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Did you know that there is a better way to make your new customers behave like they have been buying your product for 10 years?
Yes, you read it right! Your brand can attain this from refining customer experiences through an accessible rewards program. A good reward’s program can become the reason for consumers to pick you over your competition. Even for smaller businesses, studies have shown that customer retention is a more effective way to grow business. And this can be achieved by building customer loyalty. Now, let’s study how brands can build this experience for the Indonesian market.
Several trends say that the Indonesian retail market will see an inferior growth in the next 4 years due to the pandemic. Research by Technavio shows that the market could progress with a CAGR of 4%, whereas pre-covid research had predicted a CAGR of 6%. In this market outlook, customer loyalty plays a major role in establishing a brand’s foothold in the industry.
The next step in building a strong rewards program is to understand the consumer. Before we detail out the demographics of the Indonesian market, it is imperative to consider two factors – (a) what consumers think and (b) what factors determine their consumption. Let’s take a look at some interesting consumer trends in the last year that Indonesian brands can take advantage of:
Understanding that all customers are not equal and have different consumption behavior is the first step in realizing the benefits of loyalty. Knowing these nuances will help in creating an efficient rewards program that addresses the needs of customers.
Now that we have discussed what choices Indonesian consumers make while making purchases, we can use these pointers to design a suitable rewards program. While building the framework of the program, it is important to keep in mind the brand’s business objectives and aim to provide value to customers. Here are some features that may help Indonesian brands create impactful customer loyalty:
A study of other top programs in Indonesia can also be a good hygiene check while developing the right rewards programs. Here are success stories from two brands who have emerged as leaders in enhancing their brand experience with their rewards programs.
The Erajaya group has an interesting rewards program called the Eraclub program to personalize interaction with customers, understand customer behavior patterns, and reward the customers with the right offers. Their program is a tiered membership, with points and discounts provided on selected products, which is an integrated loyalty for offline and online platforms. They also give personalized instant offers based on customer preferences. This well-developed program helped the company get more than one million new member registrations in 2020, 75% loyalty sales contributed by members.
Kanmo Retail group, on the other hand, launched their Kanmo Circle program, which also provided tiered memberships. The company focused on special birthday discounts and points redemptions. Kanmo ran campaigns with personalized offers based on customers’ historical purchase data. The group achieved 94% loyalty sales contributed by members with 140,000 new members in 2020.
At Capillary, we have helped 100+ create robust loyalty programs with the consumer needs in mind. Our products can directly help increase sales and conversion with its AI-powered CRM software and rewards programs.
Developing a loyalty program is hard in a country where consumers are actively searching for new brands, experiences and promotions. But the landscape is expected to change. With a slow but sure growth in the Indonesian retail market, demand for various goods is also expected to rise. To create suitable rewards programs in Indonesia, it is important to have a deep understanding of consumer behavior in the country and prioritize customer engagement. So, the time is ripe for investment in a loyalty program that can put your brand ahead of competitors.
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Indonesia is by a fair margin the largest country in Southea