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Will consumers bite into foodpanda’s rewards deal with KrisFlyer?

Knowing the locals’ love for food and travel, foodpanda Singapore and Singapore Airlines’ KrisFlyer have struck a partnership which will enable customers to earn miles for every dollar spent on foodpanda.

Luc Andreani, managing director, foodpanda Singapore explained that this long-term partnership with KrisFlyer further cements its commitment to enhance user experience and introduce new perks for customers. “Our customers’ experience has been and will always be a key focus and priority for us,” he said.

As part of the partnership, customers will need to include their KrisFlyer membership number during checkout and the membership details will be included in the customer profile for orders over SG$35. KrisFlyer miles will be credited into users’ account within six weeks after each successful order.

Calling the partnership a win for both brands and customers, Cameron Richards, CEO of CPR Vision said:

I applaud any brand that tries to innovate and try things, and especially so in an extremely competitive space. Symbiotic partnership that is a win for everyone – brands and consumers.

He added that what is now key, is that the brand defines what success looks like and measures it at every turn. “There is no point for rewarding for current behavior, and if a carrot like KrisFlyer miles are being dangled I would suggest it would be only if a customer spends more than the current state,” he said.

Nonetheless, if the move was made based off of consumer insights, Richards believes that it is “certainly set up to be successful”.

“A lot of brands launch ideas/innovation but without checking it with consumers or asking their customers what they want, when they want it and what channel they wish to receive. Brands that take the effort to invest in their own customers and getting insights are usually a step ahead of the competition and it certainly helps remove the risk out of a strategic move when it’s driven based on what customers want versus what the brand thinks they want,” he added.

Given how competitive the food delivery business has become, Prantik Mazumdar, managing partner, Happy Marketer (A Merkle Company), said this was an “interesting marketing ploy” by foodpanda to build an association with a strong brand such as KrisFlyer and leverage off of its qualified member base.

This could definitely give foodpanda a boost in awareness and member growth as it competes with Deliveroo and GrabFood in Singapore. Having said that, Mazumdar believes the partnership has two caveats in that this is only relevant for orders above SG$35 and that the miles get added into your account only after six weeks. He said:

Whilst I suspect that the average order value may not be that much of a concern to most KrisFlyer members, I think the delay in the miles being accrued will definitely not be a pleasant experience.

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A bit too ‘me too?’

Mazumdar highlighted that in 2017, Grab had also inked a similar deal with KrisFlyer where GrabRewards points could be converted to miles. “Since one can earn GrabRewards through GrabFood transactions as well, the recent foodpanda partnership will have to compete with Grab on this front too,” he said.

He added that to make this partnership even more fruitful for foodpanda,the agreement should include more co-branding and joint marketing initiatives to the KrisFlyer audience in a programmatic, hyper-targeted manner, so that the food loving segment within the KrisFlyer base can be activated quickly.

Meanwhile Kevin Kan, former managing director of loyalty player AIMIA was of the view that with this launch, foodpanda has a competitive advantage and an incentive for consumers to order through the platform, but wasn’t an innovative play. “It seems a little bit ‘me too’,” he said adding:

What would be innovative would be ordering through foodpanda and having it delivered to your Scoot flight and earning KrisFlyer miles!  Now that would be innovation.

He said that at the end of the day, brands need to go back to basics with a “core competency” strategy and approach that will help them to innovate and differentiate. Kan added that the brand also now needs to consider if the offer is “sustainable”.

“There is a cost for every mile that KrisFlyer sells to foodpanda. It is worth considering how this cost will impact foodpanda’s bottom line. Of course to get people to spend / order food through foodpanda, there will need to be good restaurants on the selection catalogue with fast delivery,” he said, adding customer experience is a must in the delivery industry. If the food is cold when it arrives, the consumer’s mindset will be to not order again and that would leave the partnership in a limbo.

 

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