Loyalty Program Integration Requires A Lot Of Investment

Loyalty program integration requires a lot of investment - Myth or Fact?

Praloy Saha : Default

By Praloy Saha | September 11, 2020

Customer Loyalty programs in India have evolved from being a necessity for travel and lifestyle industry to a must-have for every business. Today, businesses across diverse industry verticals realise the importance of Customer Loyalty and have started investing in the same. However, when it comes to the unorganised sector or small scale businesses, most merchants feel that Customer Loyalty Program is something that needs a lot of investment in term of time and money and will not result in expected Return on Investment (ROI).

Like we divide the business sectors in India into organised and unorganised categories, loyalty programs or customer engagement practises can also be divided as:

  • Organised Loyalty Program Practices - The loyalty-focused practices which are implemented with the help of efficient tools such as a platform that captures customer transaction data and manages the rewards given to loyal customers.
  • Unorganised Loyalty Program Practices - The loyalty practices which are implemented without the help of tools and hence may not provide optimal results.

One of the above-mentioned approaches for Customer Loyalty is being implemented by most businesses regardless of the nature of their business or the type of customers.

Here are few scenarios where the same rewarding techniques are used as Unorganised or Organised practice:

Unorganised Loyalty Program Practices Organised Loyalty Program Practices
A vegetable vendor giving a bundle of coriander leaves (Dhaniya) free to the customers, on purchasing vegetables from the vendor on a regular basis A supermarket/hypermarket running a campaign for its Loyalty program members saying 1 kg Sugar free on purchase of INR 1500 or above
A local tailor accepting last-minute orders from his/her most frequent and special customers An apparel brand running a Loyalty program which guarantees resolving issues within 2 days for their top tier members
A local electronics shop owner offers delivery of product bought by his known customers to their homes for free An electronics brand offering free home delivery for any purchase made by their Loyalty program members

There are many such examples which proves that most businesses are using one of the Loyalty program practices to increase customer engagement among their loyal customers or to convert new customers into Loyal customers. Also, implementing Loyalty program practices doesn't need a lot of time and money investment but is something worth focusing on as it definitely results in expected ROIs in the long run.

However, unorganised loyalty program practices have the following disadvantages:

  • Loyal customers may find the rewarding biased as due to lack of definite rewarding structure, the rewards becomes quite discretionary and two loyal customers having the same importance to a merchant's business may not be getting the same elite services in lieu of their Loyalty.
  • As data regarding all the transaction or overall purchase behaviour of a customer is not analysed to decide the rewards, the rewards may not be what the customer deserves and therefore not justify the spend.
  • Manual intervention is needed every time, an approach susceptible to human error.

It is quite easy and seamless to convert unorganised loyalty program practices into organised loyalty program practices. Loyalty Solutions by Pine Labs aims to help our merchants convert unorganised practices into organised practices with minimal investments and maximum returns.