How brands can build loyalty amidst the demanding choices of the empowered Indian consumer.

October 26, 2024 14:33 IST

By Sumiit Zawar

I often reminisce about my childhood days when we had limited options—whether it was choosing a soft drink, buying a television, or even selecting a local grocery store. There wasn’t much to compare or bargain with. The brands that captured our imagination early on, stayed with us. Loyalty was simple, almost instinctive. Fast forward to today, and we are living in an era where customers are getting “spoilt for choices.” Nowhere is this truer than in India, where the landscape has completely transformed.

Today’s Indian customer is fiercely aware of their choices, which has made them increasingly demanding. The era of blind brand loyalty is over. The customer will switch in a heartbeat if a better deal or more convenient service is found elsewhere. And this phenomenon presents a peculiar challenge for brands trying to build long-term loyalty in an increasingly crowded and competitive market.

The Spoilt Indian Customer

Indian consumers today have access to a dizzying array of products and services, from global brands to local startups, all vying for attention. Every customer interaction is now a battleground, and the spoilt customer holds the power.

Imagine walking into a supermarket with a list of items to buy. You find yourself surrounded by an overwhelming array of choices for each product on your list. From toothpaste to smartphones, the options are endless. This is the reality for the modern Indian customer. With the proliferation of brands and the advent of e-commerce, customers are no longer bound by geographical limitations or brand loyalty. They are spoilt for choices, and this abundance has made them more demanding than ever.

For example, in the online travel industry, platforms like MakeMyTrip, Cleartrip, and EaseMyTrip offer a host of discounts and cashback deals. Customers routinely open multiple apps to check for the best offer before booking a flight, hotel, or vacation package. The experience is no longer about brand loyalty; it’s about finding who can offer the cheapest or most convenient solution for that particular trip.

Numerous brands, new & established are engaged in one-upmanship for customer attention on online marketplaces which directly impact the profitability. It leads to a price war or a higher CAC. One new trend that has started in the Indian D2C space is that, brands are directing customers to their own platforms & websites. However, this has its own set of challenges.

The Cost of Acquisition: Skyrocketing

One of the most dramatic shifts we’ve seen over the last few years is the cost of acquiring a new customer. Marketing budgets that once covered an entire year’s worth of activity now barely get us through a few months. Paid media campaigns, influencer marketing, content strategies, SEO—it’s all become more expensive as the competition grows fiercer. And yet, the return on investment for many of these efforts is shrinking because the spoilt customer isn’t staying loyal.

The challenge is more than just about attracting customers; it’s about keeping them. A 2022 report by Bain & Company on India’s digital commerce landscape noted that acquiring a new customer can cost up to five times more than retaining an existing one. Moreover, as e-commerce booms in India, more brands are entering the marketplace, driving up costs for paid ads and customer acquisition. But despite the increased expenditure, customers don’t always stick around long enough to make these investments profitable.

Creating Brand Loyalty in the Age of the Spoilt Customer

This challenge requires brands to rethink their approach. The spoilt Indian customer may be hard to keep, but they’re not impossible to win over. What’s required is a shift in how we engage with them.

1. Hyper-Personalization: In a sea of sameness, personalization can make all the difference. Customers want to feel that brands understand them, their preferences, and their pain points. Hyper-personalized messaging, offers, and experiences show the customer that you’re not just treating them as another entry in your CRM but as an individual.

2. Seamless Omnichannel Experiences: Indian customers expect brands to meet them where they are, whether that’s on WhatsApp, social media, email, or even SMS. A seamless omnichannel experience means that no matter the platform, the brand delivers the same level of service and personalization. For example, starting a conversation with customer service on WhatsApp and continuing it on voice without having to repeat the problem is the kind of fluid experience that delights customers and builds loyalty.

3. Emotional Connections: Loyalty programs or discounts are great, but they aren’t enough to make customers stay. The emotional connection a brand builds with its audience is far more enduring. Brands that successfully communicate their values, purpose, and story create a resonance that goes beyond just the product or service. Think of how brands like Tanishq and Manyavar have embedded themselves in Indian culture, creating an emotional pull that’s hard to ignore.

Conversational Channels to the Rescue

So, how do we maintain this personal touch, scale it up, and ensure our customers feel engaged? This is where conversational channels come in.

Imagine having a one-on-one conversation with every single customer, understanding their needs, preferences, and concerns. Impossible at scale, right? Not anymore. Conversational channels such as WhatsApp Business, RCS, and chatbots are transforming how brands interact with customers. These platforms allow brands to have real-time, personalized conversations with their audience, offering instant responses, solving problems, and even making product recommendations based on their past behavior.

These channels don’t just facilitate communication; they create engagement. A brand that engages a customer in meaningful dialogue—be it through a chatbot answering a simple query or a human agent stepping in when things get complicated—will undoubtedly leave a lasting impression.

The Role of AI in Customer Engagement

AI-driven tools are reshaping customer engagement by providing deep insights into customer behavior. Through machine learning, brands can analyze customer interactions and predict future needs. AI can help deliver hyper-personalized experiences, whether it’s suggesting the next best product or providing timely customer support.

Chatbots, powered by AI, are already handling a significant portion of customer service queries, allowing brands to scale their operations while maintaining a high level of personalization. These bots are no longer the clunky, unhelpful tools they once were. Today’s AI chatbots understand context, tone, and even complex queries, allowing them to provide customers with accurate, relevant information. Moreover, the ability to integrate AI across conversational channels ensures that the customer’s experience remains consistent, regardless of the platform they’re using.

The Future of Loyalty in India

So, where does this leave us? The Indian customer is more empowered than ever, but they’re also more willing to listen—if you speak their language, understand their needs, and meet them where they are. The days of brand loyalty driven solely by product superiority are gone. Today’s customer demands convenience, personalization, and emotional connection. And those brands that can rise to the occasion will not only capture their attention but also their loyalty.

The curious case of the spoilt customer presents both challenges and opportunities for brands. While the increasing demands and lack of loyalty can be daunting, they also push brands to innovate and improve. By focusing on exceptional customer experiences, offering value beyond price, and leveraging conversational channels and AI, brands can navigate this complex landscape and build lasting customer loyalty.

The spoilt customer is here to stay, and it’s up to us as brands to adapt or be left behind.

The author is VP of Marketing, Route Mobile Limited. (Views expressed are the author’s own and not necessarily those of financialexpress.com)

Publication: Telecom : The curious case of a spoilt customer