Do Brands Use All The Levers That Loyalty Programs Offer?

Analysis of Tata NeuPass shows why loyalty programs continue to be effective

A Case Study Series:

In my article Why Loyalty Programs Continue to be Effective published in the Wise Marketer, I left off with a question of “Do brands leverage these levers?”

I will begin to answer the question with a case discussion on the Tata NeuPass program, India’s latest and one of the largest Loyalty programs launched in the past few years in the country.

To provide some context:

India is a country with approximately. 1.4 B people, a marketable and addressable population of close to 150m.
The country has, over the last decade, achieved one of the most significant challenges of addressability and identification with its Aadhar and Mobile connectivity, simply put, over 1.3B Aadhar Numbers issued to individuals with biometrics and 1.1B mobile phone connections.

No wonder the Mobile number has become the KYC tool for many commerce transactions. The Government has helped organizations overcome one of the most significant challenges of business, i.e. identification of customers.

The Tata Group is India’s most valued enterprise with over 100 entities – the phrase from table salt to Steel describes the entity well, though today I prefer to describe it as “everything human” from salt to tea & coffee, to telecom and aircraft. There is simply no area in India where you can do without experiencing a Tata brand.

From a retail customer-facing perspective, the Tatas run India’s second largest Airline (approx. 200 aircraft), India’s largest luxury hotel chain (300+ properties), the 3rd largest automobile manufacturer, the 5th largest global Watch manufacturer, jewelry, Financial services to CPG, groceries, and even a marketplace.

With this diversity, the brand has battled with leveraging the Tata “Consumer” as an asset for the longest period. Different models were tested, including initial plans to carve off the Hotel Loyalty program into a group-wide program, then launching a co-branded credit card driven by its financial arm, then the experimentation with a coalition program as it went through the learning curve of the organization, until the “Tata Neu” program.

The Tata Neu Program was created as a marketplace for Tata brands under Tata Digital, a wholly owned unit of the Tata Holding Company, Tata Sons. Today, the App boasts over 100 million downloads.

Let us evaluate this against the 7 elements discussed in my previous article, For the Neu Pass loyalty program:

#1 Customer Identification

Embedded in a digital app is a location ID, username, and mobile number as the unique identifier. What also works well is the identification of the member at multiple physical stores of the Tata brands, e.g., Titan.

#2 Customer Behavior, Insight, and Prediction

As a user given the number of brands present on the platform, I am sure there is a lot of insight, however being a customer of multiple brands e.g. Big Basket, Titan, Taj Hotels and Air India, it feels that the insight is yet to be drawn from the data and as a member one does not get the feeling that the data asset is being used as much as is being generated.

#3 Data Privacy

In a majority of the brands, loyalty data and customer data existed before the Tata Neu existed, and this migration was done with great care and customer permissions. Although the new entity has zero-party data, it still needs to leverage this data asset.

#4 Marketing Effectiveness

This is a bucket where I feel Tata Neu has made the least progress, and I would not hesitate to guess that while the platform has been set up and the Tata’s have done a great job from a technology integration POV, the struggles of integrating the marketing effort of the multiple brands limits the effectiveness of the program as a shopping app at best, left to the discretion of the user.

While the intent of the Tatas was to maximize customer value with cross-selling Tata brands, the app model remains at the technology integration and shopping level and is yet to transcend to a higher level of creating a TATA customer, as well as a segmentation strategy that customers belong to.

#5 Partnerships and Collaborations

Tata Neu Pass has done a great job in integrating multiple brands in the Tata Portfolio and creating a common point (Neu coins) currency across multiple portfolio brands, but the journey has only just started. The vision of going beyond the Tata brands needs to cross several hurdles before becoming a reality. The complexity of externalization of the platform will make the segmentation and marketing an increasingly challenging task.

#6 Relevance in communication

The reason this is probably the lowest performing score on the platform stems from the fact that segmentation is a challenge across brands that are disparate and have a heterogeneous customer base.

Segmenting a high-value grocery customer and a low-frequency traveler versus a high-frequency traveler and low-frequency grocery customer, although belonging to the same household, is not a simple recognition task, but also creating relevance in the relationship is a challenge that the program must conquer.

#7 Sustainability

The biggest harm to sustainability is the trend towards quick commerce, and being an e-commerce brand model, this is currently unavoidable. Being a Tata brand and the values that the Tatas have always stood for – EVs for delivery and sustainable packaging, and refills would be a quick way to build sustainability into the business.

So, has the Tata Neu Pass Customer loyalty worked?

The jury is yet to decide on that, and the Tatas will be best positioned to answer that question. However, as a loyalty practitioner and customer, I believe the glass is half full. It has succeeded in integrating the Tata brand with a sales platform (more like a Tata Distributor), and don’t get me wrong, anyone who knows the Tatas will accept that this is no mean feat.

Where I believe a lot more needs working is building a ‘TATA Customer’ and a relationship with the Tata brand. This means some of the levers must be made to work harder, with an emphasis on segmentation, creating value propositions for each segment, customer relevance, and communications. Having only just begun, Miles to go before we sleep would be an appropriate statement I would leave as food for thought.

Editor’s Note

Brian Almeida is a frequent contributor to The Wise Marketer. Brian is the Founder of Strategic Caravan and Points for Good, both Indian based organizations changing the way people think about customer loyalty. Brian is a CLMP™, and Strategic Caravan is a certified training partner with The Loyalty Academy™ in India and the Asia Pacific regions.