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IMPROVING CUSTOMER LOYALTY

Ria Cusimano, Senior Marketing Manager of CPP Group UK, a provider of bespoke insurance products and solutions, discusses why businesses need to place just as much emphasis on customer retention as they do on acquisition.

“Regardless of what sector you work in, customer loyalty is an essential part of driving sales.

“It’s been well documented that retention is cheaper than acquisition, especially when it comes to customer numbers. We also know that repeat customers tend to spend more. It’s no surprise therefore that customer loyalty also plays a key part in impacting the bottom line, with it being reported that increasing retention rates by 5% can increase profits from between 25% and 95%.

“Statistics clearly show that businesses can achieve some real benefits from customer retention, yet so many don’t see this as a priority. For those businesses that fall into this category, they are missing out on forging meaningful and long-term relationships with their customers, which we know can generate significant financial gains.

“Take the insurance sector as an example. There is more work that can be done to encourage business to place more emphasis on maintaining relationships with customers.

“There is a natural area of focus for us at CPP Group UK as we’re always striving to add value to our partners’ customers. A big part of this is understanding what drives their customers, so we can develop services and products that are going to improve customer loyalty.

“Based on the work we’ve done in the last year, here are our top recommendations for businesses looking to improve customer retention:”

  1. Find out what your customers want and respond

“Insight is invaluable when it comes to understanding what motivates your customers. Despite this being a core part of retaining customers, many businesses don’t put enough value on customer insight. This is probably because there is the perception of it being a cumbersome task that produces findings that are hard to interpret and translate into actionable benefits. However, you don’t need huge teams and large amounts of resource, you simply need to understand what it is that your customers like and dislike about your business.

“With this insight, engaging your current customer-base is a quick and easy way of understanding what changes you should be making to the customer lifecycle. Being able to enhance the customer experience in this way not only strengthens current customer loyalty, but also gives them a reason to recommend your business to others.”

  • Use multiple touch points

“There are multiple touch points you can capitalise on in order to strengthen your relationship with a customer.

“The key thing to remember is that you’re in control of how a customer navigates and accesses your services and products, which makes it easy to create peak moments in order to ensure customers remain engaged with your business.

“App-based technology can give businesses the perfect platform to continuously engage with customers, an example being using push notifications via an app. Whether it’s making your customers aware of an upcoming promotion, offering deals or even making them aware of new products and services that they can access, these messages will show your customers that you understand them and want to offer them the best service. And this ultimately strengthens their loyalty to your business.  

“There are also other channels you can use to reach your customers including email, SMSand social media.”

  • Reward customers

“Once you know what your customers want and they have responded positively towards your activity, now is the time to reward them.

“They’ve shown willingness to engage with your business in a different way so this is the perfect opportunity to show your customers that you value them. We know that loyalty programmes work, as we’ve seen with the likes of Tesco and Nectar. They have monopolised discount-based brand loyalty schemes, but increased competition has made it difficult for them to maintain this.

“The move to making digital transactions also means that switching brands is easier, and that savvy customers are always on the look-out for the next best deal. The financial sector also has to contend with this with banks continually competing with each another on cash deals and other incentives to switch.

“The key thing to remember here is that you don’t need to be a company such as Tesco, Sky or 02 to reap the benefits of rewarding your loyal customers. There are plenty of attainable tools that offer rewards, for example our Smart Key Protection product help insurers offer more to the policies customers take out. It’s these low-cost, high-value products that are set to offer quick and affordable ways for businesses to add real value for their customers.

“With an app being fundamental to accessing the benefits of the product, it means the customer is continually accessing it, providing insurers with an opportunity to up-sell other services.

“We can’t stress enough the importance of looking after and understanding your customers. While acquiring new customers is always going to be a key part of your business strategy, this shouldn’t overshadow the importance of building and maintaining your customer-base. And the key to loyal customers is understanding what motivates them and respond based on this insight.”

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Top 10

WHY INDONESIA IS THE WORLD’S NEXT DIGITAL PAYMENTS BATTLEGROUND

Kelvin Phua, Global Head of Payment Networks at PPRO

 

The COVID-19 outbreak has seen the e-commerce sector surge. Despite economic uncertainty, consumers around the world are turning to the internet for the goods and services that they previously would have looked for in-store. In APAC, this has meant that some emerging markets have accelerated their adoption of digital services; the growth that was projected to take years has only taken months.

One notable example of this is Indonesia. According to a recent survey, Indonesia’s e-commerce sector is expecting 50% year-on-year growth with its value set to reach US$35 billion in 2020, up from $23 billion in 2019. What’s more, 30% of the country’s growing e-commerce market is new to online marketplaces and 40% intend to keep using e-commerce after the effects of the pandemic lessen.

With this upward trend has come a reliance on digital payments, and both public and private sectors have responded accordingly. Recently, the Indonesian central bank announced that all mobile payment providers were to replace QR codes with the standardised QRIS (Indonesian Standard QR code), providing a single integrated platform for all transactions made using QR codes across multiple e-wallet providers. On the private sector front, LinkAja has launched an online shopping solution to overhaul traditional marketplaces throughout Jakarta by enabling users to pay for goods using an app with the products delivered straight to their door.

For e-commerce and digital payment providers, these examples are good indicators that the time is right to go after a share of this market.

 

Understanding the playing field

Indonesia possesses many of the key characteristics that are critical to a market’s adoption of digital payments. With a smartphone penetration rate of 60%, well above the region’s average of 51%[1], and having witnessed its middle class grow from 7% to 20% of the population over the last 15 years, it comes as no surprise that Indonesia’s internet economy has more than quadrupled in size since 2015.

