The average day in China sees no less than 500 new products launched. With this in mind it’s easy to understand why its consumers are among the most promiscuous on the planet. Furthering this trait, modern concepts of a ‘brand’ have only recently taken hold in China; China’s consumers have traditionally lacked the inherent connection to brands that characterize those of the West.
Yet some brands are fighting against the tide of consumer disloyalty. Those leading the way often employ a well-considered loyalty programme at the heart of their strategy. Successful programmes are built upon many values, but those that carry the most sway with consumers ensure to be personally gratifying and bring their members a source of social currency through rewards and association. Even with organic growth slowing in China – particularly in higher tier cities – most brands are still focusing on acquiring new customers as opposed to retaining existing ones.
Building loyalty should not be undervalued as 77% of Chinese consumers claim to spend more on brands they love. That being said China’s increasingly discerning consumer base is fuelling growing expectations around loyalty programmes. 24% of consumers say their expectations around loyalty have changed in the past three years, with 75% quicker to retract loyalty. A third of consumers say they have a negative or non-existent reaction to companies trying to earn their loyalty, according to a study from Accenture.
Like any discipline in marketing, understanding what resonates with consumers is the key to developing successful loyalty initiatives. The study found that small tokens of affection hold a lot of appeal in addition to understanding them and providing personalised products, services and communications. Part of this is supporting causes such as charities and campaigns that are important to them. Partnering with relevant brands also endears consumers, such as the all-important celebrity and influencer endorsements.
WeChat’s all-encompassing ecosystem and innovative features provides one of the most powerful platforms for loyalty. By nature, it also encourages seamless advocacy, appealing to the 63% of Chinese who are loyal to brands which friends and family buy.
Developing a loyalty programme also comes with the responsibility of protecting members’ personal information. Four out of five of consumers are loyal to brands that safeguard and protect privacy and this will only grow as data becomes more comprehensive and privacy breaches increase.
Whilst it isn’t easy to develop a loyalty programme that touches Chinese consumers at an emotional level, those who do stand to be rewarded in China’s ever-more competitive market. Agencies such as China Skinny can help develop them. Go to Page 2 to see this week’s China news and highlights.