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Aneesh Reddy is co-founder and chief executive officer, Capillary Technologies.
Aneesh Reddy is co-founder and chief executive officer, Capillary Technologies.

How Capillary Technologies salvaged retailers' loyalty programmes

  • Capillary Technologies digitized the enrolment process for loyalty programmes by simply asking customers their mobile numbers
  • Capillary Technologies then extended this system to redemption of loyalty points by again using just mobile numbers

Back in 2008, while looking at possible solutions to the challenges in the retail space, we came across one common problem during our conversations with retailers. They were unable to run effective loyalty programmes. It was very difficult for them to capture customer data. Back then, the only way to do it was through paper forms, which customers absolutely hated to fill. This led to poor enrolment.

To make matters worse, after filling the form, customers were handed loyalty cards. Since almost every retailer was handing out loyalty cards, customers had many cards in their wallets and would often not bother to carry their cards on subsequent visits. The resulting poor redemption rates almost negated the benefits of having a loyalty programme in the first place. We knew we had to replace paper and digitize the process, ideally at the point of sale (PoS). We needed a quick way to enrol customers at the PoS.

We thought the combination of the customer’s name and phone number was good enough to be unique identifiers in a retail context. We swiftly developed an application that ran on the PoS through which cashiers would ask for a customer’s number and in under 15 seconds, she could be enrolled in the programme. Customers were also more likely to give their phone numbers rather than fill forms, which led to loyalty enrolment rates skyrocketing from 10% to 70%. Finally, retailers were able to unlock their loyalty programmes.

After further trials, we found out that up to 85% of customers preferred to give their mobile numbers to redeem their loyalty points, instead of carrying physical cards. With this insight, we introduced an OTP-based loyalty solution that made such programmes easier. This solution now runs in more than 35,000 stores with over 300 million registered customers across 30 countries.

Aneesh Reddy is co-founder and chief executive officer, Capillary Technologies.

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