GaGa Rewards’ operating premise is simple—it’s an app version of owning multiple loyalty cards.
This won’t be the first platform or startup to denounce the discount coupon method for customer retention, hoping instead to inspire long term loyalty.
One trend lately is to turn loyalty into a game—gamification is a much favoured buzzword.
However, at GaGa Rewards, they think that the free stuff is its own reward. So, they’re banking on that and on convenience to entice users into maintaining their loyalty to brands.
After all, it’s been said that Malaysians love free things. In a way, these guys are putting that to the test.
They’re banking on QR Codes.
As previously mentioned, these guys are not the first group looking to carve a niche in retaining loyalty.
There are many apps like Manis that allow you to just scan your receipt to collect points. Some of them have died off too, unable to retain users and sustain themselves.
For GaGa Rewards, their method for point collection also serves as marketing. Of course, this would only really apply for the kinds of people who actually read receipts.
For the rest, it’s all down to the marketing team to get the word out.
“Each participating merchant will have unique generated QR code printed on each of their receipt. The QR code underneath the receipt footer message is easy to spot and act as a reminder to remind customer for scanning.”
The team explained, “Any QR code scanner can be used to scan the receipt and earn reward points, which means less hassle as no member card or app download is required.” This means that even QRs scanners in popular chat apps like WeChat or Line can be used.
To date, GaGa Rewards has over 700 merchants on board. They take a registration cut from merchants looking to participate.
RM1 equals to one point. Collect enough from the same store, and you can then redeem them for various “rewards”.
We’ve looked at some of the rewards listed on the platform, which range from about 50 points to about 1390 points. However, the points for redemption can only be accumulated in the store where the original purchases were made.
It will probably take a very loyal customer to spend a total RM500 in one place in order to get some of the rewards listed.
Their business model is inspired by the successes in China.
The founder JR Ng is a Johor-born Malaysian who flew to Shenzhen in 2011 to seek his fortune. There, he founded an internet business company dealing in Online-to-Offline Commerce.
Seeing the success of similar apps there, JR thought that Malaysians might just be as receptive as China is to the same business model.
So he flew back to Malaysia in 2015 to start iTree Technology, with GaGa Rewards as what they call their “trump card”.
The research and development team is still based in Shenzhen, whereas their marketing team is housed in Malaysia.
Speaking on the current deals and rewards scene here, the team said, “We believe that deals sites in Malaysia are less attractive nowadays and did not turn out to be as promising as before. Consumers were attracted by merchants’ limited-offer deals which mean one-off purchases and they did not convert into loyal and repeat customers.”
“Such incentives and motives are in fact unfavorable to the business. It is our mission to educate merchants to appreciate how valuable loyalty can be and why delivering increased value to loyal customers will become even more profitable over time.”
“Over the past 2 years, we are glad to see that many of the neighborhood merchants have understood the specific strategic purpose behind an effective loyalty program.”