Mobile financial service (MFS) providers in the Philippines are failing to fully realize the potential of loyalty programs to drive revenue growth, according to the findings of a consumer and service provider survey conducted by Amdocs.
A significant gap exists between what customers want and what they are offered. This is especially true for unbanked users: 78% are not enrolled in any loyalty program. The findings also reveal a lack of awareness of the types of loyalty programs being offered.
The survey, which was commissioned by Amdocs and conducted by analyst and consultancy firm Ovum, focused on banked and unbanked users of MFS worldwide. It surveyed 1,800 consumers and 42 service providers across 9 countries in emerging and mature markets including the Philippines, the United States, Singapore, Russia, Vietnam, Indonesia, Mexico, Bangladesh, and Brazil.
“MFS providers who employ loyalty programs to engage and retain customers are better placed to increase usage and adoption of their mobile wallet service, thereby driving revenue growth,” said Eden Zoller, principal analyst at Ovum. “However they must still address the gaps that exist between what customers want and what they are being offered.”
Not well supported by service providers
The overwhelming majority of respondents consider it very important (58%) or important (37%) to be able to manage different loyalty cards via a single wallet. However, none of the service providers who were surveyed offer this feature.
The other important feature that consumers want is the ability to share loyalty points with friends and family. While 51% rated this feature as very important and 41% as important, only 25% of the service providers, who were surveyed, support this. Younger respondents (aged 16-24) showed even more interest, with 75% saying it was very important and 25% rating it as important.
Drives greater mobile wallet usage
Only half of service providers offer tiered loyalty programs. Of these, 50% said that the prospect of earning higher tier points incentivizes customers to use their services more. Consumers however, still lack awareness of such programs, with 21% saying they didn’t know if their loyalty program was tiered.
Loyalty points
While overall, consumers are receiving the rewards that they like, gaps still exist. Although there is a marked preference for cash back (45%), this type of reward was not available to more than 70% of respondents.
The same holds true for vouchers, where 32% wanted to receive such rewards but only 23% were offered them. Forty-four percent of Filipino respondents also showed preference for discounts that they can use to buy goods and services at reduced prices. However, only 38 % were offered them.
A highly untapped market
Sixty-one percent of respondents were not members of an MFS-linked loyalty program. One-third of these were not offered any such program. Of unbanked respondents, who stand to benefit most from MFS-linked loyalty programs, only 22% said they were registered to one.
“The mobile financial industry is looking for ways to accelerate usage and drive growth, while delivering a consistent and simplified experience,” said Patrick McGrory, division president for Amdocs’ Emerging Offerings. “Amdocs Loyalty Management System, which we launched today, is a simple and scalable solution that enables service providers to integrate multiple loyalty programs into one wallet. It simplifies the consumer experience, while helping service providers retain and engage existing customers, attract new ones and increase mobile wallet usage.”
Amdocs today also launched the MFS Loyalty Management System, which allows MFS providers to integrate all loyalty programs and cards from various retailers, merchants, billers and so on into one mobile wallet.
The loyalty management system is fully integrated into Amdocs MFS solution which holds and manages subscriber loyalty account information. It is also integrated with Amdocs MFS card management system, which can link virtual or physical loyalty cards to a loyalty program.
