These days, whenever we go shopping for groceries, clothes, shoes… staff at the check-out counters always asks if we have a membership card for earning incentive points, and then we’d dutifully take it out and let the staff to clock new points on to it. Bonus points, when accumulated to a certain amount, can be used to redeem gifts, discount coupons, or other offers under the same company group.
The idea of incentive rewards started many years ago with the gas stations (‘green stamps’), the airlines and credit card companies. Now, the idea has caught on as more and more retailers design similar schemes – to keep customers within their belts.
In Hong Kong, loyalty schemes have also been around for quite some time. One of the earlier players is Jusco. Its ‘J Card’ is very popular among housewives who do their shopping daily. This card offers products with discounts, members-only sales days, and newsletters with the latest promotional offers via email or posts.
Octopus card, with its enviable high penetration in the Hong Kong, launched ‘Octopus Rewards’ rebate scheme a while ago. Octopus now partners with different retail outlets to jointly promote loyalty schemes for mutual benefits.
‘MoneyBack’ is another similar scheme launched by Park’n’Shop a year ago. This programme started first with the supermarket chain, but is now extended to other non-supermarket outlets under the Hutchison Whampoa Group – such as Watsons, Fortress, hotels, internet and telephone services… Extending the catchment stores aims to expand the number and range of customers to beyond housewives.
Meanwhile, Jardines has joined hands with HangSeng Bank to launch ‘enJoy Card’ – another reward scheme hoping to share a slice of the already competitive market. Customers can earn reward points at all Jardines’ shops such as IKEA, Mannings, Maxims Catering and more. Although their network of shops is bigger than ‘Octopus Rewards’, their promotion is not as far reaching and therefore, customers still do not know how their reward scheme works.
These bonus point schemes are a type of loyalty programme. From a wider perspective, we call this ‘customer relationship management (CRM)’. There are other CRM methods available of course, such as collecting limited edition items, stamp cards, coupons…. All these have the ultimate aim of customer retention and make them come back for more spending.
The development of CRM is linked to technological advancement. Technology has made possible that a single click will enable marketers to check if we are a regular customer, where we live or work, our spending habits, and our income level. With these kinds of information, companies can customize special offers for their customer periodically.
CRM is a major marketing tool now. Besides offering discounts to customers, CRM also opens the door to new marketing opportunities, such as joint or cross promotions with offer of incentives and discounts and privileges for purchasing across brands. Financial institutions are active exploiters of CRM – their own branded credit cards are tools for capturing customer information for even more promotions.
Further good reads:
CRM Introduction: http://www.exforsys.com/tutorials/crm/crm-introduction.html
CRM data privacy: http://www.theclientsideblog.com/archives/ideas-experiences/the-future-of-crm-data-and-pri/
CRM for smaller business: http://www.youtube.com/watch?v=G0Ln4H_deGU
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