NOVEMBER 20199THE CURRENT STATE OF LOYALTY PROGRAMS. WHAT CAN SELLERS DO?In conclusion, in most cases, customer loyalty is proportionate only to the Cost benefits that are pro-vided to them. Deep discounts create traction for it-self which ultimately breeds contempt like Ramakant Khandelwal, CMO of Payback India, rightly said, "Loyalty as a concept is a strategic act -- you want to be able to retain customers. With bargain hunters, sometimes they're there for a specific deal and then won't return. When a program is designed to attract only bargain hunters, you may be missing out on the audience that truly appreciates what you're doing." With the dynamic business environment and fierce competition between brands, business is will-ing to offer a share of his pie to ensure a transaction with the customers. Today, it is the buyer's market. So every seller or business should give the buyer or the customer something back constantly to make a transaction. So, it comes as no surprise that the glob-al market for loyalty programs is expected to reach $201 billion by 2022, representing a compound an-nual growth rate (CAGR) of four to five percent, ac-cording to Beroe Inc., a leading global procurement intelligence firm. But, indeed, just offering rewards will not make a program successful. A customer expects contextual, digital-first experiences that align with their brand values. An article by Loyalty360, an association for customer loyalty, loyalty programs have to move from Conventional to Contextual Loyalty, Digital to Digi-tal-First, Siloed to Seamless, and From Personalized to Predictive. Businesses must have a foresight of the future and create policies that would benefit both the parties (Business partners and Customers) rather than focus-ing only on customers' gratification!The new-age customer treats the points as per-sonally earned and expects to use them as ubiquitous as cash. This dictates the needs of the existing loy-alty programs- wherein the customer gets freedom, flexibility to use the points anywhere, anytime. In the future, loyalty programs should be structured around a customer's needs- they cannot be bound. We need loyalty programs to move from closed loop to open loop structures. Ultimately, so no matter how mag-nificent or how cool your Loyalty Program looks, its fate is decided by its customers. Shalini Prakash, Investment Advisor
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