Gokul Krishnamurthy
Jul 27, 2013

Opinion: The truth about ‘loyalty’, is that it’s subconscious

What impact does a reward program end up having on brand loyalty? Can it really impact loyalty?

Opinion: The truth about ‘loyalty’, is that it’s subconscious

The other day I walked around Chembur with my daughter strapped around. It was the usual weekend trip. A household list including vegetables and fruits at the neighbourhood Sahakari Bhandar had to be cracked. One was hopeful of a return home before the downpour started again - the large Giordano umbrella would have seemed adequate for two adults, but the kid was a risk. Risk born of a very persuasive eight month-old who does not like be refused.

The items on the list firmly in the basket, we headed to billing. The standard “Sir, card hai ka?” followed. The reference was to a ‘Membership Card’. I did not feel the need for one ever since the first visit, although I did pick up a ‘Membership Form’ then. The calculations were too much for saving what was obviously not more than a barely three-digit sum. Filling out the form didn’t seem worth it.

We headed to the pharmacy next. Pampers Active Baby, at Rs 499 for a pack of 46. The way babies work their food, you tend to stock these. Nan 2, at Rs 368 a pack – at seven scoops for 210 ml of water, you can never buy just one. And the lady at the counter was kind enough to ask me if I wanted to become a ‘member’. The proposition was explained in one sentence: Purchase for Rs 6,000, and get a coupon worth Rs 500. And you can buy anything available at the outlet with it. Apollo Pharmacy had a new ‘loyal’ customer. So what if she can’t speak yet? She consumes.

Every time I get asked if I’d like to become a ‘member’ somewhere, I’m reminded of how long it’s been since I went to Shopper’s Stop (or Crossword). For some strange reason, I did pay and procure a loyalty card there. Maybe I was sure I’d go there again. Maybe I wanted to go there again? I still do visit those chains. And it’s definitely not for the rewards – I don’t even acknowledge that I am a ‘member’ most times. So wasn’t I loyal to the brand, and therefore I paid to be a member?

In the case of Apollo Pharmacy, it’s a rewards program, not loyalty. When does the difference vanish? Can a rewards program lead to loyalty? Can a Zara sale customer be converted into a loyalist? I’d think yes, going by a CalvinKlein ‘initiation study’ during an earlier professional assignment.

A majority of young working men with a certain disposable income, who had climbed the ranks, wearing underwear costing upwards of Rs 800 (we couldn’t check), disclosed that the first time they moved beyond the Rs 100-odd price band was when a couple of CKs (or equivalents) close to the checkout zone beckoned at the price of one. The relative value – of getting 50 per cent off – was pull enough. And once they got used to the comfort of being in a pair physically and mentally, nothing else would do.

A dear friend Mr Ramesh Natarajan was kind enough give me a download on his trek down ‘Curiosity Road’, after doing the rounds of agencies like Wunderman and corporates like DHL. One point he had to make about loyalty programs was this: there’s a difference between transaction-based ‘loyalty programs’ and behaviour-based loyalty programs. On companies’ claim that a significant majority of their revenue came from members of a loyalty program, he counters: “How many of them are redeeming points? Do we know the numbers?”

He may have a point. Brings me back to my point. Or question, rather. What impact does a rewards program have on brand loyalty? If it’s the equivalent of a discount, as in the case of CK’s briefs, then the product provides the stickiness. And the ‘offer’ must act as a one-time pull.

A reward or loyalty program by itself is nowhere close to commanding the subconscious. And to be honest, I don’t want to believe that our subconscious is ruled by the transactional.

In the case of Apollo Pharmacy, if they have Kavya Krishnamoorthy Yadav’s ‘loyalty’ for a while, it’s not just because their rewards are simple and significant. They did, after all, also give my daughter her first ‘Membership Card’.

Gokul Krishnamurthy, editor, Campaign India

Campaign India

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