5 Challenges Brands Need to Navigate to Build Customer Loyalty in Philippines

The Philippines, with its vibrant economic growth and a consumer sector flourishing at a robust 5.6% annual growth rate, is a goldmine for businesses. As one of Southeast Asia’s fastest-growing economies, it offers a promising landscape for various industries. However, despite its appealing opportunities, the challenge of building and maintaining customer loyalty remains complex and multifaceted.

Josiah Go, Chairman and Chief Innovation Strategist of Mansmith and Fielders, Inc., noted that “Filipinos buy based on emotion and justify with logic.” This dual approach to purchasing highlights the intricacies of the Filipino market. With over 7,000 islands, each rich with its own cultural nuances, brands face the formidable task of earning the trust and loyalty of Filipino consumers. 

In this evolving economic and culturally diverse landscape, businesses must navigate these five key challenges to build enduring customer loyalty. 

1. Encouraging signups for loyalty programs

One key challenge brands face is getting Filipino consumers to take the first step, ie, to sign up for their loyalty programs. There are several reasons why consumers might be hesitant to sign up: 

•  They might be hard to understand 
•  There might be ambiguity on the value they offer
• Concerns related to data transparency are also a factor that prevents consumers from taking that first step
• Ease of access is another concern when it comes to signing up for loyalty programs. If the signup is limited only through a single platform, for example, if the consumer has to visit the brick-and-mortar store to sign up, it can limit how many people sign up for the program. 

To overcome these challenges, brands need to focus on simplicity and transparency in their loyalty offerings. Programs should be easy to understand, with straightforward benefits that are clearly communicated. Additionally, brands should leverage mobile technology, given the high smartphone penetration in the Philippines, to create accessible and user-friendly loyalty apps. Brands need to come out of the card-based loyalty programs and embrace this new approach to ensure higher signups.  

2. Establishing an Omnichannel Presence

The digital landscape in the Philippines is evolving rapidly, with internet penetration increasing significantly. According to Kepios’s analysis, internet users in the country grew by 1.8 million (+2.1%) between January 2023 and January 2024. This rise in online activity underscores the critical need for a robust omnichannel presence.

Both online and in-store shopping are on the rise in the Philippines, yet many brands struggle to integrate these experiences, resulting in fragmented customer interactions. To effectively address this, businesses must develop a cohesive omnichannel strategy that ensures a seamless experience across all touchpoints. This involves integrating online platforms with physical stores and maintaining consistent branding, messaging, and above all, convenience.

For example, a customer might discover a product online, check its availability in-store, and then make a purchase through a mobile app. Ensuring that each of these touchpoints offers a consistent and high-quality experience is essential for maintaining customer satisfaction and loyalty. In a market where 85% of consumers expect seamless interactions across different channels, brands that fail to provide a unified experience risk losing customer trust and loyalty.

3. Encouraging Higher Spending

As Filipino consumers experience increasing disposable incomes, they remain highly value-conscious. So how do you make them spend more on your brand?

To encourage higher spending, loyalty programs need to offer strategic incentives that are relevant to Filipino consumers. This might include exclusive promotions that align with their interests or targeted offers based on their purchasing history.

For example, brands can offer special deals on popular local products or create limited-time offers that coincide with significant national festivals. Festivals like Sinulog, Pahiyas, and Ati-Atihan are prime opportunities for brands to engage with consumers.

Filipinos love to celebrate family relations with shared gifts and experiences. Their tightly woven familial bonds play a significant role in purchase decisions. Brands can leverage this cultural nuance by designing loyalty programs that cater to these family-centered celebrations. For instance, offering family package deals, group discounts, or rewards that can be shared among family members can resonate well with Filipino consumers. Promotions that encourage spending on family outings, dining experiences, and holiday gifts can also drive higher spending.

4. Brand Loyalty vs Value Shopping

Economic sensitivity shapes consumer behavior in the Philippines, resulting in a constant tussle between brand loyalty and value shopping. Filipino consumers often prioritize value, making it challenging for brands to foster long-term loyalty. However, the key to transforming a casual buyer into a “suki” (Filipino for a loyal customer or patron) lies in balancing value with emotional connection.

To make Filipino consumers loyal, brands must first ensure their products and offers cater to the economic needs of their audience. Competitive pricing, quality, and tangible benefits are crucial in establishing this initial value. However, true loyalty extends beyond transactional interactions and requires building a deeper, emotional bond with consumers.

By integrating personalization and tapping into the rich cultural tapestry of the Philippines in marketing campaigns and services, brands can become a part of their consumer’s life, creating lasting brand loyalty. 

5. Gap in technology

In the Philippines, many brands are still using outdated systems, making it hard to keep up with ever-changing consumer expectations and make informed decisions through the right data. Staying competitive means embracing modern, agile technologies. 

Artificial intelligence (AI) is a game-changer here. AI-driven solutions, like chatbots and personalized recommendations, can automate customer engagement, ensuring timely and relevant interactions that keep customers coming back. Picture a chatbot that not only answers questions but also suggests products based on a customer’s past purchases or a recommendation engine that tailors offers to individual preferences—these are the experiences that modern consumers love.

Understanding local consumer preferences through data analytics allows businesses to create culturally relevant and appealing offers. By analyzing trends and behaviors, brands can design loyalty programs that genuinely resonate with Filipino consumers, blending value with emotional connection.

Kickstart Your Loyalty Journey With Capillary

With the right loyalty platform, you can bid these challenges goodbye. Capillary’s advanced AI-powered loyalty platform brings everything you need to run a successful loyalty program under one roof. From hyper-personalized communications and promotions to real-time insights, Capillary makes running a loyalty program a piece of cake for brands. We have several clients across industries and geos who have leveraged our platform to beat the competition and drive business growth. Check out what our clients are saying about us. Book a demo now. 

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With a knack for creating engaging content and crafting effective social media campaigns, Anjali wants to make it her mission to leverage the power of content as a strategic marketing tool for businesses. While she is not working, she is either binging movies or writing about them on her blog.