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While loyalty marketing has recorded steady growth in Saudi Arabia over the last four years, the concept of loyalty is fast evolving considering the changing consumer behaviour and market dynamics. Ashish Sinha, Managing Director of Epsilon India, APAC & MEA, explains further in light of a recent report titled ‘State of Loyalty Marketing in the Kingdom of Saudi Arabia’ by Epsilon and Martechvibe.
Consumers in the Kingdom want more. Post-pandemic, they are more focused on quality, cognisant of how they spend their time, and inclined towards brands that align with their values. While they are willing to share information, they need to see the value that it will create towards their future purchases. This is being felt in loyalty and rewards marketing more than ever before. While loyalty marketing has recorded steady growth in Saudi Arabia over the last four years, the concept of loyalty is fast evolving considering the changing consumer behaviour and market dynamics.
As the Personal Data Protection Law to regulate the processing of personal data took effect in the Kingdom in September 2021 — organisations are also faced with significant changes to their operations to ensure compliance while they invest in data and analytics strategies.
A one-size-fits-all promos as a generic loyalty rewards programme doesn’t cut it anymore. Loyalty members spend 3x more than non-members — so it’s critical that brands treat such consumers to the powerful and personalised experiences that they deserve. And see the evolution of happy customers into powerful advocates. But converting casual customers to lifelong loyalists can be tricky without the right tools to achieve your business goals.
In a recent report titled ‘State of Loyalty Marketing in the Kingdom of Saudi Arabia’ by Epsilon and Martechvibe, fifty marketers handling the loyalty function for enterprises across a range of industries were interviewed, with the aim to study market dynamics, consumer behaviour and success metrics across the Kingdom.
The report revealed that loyalty marketing in the Kingdom of Saudi Arabia is currently in a state of transition. Powered by the nationwide focus on digitalisation and the evolving data regulation laws — enterprises are rethinking the way it serves customers via new digital channels by using this data to make smarter decisions. Enterprises are investing in the infrastructure to action this modern strategy and make the most of customer data to inform future actions and in fact, more than 50% of respondents said that updating their digital channels was a priority and 54% noted their focus was on expanding their customer base. The focus is on speaking to customers as an audience of one and delivering stellar customer experience.
“Consumers in KSA are tech-savvy and hungry for what’s next – this is one market where innovation is more than just a buzzword.”
There is no doubt that loyalty programmes can improve brand recognition, boost customer retention and drive sales. But the journey to creating the right loyalty programmes, designing the reward mechanism, making sure redemption is easy and customers see value in it — is unique for every enterprise. So is the technology that will make execution efficient and scalable towards larger business goals.
The pandemic led to digital acceleration on both the consumer and enterprise end. The main advantage of this is that brands have access to real-time data on how their consumers interact with the loyalty programme and the business as a whole. Access to this data, allows marketers to create unique and successful tactics to strengthen not only your loyalty programme, but also your brand as a whole.
Top challenges standing in the way of the success of loyalty programmes that marketers mentioned in the report include low engagement, perceptions as a purely transactional benefit and lack of exclusivity among top-tier customers.
Transactions aren’t the only way to engage with shoppers. Traditional loyalty programmes are typically based on transactions—a point for every dollar spent. Once the shopper accumulates a certain number of points, they can redeem them to receive a certain number of dollars as a discount on future transactions.
Modern methods look at integrating User Generated Content (UGC) into their loyalty programmes. It rewards consumers for submitting reviews, photos, videos, and other social content. Engage with shoppers beyond monetary transactions to foster authentic relationships with customers — and build long-term loyalty. Moreover, visual UGC gives shoppers social proof about what their peers love, and how products look in real life. This inspires other customers to make more confident purchasing decisions, quicker.
When consumers feel heard and seen by the brand, depicted via personalised communication, it creates a heightened emotional connection between consumers and brands. Yet only 27.3% of marketers admitted to using first party data to fuel their marketing actions though 95% of said they use a customer data platform (CDP). This signifies that while most enterprises are investing in infrastructure, they are yet to mature in using data to drive marketing actions.
Customer data is the biggest asset any company can have. If you are building loyalty programmes, it’s best to align it with the overall business goals. Next, segment customers based on measurable behaviours that revenue impact, and plan personalised communication. Only 22.7% of marketers said they are able to use real-time data to trigger marketing actions.
Consumers in KSA are tech-savvy and hungry for what’s next – this is one market where innovation is more than just a buzzword - all stakeholders want to make it integral to the way business and the economy grows, while ensuring it drives real value for customers, which will naturally lead to business growth.
Loyalty and retention marketing will be an area of opportunity for marketers who are focused on ethical
data collection, personalisation and better customer experience. In the future, we will see tailor-made loyalty experiences reach new heights to elevate the customer experience as a whole.
