Adding Value to Reward Programmes
February 25, 2006 - StarBiz Week
BY JOSE BARROCK
VARIOUS contraptions and gadgets occupy Nyang Koon Seng’s
desk; a miniature football with grass seeds in it, several
necklaces with miniature World Cup trophies dangling like
a pendant and a rubber football, amongst others.
But then again that is to be expected as he is the chief
executive officer of Advance Information Marketing Bhd,
a company specialising in reward and customer loyalty programmes.
The items are samples for his clients.
“We basically extract value from the data for reward
programmes. In Malaysia this business is in its infancy
stage. There is still a lot of room to expand because loyalty
programmes are not just about giving gifts, but more importantly
about using data, extracting the value from the data, and
employing it as a tool for selling and cross selling products,”
Nyang tells BizWeek in an interview.
He enthuses about a recent tie up with AmBank Bhd. The bank
approached Nyang and crew to handle the launch of a credit
card in conjunction with the upcoming FIFA World Cup. “We
have had to outsource our products in Europe which are licensed
by the governing body (FIFA)...Hence all this,” he
says pointing to his table littered with various balls and
related merchandise.
“When there is a launch such as this, we have to determine
the target customers, age group, and customer profile. We
have to conduct a lot of research to understand the clients’
budget constraints and come up with a solution in terms
of design and communication...So it is pretty interesting,”
he says.
A Good Enough Start
The business model is simple enough and it’s a money-spinner,
if done well. In 2004, Nyang says the company and its unit
Customer Loyalty Solutions Sdn Bhd, made a profit after
tax of about RM5mil on the back of RM18mil in revenue. The
business has been growing and by September 2005, the company’s
sales surpassed that of the entire 2004.
“It’s not bad for a company that is two years
old,” says Nyang.
The company’s first big break came from the banking
sector. “When we took on our first project with a
bank, we realised that financial institutions needed to
outsource a lot of services. So we focused on the sector.
Once we secured a bank, we built up confidence in our services
and managed to sign on many more.”
Nyang talks about the biggest appeal of his business: “When
an industry faces very thin product differentiation, there
is a need for a marketing tool to retain customers and acquire
new ones. That is our forte.”
Advance Information Marketing boasts of a prominent clientele
such as Japan International Tobacco, Debenhams Department
Store, AmBank and F&N Coca Cola.
“There is a growing opportunity in accessing existing
customers and deepening our business with them; from a business-to-business
initiative, to business to consumer type of offering.
“For example credit card rewards in the finance sector.
You get points for swiping your card. But the business is
much larger. The banking industry involves saving accounts,
loans, insurance and unit trusts, all of which can be integrated
to provide a common reward platform. Therefore, we are looking
at expanding horizontally to strengthen our relationship.”
 |
"When an industry faces very
thin product differentiation, there is a need for
a marketing tool to retain customers and acquire new
ones. That is our forte," says Nyang |
The current consolidation in the banking industry, Nyang
says will not dampen the company’s prospects. Advance
Information Marketing is the market leader in its field
so it stands to benefit from any consolidation.
“It is actually better for us (the consolidation)
as it is an opportunity for us to grow as there will be
bigger economies of scale post consolidation.
We also have no problem serving several banks, as we maintain
confidentiality and we have different teams handling the
various banks. Anyway, the requirements of each bank vary
from the other. The bottom line is in Malaysia we have quite
a strong market share so any consolidation will help increase
our slice of the pie,” Nyang says.
The Proposed Listing
The company just received the nod from the authorities to
list on the Mesdaq market of the Bursa Malaysia.
The company’s prospectus is likely to be released
end of this month, or early March and Nyang is hoping to
conclude the flotation exercise by April this year.
“We planned to list about a year ago. We need to tap
the funds from the capital market to expand and for our
infrastructure development. We also plan to set up a regional
presence,” Nyang adds.
He says that the company is also considering tying up with
other parties to penetrate certain target overseas markets.
“There are many issues to consider such as language
barriers. At present, we are exploring several options.”
