Mastering the Loyalty Game, by Aqilliz’s Gowthaman Ragothaman

Gowthaman Ragothaman, Chief Executive Officer of Aqilliz explains why brands need to place privacy on par with personalisation.

The digital landscape — for all its benefits by way of connectivity and accessibility — presents a burden of choice. In this year alone, the Covid-19 pandemic catalysed a critical shift in consumer behaviours, bringing a new generation of shoppers online for the first time. In 2021, e-commerce accounted for 11 per cent of total retail sales in the GCC — almost double from the year prior. Now exposed to a growing plethora of brands and platforms to interact with, MENA’s consumers are inundated with endless options every minute of every day, pointing to the need to stand out and to stand out for good. How would one do this? Customer loyalty, of course.

The region’s brands have taken note, with a YouGov MENA survey revealing that of the organisations that revamped their marketing technology (MarTech) stack last year, more than a third ramped up efforts to improve customer engagement by remembering customers’ shopping history. Now, more than ever, having the right tools coupled with the most powerful insights will be critical to offering consumers a winning proposition.

As marketers examine the path that lies ahead, it goes without saying that personalisation is key — however, how will their efforts fare in an increasingly privacy-centric landscape?

The right approach, the right tools

The global loyalty market is valued at US$7.6 billion, attesting to the critical role that these programmes play in long-term customer retention and in ensuring the quality of lasting brand-customer relationships. To stay ahead, brands need to ensure that they’re nurturing these relationships throughout the entire customer journey, addressing them holistically and across all relevant channels.

While there may be divergences in customer preferences, successful loyalty programmes will tend to leverage the four bonds of loyalty: Financial, structural, social, and emotional. Each of these provides tangible benefits to a customer — be it personalised messages, exclusive access to specialised networks, free shipping, or points for purchase and exclusive offers. In the UAE, for example, over 60 per cent of customers value financial incentives such as cashback or discounts on future purchases. That being said, one common complaint among local shoppers is that flexibility is lacking in how points can be earned and utilised, pointing to the fact that brands need to not only focus on the benefits that they bring in the short term but also how these rewards can translate to long-term value.

For one, take the Landmark Group’s award-winning Shukranloyalty programme, the Middle East’s retail loyalty programme that’s accepted across 8 countries, 57 brands, and over 2,000 stores. It’s no surprise that the programme has successfully racked up over 10 million members over the years. Leveraging a mobile app interface, members also benefit from being able to transfer their points across other partner programmes, such as those offered by American Express and the National Commercial Bank in Saudi Arabia. With programme interoperability, offers can be better personalised across these shared ecosystems all the while enabling members to better maximise their points.

To address the challenges of reconciliation among different retailers, programme operators can consider the use of blockchain to capture all transactions on a shared, immutable ledger. This means that the operator as well as merchants and partners have access to the same ledger of transactions, enabling them to have a clear view of how points are issued, exchanged, transferred, and redeemed throughout the programme lifecycle. This provides them with a better understanding of how to also customise their offers, based on the performance of specific perks or initiatives.

Playing by the rules

That said, personalisation also comes with another component: Privacy.

As a whole, the state of data privacy standards in the MENA region is still very much in its nascency. Compared to other markets around the world, be it in North America, Europe, or even in Asia Pacific, the state of data protection laws is fairly fragmented. As of January 2021, AccessNow identified that less than half of the 22 Arab states have

adopted national data protection laws and of those that do, frameworks require some revision to account for new technologies to better enable adequate enforcement and implementation. While on the consumer level, internet users in the region have expressed apathy about online privacy and data protection frameworks as a whole.

Brands shouldn’t see this as a sign to condone complacency. Whether we like it or not, the world is changing and as we transition to an increasingly digital state of affairs, there will be far less emphasis on geographical nuances and more so on the interoperability of data hygiene practices. For any brand with global aspirations, adopting internationally accepted standards, such as those upheld by the European Union’s General Data Protection Regulation (GDPR) framework would be a good start.

Beyond the benefits of interoperability, blockchain can also play a critical role in providing a tamper-proof record of all the instances in which data was used, by whom, for what purpose, and for what duration of time, enabling brands to comply with data auditing requirements. When imbued with other privacy-enhancing technologies such as differential privacy — a cryptographic algorithm that helps to encrypt data — customers can be assured that their data is being appropriately masked and anonymised so that insights can be gleaned about their preferences, without the possibility of reverse-engineering to reveal individual identities.

Even amid efforts of enhancing personalised experiences, ensuring that marketers only collect information that is absolutely relevant and necessary would be a good start in order to cultivate a culture of data minimalism rather than data maximalism. This not only reduces the burden of measures that need to be taken to appropriately secure data, but also ensures that marketers aren’t gratuitously aggregating more than what they actually need.

An ecosystem of opportunities

In a digital world, change is truly the only constant. As consumer preferences continue to evolve, brands will need to keep up, and the best way to do that is to have a strong, informed understanding of what their shoppers truly want and value. Take, for instance, the growing multitude of brands launching non-fungible tokens for their fans. As part of beauty brand Clinique’s reward scheme, loyal fans are given the opportunity to receive free products for a decade, along with “Meta Optimist”, an NFT that symbolises the brand’s heritage. To win, shoppers simply need to share stories of optimism on social media. This forward-thinking move exemplifies the unique opportunities that the new digital frontier presents in terms of bolstering consumer engagement and loyalty efforts by offering consumers the chance to build a direct relationship with brands.

Ultimately, no matter the perks or the points consumers stand to gain, brands would do well to keep in mind that it’s the underlying trust that’s been built over time that keeps them coming back. This means going back to basics — investing in the right security measures and the right privacy infrastructures. By providing such assurances, consumers can interact with your brand with confidence, assured that every interaction with your brand is one that imparts value but never at the expense of their privacy.