Successfully implementing Loyalty Scheme

Consumers prefer simplicity along with wide variety with regard to redemption of loyalty points.
Successfully implementing Loyalty Scheme

Loyalty programmes are once again the focus of senior managers at retailers and consumer-centric brands at a time when consumer spending remains subdued. In addition, marketing consultants highlight the need for these organisations to engage effectively with consumers and  understand their evolving needs via these initiatives, at a time when the government is wooing foreign retail chains in the multi-brand sector.


Senior officials also highlight that these loyalty customers typically account for 30-50 per cent of a retailer’s total sales, and can be suitably leveraged to grow sales without incurring too much additional  costs. However, implementation of these loyalty programmes can often be a challenge, point out retailers. Darshana Shah, Senior Vice President – Marketing, Hypercity Retail, said, “Our loyalty customers account for nearly half of our total sales, and we have also grown the numbers of members in this group to seven lakh over the past four years.”

Striking a similar view, Alistair Gordon, Founder and Managing Director, ValuAccess, said, “Brands are continuously engaging in creating a portfolio of loyalty programs including gift cards and e-coupons, which are more relevant, personalised and help to create a long-term relationship with consumers.”

Roadblocks in loyalty schemes

Marketing consultants highlight that consumers often do not fully understand the finer points of a loyalty scheme at modern retail chains, given the multitude of schemes running from time-to-time. In addition, not too many shoppers retain the promotional materials like loyalty cards offered at this time. Apart from that, consumers prefer redemption of their loyalty points via a wide spectrum of relevant product categories including accessories, fashion, grocery and allied items.  Taking this further,  Rahul Rana, Chief Operating Officer, PAYBACK India, shares,”  loyalty program should be driven by point base program.  customers do not feel leverage from single brand loyalty program.”

Moreover, Kunal Mehta, MD, Forysta Ventures, said, “Loyalty programs need to be conceptualised and executed, given the needs of the target audience of this programme.”

To deal with some of the above problems, Forysta Venture has initiated  the ‘virtual pocket’ for ease in shopping, and it is a mobile app-based interface which consolidates rewards points of various schemes of retailers and consumer brands. Similarly, PAYBACK is also initiating a mobile number-based application for tracking reward points.

Reward points vis-a-vis discounts

The Indian consumer is by and large value conscious and retailers need  to decide which promotional strategy is appropriate for them, given seasonal, product category and allied requirements.

Summing up,  Kunal Mehta of Forysta Ventures, said, “Every  organisation needs to design a loyalty programme based on their individual requirements.”

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