Currently, there are 37 local payment methods (LPMs)[2] in Indonesia, with GoPay, Doku, OVO, Dana, and LinkAja some of the frontrunners in the battle to claim a slice of the payments pie. This number is expected to grow as Alipay formalises its entry into Indonesia in partnership with Bank Mandiri and Bank Rakyat Indonesia, joining WeChat Pay which was officially granted a licence to operate in the country this January in collaboration with CIMB Niaga.

The growing number of players jumping on board with digital transactions bodes well for the Government’s National Non-Cash Movement launched in 2014. Go-Jek’s recent funding round and Facebook’s plans to build an e-commerce ecosystem around WhatsApp will help accelerate the adoption of digital payments for millions of SMEs in Indonesia, with businesses already using the popular messaging service to interact with their customers. Similarly, PayPal’s arrangement with Go-Jek will see the latter’s users use GoPay at PayPal merchants globally.

With the influx of foreign payment services and investment catering to higher consumer demand while creating the digital infrastructure needed to facilitate higher payment volumes, Indonesia is shaping up to be Southeast Asia’s next digital payments battleground. But what does this actually mean for businesses and consumers there?

 

Navigating a fragmented payments landscape

With all this consolidation and market movement, payment providers are innovating quickly to strengthen and enrich their offerings by partnering with others to develop their own unique payment ecosystems. Initially, these new partnerships will result in greater efficiencies when it comes to connecting consumers and businesses through one platform. But the fundamental pain point remains; the development of multiple payment ecosystems will continue to create the dilemma of choice. Consolidation in the truest sense of the word is yet to be achieved, and the payments landscape in Indonesia remains highly fragmented.

Since Indonesia loosened investment rules in 2016, foreign e-commerce players such as Amazon and Alibaba have entered the domestic market, competing against homegrown firms such as Tokopedia and Bukalapak. This has provided consumers with access to a wider variety of goods at more competitive prices.

To keep up with consumer preferences in Southeast Asia’s largest economy, merchants and payment service providers would need to evolve – by delivering a customer-centric experience where consumers are able to pay with the local payment method they prefer and trust.

In the long term, businesses should refrain from the drawing of battle lines in Indonesia’s fragmented payments landscape and create a payment ecosystem that takes into account payment preferences of the local consumers. Those who seek to enter multiple markets through one payments platform-as-a-service will be the ones most likely to succeed in capturing the lion’s share of the e-commerce market.

 

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Technology

ARTIFICIAL INTELLIGENCE AND FUTURE OF TECHNOLOGY

Ashish Jain, CEO, Future FX

 

Artificial Intelligence refers to machine intelligence that is programmed to think like humans and mimic their actions. For example while writing this article, I am not actually typing it but dictating it out using the microphone and the text is being typed by Microsoft Word itself.

The ideal characteristic of artificial intelligence is to rationalize and take actions to achieve a specified goal.

As technology advances the previous methods of artificial intelligence are taken for granted as new necessities are conjured. For example the computer was one of the most iconic invention of artificial intelligence but now it is considered as mandatory.

Artificial intelligence is continuously evolving and has to evolve. Machines are made in a way that they understand mathematics, linguistic, psychology and many more other terms that are related to human mind.

Artificial intelligence is used in many sectors for example the medical sector. It is used to test drugs and medicines.

We have applications and games which includes chess where the computer plays against us this is also a feature of artificial intelligence. Similarly self driving cars are also an invention of artificial intelligence. These have to be designed very intelligently.

This can also be used in the financial industry to trace and flag activities in banking and finance such as unusual debit card activity or usage and large deposits.

This also helps to estimate the demand supply and prices of the estimates and that makes trading easier.

Earlier, we had to pay a visit to bank on order to deposit a cheque. Then we updated to ATM/Debit Cards and now you can be identified by your retina. Many different sectors have also adapted this method to make actions it more convenient and safe.

Some more examples of artificial intelligence are iPhone’s Siri, Google’s Smart Assistant, Amazon’s Alexa, Google Maps, Ride- sharing apps like Uber and Ola, diseases mapping, Automated investing, virtual travel booking, social media monitoring, inter team chat tool, NLP tools, etc.

Artificial intelligence is all around us and playing an active role in our daily lives. Every time we open our Facebook newsfeed, do a Google search, get a product recommendation from Amazon or book a trip online, we are using it immensely.

In the coming years, computers might match or even exceed human intelligence and capabilities on tasks such as decision- making, reasoning and learning, analytics and pattern recognition, visual acuity, speech recognition and language translation.

Smart systems in commodities, vehicles, day to day use objects will save time and effort offering us a more customized and comfortable future.

It will help the medical sector hugely in upgrading the medicines and treatments, inventing new ones which haven’t been found yet and making everyone’s lives more safer and healthier. A large number of data can be collected from person to person about their health and nutrition and thus changes can be made in the lifestyle.

Artificial intelligence will bring changes in the educational system making it more revolutionary and advanced.

Overall, every factor has advantages and disadvantages and artificial intelligence has it’s lot too. Considering all the advantages artificial intelligence will also affect the human decision making power, analyzing and rational thinking, lifestyle etc. It will make people lazier and will affect their creativity. It can also lead to unemployment due to increase in usage of machines.

Like everything has a balance, artificial intelligence needs to be balanced too so that we can enjoy it’s benefits without suffering the negatives.

 

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