Middle Eastern consumers want more from loyalty programmes

December 5, 2013 7:57 am

Brands are failing to deliver on the things that matter in the UAE and KSA

According to a new report published by global loyalty agency ICLP, ‘Driving greater loyalty in the Middle East’, there is a ‘loyalty chasm’ in the Middle East region, which is the gap between what is important to customers in driving their loyalty and what brands are delivering.

The new research – commissioned by ICLP surveyed 600 consumers in the UAE and the Kingdom of Saudi Arabia (KSA) – reveals that loyalty programmes remain a powerful way to win business and improve bottom-line results. Sixty-three per cent of consumers in the UAE and 61 per cent of KSA consumers choose to buy from brands with loyalty programmes, and 55 per cent of those in the UAE and 60 per cent in KSA tend to buy more from brands they are loyal to.

The largest gaps between customer expectation and brand delivery were in the areas of personalisation and relevance. Both regions identified customised, relevant incentives and communications as important to securing loyalty. In the UAE, 66 per cent of consumers felt customised rewards would win their loyalty. However, only 44 per cent of brands delivered this, leaving a loyalty chasm of 33 per cent. Meanwhile, KSA consumers rated customisation as 62 per cent important, with 45 per cent delivery and a 17 per cent chasm.

ICLP’s report reveals that, in a harsh economic environment, customers demand more than ever in return for their loyalty. In particular, customers expect more instant, flexible and customizable rewards to be available through modern mobile technology.

In addition, customers expect instant rewards. In the UAE, 74 per cent of respondents felt instant rewards were important, while only 54 per cent of brands delivered, leaving a chasm of 20 per cent. In the KSA, 72 per cent of consumers wanted instant rewards, but delivery of 57 per cent left a chasm of 15 per cent.

The findings of the report suggest that while social media is not to be ignored, the most effective improvements to a loyalty programme in the Middle East region were found in making incentives and communications more relevant, personalised and tailored.

Dion Maritz, general manager at ICLP, says: “This valuable research proves the effectiveness of a loyalty programme, but sheds new light on what consumers expect for their loyalty. More than anything else, consumers expect loyalty programmes that are localised to the Middle East region, and offer tailored communications and rewards. We have seen an ongoing trend in customer segmentation and that is where we will get the biggest results in loyalty.”