Loyalty & Rewards December 2023

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ED’S NO T E

EVOLUTION IS THE SOLUTION

LOYALTY & REWARDS PUBLISHED BY

Picasso Headline, A proud division of Arena Holdings (Pty) Ltd, 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: Stephanie Aboujaoude, Max Brueggemann, Steve Burnstone, Cindy Carvalho, Trevor Crighton, Mart-Marié du Toit, Caryn Gootkin, Pieter Hoijtink, Michael Levinsohn, Anél Lewis, Vukani Magubane, Mongezi Mtati, Kevin Skinner, Rodney Weidemann Copy Editor: Brenda Bryden Content Co-ordinator: Natasha Maneveldt Digital Editor: Stacey Visser vissers@businessmediamags.co.za DESIGN Head of Design: Jayne Macé-Ferguson Senior Design: Mfundo Archie Ndzo Advert Designer: Bulelwa Sotashe Cover Image: Jacob Wackerhausen, arthobbit SALES Project Manager: Gavin Payne gavinp@picasso.co.za | +27 21 469 2477 Sales: Stephen Crawford PRODUCTION Production Editor: Shamiela Brenner Advertising Co-ordinator: Fatima Dramat Subscriptions and Distribution: Fatima Dramat fatimad@picasso.co.za Printer: CTP Printers, Cape Town MANAGEMENT Management Accountant: Deidre Musha Business Manager: Lodewyk van der Walt General Manager, Magazines: Jocelyne Bayer

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ew technology, the threat of recession, shifting customer preferences and more economic stresses than ever … these factors and more are driving the evolution of customer experience, and brands need to pay attention, innovate and offer tangible value if they want to avoid being left behind. Every year, the role of loyalty and rewards programmes in the customer experience game becomes more and more important, offering the opportunity to boost customer engagement, differentiate offerings in a crowded market and collect invaluable data.

In this issue of Loyalty & Rewards SA, we look at the role of predictive analytics in building more motivating programmes, along with the importance of tracking and measuring key performance indicators to ensure that they actually fulfil their mandate. We eye up the evolution of retail loyalty, where brands are working hard to transition customers to app-centred ecosystems, and the township space, where support of locally made products is driving a thriving kasi economy.

We also look at employee recognition – crucial in a competitive job market where skills are short and tenures shorter. Customer experience will continue to evolve, brands will continue to innovate, and we’ll continue to explore how and why, right here.

Editor Anthony Sharpe

Contents 13 TRANSPARENCY Simplicity and transparency are key to creating loyalty.

16 TECHNOLOGY South African consumers remain stubbornly wedded to physical loyalty cards in a digital world.

21 METRICS Measurement is key to any loyalty programme, but what are the right metrics to track?

28 DATA New technologies offer companies the opportunity to predict customer behaviour.

33 REWARDS Instant gratification is the name of the game for some consumers.

Experience-based rewards can be the currency of true brand loyalty.

Images: Supplied

Loyalty to local is on the rise in South Africa’s townships.

INFORMED

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INNOVATIVE

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INSPIRED

HOME OWNER

WELCOME HOME

COPYRIGHT: Picasso Headline.

From cash rewards to app engagement, retailers are working hard to retain customer loyalty.

53 HOSPITALITY Opportunities abound for the local hospitality industry to stimulate local travel through loyalty and rewards.

56 STAFF INCENTIVES Employee recognition and rewards can help build a high-performance workforce.

61 AWARDS South Africa is positioning itself as a global loyalty leader.

65 LONG-STANDING LOYALTY How a school fundraising plan has grown into a loyalty scheme that gives back millions.

66 GAMIFICATION Gaming elements go beyond rewards to put the customer at the centre of the experience.

38 REWARDS

43 TOWNSHIPS

SOUTH AFRICAN

48 RETAIL

44 LUXURY

GET YOUR FREE EDITION OF FRANCHISING HERE DO

WNLOA

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Smartly designed schemes can benefit consumers at both ends of the income spectrum.

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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AFRICAN BANK ADVERTORIAL

AUDACIOUS REWARDS OFFERS CUSTOMER VALUE Reward points matter in the reality of struggling South Africans, writes DR NCEBA HENE, head: Rewards and Loyalty

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ver the past decade, many South Africans have been confronted by economic challenges such as power outages, a weaker rand and rising interest rates. As this year draws to an end, South African households all income groups continue to feel the economic pinch and must adapt to another “new normal”.

