Continuing with our winning streak, Capillary was selected as the winner of the TiE-Lumis Entrepreneurial Excellence Awards at The Indus Entrepreneurs (TiE) Delhi chapter’s annual event TiECon Delhi 2011 on 30 September 2011. Each year, TiE Delhi recognizes early stage entrepreneurs who started and have achieved a certain degree of success. A strong panel of experts choose the best, who get the opportunity to present to the TiEcon audience.
Delhi Chapter is among the largest and most vibrant across the vast TiE network. In the last 10 years, it has emerged as the forum of choice for startups, serial entrepreneurs, VC and angel investors, policy makers and academia. The jury panel was headed by TiE Delhi NCR President Sanjeev Bikhchanani, Yo China’s Ashish Kapoor and Lumis Partners’ MD Sandeep Sinha. Three startups, including Capillary were chosen from a pool of over 150 startups in India for the top three slots.
Just a week after completing three years, Capillary added another milestone to its journey on 19 August 2011– Winning at TechSparks™ 2011, India’s biggest discovery platform for product technology startups, organized by YourStory.in & Intel. Capillary was chosen as one of the ‘Top Five Most Innovative Technology Companies’ being built out of India. This four month long contest, which drew participation from more than 400 startups across the country concluded with its Grand Finale at IIM Bangalore amongst entrepreneurs, VCs, angel investors, technology leaders, media and delegates from USA, Europe & China.
Narendra Bhandari (Director, Intel Software & Services Group – Developer Relations Division (Asia Pacific), Shailendra Singh (MD, Sequoia Capital India), Shane Owenby (Managing Director, Asia Pacific, Amazon Web Services), Vikas Jain (Co-founder, Micromax Mobile), Mekin Maheshwari (President, Engineering, Flipkart), Rishi Dhand (Product Manager, Google), and Jayaram Pillai (CEO, National Instruments) formed part of the jury that listened to twenty pitches from a diverse array of startups.
Tech30 Report
Capillary has also been featured in the ‘Tech30’ Report, which was unveiled at the event. The Tech30 Report is India’s first benchmarking document showcasing the 30 tech startups of the year, selected from over 400 registrants with the stamp of approval from leading VCs, angel investors and technology giants.
We would like to thank our team, partners, investors, clients and well-wishers who have been a part of this journey with us.
Read the complete TechSparks Grand Finale Report on YourStory.in
Positioned as a lifestyle store for women, ‘Maya by Gitanjali’ has been constantly innovating itself to ensure customer delight. Vinay Sharma, Chief Operating Officer, Maya speaks to ShopTalk about their loyalty program ‘Maya Club’, their in-store and social media campaigns and future marketing strategies.
What motivated Gitanjali group to start a loyalty program? What were the key factors behind this decision?
The purpose behind starting ‘Maya Club’ was to boost loyalty among our existing customers base and entice new customers as well. We had grown to a level where loyalty program was a natural progression in our efforts to keep the customers engaged and delighted. In past six months, ‘Maya Club’ has performed admirably to increase customer loyalty towards our brand as well as to respective stores.
Please tell us more about the ‘Maya Club’ and how it works. Why did you opt for a mobile based loyalty program?
Maya Club has a slab based loyalty program. The customers are enrolled under each slab based on their purchase – Silver, Gold and Platinum. Since each slab has better points earning options than previous, it also motivates the customers to upgrade to higher slabs faster.
We preferred a mobile-based loyalty program because of convenience it offers. It is easy for the customers to manage their loyalty accounts on mobile and therefore ensured more customer involvement. Since it was mobile, it also allows us to keep in touch with our customers on a more regular basis and on a personal level.
Maya became a part of Gitanjali Lifestyle in December 2009. Have you seen any difference in store performances since Maya Club was introduced in December 2010 as compared to the previous year?
Maya Club and its campaigns have generated additional revenues of 25% since inception on average for each store. Compared to December 2009 – June 2010, our revenues have increased by 20% since we started Maya Club across all stores.
Our repeat customer visits have also increased to 26% from 15% since the program was launched. There has also been an increase of repeat customer visits from earlier 15%. Moreover, we have noticed a sizable increase in the average basket size from 1.7 to 2.4 in this duration.
Maya is positioned as a lifestyle store for women. How do you use your customer data to design effective campaigns for your target audience?
Along with standard metrics, we also track metrics which helps us determine which customers come how often and what are they buying. We also track customer demography metrics and map them against the purchases, thus identifying purchase pattern and rising trends. With Capillary’s analytics support, we gather the best insights from the data collected and create effective marketing campaigns.
Please tell us about some of the successful campaigns run recently.
