Loyalty & Rewards November 2021 by SundayTimesZA

SOUTH AFRICAN

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INNOVATIVE

•

INSPIRED

HOME OWNER

WELCOME HOME

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2021

GIVING BACK Loyalty does its part for society

THE TRUTH Unpacking the SA loyalty landscape

REVIVING TRAVEL Local travel gets a boost

HOW PARTNERSHIPS OFFER GREATER VALUE

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it is easy to earn cashback earn 2% cashback every time you shop at Clicks and The Body Shop spend more than R1000 and start earning double in the qualifying period, that’s 4% cashback cashback is loaded onto your ClubCard every 2 months

even more ways to earn club

Club

ClubCard members over 60 earn 4% cashback on Wednesdays

BabyClub members earn 4% cashback on most baby products* every time they shop at Clicks or Clicks Baby stores

other benefits - vaccination reminders, exclusive promotions and Paed-IQ expert advice sign up with these m *excluding legislated products to earn more be

Earn points on the dispensing pharmacy purchases – this includes

our partners

Get up to 25% selected Health

Earn double po

Get up to 14% your whole bas

save more Get with up to R7 500 your own deals FREE

if you’re a ClubCard member,Funeral you Cover choose your personalised deals on the Clicks app visit clicks.co.za/clubcard for more information

is exclus available ClubCar

Visit clicks to activate

Underwritten by Hollard Life Assurance C (1993/001405/06), an authorised Financia Terms and conditions apply. Standar

scan here to join on WhatsApp or add Clicks +27 7 22 55 55 22 and say “Hi”

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Did you Free Fun

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it’s

free

Still South Africa’s best rewards programme. For over 21 years, eBucks has been helping South Africans stretch their Rand by paying out over R15 billion in rewards, with over R3 billion paid out in the last two years alone. In exceptionally tough times, eBucks is helping more South Africans than ever, with more FNB customers qualifying for eBucks, and getting more rewards than ever before. Customers can choose to pay using eBucks or use a combination of eBucks and their FNB cards to pay. They can even choose to pay their bank fees with their eBucks, helping them save their Rand even more. FNB’s data reveals that many customers spend their eBucks, once they receive their monthly allocation in the middle of the month, on essentials such as groceries. That’s why in difficult times, FNB has made eBucks available to more customers, with FNB Easy customers joining over 2.8 million active eBucks customers. FNB Easy PAYU customers can earn weekly grocery coupons so they can buy items like bread, maize meal and veggies, to the value of R15, for only R5. While FNB Easy Smart customers can now earn eBucks, instead of airtime rewards and with it, get up to R100 in eBucks every month when buying groceries at Usave, Shoprite, Checkers or getting their health & beauty essentials at Clicks (meaning their bank fee of R59pm basically pays itself). FNB Aspire customers get to benefit from simpler ways to earn eBucks – without having to move up reward levels. Meanwhile, FNB Premier, Private Clients, and Private Wealth customers continue to get complimentary SLOW Lounge visits; up to 15% back in eBucks at iStore, Checkers and Clicks; up to 40% back in eBucks on FNB Life insurance premiums; and up to 40% back in eBucks on their Spotify® and Netflix subscriptions. eBucks members with an active FNB Connect SIM get up to 2GB of free data, 30 minutes of airtime, and 30 SMSes every month. Customers can also earn up to R8/litre back in eBucks every quarter by filling up exclusively at Engen, financing their vehicles with WesBank and meeting the other criteria. Plus, they can save on interest when switching their home loans to FNB and consolidating their debt. Education is also more accessible to customers thanks to a partnership with Snapplify. eBucks members can save when they buy e-textbook vouchers for home learning. So, with eBucks available to more customers than ever before, and offering more benefits than ever before, switch to FNB.

Terms and Conditions and Earn Rules apply.

A division of FirstRand Bank Limited. An Authorised Financial Services and Credit Provider (NCRCP20).

Rewards that help you stretch your Rand Many things have changed over the past two years, but one thing remains the same – eBucks continues to be the most helpful rewards programme in South Africa. eBucks never expire, and they can be earned and spent at over 30 online and in-store partners – including Clicks, Engen, Shoprite Checkers, and Takealot. With the FNB App, you can track your rewards, get personalised tips on how to move up reward levels as well as earn more eBucks, all in one place. So whether you are an FNB Easy, Aspire, Premier, Private Clients, Private Wealth or FNB Business client – eBucks can help you stretch your Rand.

One simple change makes a big difference

Bank of #TheChangeables

App

Visit a branch

2019 - 2020 South African Loyalty Awards

Best Financial Loyalty Programme

Online

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Get rewarded for banking with Nedbank Nedbank Greenbacks: More Partners, More Choices and More Rewards The Nedbank Greenbacks lifestyle rewards and money management programme is expanding on the value it delivers to its loyal members by growing its network of reward partners and enhancing the ways members can earn and redeem their rewards. The increasingly popular programme offers members numerous opportunities to earn practical rewards and enjoy significant benefits from an array of value-adding partners, including big brands like NuMetro Cinemas, Legacy Lifestyle and bp. However, Nedbank Greenbacks is no ordinary customer loyalty programme; it also helps, and incentivises, customers of the bank to become better at managing their money as a way of incrementally improving their lives. “As a financial services provider that does good, we recognised the need to not only provide our members with the best lifestyle rewards and offers, but also partner with them to help build better money habits over their lifetime,” says Dharmesh Bhana, Executive Head, Loyalty and Rewards Nedbank. “To this end, Nedbank Greenbacks is not some loyalty gimmick aimed at increasing sales or growing our share of customers’ wallets, it’s a tried and tested way of empowering consumers to make consistently good decisions that lead to lifetime financial wellness and longterm wealth creation.” Using advanced data analytics, the bank observes the money management patterns of its Greenbacks members, identifies opportunities to add value to their financial lives, and unlocks ways to leverage tailored rewards offerings and incentives that encourage positive, beneficial behaviour changes. That’s not to say that Greenbacks doesn’t offer outstanding rewards in its own right. It certainly does, by giving members of the programme the opportunity to access personalised deals and generous special offers through a vast partner network that provides sought-after products and services. And now, Greenbacks is offering its members even more ways to redeem their rewards and add value to their lives.

Fuel Rewards In a move to further enhance simplicity, Nedbank’s partnership with fuel retailer bp has structured an easy-touse offering that avoids complex rules or tiers. Members simply swipe their Nedbank Greenbacks linked card while paying for fuel at any of the 500 bp service stations across South Africa, and they will automatically receive 25c per litre back. In addition, as of August 2021 and running until the end of March 2022, Nedbank and bp began offering motorists a chance to win their share of R200 000 in Greenbacks. Every month, 10 winners are selected to each win R1 000, then in December, taking advantage of the high travel period to reward their customers further, the number of monthly winners will increase to 30. At the end of the period, 10 grand prize winners will be selected to start 2022 on a high note by walking away with R10 000 each. To participate in the competition, Greenbacks members simply need to use their Nedbank Greenbacks-linked credit or cheque card to pay for fuel at any bp filling station at least twice per month.

Entertainment Rewards with Nu Metro As more South Africans get vaccinated and begin to venture out, the movie theatre is one of the places they are looking forward to returning to. Nedbank and Nu Metro Cinemas are giving all Nedbank clients a 50% discount on Regular 2D and Regular 3D movie tickets at all available showtimes, as well as on soda and popcorn at cinemas nationwide. “With lockdown restrictions being relaxed, people are excited to go out, travel and indulge in a variety of entertainment choices. While many may still feel the financial impact of Covid-19, the Nedbank Greenbacks programme is a practical way to be able to enjoy the activities that many have been deprived of for some time. It supports members by delivering consistent value and savings over the long term, helping them stretch their Rand and encouraging them to once again have some fun, safely,” says Bhana.

