Loyalty and reward programs are cash spent on marketing to effectively keep consumers “loyal” towards the brand. To keep them spending, saving and coming back for more, over and over again.
It’s not an easy task. It will take more to keep the customer coming than the gimmicks used to attract them in the first place.
UAE customer behavior
KPMG looked at a number of customer loyalty issues.
The first is: How do loyal UAE customers behave?
(All infographics below are generated by KPMG)
KPMG’s survey revealed that product quality emerged as the top factor for inspiring loyalty among UAE consumers. Value for money, customer service, and product consistency all placed second.
The industry consensus is that most consumers want personalization. Only one in five consumers in the UAE sees personalization as a leading benefit of loyalty programs.
Discounts may be a key driver to join. Only 3% of those not belonging to a loyalty program cited “personalization” as a benefit that would encourage them to join.
Pilar De Miguel Veira, partner and head of Customer Experience at KPMG Lower Gulf, said: “The future of loyalty programs is most likely to depend on an organization’s understanding of customer needs. One of the ways to obtain such an understanding is by data collection as well as the organization’s ability to improve consumers’ experience at every step of the customer lifecycle. Loyalty is not only dependent on perks and discounts but it should grow with each and every interaction.”
KPMG revealed that material rewards such as cashback and discounts are the most valued features for local customers.
The UAE survey findings echo the global survey, where 74% of consumers said product quality inspired loyalty, followed by value for money (66%).
Of those consumers who do not belong to any rewards or loyalty programs, the most common reason is lack of awareness, followed by a lack of interest in benefits.
KPMG research suggests that four factors should be considered when revamping a loyalty program:
Make loyalty programs easier to use
61% of local shoppers would like to have more flexibility to earn or utilize benefits.
Clarify their purpose
61% of UAE consumers believe they belong to too many loyalty programs.
Almost 39% of UAE consumers who do not belong to loyalty programs say it is because they are not aware of any.
Freshen them up
29% of local users find current loyalty programs unattractive. 61% mentioned that the most valuable benefit of a reward program is “cashback on future purchases.”
A report published by Fior Markets said the global loyalty management market is expected to grow from $6.54 billion in 2019 and reach $25 bn by 2027. Here are some of the most recognizable names in loyalty programs aiming to capitalize on this.
1. SHARE Rewards – Earn on spending at any Majid Al Futtaim Locations like MOE and Deira City Centre, Carrefour, Vox Cinemas, Magic Planet, etc.
2. BLUE Rewards – Cashback by Al Futtaim for shopping at Marks & Spencer, IKEA, ACE, ToysRUs, Kate Spade, Guess, Maje, Reebok, Adidas, Ted Baker, Robinsons, Quicksilver, etc.
3. RTA’s nol Plus – Dubai RTA’s loyalty app for Automatic cashback on RTA Parking in Dubai, Dubai Metro, Tram, Dubai Taxi, ENOC Fuel Stations, Zoom Stores, Carrefour, Al Maya, IMG, etc.
4. Emirates Skywards – Earn Emirates Skywards miles across outlets in Dubai.
5. Etisalat Smiles – Etisalat Smiles also opened up for non-Etisalat users in May 2019
8. Zomato Pro – Get up to 40% off many restaurants across UAE
9. Privilee – Elite membership for unlimited access to all gyms, spas etc.
10. ClassPass – (For Fitness classes)
11. Careem Rewards
Bank Reward Programs
Shopping trends, tech, and loyalty strategies
According to research by PricewaterhouseCoopers (PwC), the COVID-19 pandemic has strengthened the online grocery shopping habits of consumers in the Middle East, with 51% of respondents saying they were shopping for groceries online or by phone. Of those, 92% said that they are likely to continue purchasing online after the pandemic is over. While 41% are spending more on entertainment and media, 50% decreased their spending on clothing and footwear.
E-commerce technology has had a major impact on how customers interact, build relationships, and expect loyalty to be rewarded. Consumers take it to Twitter or other review sites to openly share their feedback with businesses and brands. These interactions hold valuable data that can, when analyzed, reveal something about how to improve the customer experience to maintain confidence and ensure loyalty.