How Thai retailers can build a successful loyalty programme
MOST ADVANCED businesses understand the importance of loyalty. In retail we know that a loyal customer is worth 15 times as much as the one who shops at multiple retailers.
Creating loyalty can clearly transform businesses. But what factors contribute to a successful loyalty programme that will appeal to Thai customers?
From a global perspective, several key themes have emerged as companies strive to differentiate their loyalty programmes from the competition. First, we’re seeing a growing new breed of programmes offering benefits or rewards beyond providing discounts to build emotional engagement with customers.
A great example of this is British telecommunications-service provider O2. Its O2 Priority programme offers members exclusive tickets, offers and “money-can’t-buy experiences”, from the opportunity to watch popular TV shows 48 hours before they air, to priority access to concerts before they go on sale and competitions to win “once-in-a-lifetime experiences”.
Another theme building pace is that programmes are providing customers with more ways to “earn and burn” their rewards. For example, Tesco Clubcard Boost allows customers to redeem their vouchers for up to four times their face value with selected partners or categories in store. Members of clothing retailer’s North Face VIPeak programme are given extra value by being able to redeem their points for adventures such as weekend getaways.
Innovative use of technology is becoming more apparent to keep programmes up to date, relevant and easy for customers. Starbucks became the first retailer to offer its own mobile payment technology combined with its loyalty programme – My Starbucks Rewards. The mobile app allows customers to complete a multitude of functions, whether it is managing and viewing their Starbucks account, finding a nearby Starbucks store or paying via the app.
Customers are increasingly being put first – we are seeing programmes empowering customers with more control over how the programme benefits them individually. This can be seen with British supermarket Waitrose, which allows members to select their own promotions.
It’s important to take this ability of choice into account in addition to local trends to make your programme relevant and exciting for your customers.
When thinking about how to apply these findings, it is vital that Thai retailers consider local customers and their needs to ensure they are locally relevant.
Retailers that succeed will be those that offer different rewards for unique Thai customer needs. These needs include the following.
Convenience shopping shift
We know that there’s a huge convenience trend in Thailand. Our in-depth study into the global shift to convenience shopping revealed that the proportion of small baskets has grown by 3 per cent in the last five years, while the average frequency of shopping trips per week has increased by 18 per cent. This behaviour has implications for customer loyalty – retailers need to cater to this growing trend to ensure that customers still earn value from their loyalty schemes on smaller transactions.
Traditional points-for-spend schemes often do not reward enough value back to entice customers to participate. A couple of examples from US convenience retailers show how customers are earning points in different ways. Thorntons convenience and petrol stores offer points for visits, while Wawa convenience stores allow customers to earn points |on cumulative spending rather |than individual visits via pre-paid cards.
Traders important to retailers
An important part of the customer base for many Thai grocery retailers are traders (small businesses reselling large quantities of goods, hotels, restaurants and caterers, wholesalers and mum and pop stores).
These types of customers are valuable to retailers but have differing customer needs from end users and therefore need to be rewarded differently by a loyalty programme.
Valuable lessons on rewarding small-business customers can be seen in the travel industry. Travel website Expedia+ offers business customers an enhanced suite of services relevant to their businesses such as their own travel site, which enables them to view employee itineraries, monitor spending and manage company rewards.
Consider larger households
Thai households are more often larger multigenerational units than in the Western world. Retailers should consider how to build programmes that cater for this trait. Allowing members to pool points like the British Airways household accounts means multiple individuals can earn points for their family.
This structure also provides flexibility on how the overall household rewards are used. This is a great example of how successful loyalty programmes are those that are tailored and evolved in line with business versus domestic customer needs.
A fun way to collect
Loyalty schemes are harnessing the concept of sanuk: 7-Eleven and Tesco Lotus Express are prime examples of creating a more fun way to collect – the stamp collections that feature in their programmes are often linked to popular cartoon characters.
Taking all these factors into account and ensuring that you always place the customer at the heart of any loyalty strategy will set you well on the way to having a successful loyalty programme that engages and delight customers.
Sara Merritt is Asia loyalty director at Dunnhumby, a customer science company.