Clicking with customers across every generation

ppealing to everyone from baby boomers to Gen Z and more, the Clicks ClubCard loyalty programme remains firmly entrenched as one of the most popular retail loyalty programmes in South Africa. “ClubCard continues to remain relevant to today’s consumer because of its continued focus on convenience, value and differentiation,” says Clicks Managing Executive Vikash Singh. “Customers love ClubCard because it’s free, easy to use and helps to stretch your rands even further in these tough economic times. ClubCard is our way of saying thank you for choosing to shop with us.” The iconic Clicks ClubCard loyalty programme, which recently increased its active membership to 9.2 million members, is a key driver of growth for the business, accounting for 80.2% of sales in Clicks. Established in 1995, ClubCard remains one of the most generous retail loyalty programmes in South Africa. In just 2020 alone, ClubCard paid out more than R500 million in cashback. ClubCard members earn 2% cashback when they shop at Clicks and The Body Shop and are able to earn 4% when they spend more than R1000 in a two-month cycle. Members also have an opportunity to earn with affinity partners such as Engen and FNB eBucks, Spec-savers and Execuspecs, Sorbet, ARC, Netflorist, City Lodge, Town Lodge & Courtyard Hotels and Europcar. The programme is constantly looking at opportunities to “add value and newness” through partnerships and benefits that enhance a customer’s lifestyle. “It’s easy to earn cashback every time you shop and the more you swipe your ClubCard, the more points you earn. For example, you can have your nails done at Sorbet, fuel at Engen or shop luxury beauty at ARC’s new store at the V&A Waterfront or Sandton City,” he says.

This includes access to exclusive BabyClub competitions, vouchers and expert advice webinars. Plus, over 60 ClubCard members automatically qualify for Seniors Club benefits which include earning 4% cashback on a Wednesday and exclusive competitions. “ClubCard has enabled us to personalise engagement and communication with customers in an increasingly digital-and technology-driven retail environment,” he says. “We continue to invest heavily in technology and digital innovation as part of our digital convenience strategy. This includes moving from paper redemption vouchers to plastic loyalty cards in 2015, as well as the introduction of the Clicks App in 2017 and more recently, our new digital Whatsapp enrolment channel.” The Clicks App has been downloaded by over 2.5 million customers and allows ClubCard members to check their points, load personalised deals, submit a pharmacy script or locate their closest Clicks store. The new digital Whatsapp enrolment channel makes it easy to join ClubCard and is instant, convenient and has low data usage. Other innovations include personalised ClubCard deals on the Clicks App and a vertical digital card for better visibility on smartphones. Clicks has also partnered with Vodacom to offer customers access to an enhanced online shopping experience, including ClubCard benefits and personalised digital engagement, as the first health and beauty retail partner in the VodaPay Super app.

Clicks BabyClub also offers customers excellent value with 4% cashback on most baby and toddler products.

scan the QR code or WhatsApp +27 7 22 55 55 22 to join

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F ROM T HE EDI T OR

LOYALTY & REWARDS Published by:

A proud division of Arena Holdings Hill on Empire, 16 Empire Road (cnr Hillside Road), Parktown, Johannesburg, 2193 PO Box 12500, Mill Street, Cape Town, 8010 www.businessmediamags.co.za EDITORIAL Editor: Anthony Sharpe Content Manager: Raina Julies rainaj@picasso.co.za Contributors: Trevor Crighton, Amanda Cromhout, Delia du Toit, James Francis, Caryn Gootkin, Michael Levinsohn, Anél Lewis, Thando Pato, Rodney Weidemann, Lisa Witepski Copy Editor: Brenda Bryden Content Co-ordinator: Vanessa Payne Digital Editor: Stacey Visser vissers@businessmediamags.co.za DESIGN Head of Design: Jayne Macé-Ferguson Senior Designer: Mfundo Archie Ndzo Advert Designer: Bulelwa Sotashe Cover Images: Supplied SALES Project Manager: Gavin Payne gavinp@picasso.co.za +27 21 469 2477 I +27 74 031 9774 Sales: David Johnson, Brian McKelvie PRODUCTION Production Editor: Shamiela Brenner Ad Co-ordinator: Johan Labuschagne Subscriptions and Distribution: Fatima Dramat, fatimad@picasso.co.za Printing: Novus Print MANAGEMENT Management Accountant: Deidre Musha Business Manager: Lodewyk van der Walt General Manager Magazines: Jocelyne Bayer

NEVER A BETTER TIME …

s South Africans still find themselves dealing with a sluggish economy and household budgets constantly on review, loyalty programmes have perhaps never been more relevant or supported as they have since the global pandemic hit our shores. And what we’ve also found is that, like so many other relief programmes out there, loyalty and rewards programme owners are also doing their bit to give back more. In this issue of Loyalty and Rewards we investigate how loyalty programmes are helping society (page 8). From there, we take a look at how banks can differentiate their programmes and encourage clients to use them (page 16), and the role social media

plays in building customer engagement (page 26). On page 15, we unpack the key insights of 2021’s The SA Loyalty Landscape Whitepaper, and on page 20 we examine how travel and hospitality loyalty programmes are preparing for a vaccinated world eager to travel. Data – the most important tool in any scheme – comes under the spotlight (page 30), as do the partnerships that help offer clients real value (page 34). Finally, we look at the growth of B2B loyalty schemes and what lessons they can take from their B2C counterparts (page 32). Anthony Sharpe Editor

34 PARTNERSHIPS Strategic partnerships can offer greater value to clients and help brands expand their markets

35 BUSINESS MODELS UNPACKED Open-loop programmes versus closed-loop programmes – the differences and benefits

CONTENTS 8 OUTREACH PROGRAMMES

A look at how loyalty programmes can benefit society beyond just their members

15 TRUTH SURVEY Loyalty consultancy Truth unpacks the key insights of 2021’s The SA Loyalty Landscape Whitepaper

16 FINANCIAL SERVICES Banks are working to differentiate their offerings and drive client engagement

20 HOSPITALITY Travel and hospitality schemes are getting travellers out and about and the industry back on its feet

26 DIGITAL SOUTH AFRICAN

INFORMED

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INNOVATIVE

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INSPIRED

HOME OWNER

Social media can be a game-changer for loyalty – if used to its full potential

WELCOME HOME

30 DATA & ANALYTICS COPYRIGHT: Picasso Headline. No portion of this

magazine may be reproduced in any form without written consent of the publisher. The publisher is not responsible for unsolicited material. Loyalty and Rewards SA is published by Picasso Headline. The opinions expressed are not necessarily those of Picasso Headline. All advertisements/advertorials have been paid for and therefore do not carry any endorsement by the publisher.

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A look at legal and efficient data management, plus the demise of third-party cookies and what it means for loyalty

32 B2B Business-to-business reward schemes are on the rise

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GIVING BACK

CARYN GOOTKIN looks at some loyalty programmes that have helped COVID-19 relief efforts

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L O YA LT Y & R E W A R D S

asked us to set up a charity fund to which they could contribute and our MVG programme was the ideal vehicle,” says CEO Anthony Leeming. “The points donated by 15 000 of our MVG members enabled us to donate R2-million to the Solidarity Fund.”

Dharmesh Bhana

NEDBANK “Several financial services rewards programmes sought ways to help their customers during the financial crisis,” says Cromhout. “Some of the banks introduced innovative features to help their credit customers who were feeling the pinch by offering special benefits to account holders with consistent payment histories, while others expanded their points redemption options to include more essential items rather than luxury or leisure rewards.” As part of the revamped Greenbacks programme, Nedbank introduced rewards to credit customers who opt in to the responsible borrower package and remain up to date on their monthly instalments, offering the chance to win their full loan value (up to R1.5-million) every quarter. “Our Greenbacks programme is continually looking to find innovative ways to reward our customers,” says Dharmesh Bhana, executive for loyalty and rewards solutions at Nedbank. “We also introduced new functionality on our Money app, enabling customers to do more with their Greenbacks, including buying data, electricity, and airtime; paying their banking

fees and card charges; or donating to the Solidarity Fund or a community programme we support called Proud of My Town. We found that our customers wanted to be able to exchange their Greenbacks for basic essentials rather than luxury purchases.” Nedbank was also one of the banks that supported their clients with payment holidays on loan repayments, fee concessions, and the ability to apply for re-advances or drawdowns on existing facilities. “Our clients came under huge financial pressure as a result of the lockdown and it was important for us to find ways to alleviate their pressure,” says Ebrahim Jadwat, head of credit risk management and monitoring at Nedbank.