We recently ran a campaign on Facebook, where we gave exclusive offers to our fans. All the existing loyalty members were communicated about this opportunity and were encouraged to join our fan base on Facebook. As a result, the number of page likes increased by 32%. We also generated 7% additional sales through these exclusive Facebook campaigns.
We also ran a live chat on our page where fans could talk to us about our products, fashion trends and any other queries. In a month, we had interacted with over 2000 customers with these live chat sessions.
What is your strategy to improve Customer Loyalty further? What future additions to your loyalty program are in pipeline?
To create stronger customer loyalty, we plan to extend the loyalty program to all the existing and upcoming Maya stores. We are also planning to focus more on the ‘lapsed customer’ segment and draw them towards our stores with irresistible, interesting promotions. We would also start running referral programs for loyalty members, where both the referrer and the referred will be reward for a successful referral which is a win-win opportunity for everyone.
In coming months, we envision Maya to grow phenomenally with more stores and new markets. To ensure that we keep our customers engaged and delight them better than ever before, Maya Club will be extended to all the existing and upcoming stores to create a synergy between all the stores and give the customers a unique, unmatched shopping experience.
One of the most ubiquitous quote in the retail world is ‘Customer is King’. But when the consumers have a long line of retailers as suitors, it is only natural that it will require a lot more than vanilla marketing to win them over. And just like everything in our lives, the loyalty program has to evolve to make more sense to today’s consumers.
For most consumers, the world has become faster, with more choices, multiple channels competing for their attention as well as thousands of personal conversations brands have with them. In this environment, being able to break the clutter and create a connect at the right time is critical – and what better time to start that conversation than when the customer is in the store, on the mobile phone – a medium they carry with them at all times – and engage with them in real-time.
Instant Gratification is the Cornerstone of Real Time Engagement
Perform a simple experiment: ask ten people around you if they remember the number of points they have in their favourite loyalty program. Our research shows that eight of the ten people will be unable to recall this. Most loyalty programs communicate with the customer when they have gone back home, and by then the interaction is not on the top of their minds. The right time to talk to the customer is when they are in the store – when you get most of their attention.
If a customer buys a top and a retailer is able to suggest matching skirts, probably top it up with a small offer, the likelihood of that being picked up is the highest. For one, the retailer is able to cross-sell and monetise the current visit of the customer, and at the same time, this discount offer is better for the retailer’s margins since it could be much lower than what is required to make the customer drive and come to the store.
Recently, a UK based department chain, launched a real-time engagement campaign with Capillary. Within three days of campaign, the average spend per customer increased by 36%. The campaign was designed to engage the customers in-store through SMS while making a purchase with relevant offers based on their current and previous transactions. By the end of the campaign, the stores witnessed an average of 141% increase in top-line numbers.
Delight Your Customers with Experiential Rewards
Being able to provide the customer with the best product or service is not enough today, the experience counts as well, and every small little thing you can do in this regard has an impact as it’s these small things that consumers remember, building deeper relationship and loyalty. If a customer just finishes a long shopping trip, and the retailer is able to delight them with a foot massage available in the spa next door, the retailer has definitely won them over.
This is relationship marketing at its best – and by using technology intelligently for the right communication at the right time, retailers are able to today realize what used to be an unmanageable item on the wishlist. The customer is enveloped in the shopping experience, and additional rewards or communication is very personalised and directed. This is also sharply in contrast to the countless, irrelevant messages people get when they are at work, or busy elsewhere and the messages become more a source of nuisance than information or engagement.
Connect Better with Younger Audience
Recently, Starwood Hotels & Resorts launched a campaign to reward members of its ‘Starwood Preferred Guest’ loyalists by offering free points and free-night awards for those who check in to properties worldwide via the local social network, Foursquare. They may form a small segment of their customer base, but they are extremely valuable with substantial lifetime value.
In other cases, retailers are able to surface social network activity in their vicinity to their store staff helping them react better to valuable customers, giving them the right suggestions, and up-selling based on their likes and dislikes – all this happening magically in real-time by the power of the mobile phone and the internet connection.
Empower Your Store Staff
Most retailers ask me why is in-store communication and visual merchandising not enough – the answer is threefold:
Firstly, in today’s fast paced world, decisions need to be taken quickly which means lead time for staff training & communication and collateral printing is very low – instant mobile communication gives a simple way to perform interruptions and iterate quickly. This is especially true in very busy stores, where the cashiers hardly have time to breathe let alone trying to indulge in a discussion.
Secondly, in most cases, taking away the decision making power on deciding the gratification also mitigates fraud scenarios. The brand is able to communicate with and give offers to the customer directly and the rewards can not be kept aside by the cashier without the customer’s information. This also gives the customers a consistent experience across different touch points and stores, thereby leading to higher loyalty.
