Loyalty Programs in India

1.5 million Customers since August 2006 have registered for i-Mint, an innovative co- branded loyalty program with partners like Airtel, Indian, ICICI, HPCL, and Lifestyle-International. In the program, cardholders earn points by shopping at any of the partner companies and will be made available to 5 million by 2007 end.

Similarly, the new Tata Credit Card offers cardholders the opportunity to earn and redeem loyalty points across 18 brand categories through one unit. The card, in association with the SBI card and MasterCard is a partnership of leading brands across all conceivable categories like airlines, books, departmental stores, durable goods, fuel, hospitality, telecom etc. The program is three tiered and features include: global acceptance, free insurance of up to Rs. 3 million, and zero-percent balance transfer charges for up to 75 days.

The above are just two examples of the new age loyalty programs emerging in the retail space in India. Loyalty programs will only get bigger and better with the anticipated entry of international retail giants.

Multi-partner coalition programs are the dominant loyalty model outside the U.S., and these two cases are signs of the accelerated pace of Indian marketing efforts in this arena.

Loyalty programs have been active in India since 1995, when British Airways launched the South Asia version of its Executive Club frequent-flyer program in India. That year, Shoppers’ Stop, launched its First Citizen Club (which has reached a headcount of 644,500 at the end of Q1-2007, one of India’s best known loyalty programs.)

Today, loyalty efforts have penetrated every major vertical: hospitality, travel, retail, telecoms, media outlets, and consumables.

The biggest challenge facing Indian marketers is the one facing marketers the world over: deriving actionable insight from customer data. While the more established sectors of fuel retail, travel are fairly established, most marketers still exist in a patchwork of segments with little knowledge of how to construct, administer and use loyalty programs.

The Indian loyalty industry is still in its infancy as most programs are very much standalone, points-driven or discounting schemes. They haven’t matured to the extent of providing differential treatment at all customer interface points. Without segmented databases, it’s difficult to benefit from a CRM program.