This often means downgrading lifestyles and reassessing finances. Now more than ever, South Africans need the skills to budget, save and use their financial resources wisely.

Rewards store, customers can redeem their Audacious Rewards points for great offers, including discounted movie tickets, grocery vouchers, airtime and data rewards.

STRETCHING THE VALUE OF A RAND HAS NEVER BEEN SIMPLER

SOUTH AFRICANS NEED FINANCIAL LITERACY AND MORE Financial literacy helps individuals make informed decisions and empowers them to navigate their financial journey effectively.

However, knowledge on its own is not enough to equip individuals to take control of their finances. As they strive to meet immediate needs and plan to achieve their financial goals, they also need the right tools to help them make the most of their money.

PAVING THE WAY FORWARD WITH REWARDS YOU CAN COUNT ON

Images: Supplied

A rewards programme can be one such valuable solution for managing finances.

According to the Truth & BrandMapp Loyalty Whitepaper, in 2022, 73 per cent of economically active South Africans actively participated in loyalty programmes. In this sea of loyalty incentives, African Bank’s Audacious Rewards programme stands out as a true commitment to customer value. This exceptional programme was designed to meet modern South African needs, with a focus on simplistic earning rules and instant delivery

Dr Nceba Hene

of value when meeting your banking goals.

In turn, this has allowed us to deliver rewards to our customers that they can count on daily.

The pressure on our wallets is constant – meeting daily necessities requires both long-term planning and immediate relief.

By making regular purchases with their African Bank cards or paying with the African Bank app, consumers can earn points within minutes with Audacious Rewards. Buying groceries, buying data, airtime or electricity, or even switching debit orders all provide immediate points, giving a customer instant value that they can spend. On the Audacious

Audacious Rewards is about empowering consumers while making money work for them. Six months since the programme’s inception, over 500 000 African Bank customers have earned over 1.86 billion Audacious Rewards points (R18.6-million).

With each swipe and transaction, customers earn points that truly matter, helping them purchase products and experiences that enrich their lives and provide real value for everyday banking.

Take the first step towards financial wellness with African Bank’s Audacious Rewards!

For more information about the programme, visit https://www.africanbank.co.za/en/home/ audacious-rewards/

READ MORE ABOUT THE AUDACIOUS REWARDS PROGRAMME HERE. RE

A D N OW

WITH EACH SWIPE AND TRANSACTION, CUSTOMERS EARN POINTS THAT TRULY MATTER, HELPING THEM PURCHASE PRODUCTS AND EXPERIENCES THAT ENRICH THEIR LIVES AND PROVIDE REAL VALUE FOR EVERYDAY BANKING. L O YA LT Y & R E W A R D S

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T R A NSPA RENCY

ARE QUALIFYING CRITERIA ATTAINABLE?

SIMPLICITY AND TRANSPARENCY ARE KEY TO CREATING LOYALTY Loyalty programmes that are transparent and easy to understand will attract and retain members, writes CINDY CARVALHO, head of rewards for Investec Private Banking South Africa

Image: istock.com/ IvelinRadkov

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veryone enjoys being rewarded. It activates pathways in the brain that make us feel good, making it more likely that we will repeat the behaviour or act that elicits the reward. This powerful psychological effect formed the basis of the first loyalty programmes aimed at attracting and retaining members.

Since then, loyalty programmes have evolved from relatively simple points-based schemes, often linked to spending, into integrated ones offering multifaceted rewards. These could include discounts, personalised offers or exclusive and curated experiences offered to members through an extensive partner network.

The focus remains on creating a win-win for a business and its loyalty programme members by rewarding behaviour and delivering added value and benefits beyond the products or services it provides. Getting this formula right can differentiate a brand from its competitors. It can also encourage the uptake of new products and services and entrench loyalty.

LOOK FOR EASY-TO-UNDERSTAND, SIMPLE PROGRAMMES As loyalty programmes today are intricate, it’s become increasingly vital that they are also transparent and easy to understand. When organisations add additional layers to differentiate

their offerings, the result is often complex rules, terms, conditions and qualifying criteria. This makes it difficult for members to understand the offering and benefit from its full value.

Therefore, transparency is critical, but yet somehow not necessarily the norm. While the rules are often clear, it typically takes members too long to read through and understand all the terms and conditions.

No matter how multifaceted the programme, the focus should be on making it easier for members to understand. They must know what they are entitled to through simplified and easy-to-understand information about how they can participate. Their status within the programme should be clear. They should also know how they redeem and engage further to get more benefits from the programme.

