Tag Archives: loyalty

Flipkart Plus: Customer Loyalty Program by Flipkart

Flipkart, the country’s biggest e-commerce company announced the launch of their loyalty program or customer benefits program (as they are calling it) on India’s Independence Day .

Launch Emailer

Here’s a quick summary of the program

  1. Opt-in membership with zero fee
  2. Free Expedited Shipping
  3. Exclusive access to promotional offers on Flipkart
  4. Reward points (coins) for purchases on Flipkart, which can be redeemed to buy offers on & off Flipkart (other vendors like Bookmyshow, Cafe Coffee Day)
  5. Superior & Priority Customer Support

Membership is just a click away

Flipkart Plus Landing Page

For an e-commerce company to become a sustainable business at scale, customer loyalty (aka retention) is a must. With increased competition and massive customer base, retention is the most obvious and un-avoidable path for all sizeable e-commerce companies, thus the recent public push towards launching loyalty programs.

Coming back to Flipkart, Flipkart Plus is their second attempt to launch a loyalty program. The first attempt was made in 2014.

Flipkart First (Launched in 2014)

‘Flipkart First’, ran for 2-3 years before the company quietly setting the sun on it. Since I was an active customer back then, I purchased ‘Flipkart First’ membership twice to avail the benefits. 

Here’s a quick overview of how the two programs compare with each other

Flipkart First Vs Flipkart Plus

Summarising the key changes:

1. Waving off Membership Fee 
2. No commitment over delivery time and charges
3. Adding early access to exclusive deals
4. Superior and Priority customer service
5. Introducing 3rd part offers and reward points

Let’s try to quickly unpack these changes

  1. Free Memberships:
    Positives — Increased Uptake
    Negatives — No additional revenue from membership fee

    IMO a loyalty program without membership fee is not reflective of brand power and will always restrict goodness you can provide.

  2. Free and Expedited Delivery:
    Positives — Increase in both order count (significant) and revenue (insignificant)
    Negatives — Extra shippings costs.

    Since membership is free and so is shipping, essentially users have no incentive to consolidate their orders and thus they can & will choose to place standalone order for low ticket items but will they spend significantly more because of this, I don’t think so.

  3. Early Access To Exclusive Deals (Actually just Exclusive Deals):
    Positives — Depends on quality of deals. Could lead to more orders & revenue
    Negatives — The deals on low ticket item products can put further pressure on shipping costs.

    The way I see it, I don’t expect great deals for Plus members. Let’s wait and watch on this.

  4. Superior & Priority Customer Service:
    Positives — Difficult to measure and communicate value to users. Negatives — If some changes are actually done at CRM, process and team levels. The costs for this could be significant.

    Unless a customer buys extremely regularly and interacts with CS often they can’t really see the difference. Even if the experience is better, I’d actually prefer to not having to talk to CS at all.

    Also, I’d never want customers to feel they are treated unequally. So generally speaking, I don’t like this feature.

  5. 3rd Party Offers and Reward Points:
    Positives — Additional benefit to customers, should bring some additional revenue from 3rd party. 
    Negatives — The offers currently are unpleasantly few and the usage terms are not friendly (to the point of discouraging impulse use).

    Giving formulaic reward points for purchases in form of coins could have been good had they allowed people to redeem them while shopping (think Paytm Cash) but in the current form, users can redeem coins to buy offers on 3rd party or Flipkart. First option currently is un-exciting and second one involves fair amount of friction

Expect a lot of low ticket orders like these

Unfriendly Terms: Of course I will remember all this two days in advance

Redeeming Rewards: 50 Coin Offers

50 Coin Offers 

Rs 250 earns you 1 Coin, so you need to spend Rs 12,500 to earn 50 coins. 
There’s also a catch, you can’t earn more than 10 coins in an order. So in effect, a user need to place multiple orders (5 big orders or 50 small ones) of Rs 250 or more to accumulate 50 coins.

