Loyalty programs have gone fully omnichannel; it’s a win-win-win!

The steep rise of India’s digital economy over the past decade, has completely changed how we think, work, consume and engage. Data, access to the Internet, and all that it has to offer, have become extremely affordable today. Having quick, easy and economical access to the Internet, has fundamentally shifted our socio-economic behaviour. It has had a profound impact on us, as a society.

It comes as no surprise then, that global brands view India as a huge opportunity and are moving quickly to bring their products and services to the country.

Moreover, this change has recalibrated customer behaviour and the relationships that people have with companies, brands and their products. Customer expectation has grown by leaps and bounds. This is both a challenge and an opportunity for legacy players and young challengers alike.

A few years back, if one had to change their banking partner or mobile operator, it was a tedious task and the sheer discomfort of the transition prevented consumers from making this shift. This, however, has changed today.

Additionally, the fast-paced growth of e-commerce and direct-to-consumer (D2C) channels, and increasing customer purchase power, are continuously disrupting traditional sales and customer engagement models. Customer experience is now – omnichannel. This, in turn, has led to a big shift in customer loyalty, and loyalty and reward programs.

On-demand availability, width of choice and ease of use are now the three key pillars of customer loyalty management. And, when these three become channel agnostic, it means a real “omnichannel approach” has been achieved. Brands and companies that have been able to actively build on these pillars, have seen not just better customer retention, but also an increase in customer lifetime value.

At the same time, the reshaping of the customer loyalty space is not a one-sided narrative. While customer expectation is evolving, brands and companies are also learning to leverage loyalty to promote specific customer behaviour.

So, how has this changed customer loyalty?

Customers have moved from purchasing only online or in physical stores, to finding products where they are or the channel that is most convenient to them. Loyalty programs that have stuck to a heavy focus on physical rewards and experiences, without adopting digital rewards, have, therefore, lost out.

We see this change unfold rapidly, as physical merchandise today accounts for less than 10 per cent of overall redemptions – a change that has taken place over the last two years, while penetration of digital rewards has grown by more than 80 per cent over the same period.

It is also imperative to understand that an omnichannel loyalty program doesn’t just mean we use a combination of online and offline reward options bundled together. It means building a program that can give your customers the same ease, flexibility, width of choice and customers satisfaction – irrespective of the purchase channel.

Now, let’s talk about how an omnichannel loyalty strategy has widened the customer base for brands and companies. This has been achieved through a two-pronged shift in an approach to customer engagement.

First, to provide a better level of ease and customer satisfaction, companies that were traditionally physical, have adapted and moved online. Second, with the development of web and mobile assets, they have been able to engage and activate a digital-first or digital-only audience, including millennials and Gen Z – that are today a large part of a brand’s consumer base across industries.

Our clients, including those in BFSI, pharma, manufacturing, etc., have learnt that their growth, since 2015, has resulted in a decrease of the average age of their customer base. They have been quick to realise that they could no longer have just a basic digital presence. They need a customer experience and loyalty strategy rooted in digital-first behaviour.

It is also worth noting that a rewards program isn’t just restricted to online shopping and e-commerce vouchers. Changing consumer behaviour has meant that these brands have increasingly started including OTT & music-streaming/podcast subscriptions, online F&B ordering, access to exclusive online communities, etc., in their rewards offerings.

Last, a digital loyalty program is not just a boon for the customer, it’s a great asset for companies and their brands, owing to the data and insights it provides – not just for them, but also their partners.

These insights have given organisations a deeper understanding of customer behaviour and helps them reward their customers in real time, no matter where they have made their purchases, while giving them greater choice and flexibility in choosing the rewards they want. It’s a win for customers, brands and companies, and a win for their reward partners.

I’m looking forward to seeing how customer loyalty will shape up in this decade, as choices, flexibility and ease set new benchmarks.

(The author is the COO at Accentiv India)