Indian Consumers Look Beyond Traditional Loyalty Programmes

According to the research, 83 percent expect high quality, consistent customer service however they interact with a brand, and 81 percent expect brands to be easy to do business with.

Indians are some of the most demanding, but loyal, customers in the world, according to new research launched by Collinson Group. 83 percent expect high quality, consistent customer service however they interact with a brand, and 81 percent expect brands to be easy to do business with. This compares with the global averages of 69 percent in both categories. Once loyal to a brand, India consumers become dedicated customers. 81 percent agree that programmes make them purchase more, and 82 percent would recommend a brand that offered a loyalty programme. This is also well above the global averages of 66 percent and 65 percent respectively.

The group polled 6,125 of the top 10-15 percent of earners from Australia, Brazil, China, France, Hong Kong, India, Singapore, the United Kingdom, the United States of America and the United Arab Emirates.

Brands, however, are failing to tap into this loyal behaviour. In India, there has been a 24 percent drop in membership of loyalty programmes among the affluent middle class since 2014. Collinson Group surveyed attitudes to programmes run by supermarket and grocery stores, airlines, credit card providers, retailers, hotels, telecom and media companies, coffee shops, and banking. Membership was down across all industries: - 47 percent hold frequent flyer memberships, down from 71 percent - 63 percent participate in credit card programmes, down from 69 percent - 65 percent are members of supermarket loyalty programmes, down from 77 percent - Retailers also performed poorly, with a drop in members to 59 percent from 75 percent - Telecoms and media providers were the only sector to enjoy a rise in membership, up 2 percent to 47 percent.

“This is a critical wake-up call to brands using points-based programmes offering only generic rewards. Given the importance of affluent middle class consumers on the fortunes of companies, brands must lift their game and rethink how they recognise, engage and reward customers,” said Anurag Saxena, India country manager, ICLP, owned by Collinson Group. “Despite lower membership numbers, the results show that personalised and relevant loyalty initiatives do positively influence consumer behaviour. Three quarters of respondents who are actively engaged in a loyalty programme said it encouraged them to spend more.”

Globally, the affluent middle class is also now less likely to repeat purchase, recommend a brand to friends or refrain from switching to a competitor as a result of generic loyalty programmes. India, Brazil and China however buck this trend, suggesting these societies are yet to experience the frustration of uninspiring programmes seen in more mature Western markets.

When asked what would encourage higher and more frequent spending with their preferred brands, 42 percent of Indian respondents requested a loyalty programme, and 77 percent valued the flexibility to choose the rewards and benefits they are offered.

“There is a clear appetite for loyalty and customer engagement initiatives, but consumers are turning their backs on programmes that no longer resonate with them. The affluent middle class value spending time with, and providing for, their families, as well as saving for the future. These rank far higher than driving a good car or going on a luxury holiday. Brands should seek to tap into what motivates their customers, instead of reaching for only discounts or material goods as rewards,” continued Anurag Saxena. “Brands that are not innovating and addressing evolving customer expectation will simply be left behind.”