How To Create Loyal Customers?

How the Chinese, the American and the German do it.

Futurist’s Club Team
Nov 2 · 7 min read

Contemporary customers worldwide are overwhelmed by choice options and commercial messages. It is an international fact of life that makes brand loyalty a precarious subject. And that forces companies to think hard on how to retain their customers, or seduce new ones to stay with them. That’s why all companies are building, improving and perfecting their Customer Relationship Management systems. These systems aim to manage relationships between companies and customers in order to raise loyalty — and profits, as a consequence. CRM systems gather and study data about sales, about marketing, about services and about what happens on the social media. CRM helps companies to understand each of their customers better — their needs, desires, preferences maybe even their peculiarities — in one unified system. Overarching aim is very often increasing loyalty.

All CRM systems and loyalty programs today have extensive and deep roots in the digital world, as on the digital planet so many data about customer’s behavior can be mined. China, Germany and the United States all have organized their digital planets in different ways. How does that work out in their Customer Relationship Management systems?

https://www.retaildetail.eu/

You may know ALDI, the German discounter. This year “ALDI Süd” decided to enter the Chinese market with a completely different strategy than in Germany. When I entered the ALDI in Shanghai for the first time, I was stunned. Instead of being a discounter, as in Germany, ALDI China aims to appeal to the middle class with high-quality products shown on furnishing with a clear touch of modern furnishing. The biggest difference though is the door-to-door service that Aldi, China is offering via its WeChat mini program — something that cannot be done in Germany. In addition, you can also order via ALDI’s online Tmall stores from everywhere in China. Just like in Germany, Chinese customers can sign up as an ALDI member. But in contrast to Germany, Chinese Aldi-members can play hosts of games in the Aldi universe — and win prizes there.

Walmart is an American multinational corporation that sells retail products at discounted prices. The giant opened its first China store in 1996 and since then Walmart has continuously worked on strengthening its relationship with its Chinese customers. Its most recent action has been launching itself on WeChat. Immediately after, a loyalty program was introduced where special deals were offered to consumers who are following Walmart’s WeChat account. Another very successful Walmart feature is the Scan & Go option: users can purchase and pay for items instantly via Walmart’s mini program on WeChat. In the USA Amazon Go works on the same concept, even opened its iconic first stores where you pay automatically. But in China wallet-less paying is reaching the main streets already — with Walmart as proof!

https://insideretail.hk/

Further, Walmart in the United States is less effectively centralized than Walmart in China. Walmart’s CRM systems in the USA derives most of its customer data from how they use their Walmart credit cards and from their online shopping. Walmart CRM China derives much more refined data by tracking its customers much more intensely — in collaboration with WeChat and what Walmart has built on the ubiquitous WeChat planet.

Differences between China, USA and Germany:

  • ALDI in China: Offers a Membership in China with gifts and your purchases will be sent directly to your home (door-to-door service)
  • ALDI in Germany: Membership option were unsuccessful and no delivery at your door
  • Walmart in the US: The physical credit/debit Walmart credit card is key when it comes to collecting data
  • Walmart in China: Walmart Membership, payments at Walmart (online and in the shops), special offering can all run over WeChat — enabling Walmart to create much richer and more powerful CRM systems

Through the WeChat mini-program both ALDI and Walmart in China are able to collect lots of extra user data. This amongst other things, helps the companies to determine what kinds of advertisements and products must be targeted to what particular demographic target group. Walmart for example knows exactly what products are popular with what demographic groups in whatever part of China.

www.azoyagroup.com

ALDI’s mini program in WeChat (as shown in the picture) also presents the possibility of scanning the product, adding it into your shopping cart and then immediately see how many loyalty points you have earnt. Also, in this respect customer data collection is more advanced and sophisticated in China than in the USA.

