Loyalty program in Consumer goods industry !??

A few days back, I was looking into various industries which organise loyalty programs and the various benefits (mutual) for both the consumer as well as the producer. I was completely astonished to see that a huge industry (a big ticket one) of consumer goods almost completely lacking this program. Most industries having high value purchases like automobiles, luxury brands, luxury hotels, airlines etc generally have a loyalty program. Won’t a company in the consumer goods space benefit by applying similar principles to retain its consumers? Let us look at a crude idea on this.

Let us look at a company like Samsung and see how the program can apply to it. Consider a hypothetical case where Samsung creates a family called a “Samsung family” which has its high value customers (Like customer who has brought a TV of more than INR 80000 or a fridge of more than INR 50000 or a Samsung galaxy S4 etc). These are generally the consumers who have high disposable income or are more tech savvy or have high affinity to expensive goods. Now these consumers are more likely to buy the next expensive tablet that Samsung might launch or more likely to be the first people to buy the next Samsung smart watch. Besides, they are more likely to buy another expensive consumer good at a later date. So targeted marketing into them will be a major benefit for the company. Isn’t it? Also, considering a country like India, where this set is relatively small but growing at a rapid pace, this database can be a major source of strategic advantage in marketing and sales.

Besides, if the company can ensure the “consumer delight” of such clients, they would help in generating more customers through positive word of mouth. They are more likely to be the ‘mavens’ in the tipping point phenomenon thus positively influencing the sales.  Also, it doesn’t make any sense to lose these consumers to a competitor as it is not just one sale lost but a loss of huge amount of business. Generally, these consumers influence the buying behaviour of a lot of people in their vicinity and hence can be a major source of business and competitive advantage. The bigger and stronger the database of the company containing this set, the higher is the chance of the success of the company.

Apple has indirectly been able to do this. They have been able to engage a huge set of mavens who have been able to positively influence their sales as the product is technologically different than most of its competitors products. If the product is similar to competitors, as is the case with Samsung, they can attract mavens by providing something different in their overall product package to be able to stand out from the clutter. A loyalty program can thus provide a huge edge in attracting and retaining mavens who can then be opinion leaders positively influencing the product sales. They have been able to attract mavens and hence have been able to create a mass drive for the purchase of their product.

I am completely surprised that why these principles are not applied in this industry. The next time you buy a consumer good, do look into it!!!