Loyalty Program: Between Loyalty and Seduction Points

When opening GoPoints in the app Gojek today, you no longer find gamification in the form of games spinner with points that were popular some time ago. All transactions Gojek also no longer get points starting at the end of last January. Users who have points can still redeem their points until 30 June 2020. Gojek reportedly wants to develop GoPoints with a different approach.

GoPoints are similar to Ovo Points, TokoPoints or Shopee Coins. These programs were originally designed to maintain user loyalty, but in the end they became one of the comparison variables that determine purchasing decisions other than price.

I tried to talk to some digital app users, all millennials, and they agreed that they really love these points. Some love it because they can get more benefits in the form of discounted prices, some love it because these points can be used for other things - buying credit, for example.

Juli Andrian uses and takes advantage of points from many services, such as GoPoint, GrabRewards, Ovo Points, TokoPoint, Shopee Coins, Ponta, and I-Saku. Everything is collected so that it can get other benefits.

"[User loyalty program] This is an advantage for me. We get reciprocity from our loyalty / the amount of money we spend. So we feel that we can benefit more from the purchases we make," explained Juli.

Juli's opinion is shared by others. Including the various points they get, they become more picky about an item/merchant/service.

"Always, because [my] child is frugal and ga want to lose a lot," explained Galuh Intan.

"[I am] very considerate. Even if I want to buy something, check which one first cashback the biggest," said Prilita Kamalia.

More faithful to the points, cashback, and discount

Indonesian society is still very sensitive to price. The presence of a user loyalty program should be the answer to loyalty, but quite the opposite. Many of the users are now also considering the "bonus" of every transaction they make. the effect, brand have to keep "offering" something to keep getting users.

This condition is not good for the sustainability of a service/brand/merchant. Those who no longer offer benefits will leave the user's preferred group. Providing benefits becomes an unavoidable dependence to be able to get users. To be misguided for the implementation of the loyalty program.

GetPlus, a loyalty program service provider, does not deny this phenomenon. They believe that all consumers love the discounts/cashback/rewards/points given out for free. But they still believe that there are still consumers who like or are loyal to some brand and merchant certain.

"Consumers [who like some brand certain] this is appreciative recognition, can get loyalty rewards of their shopping and enjoy the shopping experience through offline store. This is what is value proposition from loyalty programme, which is a program that is well designed and will be as attractive as a discount offer," said GetPlus Co-Founder & COO Adrian Hoon to DailySocial.

Adrian also explained that currently in Indonesia there are many loyalty programs implemented by brand or merchant, but unfortunately many of them don't well designed in terms of investment in technology, processes, resources, marketing, and others. It's also poorly managed, resulting in a bad user experience and a negative impact on the business.

Meanwhile Co-founder & CEO Member.id Marianne Rumantir assesses that getting loyal customers is not obtained from the user loyalty program, but from the company's products and services itself.

He explained, currently there is such a thing transactional loyalty and emotional loyalty. Transactional loyalty usually available when the brand is having a discount or cheap, while emotional loyalty is a condition in which customers remain loyal to a particular brand even though the price increases. The reason is because the customer already believes in brand that, in terms of products and services.

"For discount programs and cashback for example, this should be considered an acquisition program rather than a retention program. Discounts and cashback usual [and should be] offered to get member/user as much as possible at the beginning, but after that there customer journey next where should be loyalty programme can provide other benefits to appreciate their customers in addition to discounts/cashback. Here loyalty programme used as retention program," explained Marianne.

How should a loyalty program work

User loyalty program is a long-term investment program related to good relationship service or brand with users. In the system, besides being able to grow users, this program can be used to capture feedback, view demographics, and track user interests. This program should play an important role in the journey of business growth.

Marianne argues, there are several challenges related to the current user loyalty program in Indonesia. Two of them are the socialization about the program that is not comprehensive and the number of user loyalty programs that do not have a program customer journey clear.

"The best loyalty program is the one that has a well-designed customer journey. Customer journey this if I describe there are 4 phase, Aspiration. Earnings, Benefits, Rewards. In each phase there are elements that must be designed and executed properly depending on the brand from their respective industries," said Marianne.

In essence, according to Marianne, to work well a user loyalty program must be followed by the product needed, the price that fits the market, and the level of service.

"Loyalty program then run to help complement existing products and improve existing services so that they can help provide appreciation to consumers as well as help brand to understand consumers more deeply," added Marriane.

Redefining loyalty programs

The most obvious impact of users' habits being more selective on prices and points occurs in SME businesses. Initially intended to provide rewards and experiences for their loyal customers, but instead changed the habits of its users. They become dependent.

Redefining user loyalty programs must be done to prevent misinterpretation. Marriane and Adrian said the key was in well-designed loyalty program. Not the origin of points and cashback, but also has a clear system.

Well-designedloyalty programs, according to Marriane's explanation, it is a user loyalty program that is designed in stages and has its own phases. Marriane called it customer journey or simply a user loyalty initiative built with the user experience in mind.

Each stage is customized and has its own role in the relationship with the user. Like when to give points, when to give cashback, and other forms of appreciation. The gamification model can also be an alternative, for example for customers who already have certain points.

Adrian also gave an example of a user loyalty program which he thinks is good in Indonesia. He explained that there is one well-known restaurant group in Indonesia that has implemented a user loyalty program well.

"The program they run is designed in such a way to recognize consumer after making a reservation, reward points obtained after a transaction without having to show a membership ID, bonus rewards offered based on transaction history, and other restaurant preferences. In addition, there are also occasional surprise rewards. Well, it's programs like this that affect preferences for brand, the retention, while at the same time increasing expenses driven by experience extraordinary to achieve the challenge, bonus rewards, and others," explained Adrian.