Loyal customers who return for repeat purchases are vital to a company’s success, says Marianne Rumantir, CEO of Jakarta-based startup Member.id. If a firm spends its marketing budget on customers who only buy once, it may never see healthy profits.
With Member.id, Rumantir helps companies devise loyalty programs that incentivize customers to keep coming back. A firm can end up spending five to ten times less if it invests in retaining customers rather than acquiring new ones, she says.
It’s not the first startup in Indonesia to attempt improving customer retention. Others have tried and failed to find sustainable solutions. Member.id believes it has unique ideas to make it work, and today announced that it has raised a seed round to put its vision to the test.
The round of an undisclosed amount was led by East Ventures. Indonesia’s Ismaya Group, the startup’s first client, also participated. Ismaya runs several popular restaurants and clubs and manages live events.
Experiences over things
Rumantir, whose background in marketing meant she had to travel a lot, took many cues for Member.id from her own obsession with airline miles.
“I collect points mainly for travel in premium cabins because it has the highest value,” she explains. Buying a business or first class ticket would costs thousands of dollars, but her premium membership status lets her upgrade for just a few bucks.
That’s the magic of a good rewards program, she explains. It gives customers a great experience rather than trying to win them over with gifts or discounts.
When Member.id started revamping Ismaya’s loyalty program last year, it applied these ideas. It introduced a points system and different membership levels, similar to how airline miles schemes work. It now rewards members with VIP treatment at their venues or concert tickets. This has helped the memberships grow over 300 percent in the six month period after introducing the new scheme, Rumantir says.
With funding to support product development and hiring new people, Rumantir plans to expand the concept to new sectors, like hotels and travel.
Each program requires a high amount of customization, she says. That’s why Member.id is not a self-serve platform where clients pay a subscription fee and handle everything themselves. Member.id designs, builds, and operates the program as a third-party provider for their clients. It targets only large enterprises. Clients can log in and access data at any time.
Rumantir hopes the system will be particularly attractive to members because, in the long run, it’s devised so that members can exchange points via the platform. If you prefer the rewards from another brand, you can buy into that network by trading points. “We will be like a points bank,” Rumantir says.
Member.id’s business model differs from that of some other local startups in this space. Stamps for instance has an app that merchants can customize themselves to reward frequent visitors with discounts. It’s basically a digital version of the classic stamps card.
Loyalbox did something similar, but it already shut down, as did Pouch, Blinc, and Kleepon. Pomona, which raised seed funding earlier this year, is a contestant still in the race.
Ride-hailing apps like Go-Jek and Grab have also introduced points based systems, where customers can redeem points for discounts in-app and for partner services, but neither of them have released information on the effectiveness of these programs. The points are also not interoperable and can only be spent on deals offered within the app.
”It’s been difficult to find a loyalty platform with a holistic approach in Indonesia. Every merchant is in their own silo and consumers struggle to remember every loyalty program’s benefits,” says East Ventures partner Willson Cuaca. “We hope to change this and Member.id’s ’s team is in the right position to do so.”
Rumantir’s co-founders are Robert Tedja and Edy Sulistyo. The latter also co-founded Loket, the event ticketing startup that was recently acquired by Go-Jek.
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