Loyalty programmes, the TheoryM way

Every problem has a solution and every challenge has a string of opportunities attached. But for two-year-old TheoryM Interactive, the challenge presented by Lakme wasn't the easiest to resolve.

The beauty products and services division of HLL approached ThoeryM recently with a two-fold task. First, to increase the frequency of a consumer's visit to the Salon and second, to boost the average invoice value of the services provided by Lakme Beauty Salon, the chain of beauty parlours promoted by the company. The ideal situation the company was looking for, according to TV Shivkumar, chief strategy officer, TheoryM Interactive, is, "if a woman has 10 tasks in a month, she should do it all at a Lakme beauty parlour."

Which is why, the direct and interactive marketing services agency (founded by Shivkumar, Vinay Pinto and Gautam Shiknis - all ex-advertising hands - with strategic support from Bharat Patel, chairman, P&G India, also chairman of TheoryM, Manoj Maheshwari, managing director, JF Laboratories, and Sasha Mirchandani, founder director, Cocoon Ventures) decided to introduce a smart-card enabled loyalty programme, a first of its kind for franchised beauty operations. "You would normally associate a loyalty programme with a retail outlet such as Shopper's Stop or with an airlines, but the Lakme Beauty Salon Rewards programme is innovative and will surely catch on," asserts Shivkumar.

The mechanics of the programme work simply. "Register as a member for a nominal fee of Rs 350 at any of the Lakme parlours in Mumbai and what you get in return is benefits worth Rs 3,225, apart from special offers motivating members to utilise other services offered by the parlour," he claims.

The permutation and combination of the benefits offered work well, stresses Shivkumar. "The points are stored on the card, which can be redeemed immediately. The member could also avail of gift vouchers and discount coupons or utilise the card to burn and earn points at other outlets (read alliance partner outlets)." These affiliates include Dona Sylvia Beach Resort, Goa, as well as Mumbai outlets of Cheemo Leather Boutique, Splendour Furnishings and Tresorie Lifestyle Store among others.

The loyalty programme involved setting up the entire infrastructure - beginning with the card and card reader, integrating this system with the point of sale and finally with the agency CRM software, MEMbrane. "The entire process is online," says Shivkumar, "which means that we know when a customer is earning or redeeming points on a real-time basis."

Apart from a dedicated loyalty programme for Lakme, which is a new initiative for the agency (the programme was rolled out as part of the first phase in Mumbai on November 15, 2002), TheoryM has also beefed up its roster of clients in the last few months by acquiring a direct-to-home venture from HLL in Mumbai titled Sangam, Metro Shoes, Shopper's Stop and GTC. Its existing clients include television brand Onida, STAR India, Virgin-EMI, Alembic Pharmaceuticals and Wallace Pharma among others.

Again, by virtue of a strategic alliance with Mumbai-based Network Advertising and Publicis India, TheoryM has done assignments for Jet Airways and BBC World and has plans to close this fiscal year with revenue in excess of Rs 2 crore. On March 31, 2002, the figure stood at Rs 1.5 crore. © 2002 agencyfaqs!