Indonesia’s rewards and loyalty platform, Member.id said today that it has secured an undisclosed seed funding led by East Ventures with participation from Ismaya Group, the firm’s first corporate client.
The capital will be used to drive growth in the company’s product development, team expansion, and extending its business concept to a number of clients in other sectors, including the hotel and travel business.
In fact, Member.id adopts a business model similar to Aimia, a reward and loyalty program management for Canadian retail consumers. It provides Indonesian firms a tailored loyalty program solution to help increase consumer retention.
The platform acts as an intermediary for both businesses and members of its customer base, providing consulting services to program design which can help turn cost centers into profit centers and drives an increase in repeated sales.
“Retaining customers is 5 to 10 times less expensive than acquiring a new one,” said CEO and Co-founder of Member.id Marianne Rumantir. And she also has the statistics to back it up.
Ever since Member.id took over and redesigned the Ismaya Lifestyle Card Loyalty Program into a tier-based points system in late 2016, the company’s members have grown more than 300 percent within 6 months.
However, at present, the problems lie with customers in Indonesia. As they have a tendency to be loyal to discounts instead of being loyal to a brand, and complicated loyalty programs are not helping. This is also the reason why most businesses focus on making quick sales.
“But what they don’t realize is that retaining customers will actually cost them even more in the long run,” Marianne added. To solve this issue, the business suggests better insights into evolving customer behavior by collecting data on their target market behavior.
“It’s been difficult to find a loyalty platform with a holistic approach in Indonesia,” said Wilson Cuaca, the Managing Partner of East Ventures. “Every merchant is in their own silo and consumers struggle to remember every loyalty’s program’s benefits. We hope to change this and Member.id’s team is in the right position to do so.”
Member.id is not the only startup in Indonesia that provide loyalty programs to improve retention rates, another Indonesian startup Pomona also focuses on bridging offline shopping activities through reward pointing via mobile apps.