Loyalty has a new dimension

The last year has seen increasing request for loyalty management solutions from prospects. The requirements typically hinge on accumulation, management and redemption of loyalty points. There are complexities built in via arrangements of shared loyalty programs.

A few prospects look beyond point management and define loyalty as management of customer lifecycle. Here the requirements are more analytically oriented as against the earlier transaction oriented.

I have noticed a peculiar behaviour among the young generation. This generation is completely different to the previous one. My earlier posts highlights why a company should refocus or create a separate focus stream on the new generation of customer (Loyal customers are dying).

Though I may not necessarily belong to the "young" generation, let me start this post via my personal experience. A few years back I was transferred to a office location which was towards north of Mumbai. There was a Axis Bank branch in the adjacent building to this office. Since this was convenient, I opened a savings account with this branch to cater to my daily cash need. The bank also announced a web portal to maintain my bank account. When I checked the portal, it was pretty basic (this was quite some years back). There was not much I could do. I could not even open a new fixed deposit. So I stayed with ICICI Bank (which was the primary bank for me then). The only reason for me not to stray from ICICI Bank was the activities I could perform on the web site.

I have noticed a similar behaviour around. People often are comfortable with one channel and tend to focus their transactions on this channel. The recent percolation of smart-phones provides a good example. Ever watched two smart-phone owners converse. They compare the activities that they can perform on their phones and are quick to identify the bottleneck which prevents these activities. Whether this is a mobile banking activity or social networking. The introduction of Blackberry by just two telecom is a case in point. A good number of people known to each would have shifted their telecom provider so they could do some "blackberry" transactions, even if it meant just checking and replying mails.

Where the addiction to the channel is high, this often will take priority on the loyalty and will kill any brand or company loyalty present. Consider the purchase of books. If one had to walk to the bookstore, then there will often be a top of mind bookstore outlet or brand that one would frequent. For me, I love frequenting Crossword. But recently, I have sort of become comfortable with online purchase of my books. So do I have the same preference for Crossword online store? Not anymore. A quick search on google for the book... click on the first link... check the price and order. Thats it... Done. No more store loyalty for me.

So how does a company leverage this loyalty to a channel? As a first step, one needs to understand the profile of customers basis the channel of interaction or transaction. Any new product or service or cross sell that needs to be made to this set of customers should be provided on the channel of preference. It will not be a success if an offer is made on the phone for a customer who prefers the internet for his purchases. Similarly, expecting a in-store customer to buy into a offer by subscribing on the web will also not be too successful. Unfortunately, there is a initiative among many marketing personnel to move the customer to the lowest cost channel. Ever noticed a bank trying to entice you to go the ATM when you want to withdraw money. Maybe they are losing the additional business a customer would have given them while he is in the branch. Pushing him to the ATM will only result him in frequenting some other bank who accommodates his presence in the branch.

Want to know how to identify channel loyalty and leverage this knowledge, mail me at michaeldsilva@gmail.com