Customer Loyalty ain’t no Child’s Play!

IMG-20130515-01181Let’s admit it…we all like gifts! Better than that we all like stretching our money to get the best from what we spend. Offers and discounts have a magnetic effect and they just manage to pull more and more money out of our wallets. Better still, the very mention of the word – Loyalty Scheme  unintentionally binds us to that retailer and invariably our next shopping happens at his store. Encapsulating the inception of loyalty programmes, Brian Pearson from LoyaltyOne shares, “I think the original loyalty programs were airline programs going back to American Airlines and The British Airways. They were the pioneers. This was back in the 1980s wherein the frequent flyers could collect points and redeem it for something free. Post the airlines, it was the hospitality industry and it was only towards the early 1990s that the retail industry started having strong loyalty programs for their customers. So to speak, we are sitting on something that is just about two decades old.”

Adding more to the history bit he says, “Originally it was just value add to the customers. Only later was it seen as a means of promotion and get people to consolidate more of their spending then they might have done in a more fragmented environment.”

That much for setting the context for what is to follow. Just as modern and organized retail is gaining momentum in India, each retailer is up against the other in offering his customer alluring loyalty schemes. Shoppers Stop set the ball rolling for them. Other’s followed. Swanky cards, email reminders of the point accumulated and how you could win more, SMS reminders etc etc.  There was bombardment of reminders and offers from across! For me personally, it caused immense irritation. So much so that today I just refrain from going to these MBOs and department stores which offer you reward points which are petty to say the least! I dont recollect using any of my reward points so far!

A couple of days ago, I was casually walking down an extremely local market in Mumbai in the area of Dadar. there are hordes of local retailers based there since donkeys years and yes, they have an extremely loyal set of customers. I was due to gift an everyday causal tee to my maid’s son and one of the shop had a good offer put up on its hardly visible facade. I went in and picked two tees, each for Rs. 300. Went ahead to the billing counter to pay and the person there just asked me if I had ever shopped at his store before. When i replied – No, he pro-actively just removed a folded card (the picture that i have put with this blog) which had a few rows and columns in it, attached my bill, wrote something in one of the columns and told me that if till November I shopped for another R. 1400 more then I would be entitled to a free gift of Rs. 200. Simple! No show off and pompousness about any loyalty scheme and information booklet or filling of a form with all my personal details including my birthday, anniversary, hubby’s birthday, pet’s birthday etc etc  and ofcourse  – no swanky card!

I walked a few steps ahead and there was this store of one of the brands I stock for my Indian ethnic wear. The brand is called Cotton Cottage. I visit the place one in approximately 2-3 months and pick up a kurti (top). I did the same this time and went to pay my bill and redeem my accumulated points on the loyalty card that I had. Guess what I get to hear… M’am, our system is down hence you cannot redeem. I tell them, I have it on message the points that I have but the lady is curt enough to cut me off with a – SORRY!! According to her, I could redeem the points on my next purchase. Well, if only she knew that I might not visit her store again!

To conclude, loyalty programe and loyalty schemes are good but then do brands really care to look at them the way they should be looked at? From my experience, in India, the only reason the modern retailers want to offer a loyalty scheme is to collect data and use it for promotional and marketing activities.

For all you big guys of modern retail in India who witohut a wink just ape the West…. local players like the one I visited at Dadar have much more to teach you!

– Zainab Morbiwala

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