LOYALTY – THE NEXT LEVEL KICKER

In the age of information, building brand is as difficult as building brand loyalty. Successful businesses
are built around a robust customer retention strategy. This makes customer retention critical for brand
to thrive.

Industry estimates suggest that it costs up to five times more to acquire a new customer than to retain
an existing one. Additionally, a 5% reduction in customer defection rate can increase profits by 25%-
85%.

“India is seeing a large number of brands being built. Brand, in essence, mean strong trusted
relationships. Loyalty Programmes help further strengthen these relationships where competition is only
set to increase. Loyalty Programmes aren't just rewarding points anymore- they are becoming as good
as money in your e-wallets given personalisation and seamless, multi dimensional catalogues. This is an
effective transition from a race to acquire customers to ensuring lifetime relationships with customers,”
Nidhi Agarwal, head - Times Points observed.

Gone are the days when businesses used to focus on acquiring as many customers as possible without
necessarily developing a strategic look on retaining them. In today analytical hyper-competitive business
environment, business managers are focussed on finding innovative ways to drive value-driven
relationships with their customers, and loyalty benefits for customers are the order of the day. From
buying a car to ordering food, loyalty benefits now come in different shapes and sizes. Businesses are
now sitting on piles of consumer data points that help them understand a consumer's buying behaviour
and dole out loyalty benefit programmes accordingly.

Loyalty builds brands

Well-planned consumer loyalty programme increases customer retention and purchase frequency and
hooks customers who find it tougher to switch to a competitor offering as it would make little financial
sense.

“Loyalty programmes and reward points is an excellent way to keep frequent users engaged with your
brand for the long term. From a brand perspective partnering with Timespoints was a strategic decision
which helped us drive engagement with potential users and increase our brand awareness. It is a win for
our customer base as well as it gives them a chance to avail exclusive benefits like free air tickets and
discounts on flights just by consuming content that they love,” Aloke Bajpai, CEO & Co-founder - ixigo
said.

Among deploying loyalty programmes and benefiting from them are traditional large-format retailers.
But they are far from being the only ones. Increasingly, even online retailers that are at the leading edge
of technology, as well as new-age millennial-focused retail brands, are incorporating retail analytics,
embracing mobile experiences and other digital solutions to create a differentiated service and brand
equity. That helps them compete for less on price and more on the end value offered to the customer.
Additionally, these brands can also leverage the valuable customer data gathered from loyalty
programmes to offer personalised products and services.

Agarwal adds that companies need to relook at their loyalty mechanics as well. “Performance of a
brand’s loyalty programme and the intelligence gathered thereof can be the differentiator in transaction
level unit economics. The tables have turned in Indian retail, and it's time to reimagine loyalty,”' she
said. Lastly, customer retention also drives profitability, a key focus area for newer businesses.

According to Marzdi Kalianiwala, head - marketing and business intelligence, BookMyShow, “As India's
leading entertainment destination, BookMyShow caters to millions of customers for all their out of
home entertainment needs. Engaging users throughout their journey on the platform is a key to
retaining them and enabling frequent transactions, especially in a fast-evolving digital environment.
Building an ongoing relationship with Times Internet properties, TimesPoints' engagement strategy has
worked effectively for both consumers as well as brand partners like BookMyShow.”

Given that customer loyalty programmes reduce marketing costs, increase the average purchase order
and reduce the cost of acquisition for new users, it's the perfect performance marketing tool for
businesses to identify, target and bring back lost customers.