ICLP India has been helping major domestic and international brands to formulate and execute customer engagement strategies and drive loyalty programmes for over eight years now. Mr Anurag Saxena, General Manager – India, ICLP discuss about the various aspects of loyalty programmes in India and the way forward in an exclusive interaction with IBEF. Edited excerpts:
What are your views on potential of loyalty programs in India?
There is a lot of enthusiasm among brands in India today wherein they want to understand what can be done to move to the next ladder. However, loyalty as such is very misunderstood word still in many circles. For instance, when we talk about loyalty sometimes it is felt that it is only about points earned and points burned while customer loyalty is much more beyond that. It covers understanding the customer better, sending a personalized communication, providing recognition and in the end, providing a unique customer experience that he/she is looking at. We are at an interesting trajectory since technology in this part of the world has really taken off and that enables us to leapfrog certain hurdles and help us in creating a customer experience that is really distinct. In a nutshell, we still have a long way to go and the next three to five years will be more and more about customer engagement.
Considering the changing consumer trends in the industry, how has consumer segmentation changed?
Traditionally, the idea of segmenting consumers was more about income group or age or similar such patterns. However, retailers and brands today are segmenting consumers based on their likes and dislikes, based on the influencer group that they belong to, the social behaviour of consumers. While the classic ways are still relevant but the social segmentation is playing a huge role in our industry.
How is the Indian consumer different as compared to the consumers in the west?
The appetite of a loyalty programme in the Indian consumer is much more as compared to the western world. In other words, the Indian consumer is willing to spend more with a particular brand if he/she is a part of its loyalty programme but at the same time, the number of loyalty programmes that the Indian consumer is participating in is actually falling down. This basically means that brands today are not fulfilling what the consumer is looking at. Most of the loyalty programmes that you see in the market are plain vanilla and are not personalized and individualized. We believe that if the Indian consumer is acquired the right way, the appetite for spending with a particular brand is more as compared to the west. Similar behaviour has been noticed in consumers from China and Brazil.
What are the few ways in which an attractive loyalty program can be built in India?
Typically, industries like airlines, hospitality and banking are the industries where attract a large part of the demand for loyalty programs. One way is to look at creating earn and burn which can be universal. In other words, it is about creating more avenues for earning points rather than just focusing on buying tickets or booking hotels for the same. At the same time, one should create more avenues so that these points can be burned in many more places than only with the brand offering the loyalty program. Second, it is about communication which needs to be personalized and needs to be able to do predict what the consumer is going to do next and accordingly make an offer. Third is about creating an incentive structure so that the consumer refers you within his/her social circle. These are the broad things that you can do to create a compelling rewards program.
What are your thoughts on the current scenario of loyalty programs running in the ecommerce industry in India? What is the way forward?
We are already seeing signs of how much damage it can do to your business if you build it on offers and discounts because the customer waits for the discounts and offers and if these are not there he/she simply moves on. One thing brands operating in the ecommerce industry can do is they can engage in conversational commerce i.e. start a conversation with the prospective and existing consumers rather than keeping the sole focus on discounts. Similarly, they can engage more with their suppliers or sellers by helping them out on the various aspects of the business.
What is the future of loyalty programs industry in India?
We are moving towards an era which we call as modern loyalty. It will not be plain vanilla which entirely points based. Modern loyalty is no more a marketing initiative; it will be a business initiative which will be a customer centric activity that the organization builds. In addition, modern loyalty is not about influencing or closing a transaction but more about understanding the consumer and creating an ecosystem which creates a pull factor for the consumer. The last thing will be to create personalized and just-in-time relevant communication so that it stands out in the plethora of communication the consumer is getting by way of emails and sms.
How has been your experience of working in India so far?
We have been operating in India for the last eight years and we provide end-to-end services in our industry. Be it engagement strategies for a B2C programme including customer loyalty and engagement, channel or a dealer programme or be it an influencer programme. We work with many leading brands and help them bring incremental revenue and at the same time drive brand advocacy. We formulate our strategies looking at the end objective of the brand and the current challenges in the market. We also put a lot of emphasis on data and hence, a large part of our strategy emanates from decoding the data and looking at the trend indicators. When it comes to execution, we bring on the table a strong focus on digital which is in line with the changing consumer behaviour. Along with this, we also have a very strong research base, which we either do on our own or in collaboration wherein the focus is to understand the interesting market trends and devising strategies for various brands for driving customer loyalty and engagement. Since we bring in a lot of global best practices and global experiences on the table, it gives us a competitive edge in this market.