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Behind the lure and labour of loyalty


               By Manish Dureja, Managing Director at JetPrivilege

                                                                prefer surprise deals or gifts to
               Time and again, loyalty programmes have          information on sales, special privileges,
               proven to bring grist to the mill, serving as    time-saving opportunities, or other
               one of the most effective ways of                traditional programme benefits.
               engaging with and retaining customers.
               That is just the beginning. Several more         Successful loyalty programmes act like
               aspects account for the customer’s               motivational currencies that go-beyond
               propensity towards it, making it a               the conventional route, through tangible
               compelling strategy for long-term growth.        and intangible rewards, to reach customer
                                                                delight. Such engagements are
               Why customers love it:                           indispensable for enduring relationships.
                                                                Complimentary excess baggage, award
               Value perception                                 flights, waiver on seat select charges and
                                                                cabin upgrades for flight passengers go a
               Customers remain active within a loyalty         long way in making them feel special.
               programme because they see an increased
               perceived value in their activities that         Belongingness
               have translated into a ‘wow’
               factor.  According to persuasion expert          Loyalty programme customers share a
               Robert Cialdini, this positive experience        sense of pride in belonging. They feel
               triggers a desire to return the favour,          they are part of an exclusive and
               steeped in the power of reciprocity. A           privileged cohort, and that is an
               report from Smart Insights says, “If a           opportunity for marketers to seize.
               customer receives positive treatment like        Exclusive privileges like VIP access to
               in a loyalty programme – they will be            airport lounges and priority boarding,
               more likely to return the favour in the          allow flight passengers to enjoy the
               form of more visits, purchases or                special distinction that their loyalty
               referrals”. In a recent KPMG survey, 74%         programme offers them.
               of customers said they would go out of
               their way to shop at a store where they          Why businesses design it:
               earn loyalty points, and 60% of the
               customers said they would shop at a store         A proven growth driver
               with slightly higher prices in order to earn
               a loyalty award. Quite for the same              Many marketers use loyalty programmes
               reason, in the travel loyalty space, the         as the go-to-strategy for new customer
               basket of benefits offered to members on         acquisition, business growth and
               their flight bookings is often extended to       expansion. Members of customer loyalty
               stay and dine experiences as a value-add.        programmes generate between 12% and
                                                                18% more revenue for retailers than do
               Being valued                                     customers who are not members of loyalty
               In the same KPMG survey, more than
               80% of the loyalty customers said they            The silver bullet for customer retention
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