Fighting slowdown: How Payback India is working with brands to make consumers shop

With GDP growth slipping to lowest in last six years, consumer sentiment has hit an all-time low. The industry is now banking on attractive offers to bring back consumers. Payback, India's largest multi-brand loyalty programme, is working with merchants to create 'slowdown special' attractive offers to move sales upwards. Ramakant Khandelwal, CMO, Payback India, shares how the company is helping brands to get the consumer back

Akanksha Nagar
New Update
Fighting slowdown: How Payback India is working with brands to make consumers shop

India’s manufacturing growth has slipped to 0.6% over slackening demand and bringing the consumer back to the stores has become a challenge for brands.

As the gloom sets in on India’s retail sector, Payback, the country’s largest multi-brand loyalty programme, has started tailoring special programmes for brands to push consumers to make purchases.

Using loyalty programmes to attract consumers is not new. However, at a time when consumer sentiment is at an all-time low, Payback is studying the history of consumer behaviour related to their purchase journey and providing them incentives to buy more.

The company is working on data connected across all touch points and driving conversion rates by influencing shopping behaviour.

In a conversation with, Ramakant Khandelwal, CMO, Payback India, shared how the company is helping brands to get the consumer to shop.    

Ramakant Khandelwal

Khandelwal says the concept of loyalty programme, which aims to make consumers’ lives more rewarding and easy, is in itself unique. He explained, “The Payback membership operates seamlessly across all the partners, including offline and online. When a customer enrols with the mobile number, wherever they go, they can earn points or redeem those points in terms of discounts and rewards.” 

He added, “Any hyperactivity in the market, such as the festive season, has been a big contributor to retailers. It ends up customers earning more loyalty points. More shopping, more points along with bonus points. For customers, it becomes about collecting points and redeeming them. Members can earn points every time they shop at the merchant partner and use those points to get rewards of their choice.” 

In general, Khandelwal said, retailers are not witnessing very high growth and sales have tapered a bit.

With brands allocating more in marketing and promotion programmes, he said brands and retailers are trying to ensure consumer sentiment is back on track, combined with new launches and offers. Payback, an essentially a loyalty and marketing company, is working with its merchant partners to create joint offers for the right customers and channelising the marketing spend correctly with personalised communication and channels.

Entering the Indian market in 2010, with over 100 partners now across industry categories and verticals, Payback has an over 100 million member base. With revenue growing at a CAGR of over 30% in the last few years and with members grown 10-fold since 2011, the company has crossed 12,000 retail touch points.

The company uses channels such as emails and SMS and even social media and service platforms to reach out to customers, and to keep them updated about new offers and launches.  “We build very high relevant communication strategies to target the right audience and communicate in a way which a customer understands and appreciates. Through our database, we keep customising strategies that depend on campaign objectives.”

Payback invests about 35% of its revenue on communicating with its customers along with its partners or by itself.

Solving the customer retention challenge 

But why would any company join this programme? Khandelwal said, “Because we have the same objective like our partners: retaining valuable customers for the long term. Brands offer membership along with points that are generally given as part of every shopping from time to time. The partner network covers over 80% of the popular consumer spend areas such as retail, fuel, banking, payment cards, entertainment, hospitality and travel.”

Its retention strategy is focused on targeting customers who do not come back to the merchant in the same frequency as was expected.  It then starts communicating to customers, offering them special offers or bonus. Khandelwal said retention and frequency both are very category-driven. 

Khandelwal said more than 80% of the customers in retail format show interest in the loyalty program and more than 90% of engaged customers redeem those points. The company uses analytical tools to check whether these programmes are giving any incremental value to customers.

“Data is the important thing in the loyalty programme. Most of the people think it is all about points. But behind the scenes, it is about understanding the customers better. To run this programme, it is important to understand the customers’ preferences, their ability to purchase and some seasonality trends. At different times of the year, there are different activities in the market. It is data and past trends that help us analyse what to expect from which segment and consumer sets. So if a company is running successful loyalty programmes, they're not shooting in the dark actually, they're creating strategies that help them take informed decision to create winning objectives,” Khandelwal said.

Khandelwal said the company operated on hardcore data and analytics. And it helps brands create winning strategy, or correcting those strategies mid-term. He further said these programmes give brands reach and conversion, which they are using as part of their marketing strategies. 

He said most of the other loyalty programme providers are missing out on creating long-term loyalty. With everyone offering instant cashback and offers, these options do not last for long, he said.  And to create a meaningful programme for the customers, it should aim to achieve long-term loyalty. It is not a substitute for poor quality customer delivery. Loyalty programme works beautifully when the expectations of the customers are met, recognised and treated as valuable customers. He said loyalty is a good cost. When a company is facing cost cutting in businesses, loyalty should be the last cut, because that directly impacts customers’ expectations.

Apart from this, he explained how the platform is focusing towards digitising its whole business. Having launched its application last year in English, it is planning to get more vernacular in its reach, and launching in Hindi soon. After about four-and-a-half million downloads, it has also launched a new version of its portal.

“We are going to keep launching new features on our app. With customers sharing their locations with us, we want them to avail of real-time and immediate offers.”

Payback India Fighting slowdown