Retailers are banking on loyalty programs to retain customers!
Retailers are banking on loyalty programs to retain customers!

Loylty Rewardz Management Pvt Ltd. offers end-to-end bespoke solutions for all your consumer loyalty & relationship management needs. In a conversation with Varun Jain, the CEO of Loylty Rewardz, Bijaei Jayaraj, talks about Loylty Rewardz’s state-of-the art technology- LIDSys and how this solution is helping retailers to build a strong and a long- term relationship with their customers.


Varun Jain (VJ):  Please tell us about the inception of Loylty Rewards Pvt Ltd?


Bijaei Jayaraj (BJ): Loylty Rewardz Management Pvt. Ltd., a loyalty and rewards management company was founded in 2006. However, we began our operations in 2008. Loylty’s journey kick started its business with prestigious client, State Bank of India. Loylty Rewardz has designed a debit card loylty program for SBI - FreedomRewardz. Loylty Rewardz not only design and conceptualize loyalty programs but also runs the program for their clients. It focuses on preparation and delivery of custom measurable loyalty programs that create profitability for its clients. With over a decade of experience in Customer Relationship Management activities behind them, the tightly knit network brings together data intelligence, data analytics, creative services, web development, reward processing technology, rewards procurement, and direct marketing for all organisations’ loyalty program.


VJ:  What was the idea behind introducing this solution?


BJ: Loylty Rewardz Management Pvt. Ltd. has developed a state-of-the-art customer relationship and loyalty management platform called LIDSys - Loyalty & Intelligence Development System. The main idea behind the introduction of this solution was to have a robust and an extremely high- end infrastructure and loyalty solution that would be able to provide end-to-end solutions and effectively manage huge amounts of data and even if there is an increase in data, it is managed effectively. With stability, scalability and versatility as its three core features, LIDSys is designed to meet the customer's complete CRM requirements. It is a proprietary tool of Loylty Rewardz that they have developed in-house. Loylty has invested about million dollars in this solution and it took about four years to develop it. Loyalty’s LIDSys is almost like an ERP that provides end-to-end solutions, that is, it helps companies conceptualize, develop and operate loyalty programs, installing best practices and processes towards generating lasting relationships and loyalty amongst their customer base, irrespective of their size.


VJ : What is the aim, functions and the benefits of the program?


BJ : LIDSys is designed to meet the customer's complete CRM requirements. LIDSys is open-sourced 'in nature', so as to be able to plug & play with almost any type of loyalty platforms across industries. The modular architecture has been stress-tested severely and has performed exceptionally well under heavy traffic conditions. The two salient features of this technology are that firstly it is extremely stable and scalable and secondly, it is very versatile and configurable and rule- based. A true testimony to this is SBI’s FreedomRewardz which has 73 million customers and the number is growing month on month, the entire infrastructure is on the same platform.


LIDSys also supports simultaneous management of multiple programs, even under the same corporate. This system also helps us craft promotional offers-based on the data analytics that we have and thus, this helps organization to attract more and more customers by running offers, schemes or promotions on loyalty programs.


VJ: Who do you target...both big and small retailers...both traditional and organised retail? How does it work?


BJ : We have the infrastructure, capabilities and expertise to provide loyalty programs across verticals. We were lucky that BFSI sector has shown their faith in us. Our current clients are State Bank of India, Deutsche Bank, Standard Chartered Bank and Citibank.

Having said that, we are now seeing a huge interest from retail players. Large retail chains are beginning to take a very serious interest in Loyalty and relationship activities and a number of them are talking to us, towards rolling out national level Loyalty Programs.  


VJ : What kind of investment is required to go in for this program?


BJ : The type of loyalty programs varies from industry to industry and from companies to companies. Therefore the investment on these programs would also vary accordingly.

However, basic components of creating a good Loyalty Program is 1) Concept and design – essentially the most critically important aspect of any program. Very often, companies can launch Loyalty Programs without much scientific study. This will not necessarily lead to the desired result. 2) Second part is a robust technology platform that will allow the program to be executed. The program’s continued success depends on this technology platform, and a very versatile platform is able to offer consumer a very versatile, flexible and user-friendly program is a simple manner. 3) Lastly, the program management and development team needs to continue to nature and grow the program on a continued everyday basis. This includes daily operations as well as periodic program development steps like adding new partners of introducing new features or promotions.


The cost for such activities really depends on the scale at which you do it.


VJ: Who all in the retail industry are your clients? How have they benefited from the program? Please substantiate with facts and figures.


BJ : We are currently in talks with a few companies in the retail as well as the BFSI sectors. UP till now, we have designed various loyalty programs for India’s top notch banks like SBI, Deutsche Bank, Citibank and Standard Chartered. These are both debit and credit card loyalty programs where customers get points on their cards when they swipe at Point of Sale (POS). The standard points that can be accrued on this program are 2.5 or 3 on every Rs.100 spent at POS. However, we have partnered with various retail chains so that whenever customers swipe at these partner outlets, they get more points on every Rs.100 than the standard points i.e. 2.5 or 3. Thus, by partnering with these retail outlets, we are helping them build stronger relationships with their customers as these retailers can attract more and more customers through various schemes and promotions that we offer through our technology- LIDSys.


VJ: How has been the response from the industry and how does this program account in benefiting the clients’ business?


BJ : We are a relatively new organization and this industry is at a very nascent stage in India. However, the response that we have received has been extremely good and we have been accepted really well. The industry being new, it will take time for businesses to know it better, but till now it has been well received by our customers.

In the initial stages itself, we have been lucky with clients like State Bank of India, Deutsche Bank, Standard Chartered and Citibank and have been approached by other nationalized and private banks after the success of the current loyalty programs.


We are currently in talks with 3-4 Public Sector banks as well as other retailers. FreedomRewardz, a loyalty program designed for the State Bank Group customers has helped the bank increase its daily transactions from 50,000 to about a 100,000 as well as its customer base tremendously. Currently we run world’s largest debit card loyalty program for SBI.


VJ : What current trend do you see in retail with respect to loyalty rewards program?

BJ: More and more retailers today are looking at loyalty programs as an opportunity to retain their customers. Loyalty programs are becoming quite prominent in the retail sector. With the information that the retailers receive from the customers, they are going to the extent of personalizing their relationship with their customers so as to make them feel special which in turn results in customer retention.


VJ: Are there other players too who provide a similar kind of solution/program? How do you differ from them?


BJ: We do not have any direct competition. Loylty Rewardz offers unique solutions to each of its clients, which are designed and conceptualised for that particular company. We are the only player in the industry that provides end-to-end solutions right from designing to managing the operations as well as the redemption of the program is taken care of by us.


VJ: How do you gauge the ROI of the client for such programs?


BJ: Taking the State Bank of India’s case study, after the launch of the FreedomRewardz program that we have designed for them, the number of people that are enrolled in this program are about close to a 75 million in a span of year and this program has become the largest debit card program in the world in a span of one year. Also, on an average the number of transactions from an average of 45000 has increased to over a 100,000 per day. There has been a tremendous increase in the number of transactions per day as well as per consumer. The bank is extremely happy. Similarly, WorldMiles, a frequent flier program designed by us for Deutsche Bank is new and along with this and other programs we plan to increase our customer base to about 50mn more in the next 3-6 months. 


VJ :  Do you have a pan India presence? Do you intend to expand to other regions?


BJ : We are looking at expanding to cities like Chennai, Hyderabad and New Delhi. We are currently in Mumbai and Bangalore and will start operations in the above mentioned cities by the end of 2010. We are also doubling our current employee strength.



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