“Companies that do a very good job of retaining their customers and developing the value of everybody over time should be awarded a much higher multiple than another business that does not retain their customers as well, even if the historical revenue pat
Evolving buying habits of consumers necessitates building smarter solutions, opines Niranj Sangal, OMA Emirates Group.
The digital era helps consumers stay well informed. With news and information being accessed and passed on every fraction of a second, today’s consumers are not only smart but also know exactly what they want and where it is precisely available—this could be through a digital medium or via the usual bricks-and-mortar store. They are hence driven by the power of choice—either seek options online, which requires almost no effort, or the traditional route (visiting a store to purchase or consider the clickand-mortar model, which a number of offline and online businesses are adopting). This suggests that the ability to retain a consumer’s interest in any business model is becoming increasingly difficult, considering the numerous choices available. This is invariably supplemented by the need for businesses to redefine their customer acquisition strategy which is equally important.
Being an active fintech player in the area of payments, we generally service the end customers directly or through other businesses. It has become imperative for us to keep the end consumer at the centre in order to develop innovative and effective solutions. While conceptualizing and developing seamless solutions is the basic essence, understanding what potentially influences the buying decision has become another fundamental. Legacy businesses are gradually adapting to this paradigm shift and the progressive nature of an individual’s buying habits. As far as emerging businesses are concerned, only a handful have been successful in deciphering the code. It is visible that success here lies in increasing customer loyalty and retention. This inevitably is followed by customer acquisition, considering consumers are vocal about their choices and experiences.
Customer loyalty, ie, returning customers, is a determining metric that may be used to define the success of a business. Retaining customers and building a more sustainable relationship paves the way for loyalty. Moreover, research indicates that retaining a base of loyal customers is a much faster process than acquiring new ones, and can cost up to five to seven times lesser. This is also a more effective strategy to follow as it also drives engagement and higher recall.
One happy customer could bring in a dozen more as loyal customers are more likely to become indirect marketers for any business. In order to foster customer loyalty, a business should set the right expectations at the very onset by means of clear and regular communication. This eliminates uncertainty to a great extent, and businesses can ensure that customers experience a higher level of satisfaction.
rewarding the customer
So what is it that an individual is looking for? – A reward.
It is important to understand that happy customers may not be always loyal; and that it is natural for them to expect a reward for their loyalty. Building a relationship with the consumer aids loyalty, however it has become important to offer consumers more tangible rewards.
Customer retention is often driven by that one unique reward and value add that is otherwise not offered by other players. Discounts and cashbacks formerly would do the trick, however, now these are secondary considering every other entity offers the same. Creating a completely integrated ecosystem and being able to bolster the entire experience can add great value. Also, reinventing the buying experience for the smart consumer can work exceptionally well. This can create a highly competitive environment in a small and large markets equally. The crux of the entire experience and what appeals most to the consumer is what she gets to take away each time she makes that purchase.
It is about time that businesses, however large or small, recourse to passing on additional benefits in the form of rewards to consumers. Those who do not see value in such
a gesture could very well lose out on their market share. Offering an integrated and interesting loyalty program is the way ahead. The format of keeping engagement levels high at the same time works most effectively.
Considering digitization is on an upswing, technology should be deployed to provide a robust and exciting loyalty scheme that an individual is at the centre of.
schemes that work
Traditional loyalty schemes providing discounts and cashbacks need an overhaul. In addition to focusing on improving recall, there also needs to be a steady focus on improving the overall experience delivered at the time of purchase. Loyalty programs today are restricted in terms of their offerings, and enhancing them would create more value.
Considering digitization is on an upswing, technology should be deployed to provide a robust and exciting loyalty scheme that an individual is at the centre of. Large businesses may have the capacity to develop such solutions from the grass roots level. For smaller businesses, there is tremendous scope if they consider leveraging the opportunity by integrating with existing new age and engaging loyalty programmes.
Having understood the challenges loyalty schemes presented, OMA Emirates developed a complete ecosystem to enhance the entire buying experience with ‘Benefit Beyond’. The uniqueness of the scheme is that with a single common branded card, users can avail themselves of benefits across any store that is part of the scheme, to accrue and redeem the benefits of loyalty. Moreover, considering the increasing preference to transact digitally, this card can also be used as a prepaid card for payments. This simplifies the process of buying, paying, and ensures that a consumer enjoys the benefits of being loyal without any restrictions. At the same time, the dynamic scheme helps the business understand how its customers choose to buy.
Multi-faceted with a completely integrated loyalty ecosystem of such formats is known to help businesses achieve the high levels of efficiency. Loyalty schemes secured with technology innovation and advancements, which provide customers with benefits much before they expect will be widely accepted.