Taking customer rewards programs a notch higher

MANILA, Philippines — Customer rewards programs have become a dime a dozen.

Just start counting how many loyalty cards one has in a separate wallet – yes, the slots or pockets in one’s main wallet are not enough to store all of them – to realize that this has become a fact. From supermarkets to drugstores and medicines, to beauty salons and spas, to particular retail stores and retail brands, rewards programs have become run of the mill and part of each and every marketing manager’s arsenal.

Whether the goal is to keep existing customers or create loyal ones, attract new customers, increase sales, create brand loyalty, big and small companies swear by their effectiveness.

An article in entrepreneur.com by Williams and Swanciger says that a coffee giant’s customer retention program has played a key role in increasing its revenues and profits.

But another article by Corts Jens and Lal in forbes.com argues that it is necessary but not sufficient to offer substantial rewards to generate more loyalty from shoppers because these type of programs are easy to copy so that one approach is to create loyalty systems that are tiered. This way, customers are incentivized to reach higher levels of rewards and services by increasing their purchases. The article mentions about airline companies which offer higher class of lounge facilities for more frequent travellers in first or business class. Or casinos which designate their guests as silver, gold, and platinum members, rewarding frequent visitors with higher levels of rewards and services.

One company in the Philippines takes customer loyalty to a different and even higher level.

In 2011, Fernando Zobel de Ayala, president and chief operating officer of Ayala Corp., in his opening remark’s during the group’s 5th ICT Summit, brought up the idea of utilizing technology and information to develop more clients that would patronize more Ayala companies.

“Today, we have our best customers identified for our different businesses. We have Platinum customers in Globe, Preferred customers in BPI, Premier customers in Ayala Land. If a customer is already a VIP in Ayala Land, should’t he also be a VIP in BPI and in Globe? How can we use technology and the information that we have to encourage our clients to do more business between our companies? Within each company, are we making sure that we have all the information that we need about each customer in each of the products that we offer? Are we using that information effectively so that our customers do not have to repeat unnecessary procedures? The information that we already have in our data banks should give us the power to delight our customers. There must be a way of preserving the confidentiality of their transactions in a particular company, but at the same time signaling to other members of the group that they are a valued client,” he said.

ARC president and general manager Maria Angelica Rapadas told The STAR in an interview that immediately, a synergy council took this as a project.

The following year, on the occasion of Ayala’s 6th Ayala ICT Summit, Zobel de Ayala said that a study conducted by Accenture on behalf of the synergy council showed that from the pool of existing premium customers of ALI, BPI, Globe, Manila Water and Ayala Auto, only three percent of these customers actually have multiple premium relationships across these companies. This means that out of 100 customers of the companies mentioned, only three customers were actually considered a premium customer by one other Ayala company.

He emphasized that while this statistic is extremely disappointing, he would prefer to focus on it as a tremendous business opportunity that raises the potential for greater customer engagement and more active cross-selling of their products and services to customers who already have an established premium relationship with an Ayala company.

“This I believe will not only strengthen the Ayala brand with our customers but also help create a ‘stickier’ relationship, which in the long-term develops customer loyalty,” he said.

It was because of this that the Ayala Rewards Circle (ARC) came about.

Rapadas explains that ARC, the country’s first and only multi-industry appreciation program designed for valued clients, not only aims to increase sales but more importantly, seeks to delight customers and to strengthen the Ayala brand.

Through ARC, qualified customers of the four Ayala companies are given access to members-only perks and privileges, creating a holistic rewards experience not seen elsewhere.

“At Ayala, our customers are our lifeblood. And we want our most valued clients to enjoy amazing rewards not just with one business, but throughout the entire Ayala group. We want our premier customers in particular to feel special and valued in every engagement they have with our companies, Rapadas, who is also the chief information officer of Ayala Corp., said.

One differentiator of the Ayala group rewards program is The ARC Concierge, which can be reached 24/7 through multiple channels by ARC members. It provides services both here and internationally. The concierge can arrange a member’s travel, hotel, and dining reservations, as well as bookings to hard-to-get-in events like the Singapore Grand Prix, the PGA Master’s Tournament, Wimbledon, and London Fashion Week.

Rapadas explained that they want to redefine what a customer loyalty program looks like. “We go beyond discounts and promos, which our members also enjoy, and offer always-on mobile assistance, world-class concierge services, and access to exclusive global events. We always listen to what our customers want, and our chief concern is to offer them rewards that tie into the things that they truly enjoy and care about,” she said.

Rapadas said the concierge service is outsourced and the Ayala group has to spend a lot of money to maintain it.

Among the special perks and privileges are the special concierge service, priority handling at BPI preferred lanes and select Globe stores; special deals and discounts from Ayala-owned Honda, Isuzu and Volkswagen dealerships; Ayala property promos and exclusive room rates at Ayala Hotels and Resorts; privileges from local and international dining, shopping and leisure partners; and exclusive travel packages and invites to exclusive events here and abroad.

The ARC membership is valid for five years and is renewed subject to certain criteria. Unlike other rewards programs, membership is free but the key eligibility is premiumness of the customer.

For instance, BPI preferred banking customers with deposits of at least P250,000 and in the case of private banking, P25 million are eligible for ARC membership. Others who can apply or get invited to be ARC members are Globe Platinum members or those with plans P3500 and higher per month; those who are Ayala Land Premier, Alveo, or Avida owners with a purchase worth at least P3 million bought in the last seven years; those who have purchased a Honda, Isuzu, or Volkswagen vehicles from Ayala dealerships worth at least P1.25 million or a cumulative purchase worth P2 million in the last five years.

As of two weeks ago, ARC had 100,444 members and the goal is to increase this to 120,000 by end of next year.

Other than one conglomerate in Japan, there is no other rewards program in the world that cuts across different industries.

Those who are premium customers of all four Ayala companies are considered top-tier members and are treated to other special offerings.

Among the perks enjoyed by ARC members are vouchers to airline lounges, valet parking, access to gold courses overseas. There were also special campaigns, such as better deals for those who would avail of Generica and Healthy Family franchises.

In the few years that the ARC has been offered, it has helped increase the number of customers who patronize all four Ayala companies (BPI, Ayala Land, Ayala Automotive, Globe).

But challenges remain. Rapadas admits that the Data Privacy Act prevents ARC from having access to needed customer information of each of the Ayala companies, and more so, from finding out who are common customers. They are thus limited to what customers voluntarily give out in terms of information.

Zobel de Ayala in his speech has also said that while there are confidentiality and data privacy issues that have to be addressed, these are hurdles that can be addressed if the group has the proper mindset and framework within which to operationalize and execute the use of technology as a critical integrator of the vast information residing across each of the Ayala companies.

Moving forward, Rapadas said that the group is looking at offering a rewards program also for clients of the four Ayala companies, but this time, targeting a different and lower tier of customers.