Q: What do you suggest SMEs to do to improve their loyalty program performance in China without too high a cost?
Actually, not all SMEs have needs for a loyalty program. A lot of SMEs in China like every where in the world are rightly focused on servicing their existing clients and on improving their service quality to them.

Moreover for many SMEs investing in loyalty marketing is not their priority. Their major effort should be focused on how to improve their performance in terms of strategic & contribution value of their key clients. Our recommendation to them is to survey their high strategic value clients or partners (that we map out according to scorecards based on certain criteria such as coverage, capability, capacity and commitment). We propose to them partnership programs with attractive incentives, structured around different type of sales activities (cross-sales, upgrade, renewal, etc.). Our company Band creates and manages all the communication tools (website, e-mail, newsletters, etc) and campaigns to launch and drive the success of these incentive programs.

Q: When preparing a SME-focused loyalty program, what shall we pay special attention to?
A: The first assessment that our company Band needs to conduct when we meet new SMEs are the key loyalty drivers in their specific industry. This may request external interviews with key customers, partners or internal interviews. Direct insights from their customers along with a competitive analysis will help us to define what the key criteria of loyalty success are, whether it’s pricing, service, or knowledge level, etc.

Q: What are the common loyalty marketing challenges your clients operating in China often face? What are the common mistakes they make?
A: One of the most common challenges is the lack of commitment in investing and creating some marketing tools and products to help in driving loyalty. This could be training & certification tools to increase SME customers’ capability. This could be sales education & knowledge programs based on employee’s performance or joint marketing program for lead generation campaigns for the key customers.

Q: How can we appropriately measure the performance of a loyalty marketing programme?
A: The number one Key Performance Indicator that most our SME clients in China want to see is the additional revenues that a new partnership program or a new loyalty program can bring to the bottom line over a year or over a longer period. However, many additional loyalty factors should be measured in such a program such as frequency, share of specific sales, share of product renewal, etc.

Q: Nowadays more and more Chinese customers make buying decision based on word of mouth. How can we ride on this trend?
A: This trend has always existed in China. What is new in China is the on-line Word-Of-Mouth importance and more and more companies are trying to surf on this trend with on-line buzz generation tactics using forum, BBS and shops on websites such as Alibaba.

Q: How to balance incentives to resellers or consumers with profitability in China?
A: The key is to have a clear resellers or customers segmentation strategy and to structure the incentives to them based on financial assumptions that these incentive programs can bring in.
“Benefits are bought, status is recognized, privileges are earned’ is the pre-requisite of any incentive or loyalty programs whether addressed at resellers, partners or consumers.