All this has to happen in real-time. We are quickly moving into a phase of intelligent cash tills, which not just enable transactions but also give suggestions, recommendations and help to cashiers to make the customer’s experience more meaningful.
However, employing the right technology tools for real-time engagement is very important – used well, it can greatly enhance the customer’s experience while if there are problems, the customer experience degrades very rapidly leading to loss of faith and brand loyalty.
Instant is now a necessity, not a USP
With more and more brands embracing instant customer engagement, it’s important not to leave this tool out of your arsenal while designing your customer experience. With the rapid change in consumer lifestyle, the ubiquity of mobiles phones and always-on broadband connectivity, real-time engagement is not just possible today, but is fast becoming the medium of choice for retailers.
Customer Engagement is the lifeline of retail and it has long been established that loyal customers form the bedrock of a profitable retail business. One of the first known instances of customer loyalty marketing dates back as far as 1793, when a US merchant started giving out copper tokens which could be exchanged for free items in the store.
Gradually, customer engagement efforts evolved, creating newer media to reach out to customers, including product catalogues and direct mails to the most modern ones – plastic cards, electronic mail and paper vouchers etc. which are very successfully being used by retailers.
Loyalty Programs have become an important part of revenues for many retailers. For instance, according to the Indian financial daily, Economic Times, there were an estimated 20 million loyalty program members in India in 2010. Multi-brand retailer Lifestyle, (Landmark Group) for example, draws 50% of its annual revenue from around 2 million members of its ‘The Inner Circle’ program, while Shoppers Stop derives 73% of its business from its more than 1.9-million ‘First Citizen’ members the Economic Times added.
The Evolved Customer and Mobile Phones
The arrival of the mobile phone, one of the most disruptive pieces of technology ever developed, has changed the human civilization radically over last decade. With almost 4.9 billion subscribers (77% of the world population) today, the mobile as a device is at once personal; its always on, always present, and always connected, and has changed some of our most deep set habits.
At the same time, consumers themselves have changed; they don’t carry loyalty cards all the time and can’t remember their long membership numbers. The mobile phone as a device plugs in beautifully to the changing shopper behavior and rapid proliferation of plastic cards: by simplifying the consumer interface and making the loyalty programs easier to participate in.
Mobile Based Customer Engagement Programs
In principle, Mobile Customer Engagement Programs are very simple – the mobile number of the customer is used as the main customer key, leading to simplicity of customer engagement. It enables uniquely identification of a customer, easy and cost-effective communication, and authentication while rewarding the customer for favourable behaviour– the three most critical aspects of the customer interface and experience for any loyalty program. By combining this with real time communication, m-vouchers, point of purchase analytics, the simple concept of mobile engagement can become a very potent weapon in the retailer’s arsenal.
Simple, Low-Cost and Effective
The most important aspect of using Mobile CRM is to vastly increase the customer base. Our research indicates that most mobile based CRM programs are able to sign up as high as 80-90%, against 10-15% in card based programs. Operating cost of a cardless program is close to zero, cutting out the cost of cards, and the effort taken in logistics, operations and management, with paper based forms and data entry. Relying on m-vouchers for gratification and SMS/Email for communication can generate massive ROI on investments. The fact that its environment friendly also helps in reducing the perceived cost.
Another key benefits of mobile CRM is that a retailer can launch a simple engagement scheme with data capture without a formal points based loyalty program. For instance, a simple seasonal milestone program (Buy worth USD 200, and get a USD 25 m-Voucher) program can be used to build customer understanding. After studying the program for a few months, a well modeled points based loyalty initiative can be launched with a far better understanding of the consumer buying patterns.
A few Caveats
Easy as it may sound, its also easy to get the initiative wrong. The systems have to be very robust and simple to use so that data is captured in clean and validated otherwise the retailer ends up realizing after months of effort that the data is unusable. Quick search tools across the customer base are an absolute must and the customer database from all the stores must be available at real time at the store level.
It’s also very important to instantly communicate with the customer to give them the reassurance that the data has been captured in the system and cannot be put to misuse by the store staff. Additional features can be developed to ensure store staff doesn’t get access to contact numbers to ensure customer satisfaction. There are additional expectations of personalization of communication which have to be met.
In a form free environment, customer understanding has to be built using past purchases, including the SKUs she buys. Customer Understanding and Analytics become a necessity to ensure meaningful engagement. The ubiquity of mobile numbers also means that fraud detection and mitigation systems need to be very robust and based on analytical techniques to ensure invalid entries are quickly flagged and investigated.
