LOYALTY PROGRAMMES ENTRENCHED IN CONSUMERS’ LIVES

In the past two years, the South African loyalty industry has become stable and mature, with research revealing that citizens are using more loyalty programmes than ever

According to the 2022 Truth & BrandMapp Loyalty Report, 73% of economically active citizens are using them It also found that South Africans are, on average, using more than nine programmes, up from 3 6 in 2014

The report, based on the annual BrandMapp study by consumer insights consultancy WhyFive, outlines how South Africans are using loyalty programmes and what their preferences and motivations are towards loyalty

“Loyalty programmes have become ingrained in the lives of consumers and we don’t expect that trend to change any time soon,” says Brandon de Kock, director of storytelling at WhyFive

“Brands that don’t have a loyalty programme, or are not connected to a programme in some way, are behind the curve because increasingly, a loyalty programme is one of the only ways an organisation can differentiate itself in a highly commoditised world ”

To remain relevant, loyalty and reward programmes need to deliver on their primary mandate, which is to save customers money, he says “However, there is a gap between what businesses want their loyalty programmes to deliver increased customer loyalty and greater spend per customer and the desire by customers to save money ” If the programme is not delivering savings, then it needs to address another need, which could even be an altruistic donation to charity, says De Kock “The ability to donate to charity without any effort is where a programme like My School excels because it is passing on a benefit for spend that the customer was already spending Another programme that stands out is School-Days, which is based on a brilliant concept, given how critically important education is viewed by most South Africans ” School-Days allows members to raise funds for education by shopping at programme partners including Dis-Chem Members can choose to support their child’s school, the Adopt-a-School Foundation or allocate points towards their child’s education at no cost while they continue to earn their normal retailer loyalty points “There are numerous social causes that can be linked to a loyalty programme,” says De Kock “The challenge for businesses is to listen to their customers regarding causes that are important to them ”

A trend over the past two years has been the shift towards more aggregated programmes and more sophisticated partnerships to offer more attractive benefits “A partnership like Dis-Chem’s with Legacy offers consumers a fairly decent benefit These kinds of partnerships are a sign that the industry is maturing and raises the bar for everyone in the loyalty game Another interesting shift is the way in which the fuel industry is entering the loyalty space ” De Kock differentiates between reward and loyalty programmes

Reward programmes, he explains, reward consumers for doing something they would have to do anyway, while a loyalty programme is something slightly different, as it provides a benefit in return for increased, modified or changed behaviour Earning

BRANDON DE KOCK rewards for buying fuel, something consumers have to do to drive their cars, is essentially getting something for no effort “And clearly they work because 36% of consumers say loyalty programmes influence where they buy fuel,” points out De Kock Interestingly, though fuel retailers have partnered with other loyalty programmes, only two have their own: Sasol and Shell De Kock believes Shell’s V+ Rewards, which allows members to earn cash rewards for every litre of fuel they purchase and selected shop items, has knocked it out of the park “Earning loyalty rewards for fuel purchases is a relatively new concept in South Africa I love the idea of being rewarded for something you didn’t expect Imagine if GPs, for example, offered a discount for every fifth visit?”

Other programmes which stand out, believes De Kock, include Clicks ClubCard, DisChem, Pick n Pay Smart Shopper, Checkers/Shoprite’s Xtra Savings, Capitec and FNB Discovery Vitality, which rewards members for behaviour rather than spend, illustrates the scope programmes have to evolve their offering “When we ask consumers why they don’t use loyalty programmes, one of the most frequent responses is that they don’t spend enough to earn decent rewards,” reveals De Kock “Younger people, in particular, are less likely to use loyalty programmes for this reason This highlights the need for loyalty programmes to find innovative ways of rewarding customers for their loyalty, even when their spend is not significant ” Personalisation and relevance are among the biggest buzz words in the loyalty space De Kock maintains both will be key to the success of loyalty programmes in future “It’s critically important that loyalty programmes know their customers and, in general, players in the local loyalty space are getting better at this Customers are more likely to feel the brand cares about them when they receive a personalised offer ”

He argues that in the loyalty space, relevance and personalisation are the same thing offers have to be personalised to be relevant, but they don’t have to be relevant to be personalised “The holy grail are programmes which are personalised and relevant ”

What people really want

For the first time in 2022, BrandMapp research was extended to consumers with a household income of R10,000 and less per month This research was conducted by MoyaApp, a data-free mobile chat, digital content and payment platform MoyaApp found 82% of lower-income consumers use loyalty programmes, compared with 73% in the BrandMapp survey It revealed that these consumers are hugely influenced by loyalty programmes in terms of where they shop (76%), and bank (45%) and the products they buy (43%) This high usage, says the report, is homogeneous across gender, age and sub-income brackets within the consumer group Preferred benefits are cash, followed by data or airtime Educational courses are the fifth most preferred benefit However, 65% of lower-income consumers said they like to build up points for a bigger reward

The most used programme for such consumers is Shoprite Xtra Savings, followed by Pick n Pay Smart Shopper and Capitec Live Better

The simplicity of the Capitec Live Better programme appeals enormously to the less wealthy consumer, says the report Interestingly, half of Shoprite Xtra Savings members are also members of Capitec s Live Better programme MTN YelloBucks and Vodacom VodaBucks are also in the top 10 most-used loyalty programmes