The demand for power has seen a steep upward trend in the global market. As the pace of development has begun to pick up in India, the electrical industry has gained importance. It has become the backbone of the social and economic advancement of the country. With the government’s vision of housing for all, every village’s electrification demands a domestic supply of power and allied products and services from the electrical sector.
We live in an age where we are close to achieving 100% electrification of railways and are moving towards electric cars. The infrastructure support needed from the electrical sector and the need for quality products will be enormous. It is likely that with an increase in demand, there will be a proportionate increase in the competition within the electrical and allied industries. Customer and consumer loyalty has thus become a cornerstone for a successful business strategy.
The promise customer loyalty management brings to the business
Rewarding loyalty has been proven to be effective in retaining customers. Studies have estimated that about 61% of customers had switched brands or providers in the last year. An estimated 51% were ready to spend more on brands to which they were loyal. Many customers, close to 71%, said that they are quicker to shift brands now than three years ago.
Thus, loyalty management programs need to be reinvented and made sector specific. Customer loyalty cannot be taken for granted as loyalty programs do not work well when put on autopilot.
While the retail segments are well acquainted with loyalty and reward management, the power and electrical industry faces unique challenges and opportunities.
What makes loyalty and reward management different for the power and electrical industry?
How do you lock in customers when you do not know them? How to build a loyalty program when your end-user never interacts with your brand representatives? Can a sector that predominantly deals with retailers and service providers bring all its stakeholders under one umbrella? A company needs sustained investment to build a loyalty program. The electrical and allied industries face dual fear when it comes to customer loyalty and reward system. On one end of the spectrum, dealers and service providers have access to multiple brands with comparable quality. These dealers and service providers are the largest sources that can encourage customers to buy a particular brand. On the other end of the spectrum, electricians are a fragmented group. Breaking the manufacturer and end-user barriers is a challenge for specific sectors like electrical and allied industries.
Also, homeowners may spend little time researching electrical appliances like circuits, wiring, LEDs, etc. In all, disengaged customers, distributors, and service providers open many challenges and opportunities in loyalty management in the electrical and allied industries.
Summarizing the challenges
- The customers are not easily accessible and remain unknown. Electrical and allied industry deals with electricians and distribution partners. They can be common for multiple brands.
- Common marketing channels make it difficult for the industry to have a database of regular and loyal customers. Wipro had conducted a test-run of a loyalty reward program for the electricians who were ‘repeat customers’ to solve this issue. Electricians from tier 2 cities for its MCBs (Miniature Circuit Breakers) became the target audience. The rewards included incentives like toolkits, bicycles, mobile recharge packs, and more. The program was a massive success in boosting sales and retaining customers. It also helped the company build a database of regular customers.
- In the electrical and allied industry, the product reaches the end-user through a multi-tier distribution system. It makes engaging with channel partners tricky yet necessary. An essential factor to be considered while building a channel partner loyalty program is ensuring transparency and trust.
- For lighting and electrical equipment, the service providers like electricians need to be considered influencers. Incentivizing them is akin to boosting sales.
- The service providers and the incentives will be region-specific. Local electricians understand and dominate the market in their vicinity. The local dealer influences the service providers, who in turn influence their customers. In each locality, the residents and end-users will place their trust entirely in the popular service providers in that area.
- The sector depends on referrals from distributors and electricians. So, a bonus-based loyalty program can directly increase sale points.
Why Loyalty Management is important in Electrical and allied industries?
In addition to boosting sales, today, many companies feel that it is important to appreciate their distributors, service providers, and partners through a loyalty-based reward program. The companies want to build their brand image by doing something special for all their stakeholders. A loyalty-based reward program can benefit the electrical and allied industries in the following ways:
Need for ‘Trust’ as the core of loyalty management programs and ACVISS’s ‘BONUS’
A few pertinent questions that companies across sectors ask while rolling-out a loyalty program are:
- ‘How do we know that the genuine buyers are being incentivized?
- Can the beneficiaries be bots?
- How do we know that we are not being scammed?’
Tech startups like ACVISS are already at the forefront in addressing these concerns. ‘Bonus’ is a customer loyalty software that understands the importance of trust. With the idea of making the trust factor the core of every customer loyalty and reward initiative, Bonus has a built-in mechanism for verifying ID proofs. To ensure that the rewards are easy to claim by authentic buyers, Bonus gives brands unique designs, 2D codes like QR codes, Datamatrix and ACVISS Proprietary codes. These can be seamlessly integrated into packaging. The customized app is user friendly, making it easy for customers to claim their rewards.
Acviss's Bonus has been used by many companies in the electrical and allied sector. Some of these companies are Skava, K-ONN, Salzer, and more. With a research-oriented team and machine learning, Bonus can alleviate the challenges faced by electrical and allied industries in building customer loyalty programs.