Chinese Enterprises Should Revamp Their Loyalty Programs
Firms in China focus on improving customers’ awareness of their brand and increasing their market share. Most of the Chinese marketers I spoke with for my latest customer loyalty research have built frequent-buyer programs that dish out lots of points and coupons but don’t do nearly enough to positively affect customer retention. Such fixed, one-dimensional frequent-buyer programs do not create deep connections between the brand and its target customers. Chinese enterprises must revamp their loyalty programs and use digital to introduce more experimental rewards throughout the customer life cycle. To raise the maturity level of loyalty programs in the digital era, Chinese enterprises should:
- Integrate customer loyalty into digital strategies. Most Chinese firms lack the ability to analyze digital data and apply it to loyalty programs or campaigns. A top Chinese bank has launched a digital strategy to move frequent users from branch offices to online channels. However, its loyalty programs are not yet able to analyze digital customer data and integrate it into marketing campaigns. Inconsistent campaigns in different channels can confuse regular users.
- Combine customer data management from digital channels. Chinese social media platforms like Sina Weibo and WeChat are opening more application programming interfaces to allow organizations to access data about customer location and behavior, but firms do not manage this data well. A Chinese airline has created public WeChat accounts to serve customers, but does not integrate the data collected from WeChat into its internal database.
- Enhance performance management capabilities. Chinese firms typically don’t have the internal resources or skills needed to evaluate customer segmentation, measurement, and optimization practices. Chinese firms should consider external loyalty performance management tools like those from BrandWisdom and Pingwell; both are major performance evaluation vendors that analyze frequent users’ ratings and reviews for the hotel industry.
Early adopters of customer loyalty in China primarily come from the travel, credit card, and retail industries. Their loyalty programs are beginning to drive transactional loyalty via discounts and offers, but these firms need to invest in advanced analytics to guide and influence customers from both the behavioral and emotional perspectives. If you have a different view of loyalty programs, please feel free to contact me — I’d love to get your input.