How Companies Can Transform Taiwanese Consumers Into Loyal Fans
Retention and Loyalty Marketing in Taiwan
This article examines the state of retention marketing, specifically loyalty programs, in Taiwan. The source for this article is local marketing expert Iwen Huang, who also previously lectured marketing at both Vanung and Asia Eastern University.
Just a quick breakdown of the terms:
Retention Marketing: involves strategies and tactics to encourage existing customers to purchase more frequently and at a higher average order value. This differs from customer acquisition marketing, which focuses on attracting new customers.
Loyalty Programs are generally where retailers offer customers rewards, discounts, or other special incentives, as a way to create bonds with customers and ultimately increase customer retention. Most loyalty programs work on a points-based system, the more that the customer shops with a retailer, the greater number of points and rewards they receive.
Retention Marketing in Taiwan
According to Huang, Taiwanese companies are well aware of the importance of retention marketing but many either do not have the resources or do not want to invest. Many of the companies in Taiwan do not even have Customer relationship management (CRM) systems and, in extreme cases, rely on Excel to manage their customers.
Generally, overseas companies have invested more in CRM technology and have brought their global loyalty programs to Taiwan. For example, many of the international hotel chains (such as Marriott Bonvoy) in Taiwan have popular programs that are well-received
A New LINE in the Sand?
However, a shift has recently occurred, and Taiwanese companies have been proactive in adopting social CRM strategies and technology that leverage the popular messaging platform LINE to interact with customers, deliver personalized messaging, and create engaging experiences. Taiwan, where approximately 90% of the population uses LINE, has the highest adoption rate for the app in the world. This demand is fulfilled by promising local startups specializing in LINE CRM, such as Cooby, which raised US$2.9 million in 2022, and Crescendo Labs.
Many LINE strategies are focused on Official accounts, which serve as a primary platform for businesses to connect with their customers on LINE. These accounts allow brands to deliver personalized messages, share news and updates, and offer exclusive promotions directly to their followers.
Unlike personal LINE accounts, official accounts come with a host of features designed specifically for businesses. These include a rich message API for sending images, videos, and other rich content; a chatbot API for automating customer interactions; and a statistics API for tracking user engagement. Brands can also create interactive mini-games to engage customers.
The Changing Face of Taiwan Loyalty Programs
In Taiwan, loyalty programs are ubiquitous, but few are truly sticky and engage and retain consumers. One of the most-heard criticisms is that they commonly do not offer enough value to consumers and do not offer enough points or places to redeem them
However, as part of the COVID customer-experience push, loyalty programs in Taiwan have been forced to change, and a number of lagging programs have managed to turn around their fortunes.
For example, in 2019, the momo card offered by eCommerce leader momo and its parent company, Fubon, was struggling to gain significant traction. Despite having over 14 million monthly active users, only about 500,000 of these users converted to using their co-branded cards. The momo points connected to the card and its loyalty program could only be used on the momo platform, and expired after 12 months, which shoppers considered a weak deal.
Since then, the program has been revamped, starting with the launch of momo Coins in 2019. This relaunch was inspired by Amazon's esteemed Prime customer loyalty program. momo Coins can be redeemed not only on momo's online eCommerce platform but also for services offered by Taiwan Mobile, another company owned by Fubon. The points can be used for phone services, internet data, broadband, and the company's video and music streaming services.
According to a recent survey from Mirai Business (未來流通研究所), Taiwan now has eight loyalty programs that have more than ten million members. These are:
HAPPY GO (Far Eastern Company): Co-operating channels include: Far Eastern department stores, SOGO department stores, A-Mart, Far Eastone Telecom, and Vieshow Cinemas)
OPEN POINTS(Uni-President): Co-operating channels include 7-ELEVEN, COSMED, Carrefour, Mister Donut, and COLD STONE
Family Mart
PXMart
PChome
momo
Shopee
ET Mall/東森購物網
The majority of these adopt an open loyalty program ecosystem, where they also partner with external retailers and brands. HAPPY GO, OPEN POINTS, Family Mart, PXMart, and PChome, can be considered open programs.Open programs offer more opportunities to earn and redeem rewards across various retail and service touchpoints. This makes the program more engaging as it stimulates point accumulation and spending.
How to Build a Successful Loyalty Program in Taiwan
Huang believes that the key to crafting a successful loyalty program in Taiwan hinges on the following key factors:
Security: Taiwanese people are risk-averse and concerned about not receiving their products or being cheated. It's crucial to highlight the safety and security of your program and technology.
Price Incentives: Price promotions significantly motivate Taiwanese consumers. Programs offering substantial rebates or price promotions are likely to engage customers.
Freebies: Free gifts or promotional items highly stimulate Taiwanese shoppers. These incentives can drive purchase decisions and program engagement, whether it's a complimentary coffee or free delivery.