Once a user has spend Rs 12,500 they are eligible for these offers 
– Rs 1000 worth free Flipkart Voucher (8% cashback)
– Rs 1200 worth BMS voucher or Rs 1900 worth Zomato Gold.

These offers are definitely interesting for regular customers as they get all these benefits for free.

Would people spend more often on Flipkart or move to Flipkart because of these benefits (more offers to come) would be interesting to see.

Top 5 Reasons why your brand should have a community

Community
People love connecting with others who share the same tastes, goals, beliefs, lifestyle, social status, locality and even dislikes. Essentially (most) people  are on a lookout for new groups to join and satiate their innate desire of belonging, of being a part of something along with others for all sorts of reasons.
Brands are one of the many possible threads that connect people in many ways and it’s not limited to just those who like the same brand of alcohol or the same brand of cigarette but even to kids who like the same brand of candy.

Brands, because of the way they are intertwined in our daily lives offer tremendous ways(even unconsciously) for their customers to connect and luckily for  them, people want to connect with the brands they love. They connect to find like minded people, to know more about the brand and their latest offerings, in hope of availing some offers/discounts or just to broadcast their choices to the world. Since the advent of social software , the grouping  of  people into communities/tribes has peaked a new high.

Ridiculously easy group-forming matters because the desire to be part of a group that shares, cooperates, or acts in concert is a basic human instinct that has always been constrained by transaction costs. Now that group-forming has gone from hard to ridiculously easy, we are seeing an explosion of experiments with new groups and new kinds of groups – Clay Shirky, author of “Here Comes Everybody”

What does all this mean for brands ? Yes, if you are a brand that people love/like and you’d like to take your relationship to the next level then you should also think of  having your community.

Here are the top 5 reasons why your brand should have a community.

1) Feedback:
According to me, the most important thing a brand can get from a community is honest feedback. Be it a new product or a new ad campaign, it’s extremely important to know what your customers feel about what you are doing. Forget market research, a community gives you a direct channel to know more about your customers, what are they like and what they like. This can be immensely helpful in improving the existing products and services and building better ones. This group can also be used to beta test a new product/idea.

2) Audience:
Community, means audience that likes your brand and wants to stay connected. A small but focused audience is a lot better than large but unfocused audience. The difference here is that this audience wants to know more about your brand/products/services as much(if not more) as you want to tell them. This means the conversion rates for any campaign here would be higher than that of a campaign aimed at a randomly chosen lot.

3) Brand Image:
Everyone loves a social brand, a brand that’s closely connected with it’s customers scores better over one that isn’t. Having a community around a brand will better the brand image in general and lend more trust and loyalty to it . If a brand is spending resources to build and foster a community it shows that it cares. Cares for its customers and is willing to give them back some love.

4) Buzz:
Will you feel nice if you get a birthday greeting from your favorite brand ?
Will you feel nice if you get a discount offer on the latest product from your favorite brand ?
Will you feel nice if you get a sneak preview about the upcoming range of products from your favorite brand ?

If the answer to any of the above is yes, you are highly likely to talk to your friends(online and offline) about it and that’s how buzz starts to build and spread.  The way communities work naturally supports word of mouth. In a group even small things aren’t small. Also, there are other factors associated with a brand’s community that add more credibility and virality to the buzz ,which in turn helps it to spread faster and wider.

5) Crisis Aversion/Management:
Think about it, would things have been a bit better had dominos already been on Twitter or Youtube ? I am sure things would be been better(even though slightly). By having an account on any of these services would have helped them in connecting with a small fraction of their customers who spend considerable time online and if there online interactions with the brand had been good, they would have definitely(on their own) taken on the task of dozing the fire and maybe prevented it from snowballing and this is just a small community on a third party tool.

I am by no means suggesting that every brand should have a community, these points are just to share why I feel it’s important for brands to have communities. What do you think ?

Pic Courtesy: http://www.ccfa.org/