Loyalty: Customer engagement is tricky

In a bid to foster loyalty and maintain customer trust retail has been adopting loyalty/reward programs strongly. It is well-intentioned and both sides benefit from it. While customers get value for money, a promise of quality and assurance and the retailer gets, as hoped for, customer allegiance. Not reaping success immediately, however, a loyalty program is something that needs time to mature and earn dividends.

PAYBACK which tied up with Future Retail in early 2012 to start off a loyalty program now hit 10 million members. Sweta Pal talks to Rahul Rana, COO, PAYBACK India, to find out how a coalition loyalty program serves customers better.

SP: Please tell us about your growth achieved by PAYBACK since its entry into India.

RR: Broadly speaking, in the last 12 months we have doubled across all services. Through Future Retail we have achieved 10 million members. There has been a huge growth in the number of customers who find our programs useful across the board. We continue to look at different categories where there is money. So we are looking at tie-ups with airlines, hotels, and medicine too. We want to create value in these areas covering the customer’s entire spending basket.

Sweta Pal (SP): Who are your partners?

Rahul Rana (RR): Currently we are working with industry leaders to provide loyalty programs around the world. In large financial services, we have partnered with ICICI Bank for all its services. In retail we have the Future group and cover all their formats. We also have partnered with HPCL and Vodafone.

SP: How do you ensure customer preference for PAYBACK over other available loyalty programs?

RR: We conducted a research amongst customers who are part of loyalty programs across categories. According to our research, 68 per cent people said they would prefer to have one program that covered all their expenditures as carrying different loyalty cards is quite problematic. They would want the benefits from all brands and services to be stored at one place. Retailers too can profile customers from only one channel. We have chosen to tie-up with brands that provide products and services that are frequently used. So basically we are rewarding the customer for buying things that he buys every week or every month. We give higher offers to our customers who spend more frequently including 10X or 20X points. So the offers given are relevant offers that the customer would actually see beneficial to take advantage of. For this we tap into the consumer’s buying behaviour and spending habits.

SP: How are you making the one card idea easier for the customer?

RR: There are times when customers end up having more than one PAYBACK card through different categories or may forget their card at home and get a new one. In such situations we combine the two cards and transfer the balance to a single card. As a program we are very flexible and even let customers use their mobile numbers than their cards for access.

SP: Why should retailer choose PAYBACK?

RR: With PAYBACK, the retailer has access to intelligence from across channels and categories and the customer profile can be much better developed. The retailer is part of the club and the intelligence is shared amongst them. For this reason we have partnered with the industry leaders across all categories as they are hungry for customers and have money to invest. Our partnerships with these companies are paramount.

SP: How many customers with PAYBACK loyalty turn into repeat customers?

RR: Talking about Future Retail alone, out of 10 million PAYBACK members, 95 per cent of customers get points when signing up at the checkout point. Customer behaviour varies across all categories and our most engaged customers showed earned transactions 50-60 times per month. Others may show only one or two transactions per month. We track three month engagement rate, i.e. a customer should show at least one transaction in the next three months to be considered engaged. We are proud to say 65-70 per cent members have showed repeat transactions across all categories.

SP: How do you limit communication to the customer so as to not irritate him?

RR: A lot of work is done in this regard. Customer engagement is tricky as if done too much the customer may choose to unsubscribe. We therefore work on finding out which campaigns would do better and those should be promoted constantly. We even work on keywords and campaign messages that the customer will find useful and not disregard as spam. At the same time we concentrate on the customers who are likely to redeem the offers. Thus, profiling customers is the most important aspect. Certain customers choose to only earn and save points for a big offer; other might choose to redeem points more frequently. It is important to differentiate the two and target campaign messages accordingly.

SP: How do you stay in touch with the customer?

RR: We generally contact the customer through multiple channels through our partners. On our own we have the PAYBACK website and social networking sites. Our premium customers like to be contacted personally. We are also considering setting up kiosks, an idea we have piloted in make him understand how to check and redeem his point balance. We will soon launch our mobile app which will have customised offers and discounts for the user. We want to make the PAYBACK experience more robust by partnering through more categories.