FINANCIAL SERVICES

THE SOUTH AFRICAN LOYALTY LANDSCAPE

Truth CEO AMANDA CROMHOUT unpacks the key insights from the latest Truth and BrandMapp loyalty whitepaper

More 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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As 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 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.

Johan Moolman

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 fi rst and third Wednesday of the month, customers receive a personalised offer with a goal, and have a specifi ed period in which to complete it in order to claim their benefi t in the form of bonus rewards points or a voucher.”

eBucks Rewards customers, on the other hand, can access multiple value-added benefi ts that include R500 grocery vouchers, quarterly complimentary vouchers from Wimpy, 40 per cent off selected fl ights and car hire, and complimentary access to airport lounges, to name a few. a goal, and have a specifi ed period in which

DID YOU KNOW?

South Africa’s 10 most popular fi nancial 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

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 fi nancial behaviour by rewarding and giving value back to the customer. We help our customers become fi nancially independent by rewarding sound fi nancial behaviour.”

By subscribing to UCount 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.

Fayelizabeth Foster

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.