WeChat as the Ultimate Powerhouse

WeChat is the ultimate powerhouse for literally anything, spanning from services and products to news outlets and social platforms. In the USA and Germany, CRM systems of many companies are fragmented. Content is often published on Facebook. Actual purchasing data are derived from the use of physical loyalty cards. And data generated from door-to-door delivery often simply does not exist. In China all is much more stream-lined — on ultimate powerhouse WeChat. There you are able to see the (customized) messages a brand wants to communicate with you, but also the (customized) offers of the week. Also, your payment are realized with utmost efficiency by WeChat. And you can immediately see your rise in loyalty points. While you can also decide to see your purchases delivered at your door.

What do the numbers say about CRM’s effect consumers?

The figures show that loyalty programs are used by customers and that companies need a strategy to differentiate themselves from their competitors. 72% of German people are using at least one loyalty program. Do they have the choice? Half of the people prefer to buy in a store that offers such a program (61%). 76% of the people scan the card in the store instead of using an app. The main reason for Germans to participate in a bonus/loyalty program are price discounts. In America, even more people are using loyalty programs. Around 80% of American adults belong to some type of such programs. The idea of Loyalty Programs has also appealed to Chinese users, so 89% of the Chinese consumers would be willing to spend more money when a company offers a loyalty program.

Excellent loyalty systems? Try gamification!

When it comes to building excellent CRM and loyalty systems, we can learn from china that systems that collect, streamline and analyze the most data, will win. Here China is in the front runner position.

There is another insight we can learn from Chinese CRM practices: Try Gamification! Gamification, with its feedback capacity to show participants immediately their progress in the game, with its promise to let people win whatever, including giving them instantaneous information how close they have reached their gaming goal: it is all hugely involving and engaging, helping therefore to keep the customer loyal and ticking to the brand. Of course, each company must come up with games their target groups like. But, hey, here all the data generated by its CRM systems can facilitate immensely: they know what games what people like to play! Bally, the shoe brand, for instance, invited their Chinese customers to participate in an emoji competition. Clever, because it engages them in an entertaining way. Clever also, because the brand learned a lot on how to make messages more appealing — via emoji’s — for specific target groups.

Medium

Or take Nike, iconic in so many ways. Nike’s loyalty program, NikePlus, has more than 100 million members worldwide. These members are segmented, based on their interests.And, by the way, they spend four times(!) as much money than regular shoppers on Nike products. NikePlus has grown into a program centered on increasing engagement. A game has been created, only for members, where one can go on a virtual treasure hunt to find new shoe designs. Additionally, the program offers birthday rewards, music playlists and invitations for events.

NikePlus

To conclude

More and more companies will offer customer loyalty programs to keep up with the battle of the brands. The core data are integrated, in a streamlined fashion, into CRM, the more successful the program will appear. In order to engage new and existing customers, explore games and gamification technique. I, as a professional from Germany, working at one of China’s smart online marketing communication agencies Firework, think China is leading in this realm of future business.


This is a story of the Futurist Club

Selina Irmen

Written by: Selina Irmen

in collaboration with Chenyin Pan — Director Fireworks China

Selina is working for Fireworks in Shanghai as a Social Media Executive and originally comes from Germany. There she completed her master’s degree in business psychology and decided to expand her professional experience in China. Her current projects at Fireworks including planning management for Sparkle (Fireworks’ CRM solution for foreign brands entering China), as well as consumer behavior studies on China digital.


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Futurist’s Club by Science of the Time

Your Futurist’s Club for all that’s new and trending, by professionals for professionals. Science of the Time dates back to 1992. It is one of the first and most reputated trend research and innovation agencies in the world. Founded by professor Carl Rohde.

Futurist’s Club Team

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Sharing ideas, trend and concepts by Science of the Time

Futurist’s Club by Science of the Time

Your Futurist’s Club for all that’s new and trending, by professionals for professionals. Science of the Time dates back to 1992. It is one of the first and most reputated trend research and innovation agencies in the world. Founded by professor Carl Rohde.

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