PVR's digital path to creating loyalty

As the cinema chain launches a digital plan to woo customers, building relevance and context will be key

PVR Cinemas recently launched a digital loyalty programme — a first of its kind for an exhibition chain in India — that aims to exploit data analytics to deliver more value to retain and attract more movie-goers. The programme is designed as an intuitive feature where the user’s mobile phone is effectively the membership card that collects points for every transaction which can be redeemed for a movie ticket or food and beverage (F&B) at the counter.

The Rs 2,182-crore company aims to generate one extra visit and F&B transaction each for every member annually, and grow the membership base to two million in two years. For a business that sells half of its tickets — it expects sales of 80 million for this year — online, PVR is confident of being able to mine the data from the programme for a more granular understanding of consumer behaviour and to serve up targeted, personalised communication eventually.

According to Kamal Gianchandani, chief of strategy, PVR Ltd, global statistics suggest a sound loyalty programme can add to a company’s bottom line by almost 20 per cent. He says, “We would like to move from having discussions with our executives on ‘I think this is what we should be doing’ to ‘I know this is what we should be doing’. Data gives you that conviction.”

Sanjeev Kumar Bijli, joint managing director at PVR Ltd, points out that the loyalty programme was viewed as a hygiene element as well as one with an objective to get more admissions and customer stickiness.

He adds that it can be cumbersome to carry membership cards, and if there is an expiry date to redeeming points and customers fail to do so it does not drive loyalty. “I am giving you instant gratification, as you get a Rs 50 voucher for transactions of Rs 1,000. That is the USP of our programme on the redemption side.”

Loyalty programmes have been effectively used in retail. Shoppers Stop, for instance, launched a plan in 1994. It is one of the largest in the industry with 4.9 million members who contribute to over 73 per cent of sales.

Govind Shrikhande, customer care associate and MD, Shoppers Stop Ltd., says a loyalty programme should be built on emotional value rather than solely on transactional value. An in-house programme is essential to drive efficiency as it provides a wealth of information, he adds.

“The objective of data analytics is to ultimately help customers in their shopping journeys. Their behaviour pattern and shopping preferences are mapped to the merchandise assortment to provide the right match. This in turn helps the retailer to drive more visits, shopping in more categories and bigger baskets. In FY 17, we were able to generate over Rs 290 crore of incremental sales through analytics initiatives,” says Shrikhande.

PAYBACK India, a multi-partner loyalty programme that has tied up with over 50 brands, projects itself as a source for acquisition and better understanding of customers. “Not every customer is able to accumulate enough points in a standalone plan, where a company is able to address only a chunk of customers who are already loyal to it. But with PAYBACK, low-value shoppers may also collect points through our partners and therefore be able to cross the threshold of point accumulation, which results into a redemption,” says Ramakant Khandelwal, chief marketing officer.

He stresses the success of a loyalty plan lies is in getting more and more customers to redeem points, besides building relevance in a contextual manner with real-time interventions.

A component of getting value back is a must for a loyalty plan, says Khandelwal. Second, it should have an experiential programme that could come from free parking, upgrades or a separate check-out counter. Finally, it must include an emotional aspect. “Customers must feel that they want to be a part of the privileged membership.”

Vishal Talwar, dean, School of Management, BML Munjal University, points out that a customer may attitudinally and behaviourally loyal to different brands at the same time. “According to research, long-term success of the programme also depends on building and measuring attitudinal loyalty (strong conviction and preference for a brand). Customer retention cannot always be an exact proxy for loyalty and the reason why a customer is retained can depend on many factors, including a lack of choice which is not exactly loyalty. Thus, a strategy to judge customers by more than what and how much they purchase is important.”

Secondly, companies should ensure customers utilise the points rather than just accumulate them. Also, they should keep increasing RoI through better understanding of consumer preferences, for more tailored offerings. Lastly, linked to these is the importance of better quality data and analysis techniques which are able to analyse transactions over a period of time; predict and help design better and more seamless experiences.

With the digital loyalty plan, he feels PVR is trying to get a customer lock-in and through that create brand affinity towards itself. “The predominant idea is rather transactional in nature. Over time, they will have to ensure certain levels of innovation and customer experience gets enhanced.”