WOOLWORTHS Another programme that gave members the option of contributing to the Solidarity Fund was MySchool MyVillage MyPlanet, which focuses on making a sustainable difference to the lives of South African people, animals and the environment. “Our loyalty programme is different to others in that it enables members to benefit causes rather than their own pockets, although several of the retailers we partner with offer discounts and special offers,” says Peter Twine, general manager of MySchool. “We make giving back easy and convenient, so our model did not have to change to respond to the

Anthony Leeming

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oyalty programmes exist primarily to help brands get to know their customers better, so that they can give them benefits they care about and keep them loyal so that they will spend more. Any spin-off benefits for causes or communities are often a bonus rather than the brand’s primary intention. However, the humanitarian crises unfolding across the country as a result of the pandemic have pushed some brands to introduce extraordinary benefits to retain customer loyalty while helping wider communities. “Many rewards programmes give members the standard option to donate the points they’ve earned to charities selected by the programme,” says Amanda Cromhout, CEO and founder of Amanda Cromhout loyalty consultancy Truth. “When the pandemic hit South Africa, several programmes included the Solidarity Fund as a charitable beneficiary so that members could exchange points for monetary donations to this public-benefit organisation, which was set up to bolster the national health response and support humanitarian relief efforts.” Sun International’s Most Valued Guest (MVG) programme offered members the option to pledge their leisure points, upon which the company would pay over the rand value of those points to the Solidarity Fund. “A number of our MVGs

OU T RE ACH PROGR A MMES

GLOBAL BEST PRACTICE

COVID-19 lockdown period. Every month MySchool MyVillage MyPlanet gives over R8-million to our beneficiaries, changing lives through education initiatives, community support, and helping animal and environmental organisations.” MySchool members who don’t want to support a particular beneficiary can choose MySchool’s CSI fund – the Thuso Fund – as their beneficiary. The Thuso Fund supports different organisations. “During lockdown, the fund donated R500 000 to The Solidarity Fund,” says Twine. Over the past year, the organisation also ran several campaigns to further increase its contribution to those in desperate need. “During hard lockdown, Peter Twine we promoted a ‘Caring in Action’ movement, which encouraged cardholders to continue to make a difference by swiping their cards at participating partners,” says Twine. “This helped our programme beneficiaries with funding when direct donations and support dwindled from the public.” Other initiatives MySchool undertook during this time included helping educational partner Worksheet Cloud to provide free online classroom lessons and worksheets during school closures, and supporting 44 Grow Educare Centres to continue paying their teachers.

Global communications firm Edelman’s annual trust barometer measures and analyses the level of trust stakeholders have in various brands. The 2020 Trust Barometer Special Report: Brands and the Coronavirus revealed that 33 per cent of people surveyed globally across 12 countries (including South Africa) would encourage others not to use brands that didn’t act appropriately in their response to the pandemic. Locally, this figure was 27 per cent. The vast majority (90 per cent) of respondents wanted brands to partner with government and relief agencies to address the crisis. Interestingly, 37 per cent of global respondents (30 per cent in South Africa) said they had started using new brands because they valued the way the brand had responded to the crisis, while 65 per cent (70 per cent in South Africa) said that the way brands had reacted during the crisis would impact their future shopping behaviour. To further demonstrate how attentively consumers observed what brands did to alleviate hardship during hard lockdown, 71 per cent of respondents (72 per cent in South Africa) said that they would forever lose trust in those brands and companies that placed their profits above the interests of people at this difficult time.

in store,” says TFG group retail director Shani Naidoo. “We also recognised that many of our myTFGrewards customers needed help with basic essentials, so we rewarded those who converted to a different payment option during this period with more than R3-million worth of food vouchers.” The various brands in the TFG stable also ran campaigns to help communities. “Markham’s ‘MASK UP. MAN UP. SAVE LIVES’ initiative contributed R20 from each mask sold to the Solidarity Fund, for a total of R1-million,” says Naidoo. “And, The Fix donated R406 000 to Ladles of Love to help them feed the hungry.”

SMART SHOPPING IN TOUGH TIMES Pick n Pay’s Smart Shopper programme, which increased its sales participation from approximately 63 per cent to 75 per cent during the last fiscal year, was voted the most-used loyalty programme in the 2021 Truth and BrandMapp The SA Loyalty Landscape Whitepaper. “Melissa Hanley, head of loyalty and strategic partnerships at Pick n Pay, attributes this to the introduction of Smart Prices deals on everyday essentials, which are what customers are looking for during the ongoing financial crisis. These are only available to Smart Shopper members,” says Truth CEO Amanda Cromhout.

TFG

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Some retailers tried to soften the blow for their account customers while also supporting wider relief efforts. “TFG implemented payment holidays for loyal customers who couldn’t afford their monthly repayments, as well as new COVID-19-safe payment options – PayU, PayNow, Snapscan, EasyPay, Checkers or Shoprite stores – for all customers, the majority of whom usually pay their accounts

Shani Naidoo

“TFG IMPLEMENTED PAYMENT HOLIDAYS FOR LOYAL CUSTOMERS WHO COULDN’T AFFORD THEIR MONTHLY REPAYMENTS, AS WELL AS NEW COVID-19-SAFE PAYMENT OPTIONS.” – SHANI NAIDOO, TFG L O YA LT Y & R E W A R D S

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LOYALTY, TRUST, RELATIONSHIPS, REWARDS AND GIVING BACK LYNNE BLIGNAUT, head of loyalty and customer rewards at Dis-Chem Pharmacies, unpacks the interwoven facets of building loyalty, keeping customers, and the business of doing good

is-Chem’s Benefit Card loyalty programme, with 5.7 million members, has grown to become one of the country’s best-loved loyalty programmes. Now in its 18th year, it is built on a foundation of the relationship between the brand and the customer, underpinned by allegiance, affinity and trust. This is further supported by strategic partnerships that combine relevance, value and alignment to appeal to customers and ensure they earn superior rewards by shopping at Dis-Chem while giving back to the vulnerable members of our community. Our customers are not all the same, and to place them in one homogenous group doesn’t recognise their individual needs. As such, the success of our Benefi t Card is based on understanding what

our shoppers want and giving it back to them through loyalty rewards, cashbacks, instant rewards and discounts. Money talks, and a central component of our scheme rests on cashback rewards. Yet tailoring to customer segments is key to the programme’s longevity and growth. Since today’s younger shoppers are tomorrow’s big spenders, loyalty in this segment is paramount to increasing customer lifetime value. The largest single Benefit Card member group – 32 per cent – is in the 19 to 35 age bracket. Dis-Chem’s For YOUth Programme, aimed at consumers aged between 18 and 25, talks directly to this segment by offering savings tailored specifically for this cohort – double Benefit Card points every Monday, tailor-made promotions and campaigns, automatic

CUSTOMER LOYALTY AS A STRATEGY GOES BEYOND POINTS AND REWARDS: IT FOCUSES ON DELIVERING A LOYALTY CUSTOMER EXPERIENCE THAT IS INTEGRAL TO OUR MAIN VALUE PROPOSITION. 12

entry into competitions, exclusive offers and discounts rewards and prizes just for shopping at Dis-Chem.

VALUE-ADD FOR YOUNG PARENTS The recent acquisition of Baby City has extended the Benefit Card programme into Baby City stores, bringing the parallel benefit of appealing to For YOUth members who cross over into the young parent category. The baby sector sees approximately 900 000 new babies annually; extending the Dis-Chem Benefit and partner offering to Baby City customers has resulted in increased shopper frequency and larger customer baskets. Benefit members enjoy all the wonderful rewards they are accustomed to from DisChem within the Baby City space. Recognising the pressures on today’s parents and the reality of the cost of education, our partnership with School-Days is both relevant and meaningful. It enables members to raise education funds for their chosen beneficiaries. Members can choose

L O YA LT Y & R E W A R D S

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DIS-CHEM A DV ER T ORI A L

EXTENDING THE DIS-CHEM BENEFIT AND PARTNER OFFERING TO BABY CITY CUSTOMERS HAS RESULTED IN INCREASED SHOPPER FREQUENCY AND LARGER CUSTOMER BASKETS.

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to support their school, Adopt-a-School Foundation, or to help save for their own child’s education. Existing and upcoming strategic partnerships with established financial services brands will continue to increase earning potential and add value to Benefit members.

CLIENT-CENTRIC CARING For the benefit of all members, no matter which category they fall into, we have removed any barriers to redemption – our points don’t expire, and customers can redeem at any time without vouchers. Rewards can be used on their purchase or can be saved for that “something special”. We have never lost sight of the view that customer loyalty as a strategy goes beyond points and rewards: it focuses on delivering a loyalty customer experience that is integral to our main value proposition, as opposed to a standalone programme. Dis-Chem has been built on the premise of “pharmacists who care” and this philosophy extends beyond the physical boundaries of our stores. It is one of the pillars of the DisChem Foundation, and the connection between our philosophy, our brand, the Dis-Chem Foundation and the Benefi t Card is deliberate.

