India’s Next-Generation Loyalty Landscape


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Coverage of the 3rd Loyalty Summit at the Taj Lands End, Mumbai, Jan. 27–28, 2010

Sixteen hours of meditation can lead to a cornucopia of enlightenment, or so COLLOQUY’s intrepid conference participant Kelly Hlavinka has proven with her recent voyage to India’s 3rd Loyalty Summit in Mumbai. Sixteen hours of flight time to the conference—well worth it, she reports—and sixteen hours of return flight, part of which Kelly graciously spent in compiling this recap for our readers.

With the backdrop of India’s 60th Republic Day celebration—and the accompanying heightened security measures—I made the long journey to Mumbai to join India’s Loyalty Summit 2010, the third edition of this event. The conference theme was “Next Generation Loyalty,” and it seems that this next generation is arriving not 16 hours from now, but as I write this.

Nearly 230 retailers, bankers, travel companies, academic leaders and graduate students of the Bharati Vidyapeeth’s Institute of Management Studies and Research program gathered to discuss the dynamic state of loyalty strategies in India. I was honored to deliver the opening keynote speech on global loyalty trends and share COLLOQUY’s global perspective on how those trends will shape the evolution of their efforts. The conference included 20 other presentations and the 3rd annual Indian Loyalty Awards ceremony, with this impressive list of award-winners.

The agenda was packed, so allow me to summarize the five biggest themes discussed during event:

1. Amazing opportunities and amazing challenges. With only about 5 percent of its retail purchases made in “organized,” formal retail formats, India is still a country that buys its food and other goods from the neighbor that customers know down the street. So, as new retail stores open, much novelty surrounds them; as such, this is a country that can enjoy the “build it and they will come” benefits of the early adoption of retail.

Compared to the U.S., India’s consumers are savers; nearly 24 percent of their salaries are saved. And, only 20 percent of India’s customers are considered bankable. These facts mean that there’s not a natural tracking mechanism on credit and debit purchases for a vast percentage of economic transactions.

It would be easy to say that issues of retention and cultivating customer growth should be low on India’s priority list. According to attendees I talked to, that is understandably the mindset of many Indian companies. However, several forward-thinking companies are already surprisingly far along in adopting customer-centric strategies. One example is how Mr. Vinay Bhatia has championed Shopper’s Stop’s customer-centric efforts. Ms. Maitri Kumar’s efforts and breaking down the product silos at HSBC in India are another fabulous example.

2. A market ripe for partnerships. Despite a huge population of 1 billion people, there continues to be great disparity in income levels. In fact, only about 1 million households make over USD$60,000 annually. This fact, combined with the still relatively small percentage of household spending in traditional channels, demonstrates that any loyalty strategy faces the looming challenge of a reasonable earn velocity—the rate at which customers attain rewards in a standalone program. Therefore, the attractiveness for forging partnerships between complementary businesses in India is amplified.

3. Sorting out the role of loyalty programs. Among the summit’s attendees was a surprising amount of debate about the role of brand loyalty marketing, customer experience management, enterprise loyalty strategies, customer relationship management—and the role of loyalty programs in these broader disciplines. I believe I have the topic of my next presentation in India should I have the honor of returning. Theme: dispelling the preoccupation with jargon and acronyms (and I already have my first PowerPoint slides ready for the presentation). My hope is that Indian marketers will quickly realize that a loyalty program fuels all of these other business-building efforts by offering a value-added reason for Indian consumers to identify themselves and engage with the targeted offers sent to them.

4. Swift velocity of loyalty evolution in India. While Indian companies are grappling with some crucial systemic issues, don’t underestimate how quickly they will catch up to markets that have been running loyalty programs for decades. In fact, I believe Indian corporations will benefit from the ups-and-downs of the loyalty journey that companies in North America, Europe, Australia and Japan have been on for decades. By applying the discipline of loyalty principles now, companies in India will forge loyal customer relationships before the battle for share of customer becomes a crisis.

5. The entrepreneurial spirit on steroids. Unless you are completely oblivious, you can’t help to be caught up in the maelstrom of entrepreneurial energy in India. I heard amazing stories of new technology startups, new analytical capabilities, and new program ventures that have recently launched from more than a dozen Indian companies. I urge you to watch what’s coming soon in India’s loyalty space. I believe we may see this entrepreneurial energy generate an exciting new wave of loyalty innovations in India in 2010—ones that will enlighten the industry as a whole.

Kelly Hlavinka
A partner of COLLOQUY, owned by LoyaltyOne, Kelly Hlavinka directs all publishing, education and research projects at COLLOQUY, where she draws on her broad experience as a loyalty strategy practitioner in developing articles, white papers and educational initiatives.


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