Updated: Sep 9, 2022
7 May, 2022. I was out shopping with my best friend, Asha at H&M, Orion Mall, Bangalore. Although we both are crazy shopaholics (Asha being the bigger one), this time we weren’t shopping for ourselves.
We were actually buying clothes to surprise a friend of mine for his birthday which was coming on 9 May.
The plan was simple. Pick two shirts and get them billed. But then the ‘shopaholic me’ ended up picking this cool pair of jeans and by the time we reached the billing counter, I was already guilty.
With the same guilt in my eyes, I watched the clothes get billed one by one and then something amazing happened.
“Do you have a membership card?” asked the guy who was billing our items.
“Yes, I do.” replied Asha.
“Great! We actually have a birthday offer running wherein you get 15% off. When’s your birthday?”
“It was on 30 April.” Asha said.
He replied, “How cool is that! Then you’re eligible for the birthday discount”.
As they spoke, I stood there, feeling the guilt being replaced with joy. I was so happy to see that my pair of jeans became almost free after the discount and I kid you not, I told Asha, “This is why you’re the best!”.
You see what happened here apart from me falling for Asha all over again? H&M smoothly offered a great experience to one of their customers with their loyalty program. Here’s a simple explanation on how they did it.
How H&M Aced Loyalty Management Like a Pro
Analyse: H&M first analysed whom to target. I can’t even remember how many years Asha has been buying from H&M.
Communicate: Once H&M knew that Asha had been regularly purchasing from their store, they offered her a card where she could collect in-app points for every purchase. They also communicated that once she collects 800 points, she will be eligible for special discounts.
Personalise: All of the communications were also personalised through special discounts (15% of your birthday) to an extent where Asha felt privileged as their customer.
Now, what if H&M hadn’t leveraged loyalty management?
We’ll talk more about it soon but first things first, let’s get into the basics.
What is loyalty management?
I want to start by sharing what Salesforce - World’s #1 CRM says. Loyalty Management lets you configure a loyalty program with benefits, vouchers, and rewards that fit the exact needs of your business and your customers.
Next comes the benefits of loyalty management and no, I won’t throw another set of words and pointers. Rather, I want to show you GPay’s fun Indi-Home offer which by the way is not open to all users.
GPay’s Indi-Home game
GPay recently launched an Indi-Home game where users need to earn energy to build houses and travel across the map to complete levels. Based on the energy collected, they can redeem rewards.
The energy is distributed based on actions the user takes on Google Pay:
Daily check-in: 2 to 8 energy daily (1/1 Daily)
Make any payment (min. ₹30): 10 to 300 energy per time you pay friends, merchants, bills and more (1/3 Daily)
Split an expense: 10 to 300 when it’s fully settled and at-least one friend paid with GPay (0/1 Daily)
Visit and collect energy for friends: Half of the energy value you tap on per friend (0/5 Daily)
Gift energy to a friend: 2 energy per friend (0/5 Daily)
Share Indi-Home: 10 to 300 energy per share (0/1 Daily)
Share a completed house: 10 to 300 energy per share (0/1 Daily)
Moreover, the first 2 lakh users to complete any Indi-Home house every month can get an 11-111 cashback!
Why did I, as a GPay’s customer, like it?
Frankly speaking, I’m not really a fan when it comes to making transactions. I keep them on hold for quite long or wait for the month end to clear my bills and stuff. But when I came across this game, I found myself
Driven towards making transactions more frequently
Collecting energy points each day
Completing my house
You see, I started connecting with the app more which automatically boosted my app engagement. Now, imagine if GPay had simply continued to nag me with endless notifications to make transactions.
Would I have had the same inclination towards the app? No! I’d have rather said,
The reason I was driven to engage with Indi-Home games is because GPay not only had their marketing automation on point but also offered rewards in turn.
Marketing automation without loyalty management? Nay!
Buy, buy, buy, buy, buy!
What if H&M had sent such in-app notifications to Asha without offering any reward on her regular purchase? Then it’d have been marketing automation alone which let’s face it has its own limitations. Let me show this by considering 3 basic parameters.
Marketing automation tool’s ability to analyse user behaviour and create funnels is a solid check. Let’s take StuCred for example. Being India’s most trustworthy real-time student credit app, StuCred offers short-term, interest-free, “pocket-money” credit to Indian college students.
Say StuCred uses a marketing automation tool to analyse how many students are taking loans but not repaying on time.
Next, StuCred finds out that only 30% of students are repaying on time and decides to
1. Create a student segment based on those who were delaying payment
2. Sends a payment reminder email sequence to this segment
Student loyalty offering? Hmm…
This is where it gets tricky. Say StuCred continues to send emails, WhatsApp messages, SMSs to the rest 70% of students without offering anything. What will happen?
For starters, students will get irritated
This will affect their engagement and motivation
To avoid this, say StuCred nudges students by saying repay your loan before the due date and get a scratch card worth upto ₹500?
Would offering such value motivate students? Yes! Would it increase their on-time loan repayment? Big yes!
Such a loyalty program is what StuCred eventually implemented which made their on-time loan repayment grow up to 94%. You can read more about it here.
Marketing automation VS loyalty management doesn't exist
It’s clear that marketing automation and loyalty management systems are a package businesses need. But what still needs to come to light is integrating them together and tools like Flyy are doing the same by offering seamless integration of loyalty programs with marketing automation platforms such MoEngage, WebEngage, Clevertap and more.