Inaugural Mastercard Study Reveals Significant Growth Opportunities in Asia Pacific’s Changing Loyalty Landscape

Singapore, January 18, 2018 – Consumers in emerging Asia Pacific markets are embracing loyalty programs with gusto, while their peers in developed markets express a more reserved sentiment, Mastercard’s inaugural multi-market study on Asia Pacific’s loyalty landscape revealed today. Despite the variances in perception, the research signals room for growth across the region to enhance the appeal of loyalty cards.

The Mastercard loyalty insights study titled Achieving Advocacy and Influence in a Changing Loyalty Landscape, conducted across seven markets – Australia, China, Hong Kong, India, Indonesia, Japan and South Korea – found that the loyalty market is at different levels of maturity across the region in view of shifting consumer expectations and needs in each market.

“At Mastercard, we are constantly researching and developing new ways, such as this study, to understand the evolving consumers’ needs so we can better cater to them,” said Felix Marx, Executive Vice President of Services, Asia Pacific, Mastercard. “The loyalty landscape in Asia Pacific is a competitive space with many players battling to stay top of a consumer’s loyalty wallet. Loyalty program providers now need to move away from traditional earn-and-burn levers and invest in smarter initiatives that will influence consumer behavior and ensure loyalty for the longer term,” he added.

Using the Net Promoter Score[i] (NPS) as a measure of the value loyalty programs bring to consumers, the study found that the regional average score was -5, signifying the potential for greater advocacy and influence on consumers’ spending habits. Today’s consumers demand immediate rewards, greater personalization and a more secure and convenient experience as they look for gratifying experiences.

The NPS results reflected a significant contrast between the markets as well. Emerging markets China (+14), Indonesia (+19) and India (+37) have a healthy appetite for such programs. Conversely, the NPS for Australia (-6), Hong Kong (-26), South Korea (-38) and Japan (-39) displayed a more jaded outlook, where the loyalty landscape is well-entrenched and highly competitive. More detailed information from the study can be found here.

The study identified three key pillars to ensure a successful loyalty program: enhanced digitization, greater levels of personalization and improved modes of communication.

Go digital

Asia Pacific is undergoing digitization at a rapid rate, with 96 per cent having access to a mobile phone – higher than any other region. Despite this, Mastercard’s research found that only 40 percent of the consumers polled can interact with their loyalty programs via a mobile app. Digitizing is crucial to engaging with consumers and adding value to their loyalty experience by displaying offers and points balance more conveniently.

Get Personal

The study revealed that much more can be done in terms of curating experiences for each individual customer and maintaining regular two-way communication. Across the region, only 36 percent were highly satisfied with the level of personalization. The majority (71 percent) of consumers were willing to disclose details about themselves in order to receive a more relevant experience.

Communicate Better

Loyalty program providers should cater to the consumers’ preferences when it comes to the frequency and modes of communication. Regular communication alone is not enough as consumers prefer to be communicated with in their preferred channel about personally relevant subjects.

Those who delivered on these programs will be able to reap the benefits of greater spending. An overwhelming 70 percent of consumers said that their most valued loyalty program which had more effective digital interoperability, personalized privileges and improved on relevant communication modes would be very influential on their shopping, payment or travel behavior.

Other consumer insights from the study:

On average, consumers in Asia Pacific are members of 7.6 loyalty programs.

Millennials hold a higher number of loyalty memberships than the average consumers, and are a key demographic to tap into.

Financial services programs (47 percent) are the most valued loyalty program. Retailer (29 percent) and airline (11 percent) loyalty programs follow.

The top three key drivers of a valued loyalty program include easy-to-earn benefits (30 percent), a good range of rewards (28 percent) and benefits that are relevant to the consumer (28 percent).

It’s a mixed bag with regard to the region’s preferences for the type of rewards earned from loyalty programs. Markets such as Indonesia (65 percent) and South Korea (45 percent) prefer discounts while the Chinese are hungry for bonus or complimentary products (47 percent).