Is Loyalty Dead?
Authored by Vivek Gupta, Managing Director, Mumbai Market, Ipsos India
I still recall a friend bemoaning when Jet Airways stopped flying suddenly one day about a year back that he was almost as hurt as the airlines staff. The friend in question happened to be a platinum tiered member of their elite jet privilege membership program who used to travel on the airline at least twice a week where he was frequently up-graded and given the benefits of preferred seat and being addressed in a most courteous manner by the airline crew, hence he had almost forgotten what a queue at the airport looked like. But within few months of the same, this was completely forgotten, and he was happily flying Vistara with the same gusto, chasing another set of point goals and tier levels. When I happened to check with him about his emotional upheaval at Jet’s final departure, he mentioned he was not concerned as he had liquidated all his points against Amazon vouchers.
The thought that crossed my mind - is loyalty ephemeral; and do the millions spent by airlines, hotels, restaurants, retail stores, credit card companies and score of others on customer experience and loyalty programs, come to nought?
This question becomes even more relevant in today’s times when the factors affecting choice of service provider may be governed more by factors that are more critical now like safety and hygiene, rather than freebies, points, rewards and a platinum/ diamond status etc.
The withdrawal of all offers, discounts, promotions by most e-commerce players and most communication now being focused on contactless delivery, temperature checks for the delivery person and adequate sanitisation seem to have replaced all communication on price savings and other discount offers. This is a clear indication that the customers are overtly focused on the key issue at hand – health, hygiene and safety standards rather than risking it all to save a few more rupees or get a few more points. Whether it is a temporary phenomenon, when risk of infection is the highest or will it become a permanent habit is something only time will tell, but I doubt our customer will be floored by the freebies and discount offers soon enough to give up on these minimal hygiene expectations.
The issue becomes pertinent when we think of different scenarios and how we deliver service going ahead, more than, on how we reward our most loyal customers.
Just to give an illustration, will you travel more with an airline which offers you on-time departure (Indigo offer) or one which offers you a free meal (Vistara) or more leg space (Air India) or one which tries to keep the seat next to you vacant? These would be interesting trade-offs, companies will try to make, to attract their customers back and the most attractive or lowest fares may pale in comparison to the one that offers the customer best opportunity for social distancing while being onboard.
Similarly, will the private banking customers be happy if we offer him home banking with a service manager on-call-offer or a free top-end premium credit card plus a free locker or will they be swayed by the bank offering them a ticket to a movie premiere with the exclusive box seats booked for them, separated from the crowds with a sanitised box of popcorn pre-packed with gloves and a sanitiser that accompanies the gift box.
Which leads me to another interesting conundrum, which could impact fortunes of Bollywood and viewing habits of millions of its worshippers. Would consumers prefer to watch movies at PVR just because they get free popcorn and Pepsi due to their loyalty or would they start frequenting a Cinépolis because it offers a better 4 DX viewing experience with latest Dolby DTS sound system or would they be frequenting a multiplex chain like Inox which offers better hygiene and sanitisation standards and ensures seating in a manner that immediate seats beyond your family are always kept vacant and you could see their staff meticulously cleaning each seat with a sanitiser before you are seated. Or will the consumer let go of the theatre movie going experience altogether and fall for the cocooned environment of home watching with premieres on OTT.
Will the exclusivity and badge value continue to drive loyalty, or will it all simmer down to the common factor of safety and hygiene for all? My own take on this is that this would vary widely by service categories and while we may never go back entirely to our earlier behaviour, we may settle at somewhere in the middle which translates into the best of both worlds.
