Enhancing app value proposition in fl loyalty program a study of FL Pharmacy chain

Abstract

The Vietnamese pharmaceutical industry is expected to be a potential market with a high growth rate because of the increase in the middle class and healthcare spending. Accordingly, it has become a highly competitive market in recent years. Because of that, pharmacy chains, including FL Pharmacy, have been implementing loyalty programs to improve customer experience and retention. However, there was an issue that among the two loyalty signup methods, ZaloOA is significantly higher than the app, which leads to higher costs and dependence on third parties for FL Pharmacy chain. Through substantial research efforts, four potential problems that lead to the low proportion of app users’ enrollment in the loyalty program have been identified: (1) ineffective marketing and promotional activities for the app, (2) challenges in app onboarding process, (3) app privacy and security concerns, and (4) insufficient value proposition of app. Following the validation process, the fourth problem was identified as the main problem. After that, additional investigation was conducted to identify three potential causes: (1) the app lacks innovative features, (2) unclear benefit of using app, and (3) the reward program for the app is unattractive. Finally, the root cause of the problem in customer motivation was identified as the unattractive reward program for the app. Two alternative solutions were proposed to enhance app value proposition by (1) increasing point accumulation for app users with each transaction and (2) adding more attractive rewards options. Each solution has its advantages, so combining the two solutions is the best choice. However, to reduce operation costs, solution one can be run as a promotional program instead of a continual one. Action items were also listed with detailed expected results and the person in charge of the task.