30 Seconds On The Business Of… Loyalty Programmes

How popular are loyalty programmes in the GCC?

Research conducted by Forrester on behalf of ICLP showed that on average, Middle Eastern consumers belong to two loyalty programmes and participate in at least two, whereas in other markets such as China, India, UK, US and Brazil results were slightly higher.

Which are the sectors that are more conducive to such programmes?

Generally speaking frequent flyer programmes (FFP) and frequent guest programmes (FGP) are most popular here in the Middle East and elsewhere in the world. Travel rewards such as flights, room nights, and upgrades in both categories are highly desirable for consumers.

Is it possible to measure the benefits of having a loyalty programme for a business?

As a starting point, the basic health of a programme which can be measured and tracked through dashboard reporting, is a vital tool for management to assess the overall programme performance. Key performance indicators would include-

• Direct Revenue – member spend, frequency, upsell/cross sell, reduced attrition, auxiliary revenue
• Indirect Benefits – communication effectiveness (targeted/relevant), brand equity, net book value, customer satisfaction
• Direct Costs – cost of operation, cost of rewards
• Indirect Costs – dilutionary, displacement, opportunity cost

What are the main challenges that the industry faces in the region?

Findings of recent ICLP research shows that consumers in the Middle East are demanding more personalised and customised engagement with brands. Brands need to re-evaluate efforts in the areas that matter most to consumers such as mobile redemptions, instant and flexible rewards, and more tailored and personalised communication.

How do you see the industry developing in the future?

The GCC consumer landscape presents a unique challenge for loyalty marketers as it is one of the most culturally diverse markets to be found anywhere in the world with an incredible wealth spectrum.

The next chapter and challenge for regional loyalty marketers is the ability to plan for and deliver upon what is required to secure a deeper, more emotional connection with their existing and prospective customers.