Can A Loyalty Program Create True Loyalty?

It’s always interesting to see how customer loyalty is viewed in other parts of the world.

The Turkey-based Ketchup Agency recently released its Ketchup Loyalty Research 2017 and Altan Bulur, the company’s chief communications officer, talked to Loyalty360 about the revealing results.

What was your biggest takeaway from the research?

Bulur: We’ve been conducting the loyalty research for three years in Turkey and this year we examined over 150 loyalty programs that are currently active in Turkey from various sectors. Every year we try to come up with a new unique concept and this year’s concept was solely focused on customers’ emotional bonding with loyalty programs. Besides our usual topics such as sales triggering, most actively used programs, or redemption rates, we also wanted to examine if customers were really in love with the programs they use and if they can really give up on these programs or not.

We do know that a loyalty program cannot create loyalty and a loyalty program is only the topping sauce for a perfect product or service. However, we did examine that there are some programs out there that users are really attached to. When we look at the top 10 programs in the “Love” list, we can clearly see that banking, miles, telecom, and retail programs dominate the list. We were aware that customers in Turkey use these programs very frequently in their daily lives, but we weren’t expecting that these programs were that essential to them. 

How would you characterize the current state of customer loyalty in Turkey?

Bulur: Within the past two years, customer loyalty programs have flourished in Turkey. Especially the effect of big holding companies’ investment, such as Boyner Holding and Doğuş Holding, have carried out very successful mobile coalition programs. They used their media power to create awareness throughout the whole nation. They came up with very big brand partnerships from various sectors and, with the rise of mobile usage in Turkey, customers have come to understand the advantages of these loyalty programs in their daily lives. Smartphone penetration is currently around 85 percent in Turkey. Therefore, it’s a big playground for these brands to come up with such mobile coalition programs.

Retail and textile sectors had to and still have to come up with creative and attractive loyalty programs in Turkey. Their physical loyalty card game and old collecting points scheme are very out of date. Even big brands like GAP or Marks & Spencer aren’t able to create successful and outstanding programs yet. However, new mobile coalition programs, such as (Boyner Holding) Hopi or (Doğuş Holding) Zubizu, have opened up the scene for new brand opportunities and partnerships. Therefore, customers become more aware of the importance of these loyalty programs when they arrive at the counter.

What was the biggest surprise from the research?

Bulur: We do know that mobile penetration is very high in Turkey, however, we never expected that some of the mobile usages of loyalty programs could be this high. Especially Garanti Bank’s two brand new apps called “Bonus Flash” and “GarantiOne” have very high usage rates. Vodafone’s Avantaj Cepte, which consists Vodafone’s all segments in one app, does also have very high usage rates.

What are brands doing well regarding customer loyalty and where do the challenges lie?

Bulur: Establishing a loyalty program with the integration of new technology and assigning a team is not cost-effective, so it still seems like a big challenge for brands. However, Mobile Coalition Programs (MCP) has opened up a new era and eased some of the brands’ lives. MCPs especially became very valuable in terms of technology integration and cost efficiency. For instance, very high infrastructure investment must be made for the integration of loyalty programs and mobile application platforms by oil and gas companies. However, it becomes much more cost-effective for those companies to provide services to their specific customer groups via MCPs such as Hopi and Zubizu in Turkey.

According to the previous research we have conducted throughout the years, we can see that the loyalty programs that are used in the retail and textile sectors provide only discounts via physical loyalty cards, but nothing more. Consumers still enjoy using these cards, however, it has been stated in the current research that the mobile coalition programs hold the third place when it comes to sales triggering. Therefore, we can state that the MCPs play a significant role in decision-making while making a purchase.

However, there are also very successful standalone loyalty programs in Turkey. These brands face up the challenge and invest in technological platform to make an impact about personalization by creating customized offers & privileges. Banking (especially miles programs) or telecom loyalty programs are still dominating the loyalty program scene in Turkey and they do come up with the best offers that do touch customers’ needs and expectations. On the other hand, textile and sports programs still have a long way to go.

What trends do you see in the future connected to customer loyalty in Turkey?

  • Mobile connectivity and easy to use (being able to redeem points quickly at the point of sale)
  • Instant access to privileges becoming more and more essential (Especially with Gen Y & Z)
  • Personalization will be the most striking element in loyalty programs. Setting up the technological infrastructure and making that investment will be a must for brands (especially for retail & textile brands). Instant offers based on location and personal preferences will be what customers are looking for in Turkey very soon.
  • Discounts are still important for every segment, however, creating emotional bonds will be a lot more important. Gen Y & Z want to have fun while they are getting instant discounts.
  • Brands partnerships from various sectors including hip mobile brands such as Spotify, Uber
  • Lack of ecommerce loyalty porgrams: there could be an opportunity in this area
  • Yes, people still carry around physical loyalty cards, however, they do prefer to access programs via their smartphones. 

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