CUSTOMER loyalty used to be relatively simple – set up a loyalty program, reward customers with redemption points, vouchers, or gifts, rinse and repeat. But, with omnichannel and digital platforms, cultivating customer loyalty has become rather complicated. The big question is – do customers even care for loyalty programs and rewards systems anymore?
I was invited to join a media briefing session by Adyen regarding their new study on loyalty called ‘Singapore Retail Report 2022’ and how businesses may be losing a valuable connection with their customers. It’s an interesting subject, and I was particularly interested in loyalty within the hospitality scene. This report surveyed 1,000 consumers and 500 businesses across different sectors in Singapore, including retail, hospitality, and F&B.
The session was conducted by Priyanka Gargav, Adyen’s Head of Commercial, SEA & Hong Kong, who was able to break down what I assume were lots of complex numbers into easily digestible nuggets of info.
Basically, new data by Adyen reveals that businesses are missing the mark in meeting consumers’ expectations and retaining customer loyalty in a price-sensitive and highly competitive environment. According to the findings, Singaporeans are more likely to frequent businesses that reward them for their loyalty but there’s a caveat: the loyalty programs must be hassle-free to use. Yet, many businesses in Singapore don’t prioritize loyalty initiatives as they rarely find them contributing to revenue.
“Aha!”, I thought. The famous “R-word”. Also known as “money”, “cash”, “dough” or “moolah”.
It was an unexpected revelation because in my years in media and journalism, loyalty programs were said to be one of the easiest ways for businesses to learn about their target consumers on a deeper level. This was echoed during the media briefing, with Priyanka saying something to the effect of, businesses also unlock insights into consumer behaviors and preferences with a good loyalty and rewards scheme.
In fact, third party research found that top-performing loyalty programs can increase revenue by 15% to 25% annually. So where’s the disconnect?
My bet was on e-commerce platforms flooding the market. I asked Priyanka if this was true, because many customers only connect with brands through third-party platforms, which means their loyalty is also to those platforms.
She replied that the question of “who owns the customer when a third party platform is used” is a prevalent one. While the presence of e-commerce is undeniable, brands are driving direct purchases and direct loyalty, and still want to use loyalty points to differentiate themselves from competitors on common platforms.
Like I said, it’s a complicated landscape.
While the study covers experiences like retail and dining, travel and hospitality seem to be having their own issues when it comes to enhancing traveller loyalty.
According to the survey:
- 63% in Singapore would prefer using self-service kiosks for check-ins and check-outs.
- 59% also want hospitality venues to issue payment tokens so they can make their purchases easily and securely.
- 48% of hospitality operators find it hard to maintain customer loyalty in the current environment and rely on the quality of their products to attract repeat customers.
My key takeaway from the study is that people enjoy being rewarded for patronising a business, hotel, or restaurant – who doesn’t? But with multiple payment methods – credit cards, debit cards, third party tie-in cards, bankless cards, e-wallets – in the market, it’s a struggle for brands to pick a channel to reward customers on.
Plus, as a consumer, I don’t want another app to download. And I definitely don’t want a physical card that’s only tied to one brand. So, I can see where the divide happens. The study seems to point to a solution, though.
In a collaborative landscape, brands need to acknowledge that omnichannel is here to stay. Automation and tech-savvy consumers are here to stay. Loyalty, it seems, is still appreciated on both ends, it just needs to evolve to serve a changing market.
