As the retail markets get more organised, credit card agencies are looking for newer ways to attract and retain customers. One such feature that is fast catching up is the offer of reward points on purchases made by customers that carry a surprise element.
Credit card companies are exploring marketing platforms that ensure them new footfalls which can be converted into customers. This will be followed by efforts to retain customers by awarding loyalty points which the customers can redeem either as gifts or in the form of hefty discounts which, in turn, will make sure that bulk of their valet share is kept aside for purchases through a particular brand.
In this direction, these firms are making extensive use of analytics which helps them understand customers’ behaviour that includes periodic shifts from one brand to other. Credit card firms believe that deploying analytics will help them understand the transactional data pertaining to a particular customer, the shifts in his behaviour and interpret their attitude in a right way.
Retail stores, particularly in the organised sector, have a larger customer base where it is difficult to keep track of customers without deploying technology. The ability of the stores to aggregate the data meaningfully comes into place at this point so that they can offer compelling value to customers and retain their loyalty to the particular brand/store.
Loyalty solutions firms are focussing attention on evolving measures to offer an assortment of brands to customers.
These involve creation of coalition of partners that include retail chains, fuel supply outlets, hotels and others where the reward points earned on making purchases at one outlet can be redeemed at any other partner of the network.
Drawing inspiration from the traditional neighbourhood stores where the owners enjoy a one-to-one relation with customers, the companies are now trying to nurture relation with customers to higher values. But given the fact that organised retail is less than 10 per cent of the entire market, they are finding it difficult to understand customers’ behaviour when it comes to dealing with masses, particularly in the tier III cities and rural areas.
This is because of the heterogeneous behaviour of the people whose attitude and aptitude changes from place to place.
“Understanding the transactional data through analytics will put in place all pieces and help give a better insight into customers’ attitude,” says Vijay Bobba, managing director and CEO of Payback, a leading Loyalty Solutions and Research firm.
Companies, particularly those engaged in organised retail, should make sure “customer fatigue” does not set in as it will have an adverse impact on their performance. They are focusing on the Tier II and Tier III cities in the State where there is a significant change in lifestyle as also the mode of spending by customers, particularly youth.
Accordingly, the focus is more on removing some misconceptions about the usage of credit cards that have become a cause of concern for the industry in general. “These are the areas with high potential but are largely left untapped. The focus will now be on these markets and we have commenced educating people about the advantages of reward points that can be redeemed for an attractive value,” he said.