GIVING BACK, CHANGING LIVES Closely aligned to the Benefit programme is the Dis-Chem Foundation, which was founded 15 years ago based on our longheld belief that as a corporate entity we have

a role to play in making our society sustainable by improving the lives of individuals within organisations while relieving the burden on struggling communities. From day one, the foundation focused on four key parameters: impoverished families with no basic food and shelter, abused women and children as well as abandoned babies needing a safe haven, young girls who need sanitary pads to ensure they do not miss going to school, and people requiring primary healthcare services. For many years we have supported well-known initiatives such as clinics and mobile clinics, Smile Week and Reach for a Dream. A focus has also been on balanced nutrition in the early childhood development phase of children. Our customers are true partners of the foundation and ensure its ongoing ability to care for the less privileged in and around our communities. The mechanism is simple: the Dis-Chem Foundation is a beneficiary of the Dis-Chem Benefit Programme and every time a Benefit member swipes their card when purchasing, Dis-Chem donates a percentage of the eligible purchase to the foundation. Core to the foundation is continuity – a onceoff donation has short-term benefits, but an ongoing commitment, spanning years in many cases, can effect real change and allows a nongovernmental organisation or charity to better plan and care for their beneficiaries. With 5.7 million members, it gives the foundation the critical mass to grow and build on our ability to impact people’s lives. The business of doing good is increasingly being recognised by consumers, who are becoming more discerning as to where and how they spend their money. It is imperative to continue to demonstrate to our customers that we have a value that goes beyond the products on our shelves. Dis-Chem has never paid lip service to doing good – it is part of our ethos, it is inherent in our DNA, it is driven by lasting relationships and customer loyalty, and is built into our day-to-day operations. CSI is of particular importance to the youth of today, and we are cognisant of the vital importance of our customers as critical contributors to our CSI endeavours.

➔ Scan this QR code to go directly to the Dis-Chem website.

For more information: 011 589 2200 careline@dischem.co.za www.dischem.co.za Dischem @Dischem Dis-Chem Pharmacies

L O YA LT Y & R E W A R D S

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T REND S: T HE T RU T H SURV E Y

THE SOUTH AFRICAN LOYALTY LANDSCAPE Truth CEO AMANDA CROMHOUT unpacks the key insights from the latest Truth and BrandMapp loyalty whitepaper

ore South Africans are using loyalty programmes than in 2019, according to the results of the recently released Truth and BrandMapp’s 2021 The SA Loyalty Landscape Whitepaper, which highlights how loyalty programme usage has increased compared to before COVID-19 hit. The insights come from a comprehensive annual snapshot of the loyalty habits of more than 33 000 South African adults with a gross monthly household income of R10 000 or more. This BrandMapp study represents 100 per cent of the country’s tax-paying base and 80 per cent of all consumer spend. Significantly, the number of loyalty programmes to which South Africans belong has dramatically increased to 8.7 programmes on average, a 50 per cent increase on 2019. The pandemic months have flattened the gender curve for loyalty, with males now using loyalty programmes more and at a higher rate than females in South Africa. We have never seen this before, and put the change down to more men working from home and sharing the household purchasing chores.

RETAIL COMES OUT TOPS The sector with the largest gains in loyalty programme usage is, unsurprisingly, grocery retail. This shows that when the rubber hits the road, everyone needs assistance in cash-strapped times. The benefits and rewards gained through daily grocery-shopping loyalty programmes can help to stretch our wallets a little bit more every month. Pick n Pay Smart Shopper has regained its position as the most-used loyalty programme in South Africa, nudging pharmaceutical chain Clicks and its ClubCard programme into second place. Pick n Pay saw the greatest gains (22 percentage points) in retail loyalty programme usage versus pre-pandemic statistics, bringing the volumes of South Africans using Smart Shopper to 80 per cent. “Historically, Smart Shopper has seen a sales participation of approximately 63 per cent, which we increased to 75 per cent during our last fiscal year,” says Melissa Hanley, Pick n Pay’s head of loyalty and strategic partnerships. “Smart Shopper had its most successful year ever last year and we believe we achieved this by giving our members what they really needed, when they needed it, through Smart Prices.”

While Pick n Pay and Clicks have dominated the top two spots in loyalty programme usage for the past five years, Dis-Chem Benefit has found itself in the third position once again. Loyalty newcomer Checkers Xtra Savings successfully secured fourth position, while its big sister in grocery retail Shoprite’s Xtra Savings programme sits in eleventh position.

FINANCIAL SERVICES FARE WELL If we assess loyalty programme usage outside of the dominant sector of retail, we still see FNB eBucks as the most-used loyalty programme in the financial services space – in fact, it has been the most-used nonretail loyalty programme for the past six years. More significantly, when forced to choose one loyalty programme over all others, consumers picked FNB eBucks as the one loyalty programme that they could not live without. Consumers voted for seven financial services loyalty brands ahead of retail – FNB eBucks, Discovery Vitality, Standard Bank UCount, Investec Rewards, Absa Rewards, Nedbank Greenbacks and Momentum Multiply. This highlights how well financial services are integrating loyalty and rewards into their core business, and how the cash equivalent value offered through loyalty and rewards outweighs some traditional retail loyalty offerings. Discussions with eBucks revealed that they helped their consumers during the last 18 months with eBucks redemptions against everyday items like grocery shopping, data/airtime (with more working from home) and fuel.

WHAT CONSUMERS WANT As expected, cashback remains the number-one loyalty benefit of choice, followed by discount vouchers, with all ages, incomes and genders voting for the former. This has been the case for years, but right now consumers need every bit of help they can get, and loyalty programmes are helping their needs for that little bit extra. Surprisingly, consumers still prefer to swipe a plastic loyalty card than identify themselves via apps. In a society driven touchless by the global pandemic, it comes as a surprise that more South Africans prefer a card than in 2019, at a level of 76 per cent. Even the younger loyalty consumer doesn’t vote for apps over loyalty cards. The traditional card is everyone’s preferred choice of loyalty mechanic.

GROWING INVESTMENT IN LOYALTY Strategically, we definitely see more and more brands investing in customer loyalty. That doesn’t always mean a traditional loyalty programme, but perhaps clever customer relationship tools that add value to their customers’ lives and, of course, at the end of the day add value to the bottom line of the loyalty brand. Whatever approach a brand takes, it needs to add value to its customers’ lives by offering greater value or a better brand experience in exchange for the customer agreeing to sign up to the programme and becoming a “known” customer. As stated in the whitepaper: “Like never before has the need to know and understand your customer been more of a strategic imperative. Loyalty programmes give a company permission to get to know its customers and to engage with its most valuable asset – that is, its loyalty customer. During the troubled months of the pandemic, it is undoubtedly loyal customers who have helped businesses survive.”

DID YOU KNOW?

Truth and BrandMapp have delivered loyalty insights over the last six years, born from BrandMapp: South Africa’s largest independent study. The SA Loyalty Landscape Whitepaper analyses the changing consumer attitudes towards loyalty programmes in South Africa and further deep-dives into demographic differences and any other factors influencing loyalty usage. Truth and BrandMapp have published five whitepapers since 2015, but there is no question that this year’s whitepaper is particularly fascinating as we review the shift in consumer behaviour after the disruptive year of 2020, the year of the global pandemic: COVID-19.

THE 2021 TRUTH & BRANDMAPP LOYALTY WHITEPAPER

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F IN A NCI A L SERV ICES

Banking loyalty programmes are some of the most entrenched and integrated in the country. THANDO PATO finds out how two banks incentivise customers to use their programmes

HOW ARE CUSTOMERS INCENTIVISED? Foster says UCount subscribers are incentivised based on their banking behaviour and entrenchment with the bank. “The more products and services the customer has with the bank, the higher their tier and the more rewards points can be earned.” The UCount platform on the Standard Bank app also provides personalised offers to subscribers such as Goals and Gains. “This is where customers can achieve a goal and choose between bonus rewards points or vouchers as a gain,” explains Foster. “Every first and third Wednesday of the month, customers receive a personalised offer with a goal, and have a specified period in which to complete it in order to claim their benefit in the form of bonus rewards points or a voucher.”

DID YOU KNOW?

South Africa’s 10 most popular financial services loyalty programmes are: 1. FNB eBucks 2. Discovery Vitality 3. Standard Bank UCount 4. Absa Rewards 5. Nedbank Greenbacks 6. Old Mutual Rewards 7. Momentum Multiply 8. Mr Price Money Insiders 9. Sanlam Reality 10. Investec Rewards Source: Truth and BrandMapp 2021 The SA Loyalty Landscape Whitepaper

eBucks Rewards customers, on the other hand, can access multiple value-added benefits that include R500 grocery vouchers, quarterly complimentary vouchers from Wimpy, 40 per cent off selected flights and car hire, and complimentary access to airport lounges, to name a few.

