer base and increase customer revenue share but also enables them to deliverpersonalized service consistently. It is therefore not surprising that many retailers have adopted loyalty programs as a convenient mechanism of meaningful differentiation in today’s market scenario.