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Middle Eastern consumers want more from loyalty programmes
The gap between demand and brand delivery is widening.
December 30, 2013 12:01 by Muhammad Aldalou
If we were put on the spot, we can all think of at least a few brands that we are loyal to – be it an airline, a certain brand of cheese or a reliable toilet cleaner. However, what are we getting in return? The product (or service) obviously, but what keeps us loyal to that particular brand and stops our wandering eyes from leaning towards another?
In a harsh economic environment, in particular, customers – in return for their loyalty – continue to demand more from brands. Setting other factors (such as price) aside, they expect instant, flexible and customisable rewards, available seamlessly through modern mobile technology.
Loyalty programmes play a big role in the Middle East region. In fact, many of them shape our choices and long-term loyalty as well, but a recent report suggests that the majority are failing to deliver on the things that matter the most to consumers.
A recent report by loyalty agency ICLP, entitled Driving Greater Loyalty in the Middle East, identifies what the company describes as a ‘loyalty chasm’ –the gap between what is important to customers in driving their loyalty and what brands are actually delivering. It surveyed 600 consumers in the UAE and Saudi Arabia (KSA), and found that loyalty programmes still remain a powerful way to win businesses and improve bottom-line results.
For instance, out of the surveyed consumers, 63 per cent from the UAE and 61 per cent from the KSA choose to buy from brands with loyalty programmes, while 55 per cent of UAE and 60 per cent of KSA consumers preferred to buy more from brands they are personally loyal to.
The largest gaps between customer expectation and brand delivery are in the areas of personalisation and relevance. Both regions identified customised, relevant incentives and communications as important to securing loyalty.
In the UAE, 66 per cent of consumers feel customised rewards would win their loyalty, while only 44 per cent of brands delivered this, leaving a sizable chasm of 33 per cent. Meanwhile, 62 per cent of KSA consumers rated customisation as important, while only 45 per cent of brands delivered this, with a chasm of 17 per cent.
In addition, customers expect instant rewards. In the UAE, 74 per cent of respondents feel instant rewards are important, while only 54 per cent of brands delivered, leaving a chasm of 20 per cent. In the KSA, 72 per cent of consumers want instant rewards, but with brand delivery at 57 per cent, it left a chasm of 15 per cent.
In contrast, the smallest gap was found in the delivery of social media loyalty elements. While many brands perceive social media as important in engaging with customers, only 20 per cent of consumers had connected with brands they are loyal to on social media. In addition, the gap between perceived social media importance and brand delivery was just six per cent.
The findings of the report also suggest that, while social media is not to be ignored, the most effective improvements to a Middle East loyalty programme are found in making incentives and communications more relevant, personalised and tailored.
Dion Maritz, general manager at ICLP, says consumers expect loyalty programmes that are localised to the Middle East region. “We have seen an on-going trend in better customer segmentation and that is where we will get the biggest results in loyalty.”