HOW DO THESE AFFECT BANKING BEHAVIOUR? Moolman says FNB’s goal is to be the leading trusted money manager in South Africa. “eBucks Rewards is the vehicle that helps us drive good financial behaviour by rewarding and giving value back to the customer. We help our customers become financially independent by rewarding sound financial behaviour.” By subscribing to UCount Fayelizabeth Foster Rewards, Standard Bank customers are encouraged to use the banking app, which Foster says is more cost effective. In addition, customers have the option to save or invest their reward points, or redeem them to reduce their instalments on personal loans. IMAGES: SUPPLIED

How SA banks are keeping customers loyal

s of February 2021, FNB has awarded its customers more than R15-billion over 20 years. The eBucks partner network includes all major categories in retail and online, incorporating health, groceries and fuel, where FNB customers earn up to 15 per cent at Clicks and Shoprite/Checkers and up to R8 per litre at Engen. Johan Moolman, eBucks CEO, says the success of their programme lies in the fact that membership is free, eBucks never expire, and that the programme is designed to offer its customers real and meaningful value. “We also offer customers the simplest and widest range of earning rewards, and give them the widest choice by far when it comes to spending Johan Moolman their eBucks.” Launched in 2013 and with over one million subscribers, Standard Bank’s UCount Rewards is a tiered, opt-in rewards programme that rewards customers who use their Standard Bank credit, cheque or debit card. “Customers only require a rewards card to redeem their points, not to earn them,” says Fayelizabeth Foster, head of loyalty and rewards at Standard Bank. Foster says subscribers earn up to 1.25 per cent in rewards for every swipe they make, which can increase to 20 per cent at selected retailers, and up to R5 back in rewards points for fuel and oil at Caltex.

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Standard Bank UCount Rewards expands its Rewards Retailers. As we near the festive season, Standard Bank is excited to announce that UCount Rewards members can now earn and redeem Rewards Points from even more Rewards Retailers across various retail segments such as car, baby necessities, grocery, and wellness offerings. Head of Loyalty & Rewards at Standard Bank, Fayelizabeth Foster, is celebrating this as a milestone for the team. “Expanding the reach of our UCount Rewards programme, with the various retailers, is something we have been working on continually to ensure we stay relevant in the market and to solidify strong partnerships”, says Foster. UCount Rewards gives you access to these new Rewards Retailers: • Car Service City – earn up to 4.25%* when you take your car for repairs or a service at Car Service City. • Baby City – whether you’re preparing to welcome your new baby or need new toys for your little one, Baby City is offering UCount Rewards members up to 5%* back. • Game – visit any Game store nationwide and earn up to 2%* back on general merchandise and liquor. • Wellness Warehouse – Wellness Warehouse is offering UCount Rewards members up to 4.75%* back when you shop for your favourite wellness

products. • Coastal Hire – earn up to 3.25%* back when you hire from a great range of small equipment at Coastal Hire. • EZ Shuttle – earn Rewards Points with EZ Shuttle when you make use of their airport shuttle and door-to-door transfer service. Make a payment online at EZ Shuttle and earn up to 6.25%* back in Rewards Points. • Makro Liquor – earn Rewards Points when you shop a wide range of premium liquor and beverages at Makro Liquor. Shop in-store or online and earn up to 2%* back on liquor purchases. • Courier Connexion – earn up to 4.25%* back on parcel deliveries anywhere in South Africa with Courier Connexion. For a comprehensive list of the Rewards Retailers where Rewards Points can be earned and redeemed, you can visit the Standard Bank UCount Rewards page at www.standardbank.co.za/ucount *Ts&Cs apply. Auth FSP 11287 and credit provider NCRCP15.

MORE RETAILERS MEANS MORE PLACES TO ENJOY YOUR REWARDS POINTS.

Shop with your Rewards Points at our new Rewards Retailers. Say HELLO to all our new Rewards Retailers where you can earn and redeem your UCount Rewards Points:

Ts&Cs apply. Auth FSP 11287 and credit provider NCRCP15.

Reviving travel

HEALTHY TRAVEL

With severe lockdown restrictions eased and government’s drive to revive the local tourism economy, TREVOR CRIGHTON unpacks the loyalty and rewards programmes promising to make travel more accessible for the local consumer

OVID-19-related “For members in lockdowns that have South Africa, there are kept international (and benefits for collection at times provincial) and redemption, and borders shut have not the earning goes only decimated the industry, beyond air partners,” but also taken a huge slice out says Brian Kitchin, of the entire country’s revenue. Comair’s executive for But as travel options open sales, distribution and up, more locals have been marketing. “Members taking the chance to explore can also earn points Brian Kitchin their country. Recognising this, with local partners such travel providers are increasing as Absa, Diner’s Club offers focused on helping the industry get back and Sotheby’s, as well as several international on its feet and making travel more accessible nonaviation partners such as Booking.com, and affordable. Avis and Airbnb.” Apart from being able to redeem “locally earned” points on international TIER POINTS flights with British Airways, members can Having suspended operations for much of the also redeem their points with global partners lockdown period, Comair has worked hard such as Avis and Avios Hotels. While there to continue to deliver value to its Executive are currently no plans to add a loyalty Club frequent flyers, who earn Avios points programme for kulula.com passengers, locally and internationally with British Airways. they and British Airways operated by Comair The company has extended the tier status passengers can access discounts through of members to allow those with tier point Discovery’s Vitality platform. collection end dates before 31 March 2022 to enjoy their status for another year, irrespective of how many tier points they earn. It’s also decreased the number of tier points needed to upgrade to higher tiers by 25 per cent until 30 June 2022.

Discovery’s Vitality programme, although branded as an incentivised behaviour change programme, does offer rewards, which are based on healthy living and positive behaviours, rather than loyalty. At the beginning of October, Vitality CEO Dinesh Govender Dinesh Govender announced changes to the programme, effective in December this year. Vitality Travel is an end-to-end travel platform that will run within the Discovery Bank app, allowing customers to book and manage flights, accommodation and car hire in one place, while earning discounts by engaging with Vitality and Discovery Bank. “We realised the need to change things to offer travellers value, flexibility, choice and ease of use, and to reward them for engaging,” says Govender. The value aspect continues in terms of discounts of up to 35 per cent for engaged Vitality members and up to 75 per cent for Discovery Bank members. “In terms of flexibility, the team saw the change in search patterns towards smaller, self-catering establishments, so we’ve added B&Bs,

“MEMBERS CAN ALSO EARN POINTS WITH LOCAL PARTNERS SUCH AS ABSA, DINER’S CLUB AND SOTHEBY’S, AS WELL AS SEVERAL INTERNATIONAL NONAVIATION PARTNERS SUCH AS AVIS, BOOKING.COM AND AIRBNB.” – BRIAN KITCHIN, COMAIR

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HO SPI TA L I T Y

lodges and resorts to offer more than 2 000 accommodation options for booking,” says Govender. “We’ve also expanded our flight partner list beyond Comair to include Airlink, FlySafair and Lift, and added holiday packages, which provide great value.” Vitality Travel’s flexibility options now include being able to book international flights within one week (as opposed to the previous six weeks) and local accommodation with 48 hours’ notice, rather than the previous 21-day window. “We found that if we encourage people to manage their health and their financial wellness, they present a lower risk profile,” says Govender. “Those who are going for screenings, eating well, exercising and managing their money well are likely to travel more safely and responsibly, so we want to reward them.”

BON VOYAGE The Marriott Bonvoy hotel group – which includes Protea Hotels by Marriott, Protea Fire & Ice, Autograph Collection, Marriott and Westin brands – has a global loyalty programme and a local stand-alone benefits programme, Prokard Explorer. “Members may belong to both programmes,” explains Volker Heiden, area vice president for sub-Saharan Africa at Marriott International. “Prokard Explorer offers dining discounts, accommodation vouchers and preferential rates on accommodation. Through the Marriott Bonvoy programme, guests can earn Marriott Bonvoy points on hotel stays and redeem those Volker Heiden points at over 7 600 hotels around the world.” Heiden says the company understands that the travel restrictions have been hard for its members. Marriott Bonvoy extended the validity of member status earned in 2019 through to February 2022, paused expiration of points until 31 March 2022, extended validity of Free Night Awards and gave members the option to donate Marriott Bonvoy Points to relief organisations active in COVID-19 responses globally. “We’ve added benefits and offers for local travellers to help stimulate the industry, including family offers with 50 per cent off a second hotel room at certain properties, kids stay and eat for free at selected hotels, and the combo of 50 per cent off the second hotel room and kids stay and eat for free at others,” says Heiden.