Rapid Adoption
Apparel major Indus League was one of the first retailers to adopt mobile based loyalty programs. Within months, the loyalty conversion for their ‘One League’ program increased by almost 75% compared to its predecessors. Rachna Aggarwal, CEO, Indus League Clothing Ltd. Said, “The biggest benefit members enjoy is that ONE League is now instant! Earlier, it took upto 15 days to credit points to a loyalty account, now it is done the moment a purchase is made. ” Similarly, marquee Indian brands like Peter England, Dabur’s newU, Odyssey Bookstores and Puma India have also successfully launched mobile loyalty programs.
The simplicity of Mobile Based Customer Engagement means that retailers of all sizes can now use powerful data capture tools to build a large customer databases, learning about them and effectively analyzing their behavior and using insights to drive repeat visits and higher transaction values – all that at a very low cost.
Last year, Indus League launched One League, integrating seven of its brands under one hybrid unified loyalty program. ShopTalk catches up with Rachna Aggarwal, CEO, Indus League to know more about the program, its genesis and the results so far.
1. Congratulations on the success of ONE League program. Can you tell us a little more about objective behind launching a unified program and the decision making process ILCL went through for it?
One of ILCL’s key distribution channels is our own exclusive brand outlets. We used to have different loyalty programs for each of our brands and noticed that there was a fair amount of duplication in their customer base. It was also an inconvenience to the customers to carry multiple loyalty cards and often missed the benefits of the programs. Therefore we decided to simplify our loyalty program through a unified model, which could allow the customers to maximize the benefits yet making it user friendly and convenient.
In a typical scenario, if the husband shops at Urbana, there is a possibility that the wife will shop at Scullers for her and kids at Jealous 21. We saw this as an opportunity and decided to leverage each brand’s potential to boost others. A combined loyalty program proved to be more customer friendly with better appeal across different customer segments across all brands thus helping brand loyalty for ILCL as well as its individual brands.
2.What benefits the ONE League program extends to the customers compared to the previous, individual brand loyalty programs?
The biggest benefit members enjoy with ONE League is that now it’s instant! Earlier, it took upto 15 days to credit points to a loyalty account, now it is done the moment a purchase is made. Capillary’s InTouch allows us to gratify our customer instantly through SMS updates, m-vouchers etc. the moment a transaction is done. InTouch sends automated reminders for points expiry, special offers, birthday messages etc, which has resulted in better rate of redemptions.
The entire system is more transparent and the customer can easily keep a track of her loyalty account. The registration process is completely paperless now and takes less than 30 seconds to enroll. One League was specifically designed in a way where the customer can accumulate and redeem points at any of our outlets.
3. ONE League is a hybrid loyalty program, a combination of mobile and card based models. Please tell us a little bit more about how it works?
The mobile technology adds scale to One League and the card is used for creating brand recall. Once enrolled, the member can manage the loyalty program on mobile until reaching the Gold slab, where she is issued a standard Gold Card. Upon moving to next slab, the customer is issued a personalised Platinum card. Thus there is an aspiration factor attached to the loyalty program, encouraging the customer to move up to the next level of loyalty program faster.
InTouch, which is integrated with our POS software, Shopper, has automatic triggers and automatic data capture features, which has empowered our storefronts in managing loyalty in 74 ILCL stores across India. It also allows us to cross-promote our brands more effectively by instantly giving offers on different brands based on customer profile and purchase pattern.
4. As a retailer what benefits do you feel you have received by having a unified program?
The unified model has helped us to have a larger and deeper reach across all customer segments. We have better understanding of our customer demographics, their profile, needs and demands.
Thanks to the mobile technology, our cross-sell and up-sell promotions are yielding better results. Overall, our sales across all brands are much better than before, and more importantly, the brand loyalty quotient among customers has increased significantly.
5. Please tell us about some metrics you track – in terms of enrollments, engagement and revenue generation etc. How does the unified program fare compared to your earlier programs.
We were tracking metrics like conversion and contribution from loyalty to sales, points earning and trends, zone-wise, store-wise performance indicators, Recency, Frequency and Monetary contribution of customer in our previous programs, but due to us getting unified data from all brands, the same metrics are producing better insights now.
With Capillary, we also started tracking new metrics like consumer preferences, campaign ROI, and cross-pollination etc. These metrics have given us more control over our marketing campaigns, making them work better.
6. What is your strategy to further improve Customer Loyalty? What future additions to your loyalty program are in pipeline?
We have many exciting strategies which will be taking shape in coming months. We will be soon integrating social media to our loyalty program, engaging the customers further at online social networking platforms through exclusive contests, offers and announcements.
To generate more word-of-mouth publicity, we will be soon introducing a referral program in which we will encourage our existing loyalty members to share discount vouchers with their peers and be rewarded in the process themselves.
We are also in process of launching a new corporate version of One League, where the all the loyalty members enrolled from a company will enjoy additional benefits across all ILCL brands.
