Loyalty Program Strategy for the Asian Consumer

July 18, 2017

Loyalty In Asia

Over a series of recent reports Foresight Factory has been examining the trends driving successful customer loyalty programs. From acquisition through to long term retention, how should CRM be shaped in order to be truly customer-centric, and avoid weakening your brand

While the macro trends explored in these reports hold universal truths, there are some areas to focus on first when targeting Asian consumers. Here are some commonalities across the APAC region for setting a strategic loyalty vision.


Acquiring & Activating Loyalty Program Members

One key move is to leverage consumers’ need for social capital. It’s no secret that Asian consumers are amongst the world’s heaviest social media users, and the need to live up to an online image that has been crafted to perfection is felt particularly strongly amongst Asian millennials from China to Indonesia.

In attracting shoppers to sign up, Insta-worthy experiences such as members-only access to events may prove a more effective hook than accruing points over a potentially long period of time. Similarly, exclusive offers and early bird access to new products can provide that all important social capital.

Yet the Asian shopper is nothing if not savvy when it comes to prices and discounts – across South East Asia, India, China and South Korea, 45% of shoppers have compared prices on their smartphones versus 35% globally. Many consumers have grown to expect introductory benefits and deals from loyalty programs, so brands must look to break the discount expectation early in the life-cycle by appealing to other features of the maximising mindset, which deliver a better brand experience.

This is particularly key in Japan where rampant consumerism is less overt; the need for new experiences is felt by 3/4 of the population compared to less than 30% who feel the need to own more things.

Asia Miles is a travel and leisure rewards program, associated with Cathay Pacific’s Marco Polo Club. It differentiates itself from the competition by allowing redemption of points against more than just air fares. Users can also access discounts for other valued experiences such as dining, and in the case of music events members can access raffles to buy much coveted concert tickets.


Maximising transaction frequency

Once hooked, the next challenge is to encourage use.

By embedding loyalty programs into smartphones –  either via dedicated brand apps or messaging apps, as we have seen in China through WeChat  –  acquisition and subsequent engagement becomes convenient and familiar for consumers. Mobile-based programs can also be positioned as offering more benefits than static store cards, such as instant access to rewards information and the promise of real-time, personalised rewards.

AsiaMalls launched AMperkz last year, one of the first cardless loyalty programs in Singapore. By combining purchase history with contextual and locational data, the rewards program encourages use by engaging with shoppers with personalised rewards, balance updates and member offers when they are most open to responding i.e. when in or near a participating mall.

Injecting a sense of competition or play can make membership a fun experience which boosts positive emotional associations with the brand, as rewards are not only received based on transactions. Jet8 is a mobile-engagement platform across SE Asia where brands reward customers who share branded photo messages on social media with product discounts, providing branded stickers to jazz up your selfies.


Retaining long term loyalty

The last challenge is to retain members in the long term.

One route is for brands to create a community around values shared by the brand and consumer which can help to develop loyalty in the long term. Existing loyalty programs can be used as a structure to build connections between consumers as well as between brand and customer, thus creating a sense of membership and community, important in typically collectivist countries.

Alipay launched the Ant Forest Program in China in late 2016 which has now attracted 200m users. The program connects each Alipay transaction to how environmentally friendly the purchase is, for example paying a bill online rather than travelling to a store. Users are rewarded with green energy points for each transaction made which can be used to grow virtual trees in competition with other users. In Asian markets where environmental concern is typically high but awareness of actions is much lower, programs like this which both educate and reward hold a lot of potential.

In order to build longer term loyalty brands must also deliver warmer online interactions with their customers which seek to replicate in-store, human service experiences. This is particularly important in Asian markets where shoppers are already used to informal messaging with human sellers before making online purchases: 60% of shoppers across China, India and SE Asia have used a messaging service on their smartphone to speak to a customer service representative, almost double the global average.

Major brands are now seeking to replicate this service through AI and chatbots, such as the “POSB digibank Virtual Assistant” on Facebook Messenger from DBS bank in Singapore, allowing account holders to ask for their account balance, transfer funds and make card payments by chatting with the chatbot. We anticipate a future in which AI assistants offer personalised advice, updates on membership benefits and which provide a long-term, real-time and emotionally-aware connection with otherwise static loyalty programs.


Interested to find out more? Download Foresight Factory’s global sample report on Reshaping Loyalty.



Written by Michael Agnew

Michael leads FF's APAC business from Singapore - home to world leading innovation. When he's not marveling at the smart city initiatives of the Little Red Dot, he's travelling to speak at industry events, tracking regional trend movements and working with our APAC clients.

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