Indian companies spend Rs 2,000 crore annually on loyalty programmes

On an average, an engaged customer in India have four or more loyalty cards at a time, which is still very low compared to 12 in the US.
Indian companies spend Rs 2,000 crore annually on loyalty programmes

New Delhi: Loyalty programmes are still very low in India compared to other developed countries like the US, according to a study.

Currently, the overall loyalty spend in the country is around Rs 2,000 crore annually at present and it is growing at 10 per cent, say a PTI report citing the study.

The report on customer service has been prepared by the global loyalty management firm Aimia.

"On an average, an engaged customer in India will have four or more loyalty cards at a time, which is still very low compared to 12 in the US," Shoppers Stop non-executive vice-chairman BS Nagesh told PTI.

'It is quite low compared to the global spending through loyalty programmes,' added Nagesh.

According to an estimate there are 500 loyalty programmes are active through various B2C retailers and brands. There are 2 crore active users, out of five crore who have enrolled themselves for various loyalty programmes, he told PTI.

Engaging in loyalty programmes reduces cost of customer acquisition and retention by over 50 per cent and therefore it is significantly profitable for companies, according to Vikas Choudhury, Aimia MD and its APAC (asia pacific) vice-president.

The quantum of loyalty programmes is growing at 20% per annum in India, according to Choudhury.

Image: CorbisImages

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