South Korean loyalty coalition reports growth
The South Korean energy and chemical company SK Corporation has reported back to The Wise Marketer on the successful progress and growth of its OKCashbag Service (known as "OCB Service") coalition loyalty programme.
Started in June 1999 as an alliance-based loyalty programme provider (a multi-sector coalition) covering a number of industries, the OCB Service caught on with the country's population, and grew rapidly.
The basic OCB Service model is for customers to accumulate points at a pre-defined rate based on their spend with each merchant. Programme members are kept informed of their point balance in real time through their printed receipt at the point of sale.
Members can then redeem their accumulated points either to pay for goods and services at the merchant's point of sale, or redeem them for cash refunds at any time.
Development Throughout the programme's growth, SK Corporation has continued to develop the model. From its origins as a simple loyalty programme for shop owners, it then introduced the OCB Coupon loyalty programme for manufacturers in 2002.
Since that time, OCB Service has now also developed into a more general micro-payment system that enables both internet-based and mobile payments.
Key benefits For customers, OCB Service provides discount benefits, the convenience of collecting points from multiple partners with a single card, a wide range of redemption options, as well as providing product and service information from partner companies.
For its various partners (retailers and manufacturers), OCB Service aims to provide increased sales by leveraging the power of the OCB brand, customer acquisition, customer retention, database marketing and CRM support, co-marketing services, and marketing consultancy.
Key partners OCB Service has some "unavoidable partners" (which drive consumer familiarity and frequency of interaction) in key sectors, including SKT (a major mobile phone provider), Emart (a major discount store), SK Enclean (a major fuel retailer), FamilyMart (a major convenience store chain), CitiBank, and several fast food/restaurant chains (including KFC, Burger King, and TGI Fridays).
Programme membership By the end of 2005, SK Corporation reported that OCB Service has some 24 million members (out of a total adult population of some 39 million). South Korea currently has 14.6 million households, comprising approximately 39 million adult consumers. According to SK Corporation, programme members include almost all of the economic population.
The programme currently has 41,000 partners, 60 million alliance loyalty cards in issue, and processes 2.0 - 2.5 million transactions each day. The programme makes full use of all available communication channels including the web, e-mail, call centres, direct mail and High Street presence.