SME Loyalty Trends in Mumbai & Customer Footfall Analysis.
Hashtag Loyalty’s vision is to unlock the power of customer data for small and medium sized businesses. We hope to keep a finger on the pulse of the market trends & insights with respect to loyalty marketing and customer engagement. In accordance with this, we’ve published a few insights about loyalty programs & marketing across offline businesses in Mumbai along with a customer footfall analysis to offline business for the month of September 2017.
What are the different types of loyalty programs that offline businesses are adopting?
- Keeping it simple: A whopping 91% of businesses opt for a simple spend based program that rewards customers on how much they’ve spent! Spend based programs are easier to explain to customers — and they grasp the value proposition easier than other types of programs.
- 7.4% of businesses adopted the visit based program, the earlier widely adopted type is now dwindling as it doesn’t serve mutual interests of both businesses and customers. Mostly fitness studios, sports arenas and salons adopt this program because they have upfront payments or subscriptions. Most businesses prefer spend based programs because:
a. Technology now enables easy capture of customer data via direct POS Integrations, Mobile or Web Based Applications.
b. The data captured via spend based programs is far richer. - Only a small percentage of small businesses opt for a Multiple Tier program, since it’s cumbersome to explain the value proposition to a customer, when you have only 30 seconds with him. It makes sense for large corporations with higher cheque sizes (such as large retail stores, airlines) to introduce different tiers for customers on the basis of their spend.
What kind of businesses are these?
- The F&B Industry has always been quicker to adopt new technology. A lot of innovation has happened in this industry and given rise to the new-age of Food Tech startups. The local SMEs in the F&B industry have been on their toes to quickly adapt to customer preferences and & onset of large global brands.
- F&B, Health & Beauty brands have often focussed on loyalty programs to ensure higher customer retention rates in a difficult, ever-changing and competitive market scenario.
- The outliers: A cool 11% of the outliers or innovators in their fields have realised the importance of loyalty market and customer engagement.
- Sub-categories such as Fashion, Convenience Stores, Pet Grooming, Laundry, Liquor Stores form this 11%. Brands such as Hops Cork (Liquor Store), Tailwaggers Salon (Pet Grooming) & Euro Clean (Laundry) have adopted a loyalty solution to have an edge in the market and offer their customers the highest value proposition.
The SME industry apart from F&B, Health & Beauty is set to get further organised and developed with the onset of radical changes by the government. How it affects business is yet to be seen, but the importance of customer retention and data will play a big part. Today product & service differentiators are slowly decreasing with the ease of access to different resources and technology. The ones who focus on customer engagement will be the winners. Kudos to the innovators who’ve got a head start already!
What is the spend potential of customers or shoppers?
More than 80% of our platform is dominated by customers from the age range of 18–40. These customers are the primary revenue drivers across our partner businesses. Deep-diving into an analysis of their spend habits, we’ve uncovered interesting facts:
- Customers between the age of 30–40 having average spend potential that is 35% more than customers between the age of 18–24.
- A mature audience of above 40 years has a spend capacity of nearly 45% more than customers below 18 years old.
This data just proves the fact that an older, mature audience always has the potential to spend more. Upselling products that are targeted for this particular audience will always produce better results. Our marketing needs to be broken down to demographic levels to ensure higher conversions and hence revenues.
What customers expect of a loyalty program VS what businesses actually offer?
Businesses and Customers are actually in sync with respect to the most popular type of rewards that are Free Items. But beyond that there is a severe disconnect with respect to what customers actually want. Businesses tend to offer Percentage or Rupees Off discounts compared to Combos or BOGOs which customers actually prefer.
It’s highly imperative for businesses to be in sync with their customers, all we need to do is step in their shoes to understand what I would like as a customer. Obviously there are margins and marketing budgets that need to be adhered to — but understanding what your customers prefer gives you an upper hand in retaining them. Today customers prefer item/service level offers rather than percentage or rupees off especially if your business is catering to a demographic that is between ages 24–35. These individuals usually have a high threshold of disposable income and look for innovative offerings versus percentage discounts.
Footfall Analysis for the September 2017
We ran a footfall analysis for the month of September to understand how shopper behaviour fared across the weekends, weekdays and public holidays.
September followed the thumb rule for basic customer trends: Weekends were much better for businesses. The following insights were observed for the city of Mumbai by analysing customer data across our partner locations in Mumbai.
- The average footfalls recorded across the weekends was 27% more than weekdays.
- Week 3 (18th September to 22nd September) business suffered due to heavy rains on 19th September & the beginning of the Navratri Festival (21st onwards) where people usually abstain from Alcohol & Non-Vegetarian food. The business dipped by 17% for Week 3 as compared to Week 2 which was the best week of the month.
- Dusshera a public holiday and Saturday recorded the highest footfall for the month, ~50% more than the average footfall for the month.
All the data published above is according to what Hashtag Loyalty has recorded on its platform since its inception. Although Hashtag Loyalty is currently present in 9 cities, for this publication only data across Mumbai has been considered.
You can reach out to me at karanc@hashtagloyalty.com. Know more about what Hashtag Loyalty does for local businesses at hashtagloyalty.com.
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