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Loyalty Is Not Just a Game of Points and Perks Anymore



Head of business consulting and innovation at MLG Jonny Stark and Huge GVP Ben Skelsey on how loyalty can help you win in the battle for the discerning consumer

Loyalty Is Not Just a Game of Points and Perks Anymore
- Above: Left - Jonny Stark // Right - Ben Skelsey

With over a decade or so in Asia between us, our experience is that every time a meeting happens about loyalty the conversation moves quickly to, ‘people in country X love freebies’. Well, sure. Everyone loves to feel like they’re getting more for their money. If you ask people anywhere in the world if they’d like some form of a perk they’ll be inclined to say yes. But that is increasingly a hygiene factor.

Generations Y and Z have different expectations. It’s not just about bagging a bargain. They are a more discerning crowd.

Sustainable Business: Asia Does Care
NYU’s Centre for Sustainable Business found that 50% of sales growth in consumer packaged goods between 2013 and 2018 came from sustainability-marketed products, even though those goods account for less than 20% of the market. And generations Y and Z have a lot to do with fuelling that growth.

It should be noted that the NYU research is not Asia-specific and we often hear that Asia’s emerging consumers do not have the same appetite for sustainable products and services as their western counterparts, even though it is a fact that, by 2025, Generation Z will account for around a quarter of the Asia Pacific population.

This 'lack of appetite' claim isn’t necessarily true. As McKinsey’s 2019 Asia Pacific research showed (focused on Generations X, Y and Z), 60% of millennials and Gen-Zers in China say they want to minimise the negative effects their eating habits have on the environment, while in Japan, 54% of Gen-Zers say they always look for clothes produced sustainably.

Growing up in emerging countries, many younger consumers have witnessed and experienced firsthand the negative environmental impact that comes along with rapid growth. So they do care. And they take notice.

What does seem to be the case though, from that same McKinsey research, is that despite the issue of sustainability being a purchasing decision factor, they aren’t necessarily wanting to have to pay more for sustainable goods or services. So affordability is key while still wanting to make a difference.

Involve Consumers in Making a Difference and Build Their Loyalty
Shifting to sustainable supply chains is a big part of the answer for businesses, but the challenge is that, beyond keeping consumers up to date with those efforts, it is hard to involve customers actively in those changes. So how can you involve them and also create some loyalty?

Loyalty programmes have historically been quite transactional, using redemptions based on spending as a way to effectively attract and then retain a customer. But another way to think about creating that loyalty, with an ever more conscious consumer, is by considering how that programme could be more of a partnership: one that both aligns to supporting the sustainable vision for the business and having a positive impact on society. And, given what we know about those consumers in Asia, doing so in a way that doesn’t have to come at a discernible cost to them.

Simple steps like the North Face’s Clothes the Loop scheme, where people are rewarded for dropping off unwanted goods and letting Soles4Souls use them for their micro-purpose programmes, is a good first initiative. But you can take that even further.

Aligning Loyalty to Sustainability Goals / Commitments / Ambition
For a business, a loyalty programme can also become a proof point in a sustainability strategy, as well as helping to make you stand out from the crowd. And, given the shifts outlined so far, it makes good business sense in capturing a new generation of customers.

Samsung have launched their ‘Global Goals’ initiative, aligning themselves to the UN’s global goals for sustainability and positive societal impact. As well as educating a wider consumer base on what the goals are and why they matter, just by downloading an app and engaging with content users can earn credits to donate to causes that ladder up to achieving one of the global goals within the next decade. That power of ‘frictionless good’ is one that looks set to become key to winning a consumer’s heart and eventually their wallet too.

In short, you should think about how to make it easy for this increasingly powerful consumer group in Asia to make a difference, without necessarily having to pay for the privilege. You’ll not only win them over, but you and they, can become better corporate citizens for it.

- Head of business consulting and innovation at MLG, Jonny Stark; and GVP at Huge, Ben Skelsey

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Categories: Marketing, Business Services

MullenLowe Asia Pacific, Mon, 19 Oct 2020 11:02:27 GMT