IMAGES: ISTOCK.COM, SUPPLIED

THE FUTURE IS LOYAL

FAST FACT

The World Travel & Tourism Council estimates that 100 million tourism-related jobs have already been lost globally, including nearly 8 million in Africa, due to the COVID-19 crisis.

Heiden believes that loyalty and rewards programmes will play a major role in the future of travel. “Travel booking has become a much bigger decision, with more elements to consider and more expectations on the experience itself after a period of very limited or no travel. Consumers will be looking for the maximum value, not only in monetary terms, but also in terms of the experience for them – what they get out of a holiday personally.” He says that giving guests a sense of recognition, added value and welcome will become even more important. “Existing members of Marriott Bonvoy already benefit from this, in terms of upgrades and exclusive member offers and experiences. Rewarding our most regular, most valued guests underpins everything we do – and this will become ever more important for us and our guests as travel returns.”

Kitchin also believes that loyalty programmes will continue to play a significant role in travellers’ choices. “They’re an important tool for airlines to maintain customer retention, connection and engagement while rewarding customers for their loyalty. We have many business travellers collecting and consolidating their Avios throughout the year, using their rewards to take their families on holiday.” Govender says that the natural link between health and leisure is seeing people look after themselves so that they can reward themselves with the chance to unwind. “We must encourage people to get out there and travel safely; we have a responsibility to back the local travel industry. Our travel partners have recognised Vitality as the country’s biggest travel agency – in 2019, our customers booked one million flights and over one hundred thousand hotel nights. So we’re able to help the travel industry, and our customers, in a major way.”

DID YOU KNOW?

A study by the World Travel & Tourism Council showed that the South African economy lost over R26-million every day while on the UK’s “red list”.

THE EFFECTS OF COVID-19 ON THE LOCAL TOURISM INDUSTRY According to Statistics South Africa’s Tourism 2020 report, foreign arrivals dropped by 71 per cent from just over 15.8 million in 2019 to fewer than 5 million in 2020. The report says the overall number of travellers (arrivals and departures) also decreased by 71 per cent between 2019 and 2020. The overall number of travellers decreased by 50.7 per cent over a 15-year period from nearly 24.6 million, recorded in 2006, to 12.1 million travellers in 2020. Deputy tourism minister Fish Mahlalela says the department estimates that the industry has shed more than 300 000 jobs due to hard lockdowns.

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DIGI TA L

BUILDING ON TRUST Companies can make mistakes around social media, such as chasing vanity stats (caring more about numbers of followers than their relevance to the brand). But a more common error is to treat social media as yet another marketing channel. “Social media is the mesh that pulls all of your communications together,” says Mike Saunders, CEO of marketing agency Digitlab. “Brands tend to treat it as a channel and communicate through it, but they don’t always accept that it’s more fluid than that. That’s the biggest challenge: solving brand loyalty inside social media is an organisational conversation, not a channel conversation.”

FAST FACT

Enhanced tiers are becoming more important to customers in loyalty programmes. According to Bond Brand Loyalty’s Loyalty Report 2021, three out of five customers will do more business with a brand if they have access to an enhanced tier. Such members are 2.9 times more likely to consider a brand loyal to them than customers on entry tiers.

Building loyalty through social media JAMES FRANCIS looks at how social media can help boost loyalty programmes

Sylvia Zanetti, MD of brand agency Stratitude, agrees, noting that companies often use social media for broadcasting a message. “That approach doesn’t build social currency, which is the trust customers place in the message companies put out Mike Saunders and how others view that brand. If a company isn’t trusted on social media, it will struggle to promote loyalty programmes.”

ADDING FOCUS Once that social currency exists with customers, one can start promoting loyalty programmes and messaging on more nuanced levels by targeting specific audiences, says Zanetti. “We have Nelson Mandela University as a client. They’ve got a digital team that’s managing their social media, and they ring-fenced an application campaign where they’re trying to get matrics to apply. We’re driving a social media campaign specific to that, using the existing platforms, but then also doing digital campaigns, targeting content at a very specific audience. We’re not throwing everything together on one platform and hoping for the best.” Strategy is vital in an ever-evolving, nuanced social media landscape, says Nicolas Baker, Stratitude’s digital business unit director. “To develop that strategy, don’t hand social media to a junior staff member. Design it right

“IF A COMPANY ISN’T TRUSTED ON SOCIAL MEDIA, IT WILL STRUGGLE TO PROMOTE LOYALTY PROGRAMMES.” – SYLVIA ZANETTI, STRATITUDE 26

DID YOU KNOW?

There are several ways to communicate with customers on social media, according to research by Harvard Business Review. • Relational posts target a tribe of customers, not just individuals. • Intellectual posts encourage conscious mental processing, using humour, problem-solving or creativity. • Behavioural posts focus on activities or interactions with a product or service. • Sensory posts use media content to stimulate the senses. • Emotional posts generate moods or feelings.

from the start, preferably with an agency to help guide the process. “It’s important to have a proper social media partner to do that. There are lots of tools and nifty techniques that can be used. Social media is incredibly dynamic. Since agencies deal with it daily, we can see the changes in the tools and the new additions and features.” Above all, adds Saunders, remember that social media is about conversations. If you want to ensure a loyalty programme attracts new Sylvia members, then “the one Zanetti train of thought is to try and become more and more personable. Again, I bring this down to that trust conversation because trust is a human attribute. And social media is about connecting with humans, not just addressing them.”

IMAGES: SUPPLIED

ou don’t have to go far to encounter a loyalty programme. As competition grows in a strained economy, more and more companies are pushing loyalty programmes to retain and attract customers. Loyalty programmes can have a profound impact on sales. According to Bond Brand Loyalty, 73 per cent of customers say they are more likely to recommend a brand with a good loyalty programme, while 80 per cent say they are more likely to stick with a brand due to its good loyalty programme, and 68 per cent even adjust their spending to maximise their programme benefits. Social media platforms can be a powerful way to encourage more loyalty members. For example, Clicks customers can now conveniently sign up for its ClubCard via WhatsApp. But social media can be tricky, and companies often get the synergy wrong.

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THE DESIRE FOR DATA Loyalty programmes require customer data if they are to be effective. But it must be collected legally and with client privacy in mind, writes RODNEY WEIDEMANN

o best determine matters of customer loyalty or to ensure the right people are rewarded in the right way, having access to relevant customer data is the most important tool in any loyalty programme’s arsenal. The question is: how can loyalty programmes best gather useful data in a way that is both legal and efficient? HEALTHY DATA Avsharn Bachoo, CIO at Anton Keet, head of risk Comair, says that data is services at 1Life, notes necessary to better understand that Pulse is a health and meet consumers’ needs. It management programme also enables loyalty programmes focused on rewards, to create personalised consumer rather than loyalty, but experiences. “The information adds that the success of used encompasses personal any programme depends Avsharn Bachoo data, such as names and email on the usefulness and addresses; engagement data, accuracy of the data. relating to their interactions with our “With 1Life Pulse, our aim is to help members website, apps and social media pages; improve their health by making them aware behavioural data, such as purchase of critical health markers and incentivising histories and product usage; and them with increased life cover as they use attitudinal data, which relates to metrics the programme and improve on consumer satisfaction.” their health. To best achieve Comair uses this data to build segmented accuracy, it is crucial to use consumer profiles for personalisation, technology that has proven cross-sell, up-sell, next best offer, future its scientific accuracy, and to sales or marketing efforts, Bachoo explains. partner with an experienced “It helps us understand market trends and and reputable provider – as shifting consumer behaviour. It is also useful we have with LifeQ.” for discovering what consumers want now, LifeQ COO Christopher and what they will want in the future, through Rimmer says that by predictive analytics.” leveraging an in-depth Clicks managing executive Vikash Singh knowledge and understanding indicates that gathering such data remains of human physiology and systems biology, vitally important as it enables Clicks to their team of scientists and technologists connect with customers by providing developed four health scores directly related benefits and rewarding points, and through to long-term mortality risk: heart, sleep, personalised special offers and promotions. fitness and lifestyle/activity. “Customers are “Of course, compliance with the legal expected to wear a supplied smart device protection of customers’ privacy and personal 20 days out of every month. This is tracked in data is extremely important to Clicks. the easy-to-use mobile app. Every time they Therefore, we implement a variety of security get a little extra sleep or go for a walk, for measures that accord best practice. These example, they are growing their life cover are constantly reviewed and updated.” as they grow their wellbeing.”

