SYDNEY, HONG KONG and SINGAPORE--24 Oct--PRNewswire/InfoQuest
Global study commissioned by Collinson reveals businesses are failing to measure the right information to understand why customers
are loyal
A commissioned study conducted by Forrester Consulting on behalf of Collinson, a global leader in loyalty and benefits, reveals
that the majority of organisations do not understand what is driving customer loyalty, and are therefore putting customer relationships and
profitability at risk.
Surveying decision-makers in organisations with revenue exceeding US$300 million, respondents graded their programmes based on a
series of measures and also shared their key goals and challenges. The study surveyed and compared the results for a multitude of countries
and regions in Asia Pacific (APAC), including Hong Kong, mainland China, Singapore, Indonesia, Japan, Korea and Australia.
The research found that two thirds (65 per cent) of those surveyed markets in APAC do not understand why their customers are loyal
to their organisations. Almost 7 out of 10 (67 per cent) reported that they do not have a proper framework in place to measure loyalty in
the context of overall business performance. Remarkably, the research also found a misalignment between the loyalty objectives and the
measurement criteria used to determine the effectiveness of their loyalty success.
Three reasons why organisations may be struggling with customer loyalty
1. Loyalty strategy without clearly defined business objectives and appropriate metrics
Loyalty success is led by a holistic loyalty strategy with clear defined goals and measurement framework which needs to be
embedded consistently across an organisation.
Less than half (49%) of the APAC respondents have clearly defined business goals and objectives to define their loyalty
proposition, where Hong Kong and Japan have the highest percentage (55%) compared with 39% of respondents in Singapore. Only 40% have
cohesive customer loyalty strategy that spans multiple functions and is a top strategic initiative with C-level support.
From the research, we found there is a clear discrepancy between what people are trying to achieve through their loyalty
programmes and the KPIs in places to measure the performance in relation to their objectives.
The key loyalty objectives and performance metrics shared by our respondents for their customer loyalty programme in APAC are
misaligned as shown below:
Key loyalty objectives The metrics for measurement
1 Acquiring new customers (53%) Customer satisfaction (62%)
2 Retaining existing customer (47%) Customer engagement (59%)
3 Enriching customer relationships (46%) Customer retention rate (57%)
4 Improving the customer experience (37%) Loyalty programme enrolments (57%)
5 Increase customer advocacy (35%) Sales & revenue (57%)
Without appropriate metrics, it could be difficult to know which areas need improvement and understand the impact of customer
loyalty on overall business performance.
2. Without a single customer view to harness data potential
To appeal to the modern, choice-rich consumers, it is important to engage them at an individual level which means collecting all
appropriate data across the customer journey.
The research found that three-fifths (60%) of respondents in APAC do not have centralised business rules to incorporate all
sources of customer data into a single customer view. Less than a half (48%) collect a wide enough range of customer data to run deep
analyses, where only 26% of them automate advanced data analytics to optimise their customer strategy, and 35% would use predictive
modelling to identify the right existing dynamic content based on customer behaviour.
Predictive modelling enables brands to make better decisions and run more effective programmes where China has the highest
percentage (47%) compared with the rest of respondents in Asia Pacific to harness the value of data for providing personalized offers for
each member. It is vital to recognise each customer preference and behaviour to provide a personalised experience that stands out from the
competition. This can only be done when brands continuously collect the right information about their customers and using it effectively, to
understand what makes them tick.
3. Competitive differentiation
Loyalty programmes with reward, point and VIP schemes have been pervasive for years. These tactics are still frequently employed,
but the effectiveness is uncertain when they are deployed without a sound loyalty strategy. From the research, we found that brands continue
to see competitive differentiation as being vital, with two thirds (66%) of loyalty practitioners in APAC reporting that is a critical or
high priority.
72% in Asia Pacific, 78% in Hong Kong, Indonesia and Korea respondents planned to increase funding for developing new loyalty
programme benefits and rewards. Embracing partnerships with like-minded brands, who can offer unique experiences and access to their
customer base, will enhance and strengthen the member's engagement. It enables partner brands to expand their knowledge of the customer
through an integrated cross analysis of buyer behaviour and preferences for personalized, curated communications to increases sales
leveraged through the partnership.
Mary English, Executive Vice President, APAC of Collinson, says, "A clearly defined loyalty strategy provides the foundation to
design a proposition for continuous engagement with your customers in a relevant and meaningful way. Data is the fuel for ongoing loyalty to
a brand with heavy weighting on a well-structured single customer view to capture, measure, gain insights, and personalise the dialogue with
their customers. Organisations need to put loyalty back on track by becoming better aligned in terms of their objectives, what they measure,
and how to differentiate their programmes. There is really no 'one size fits all' approach and each organisation must identify their brand's
unique, valuable assets in formulating a strategy that is regularly reviewed and updated to the changing behaviours of their customers."
"Creating formalised processes and employing dedicated resources can be a valuable investment and demonstrate your company's
commitment to loyalty. It is logical for companies to consider 'connected loyalty' as a goal of their strategy. Customers who feel connected
to the organisation become fans, not just purchasers of their products and services. The latter may simply be shopping out of habit or
convenience, whereas fans will go out of their way for the brands they love."
About the research:
A commissioned study conducted by Forrester Consulting on behalf of Collinson was carried out in April 2018. 635 respondents in
UK, North America, Hong Kong, mainland China, India, UAE, Singapore, Brazil, Australia, France, Japan, Korea, Indonesia, Saudi Arabia,
Mexico, South Africa were asked 20 questions. Participants' job function included decision makers ('manager' or above) for organisations
with revenues over $300 million in the retail, travel and financial services sectors.
About Collinson
Collinson is a global leader in loyalty and benefits. We craft customer experiences which enable some of the world's best known
brands to acquire, engage and retain the most demanding and choice-rich customers.
Our unique expertise and insight into high earning, frequent travellers allows our clients to deliver the smarter experiences it
takes to drive deeper customer devotion.
We have 30 years' experience working with the world's leading payment networks, over 600 banks, 90 airlines and 20 hotel groups in
over 170 countries to create loyalty, deliver smarter travel experiences, and protect and assist their customers in times of need. Our
clients include Air France KLM, American Express, Cathay Pacific, Hackett, Hilton, Mastercard, Radisson Hotel Group, RSA, Sephora, UnionPay,
Vhi and Visa.
For more information, please visit collinsongroup.com
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