Just to illustrate, this example further and taking my food consumption habits in context, I would never go back to the street food that I loved like paani puri, bhel puri, samosa, vada pav, schezwan dosa and masala sandwich etc. Their mouth-watering images float before my eyes whenever I think about them, but I am surely not visiting them till I am sure of their hygienic standards. However, let me admit I may soon start ordering from my favourite Chinese restaurant chain for delivery by getting it home delivered and microwaved before consumption, thus retaining both the taste and hygiene expectations, ergo, delivering on both my critical evaluation parameters. I may still not visit the restaurant again for sit-in dining for a long time to come, till I am 100 per cent sure of how they have implemented safe distancing within the restaurant seating map. Thus, do I not continue to be loyal to them while still not frequenting them physically? An additional feature which may enhance my experience further may be having access to the sous chef at the restaurant over a call or virtual video tour of the kitchen or access to the waiter who served me and knew my palate preferences including the extent of spiciness and salt, even when I am ordering for delivery. If the complimentary dessert they indulged me in whenever I visited them frequently, accompanied my delivery order, it may be the proverbial cherry on top.
Similarly for my movie going experience to be enhanced, I would be delighted if my favourite multiplex allowed me to take my 3D glasses home with me, and reminded me to bring them back with me next time I book for a 3D/4D movie with them at their IMAX screen. In fact not to forget the expensive popcorn which adds to the movie going experience, I would be hugely relived if my tub of popcorn emerged from a microwaved bag of ACT 2 butter flavor rather than from the giant cauldron from which the popcorn keeps pouring out and the smell of butter, cheese and caramel which keeps wafting around the forecourt right till the elevators and beyond. This was once delightful but may now be worrying for some, reminding them of the risk of infection & contamination.
Coming to final point on the future of shopping and entertainment, will the paradigm of service levels change in times to come as e-comm retail finds deeper roots? Will the future of e-comm retail be rooted in just the aspect of contactless delivery and hygienic packaging? Or will it be based on more tangible aspects like savings and offers which has been the raison d'être for its existence in India in the last couple of years? Or will the future pivot be convenience of not having to visit a crowded shop and a much bigger range than a single shop can provide. I would believe that savings would still be a great platform. Building in schemes that offer future savings in times to come when customers look for a panacea and are worried about future earnings should work well. Subscribe and save offers may start finding more traction soon as online shopping starts becoming a more in-grained habit for the frequent online shoppers. But given that most Indians are still testing the water with e-comm shopping on the net, no questions asked returns may turn out to be a bigger driver going ahead than cash-on-delivery in times to come, as customers start trusting and become familiar with bigger and salient brands like Amazon and Flipkart. Even on payment on delivery options, e-wallets like Amazon Pay may start finding favour given the contactless payment benefit they offer.
Further, Amazon Prime which is technically a gigantic global loyalty program may find a lot more takers now for their 30-day free trial which offers a mix of shopping convenience and free entertainment through their OTT Amazon Prime Video services as it offers movie premieres online soon. Consumers may start subscribing to the monthly subscription rates soon. We Indians over the years have loved sachet packs (read monthly) over bulk packs (read annual) any day when it comes to shopping and despite the discounts involved, monthly packs may do better as in the case of Netflix 199 offer.
One of the key aspects missing in online shopping currently is the experience of shopping with friends & family. Shopping in India is more a social activity to be done with friends and extended family. Hence, if for categories like fashion, apparel and gadgets an equivalent feature like house party and zoom can be built in, which allows you to video chat/ display/ share with friends and family while you shop and get their feedback and advice, shopping can really become a fun activity with friends and family at close quarters virtually, even when shopping online.
Hence, I feel loyalty will not just live to survive another day but also thrive more day after today, that is tomorrow. And the net promoter score metrics and recommendation for some brands which heed to customers’ feedback will only grow. However, there may be new set of expectations and a new set of brands to be loyal to, in addition to the ones that show agility. The brands that command this loyalty would be those that can emotionally connect with their customers and show genuine care for not just the customer but the world at large, by being environmentally conscious and thinking and talking about reduced packaging, waste and smaller carbon footprints. This would be in addition to, building custom experiences and not trying to offer one size fits all. Finally, let us not lose sight of the safety and hygiene aspect and let these not be at the cost of these, in times to come.