“THE DATA FORMS A CRUCIAL PILLAR OF INCENTIVISATION AS IT MEASURES IMPROVEMENT IN WELLBEING AND REWARDS THE USER WITH ADDITIONAL LIFE COVER ON THE BASIS OF THIS.” – CHRISTOPHER RIMMER, LIFEQ 30

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TOP-PERFORMING DATA ANALYTICS SOFTWARE FOR REWARDS SCHEMES If your business is seeking to implement a loyalty or reward scheme, you could do worse than consider one of these solutions, reputed to be the top software in Africa. • Inﬂuitive • Talon.One • Tremendous • White Label Loyalty • Zinrelo • Loyverse POS • Fivestars • Tango Card • Tribe • SmartMatchApp Source: SourceForge.net

With the data covering such a wide range of health markers, programmes can be tailored for individuals, suggests Rimmer. “So it could be used to incentivise healthy people to stay healthy or to improve those whose health is below average, through programmes Anton Keet targeted to their specific needs. The data forms a crucial pillar of incentivisation as it measures improvement in wellbeing and rewards the user with additional life cover on the basis of this.” For Comair, the most valuable is behavioural data, including details such as purchase histories and product usage. “This allows us to create personalised offers for individuals based on specific behavioural history,” says Bachoo. “For instance, for an airline flight sale, personalised offers can be sent to specific individuals based on us already knowing their preferred destination, the time of the day they enjoy flying and their budget – based on their past spend. This also provides opportunities to cross-sell or upsell ancillary products such as car hire or insurance.”

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DATA & A N A LY T IC S

n light of rising consumer expectations for privacy and alongside rapidly evolving regulatory restrictions, Google Chrome has announced its intent to remove support for third-party cookies by 2023. Worth noting is the key difference between third-party and first-party cookies. The latter occur when a consumer visits a website for the first time and their data, such as preferences and selections, is saved to improve their experience the next time they visit the same website. Third-party cookies push these saved preferences and selections to other websites to which the consumer may not have agreed. The real trouble with cookies is that they often collect a wide range of information, including everything from your age and gender to your behavioural preferences, notes Mark Walker, associate vice president for sub-Saharan Africa at the International Data Corporation. “All of this cookie feedback is then aggregated, parsed using artificial intelligence and used to plan sophisticated marketing initiatives, which, based on the strong profiles created, can be directed accordingly. While this can make the buying experience more positive, the concern when it comes to third parties is privacy – an increasingly big issue in the digital world.” Walker says all the worry is around what data these cookies collect, about whom, and with whom data is then shared. “For example, a retailer will leverage the information it collects differently to a political entity. Having a store know specifics about you to enable better purchases is a very different thing to having the government know those same details.”

THE LOYALTY ANGLE When it comes to loyalty programmes, the principle with cookies is that if the consumer allows the organisation to track them, they are rewarded accordingly, says Yaron Assabi, CEO of Digital Mall. Of course, people don’t mind opting in

IMAGES: ISTOCK.COM, SUPPLIED

FAST FACT

Google has launched a Privacy Sandbox, a secure environment for personalisation that also protects user privacy. This is designed to eliminate the pervasive cross-site tracking enabled by third-party cookies, replacing this with anonymously aggregated user information, creating a thriving web ecosystem respectful of users and privacy by default. Source: Chromium.org

WHY PROTECTING CUSTOMER PRIVACY IS KEY Google is set to follow in the footsteps of other browsers like Safari and Firefox and ban third-party cookies by 2023. RODNEY WEIDEMANN looks at the implications for loyalty schemes if it offers them value, but if this is overdone or data is sold without consent, the consumer is likely to opt out. “Recent legislation is designed in part to protect this ability to opt in and out, but because third-party cookies may spread your Yaron Assabi information further than the original site, organisations like Google are trying to bring in additional control and further empower the consumer.” The digital ecosystem will have to continue to evolve, both to stay in line with laws like the Protection of Personal Information Act and the General Data Protection Rule and to keep consumers happy. “In my opinion, Google’s move is a very good thing for consumers as it makes compliance easier and protects customer data more thoroughly,” says Assabi. He adds that what must be understood is that third-party cookies or not, loyalty programmes are a good way for companies to obtain relevant customer information that can enable more personalised marketing. “This approach essentially becomes a self-fulfilling cycle in that companies reward clients with extra benefits if they provide more

data. Customers who get better deals will then be happier providing additional information, which allows the company to deliver even better benefits. “However, this always needs to be done in a way that doesn’t infringe upon their privacy and demonstrates respect for customer information – I suspect this is the key reason behind Google’s move,” Assabi concludes.

RISK VERSUS REWARD According to a survey by the US-based Pew Research Centre: • 81 per cent of the public say that the potential risks they face because of data collection by companies outweigh the benefits. • 66 per cent say the same about government data collection. • 72 per cent feel that all, or almost all, they do online is being tracked by advertisers. • 47 per cent believe that the government is tracking at least most of their online activities. • 70 per cent also feel that their personal data is less secure now than it was five years ago.

“THE CONCERN WHEN IT COMES TO THIRD PARTIES IS PRIVACY – AN INCREASINGLY BIG ISSUE IN THE DIGITAL WORLD.” – MARK WALKER, INTERNATIONAL DATA CORPORATION L O YA LT Y & R E W A R D S

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B2B

DIGI TA L

GETTING DOWN TO BUSINESS Are B2B loyalty programmes gaining the same sort of traction as their B2C counterparts? LISA WITEPSKI investigates

group’s malls as an open loop, with individual brands and stores able to participate in a group app. Tenants and consumers can earn and redeem loyalty benefits across retailers at all Attacq properties. He points out that a fuel brand would do well to join the programme as a partner, as such companies target the same market.

s businesses scramble to hold on to existing customers – never mind gain new ones – any new weapon in the arsenal is welcomed. Could this mean the stage is set for an increase in business-to-business (B2B) loyalty programmes? Rioma Cominelli, director at First Loyalty Plus, believes the answer is yes. Loyalty programmes across most sectors in South Africa are exploding, she reports, as companies strive to add value for clients and drive retention. But, while business-to-consumer (B2C) loyalty programmes are certainly benefitting from this increasing interest, the B2B sphere is lagging somewhat. DashPay MD Benjamin Powell maintains that although there is plenty of willingness to co-operate (and even, in some cases, develop partnerships), he is hesitant to say there is a cohesive B2B industry. “We’ve already seen several successful collaborations between brands, so there is interest in this model, but we’re not there yet.” Powell says that while some of the big brands in mass retail are getting it right, it’s the country’s sports teams that are closest in scale. “If they could align their various sponsors with their fan base and get them all working together, they would have a captive audience of like-minded people engaging in the brand and its associated sponsors.”

When it comes to digital engagement, the industry is on target, Powell says, replacing the need for paper and cards or clumsy earning and redemption processes. The industry should also be commended for its efforts to maintain real-time engagement: transparent methodologies are in place, delivering tangibles, which enhances credibility while generating excitement. Cominelli believes that in our hyper-digital world, the greatest opportunities lie in creating a substantial digital ecosystem or universe.

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There’s also room for more collaboration between brands, which would benefit not only the corporate partners in question, but also their customers. Partners need to think less in individual terms, says Powell, and focus instead on the value they could generate in a partnership. He cites the example of DashPay’s Shôping: the app developed to house loyalty for the Attacq

How closely aligned are B2C and B2B programmes? “In a B2C environment, loyalty programmes generally aim to lock customers into an ecosystem and so increase the share of wallet,” says Cominelli. “In a B2B environment, the goal is to drive retention, spend and loyalty.” The goals may be different, but that doesn’t mean that those in the B2B space can’t learn from their consumer-focused counterparts – the most important insight being that the moment of truth is that instant when someone redeems the benefit. It’s that simple, says Powell, adding that “simple” should be considered key when it comes to loyalty. The easier it is for members to understand the currency and the more transparent the programme, the better. Whatever the environment, funny money and weird formulas create distrust. Will B2B loyalty reach the same heights as the B2C industry? Perhaps, but getting brands to collaborate can be tricky, Powell observes. “Also, these programmes need to be run at scale, and because of the slow nature of turnaround in corporates, they often can’t react quickly enough to changing market opportunities and challenges. They need agile, exciting and dynamic partners to help them do this,” he concludes.

