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Taking Stock: How to create loyal customers?

"Good customers are as rare as latinum… treasure them!" – a classic quote from Star Trek. Although it is just a quote from a TV show, it is good advice for companies who wish to keep and increase their repeat business. A rather simple but amazingly effective method to do just that is a loyalty programme. The names might be different but the focus is the same: shop here more often and we will give you things.  A good way to increase the effectiveness of any programme is to tailor the rewards to fit the customer on an individual level. TIBCO Loyalty Lab, a loyalty management solutions provider, has created a new level of software that rewards a customer more on a personal level while making use of all the little bits of information retailers normally don’t use to personalise a shopper’s experience. Matt Howland, vice president of TIBCO Loyalty Lab, tells Retail in Asia how to build consumer loyalty in today’s challenging retail environment.

RIA: What are the newest trends and tactics in loyalty marketing and customer engagement?

Matt Howland (MH): What’s really exciting about loyalty marketing is the shift beyond points-driven programmes and evolving to be the primary means to both understand – and then engage – a consumer. Micro-targeting, omni-channel communications (including social and mobile), event-enabled and real-time interactions, harnessing big data – all of these are converging around consumers and marketers.

RIA: What challenges are Asian retailers facing in building consumer loyalty nowadays?

MH: There are two challenges these days that virtually every consumer-facing company has to address.

The first is that customer expectations have really begun to skyrocket and many companies are failing to keep up. Customers expect to see information in real time and this has become more demanding than even a few years ago.
The second challenge is that there’s been a fundamental change in the last couple of years around what it takes to get people to make a choice about your particular brand, because there are so many technologies that can grab a customer at any moment. When companies look at customer loyalty they think long term: how much revenue does the customer generate in a year, how many visits do they make in a year? But nowadays you can’t just assume you’ve won when the customer gets in their car to go to your store. You have to win every moment along that drive, and even when the customer is in your store there are so many technologies now that can get their attention make them an offer and take them away from you. Customers don’t think long term – they make split-second decisions, and there are many ways that companies are changing customer decisions around what to buy, where to buy and how to buy in just a period of a few minutes or seconds.

RIA: How to manage these challenges?

MH: Cultivating loyalty is still a relatively simple process, and it’s driven by an understanding of how an individual customer interacts with and perceives the brand. So first you have to understand why customers choose your brand, because if you don’t understand that then understanding why they are loyal is going to be a difficult process. Second, you have to consistently deliver on customer expectations; otherwise you’ll quickly fall by the wayside. Once you have those basics in place, you have to get down to the individual customer level and improve relevance in products, services, offers and content. That may mean understanding a customer’s niche, understanding how individual customers are interacting with you, providing something that’s unique, etc.
Effective use of social and mobile channels can also help.

Mobile allows consumers to be armed with more information than a sales associate due to the level of research they can do on a product in a very short period of time. Smart companies are then trying to introduce their own information to consumers so that while that research is going on, they can influence choice. Mobile is also the great enabler when it comes to location-based marketing, and once that reaches more of a mainstream audience and the technology matures a bit, it will fundamentally change the consumer-choice process. Location will be a primary influencer in the choice a consumer will ultimately make.

Social is a little different in that it’s less immediate and doesn’t necessarily impact choice at the time that choice is being made. But it does have a big impact on customer perception both positively and negatively in how people share their experiences or how companies try to handle positive and negative issues in a public domain. It goes a very long way in shaping how people think about a corporation.

RIA: How are retailers in Asia adopting loyalty marketing programmes? What do you suggest them to focus more or start doing?

MH: The maturity of loyalty programmes and their uptake across Asia is as diverse and varied as the countries and cultures within it. In island regions like Hong Kong and Singapore, coalitions are strong; coalitions are also strong in India where only 25 percent of retail is organised; Australia loyalty is dominated by grocery, fuel and airline co-op programmes.

Regardless of the country in which you operate – the important point is to recognise that customer loyalty is not just about one thing, like points programmes. It’s about a much broader range of business practices and technologies that can help in understanding who the customer is and why they do something.  Companies need to think about customer loyalty from a very holistic point of view. You need to be consistent across all the different touch points in terms of having visibility into customer behaviour, and you need to use it effectively across a wide range of interaction points, whether it’s support, mobile, marketing or customer care.

RIA: You joined Retail Asia Expo’s Multi-channel Retailing Conference last month, what top tips did you share with attendees at your "2020 – Top 10 Predictions for Loyalty Marketing and Tomorrow’s Consumer" presentation?

MH: The big idea that I wanted to leave with the attendees of the conference is that marketers can create "serendipity" for consumers. That is to say – creating good fortune on a daily basis, but taking chance out of the equation.  Through a deep understanding and connection to a consumer, marketers can present the right offer, at the right place and at exactly the right time to influence their behaviour. It really is a great time to be on both sides of the marketer and consumer relationship.


Matt Howland is Vice President of TIBCO Loyalty Lab. He has led the design and successful deployment of more than 60 loyalty programs for some of the world’s largest brands.  He is leading the creation of the next generation TIBCO Loyalty On-Demand Platform which will combine the expertise and platform of Loyalty Lab with the real-time, event-driven and analytics technology strengths of TIBCO.  Matt’s previous role was CEO of Loyalty Lab before its acquisition by TIBCO. He also served as Loyalty Lab’s CTO, where he led the architecture and operations of the company’s core SaaS offerings, which process more than 1 billion transactions per year and support more than 250 million consumers.

Taking Stock is Retail in Asia’s fortnightly column dedicated to showcasing opinions from experts in the retail industry.