How hypermarkets can structure non-monetary loyalty programs around customers' values

With the rising consumer expectation and fierce market competition, retail brands are betting on consumer loyalty programs to engage well with their customers.
Customer Loyalty Programs

In today’s new-age retailing scenario, a company’s survival will be directly related to their matrix of understanding a consumer’s state of mind and deliver solutions that fulfils their needs. Today shopping is not just about going out to the market and buying products. With the increasing digitisation in the country, customers today want more from brands.

With the rising consumer expectation and fierce market competition, retail brands are betting on consumer loyalty programs to engage well with their customers. Today almost every big/small retailer is trying to bind its loyal customers and make sure they shop with them again and again. Customer loyalty programs were intended to exactly do the same. With such programs, retailers are now able to track and reward customer behaviour and shopping patterns that further help them to enhance their operations.

Deploying an apt loyalty program is itself not an easy ball game altogether. To put a loyalty program in place it’s important to understand the segment your consumers and provide offers based on the segment profiles. Retailers are doing this in multiple ways by giving promotional offers to customers based on their past visit patterns, consumption behaviour and other customised offers. A loyalty program is not just a discount card and is way more than plain rewards.

PAYBACK brings on-board a multitude of benefits over traditional and stand-alone customer loyalty schemes. The company provides loyalty solutions to over 50 brands including some big names from the retail ecosystem such as Big Bazaar, eBay, Future Bazaar etc.

Here is how one of India’s largest hypermarket retail chains enhanced its operations and footfall after it deployed a customised loyalty program provided by PAYBACK:

The leading hypermarket wanted to increase the frequency of visits of their existing transactors.

Proposed Solution
That was when the hypermarket was proposed a pilot frequency promo in select cities with a clear objective to get the transactors to transact for ‘one more time’. The existing transactors of hypermarket in these cities were divided into the following 3 segments:

i. Customers who have transacted only once in last 2-months

ii. Customers who have transacted twice in last 2-months

iii. Customers who have transacted 3-times in last 2-months

For each of the above target segments, the communication was themed around ‘Shop More and Earn More’, and the offer was bonus points for each additional transaction which was increasing exponentially as the customer moves from 2 transactions to 3 to more.

The starting offer slab was decided basis the customer’s existing transaction behaviour. For eg - customer who have transacted only once in 2-months, was given bonus points on their 2nd, 3rd and 4th transactions in the 2-month promo period. Whereas, customers who have transacted twice got offers on their 3rd, 4th and 5th transactions and customers who have transacted thrice got offers on their 4th and 5th transactions.

The After-effects
The promo was successful in getting incremental transactions from the target customers. Following were the key highlights of the campaign:

i.  Almost 50 per cent of the target customers responded to the communication by transacting at least once during the promo period

ii. The frequency of the responders moved up during the campaign period by 30 per cent as compared to the frequency in the earlier period.

iii. The objective of the campaign of increasing the frequency of visit was achieved with campaign driving 93 per cent more transactions amounting to 112 per cent more incremental spends. 

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