“THE GREATEST OPPORTUNITIES LIE IN CREATING A SUBSTANTIAL DIGITAL ECOSYSTEM OR UNIVERSE. THERE’S ALSO ROOM FOR MORE COLLABORATION BETWEEN BRANDS.” – RIOMA COMINELLI, FIRST LOYALTY PLUS

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WHAT WE’RE DOING RIGHT, WHERE WE NEED TO IMPROVE

LESSONS LEARNED

L O YA LT Y & R E W A R D S

2021/11/10 11:23 AM

PA R T NERSHIP S

IN IT TOGETHER

ANÉL LEWIS finds out why strategic loyalty partnerships are a win-win for brands and consumers

“This is why the choice of partners should be verybody loves a free coffee or money JUST CLICKS triple-checked against off their next purchase, but in an Clicks ClubCard is used brand alignment,” says increasingly competitive environment, by 79 per cent of consumers, making Cromhout. There should brands need to retain customers it the second-most-popular loyalty also be processes in by offering multipartner loyalty programme in South Africa currently, place to ensure that the programmes with a range of benefits. according to the latest The SA Loyalty marketing messages from “Strategic loyalty partnerships are a key Landscape Whitepaper 2021 (to see the participating brands way in which brands expand their loyalty the full list of SA’s top 25 most used are complementary. offering and tap into broader customer bases,” loyalty programmes for 2021, scan the Financial services says Amanda Cromhout, CEO of Truth, QR code on page 15). brands fare particularly a strategy consultancy specialising in Clicks managing executive Vikash well in multipartner customer-centricity, loyalty Singh says its strategic partnerships Vikash Singh loyalty programmes, says and CRM programme – which include Engen, Discovery Cromhout, which explains development. “Competition HealthyCare, Sorbet, ARC, The Body why they have clinched the top seven spots for is fierce among loyalty Shop, SpecSavers & Execuspecs, City loyalty programmes that South Africans say programmes, and customer Lodge Hotel Group, Europcar and they can’t live without, according to Truth and expectations are higher Netflorist – complement the ClubCard Brandmapp’s latest The SA Loyalty Landscape than ever before. A greater loyalty base across its health and Whitepaper. These include FNB eBucks, value can be attributed to beauty brand pillars. Discovery Vitality and Standard Bank UCount. a multipartner programme “This all contributes to an enhanced “FNB eBucks and Discovery Vitality have because it offers more choice customer experience, increasing proven that offering benefits spanning multiple and often can bring more value new members and retaining our aspects of people’s daily lives makes for than just offering a reward established membership base of good loyalty programmes and partnerships,” through your own brand.” over nine million active members,” Thokozani Mahlangu says Du Bruyn. “Ultra-luxury brands are less Thokozani Mahlangu, CEO explains Singh. appropriate for this type of partnership due to of marketing agency Lerato, factors such as price, brand exclusivity, low says consumers will always be drawn to frequency of purchase and the importance brands that offer greater benefits and services, of being able to control a specific and which can be created through partnerships. THE RIGHT INGREDIENTS personalised customer experience.” “Rewards need to be relevant to consumers’ Considerations for successful strategic needs, and should also allow for some partnerships include brand alignment, flexibility and choice.” similarities in the geographic Jacques du Bruyn, location and size of the respective MD of digital marketing customer bases, and whether agency Flume, believes or not they have similar loyalty There’s a new loyalty programme loyalty programmes offerings, says Cromhout. “Does in Mauritius, called wiiv Rewards. It should give brands a one brand offer points and the has 11 loyalty partners that reward better understanding other discounts? Make sure members for purchases across key of their customers and the loyalty offerings are simple lifestyle categories. what they are looking enough for the customer to It is an excellent example of a for and, in turn, lead to understand and use.” strategic partnership and its key better and more relevant Vikash Singh, Clicks managing success factors include simplicity Jacques du Bruyn benefits for customers. executive, says Clicks ClubCard and transparency of benefits and a Brands that form picks a brand partner based on seamless user experience – only one strategic partnerships strategic relevance. “We look at card is needed to redeem points. make it possible to tap into adjacent market added value, convenience and differentiation About 160 000 people joined the segments that could result in unexpected for ClubCard members, and the enhancement programme within three months of it growth for the brands involved, he adds. any partner can add to a member’s lifestyle.” being launched in 2019. “Partnerships allow brands to access valuable While they are beneficial, there is also a risk Source: wiivrewards.com data and customer insights that they may not that partnerships could dilute brand identity. have had before,” says Du Bruyn. They also allow brands to leverage off each other’s strengths, increase awareness of participating brands and create value for the – Jacques du Bruyn, Flume consumer, adds Mahlangu.

“Partnerships allow brands to access valuable data and customer insights that they may not have had before.”

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DID YOU KNOW?

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T HOUGH T L E A DERSHIP

he Truth and BrandMapp 2021 The SA Loyalty Landscape Whitepaper reports that the average number of loyalty programmes to which South African consumers belong is 8.7. This means that there are over 100 million loyalty programme memberships in a country with around 12 million economically active people with a household income of over R10 000 per month. Figuring out who benefits most from all these loyalty programme memberships can be quite intricate.

OPEN LOOP VERSUS CLOSED LOOP: WHO WINS? MICHAEL LEVINSOHN, MD of Legacy Lifestyle, unpacks the differences and benefits of the open-loop versus closed-loop business models

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DIFFERENT FEATURES AND BENEFITS The starting point is to understand that there are essentially two types of loyalty programme structures: closed loop and open loop. In a closed-loop loyalty programme, rewards earned at the retailer who owns and operates the programme can only be spent at that retailer – the rewards are not interchangeable. Open-loop programmes are mostly run as part of a coalition where noncompeting brands allow their customers to earn and spend across the network of coalition brands. The two programme types have vastly different features and benefits, for both the members and the programme operators. A closed-loop programme is essentially a discount programme because the retailer or partner providing the benefit incurs the cost of running the programme and absorbing the discount on offer. In a closed-loop programme, the objective is to increase the number of customers and ensure their long-term loyalty to the programme operator’s brand. This model has many challenges; some are systemic and very hard to overcome. For example, in a struggling economy where there is no growth, closed-loop programmes often end up discounting to their existing customers and not growing their customer base. In addition, customers continually have higher expectations, so they expect bigger and better benefits, which means the cost of the discount or reward continually increases, making the programme unsustainable over time.

In an open-loop programme, rewards earned at one partner can be redeemed at any of the other partners in the network. The obvious benefit for customers is choice and the ability to decide at which partners to spend those rewards. Open-loop programmes by definition create ecosystems where retailers or partners in noncompetitive verticals collaborate. For example, a bank, a mobile phone network, a food retailer and a fuel retailer would form a coalition to cross-sell their products and services to one another’s customers. The major benefit of open-loop programmes for the partners is that they can grow their market share because they have access to a larger base of customers through their marketing alliance. The costs of developing and running an open-loop programme are also shared between the partners, leading to better economics for them and resulting in a business model that has longevity.

In a struggling economy where there is no growth, closed-loop programmes often end up discounting to their existing customers and not growing their customer base.

CURRENCY Another critical aspect of all loyalty programmes is the currency of the programme. There has been a proliferation of virtual currencies in the form of beans, bucks, miles and points. The obvious benefit for the issuer of these virtual currencies is the ability to change what is referred to as the “attainability horizon”, which in essence is the number of virtual currency units necessary to receive or pay for an advertised benefit. In most cases, over time, the economic value of the units is adjusted so that the cost of issuing the benefits is reduced. For example, five years ago, you needed 100 000 air miles to fly to Europe. Today, you need 200 000 air miles. The added reality is that the percentage of customers who can benefit from virtual currencies also decreases over time. In other words, customers end up spending more to get less, and fewer customers benefit. This is

all counterintuitive to consumers, but a necessity for issuers of virtual currencies. Legacy Lifestyle’s open-loop, cashback model is proving both viable and sustainable in these challenging times. Our year-on-year growth shows that we are the fastest-growing open-loop programme in the country. Our members earn cashback, not points, at all of our partners, and they can take their cashback and spend it at any of the partners in the Legacy Lifestyle network. And a rand is always a rand, so our members know exactly what the value of the reward is each time they shop.

The major benefit of open-loop programmes for the partners is that they can grow their market share because they have access to a larger base of customers through their marketing alliance. Michael Levinsohn

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Loyalty & Rewards November 2021

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