A changing loyalty environment

How to ensure brand loyalty in Asia
Oct 22, 2020

In today’s ever-changing and highly competitive market, customer loyalty is at its lowest levels due to a lack of product diversity and high brand switching. To survive in this environment and boost sales, retailers need to find more innovative and engaging ways to keep and of course attract, consumers. Of course, these strategies are not universal, but change based on the country.

When talking about the best Loyalty and Consumer Relationship Management (CRM) practices in Asia, we should first consider three main characteristics of Asian consumers: they tend to have an on-the-go lifestyle, are digitally savvy, and are not particularly brand loyal. By being well-traveled and tech savvy, they tend to be very informed about products, brands, prices, and latest trends which inevitably leads to the fact that they easily switch brands based on convenience. Moreover, Asian consumers are amongst the world’s heaviest social media users. As a result, what attracts them the most is social capital. This is certainly a challenge, but considering that Asia accounts for 45 percent of global retail sales, it needs to be approached strategically.

 

First step: attract consumers 

Digital methods to access or participate in loyalty programs are preferred in the Asia – Pacific region rather than traditional loyalty cards, still popular in Europe. Mobile apps are regarded so highly in Asia, that 69% of loyalty program members agree they are more likely to participate in a loyalty program if a mobile app is available, compared to 56% globally¹.

Statistics show that consumers in Singapore, Malaysia, and particularly in Thailand place a significantly higher level of value on member-only events than consumers across the globe. Consequently, Instagram-worthy experience may prove more effective than accumulating points over a potentially long period of time. The highest value is placed in anything that can be shareable through social media, like exclusive access to events, pop-up retail experience, members-only offers, and early access to new products: everything thought to create unique content opportunities.

But as we said previously, the Asian shopper is extremely digitally savvy also when it comes to prices and discounts: across South East Asia, India, China, and South Korea, 45% of shoppers have compared prices on their smartphones, versus 35% globally². 

Second step: encourage users

Once attracted, the next step is to encourage users: by inserting loyalty programs into smartphones, purchases become convenient and familiar for consumers, and over time loyal customers start to buy more, pay premium prices, and bring in new customers through references.

Many companies try to boost positive emotional associations with the brand, adding a sense of competition and play, and placing rewards not only for transactions, thus stimulating consumers’ affective state by appealing to their feelings. Increased loyalty driven by emotional branding, in turn, leads to higher sales. For example, purchase intentions from television advertising are three times as likely to result from emotional responses as advertisement content. Overall, emotionally connected consumers are 52% more valuable to a brand than those who are just satisfied³. Because retail has traditionally been associated with experiential, symbolic, or hedonic products, emotional branding is like a vital approach to directly speak to retail consumers.

Last step: retain them

The last challenge is to retain members in the long term. One route is for brands to create a community around values shared by the brand and consumer which can help to develop loyalty in the long term. Many brands (like Patagonia, Lacoste or H&M), are for example brushing up on their green credentials in order to win the popular vote - and perhaps make a change.

Patagonia breaks the rule of marketing that promotes the purchase, to encourage sustainability

In order to build longer-term loyalty, brands must also deliver warmer online interactions with their customers to replicate in-store, human service experiences. This is particularly important in Asian markets where shoppers are already used to informal messaging with human sellers before making online purchases.

 

Get in touch with us to make your way through the dynamics of the Asian markets and build your marketing strategy.

 

 

1: Nielsen Global Loyalty-Sentiment Survey

2:  https://www.foresightfactory.co/loyalty-program-strategy-asia/

3: Harvard business review, The New Science of Customer Emotions, 2015

 

 

 

 

 

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