Various loyalty programmes are retooling their offerings with a view to simplifying them – either the programme itself or the messaging and language used in marketing it. Going forward, crafting intuitive, self-service platforms will go a long way to providing better visibility and greater transparency.

In the hunt for new members, organisations are pushing the loyalty envelope when it comes to marketing. However, headlines don’t always tell the full story. Before signing up, potential members need to dig deeper to determine whether Cindy Carvalho it’s even possible to achieve the criteria needed to access the advertised discounts and offers.

Potential members should check what limitations exist on qualifying for a discount and determine if they can earn rewards from the very first transaction and each subsequent transaction throughout the month or whether they need to reach a threshold even to qualify.

FOCUS ON FEES Cost will also remain a critical factor related to loyalty programme enrolment. A lack of clear and transparent pricing information creates misperceptions. Members either assume there is no cost associated with joining a loyalty programme or that the membership fees are set.

Often, there is an entire schedule of fees per service, and the potential costs may outweigh the benefits. As competition in every sector heats up, the benefit of consolidated fees cannot be overstated. Members should know what they are paying for and what they are getting.

BEYOND POINTS AND PRIZES We often think that we are most motivated by transactional and financial incentives. However, as behavioural research tells us, it’s often nonmonetary rewards that can be most appealing.

Although enticing at first, the thrill of financial rewards can wear off.

Deeper emotional factors exist, which can determine the value we gain from the rewards – those that give us a sense of exclusivity, boost our social status and make us feel empowered.

When designing a loyalty programme, it’s important to consider how to tap into these wider psychological needs. This is not to say that points and prizes aren’t motivating, but it’s often the psychological value that can be most motivating for members.

NO MATTER HOW MULTIFACETED THE PROGRAMME, THE FOCUS SHOULD BE ON MAKING IT EASIER FOR MEMBERS TO UNDERSTAND. THEY MUST KNOW WHAT THEY ARE ENTITLED TO THROUGH SIMPLIFIED AND EASY-TO-UNDERSTAND INFORMATION ABOUT HOW THEY CAN PARTICIPATE. L O YA LT Y & R E W A R D S

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T ECHNOL OGY

SIMPLER AND EASIER WITH DIGITAL WALLETS South African consumers remain stubbornly wedded to physical loyalty cards in a digital world, writes TREVOR CRIGHTON

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bove all else, loyalty and rewards programmes need to be convenient for customers – and offering eWallet integration certainly makes it simpler for members to manage. That said, the Truth & BrandMapp Loyalty Whitepaper showed that 74 per cent of South African members still preferred to swipe a card – with younger members even more likely to do so.

Digital wallet functionality and applications allow users to store all their rewards in one place and also allow access at all times – a member is more likely to have their phone to hand than a wallet full of cards. Mobile wallet apps can – and usually are – linked to credit cards or bank accounts for extra convenience and security.

“IN SOUTH AFRICA, PAYMENT LINK LOYALTY ISN’T BEING DONE EXTENSIVELY, IF AT ALL, BUT SOME BANKS HAVE THEIR OWN PROGRAMMES THAT OFFER THEM THE ABILITY TO TRACK SPEND.”– AMANDA CROMHOUT DIGITAL LOYALTY

CONVENIENCE OVER CARDS

Amanda Cromhout, founder and CEO of specialised loyalty consultancy Truth, says there are as many as 10 elements to look at when judging the success of a loyalty programme.

“Primarily, the programme must be simple and transparent – customers must understand the value, it must be easy to sign up for, the rewards must be clear, and it must be easy to redeem them,” she says. “The value to customers is a second key element – are they worth anything and worth the effort of attaining? Thirdly, the company running the programme must ensure it is commercially viable to ensure longevity and that it offers good brand positioning.”

Loyalty & Reward Co. CEO and founder Philip Shelper says that a major benefit to having various loyalty cards connected via a digital wallet is that most consumers no longer want to carry a pile of plastic cards.

“Other benefits include giving preferred loyalty programmes the ability to provide tailored offers through the app, making it easier to transact (simply tap the phone on the EFTPOS terminal to identify), and even paying directly through the app – it’s all upside by providing more convenience for members.”

A Deloitte Consumer Review article on customer loyalty theorises that traditional

FAST FACT

According to the 2022 Truth & BrandMapp Loyalty Whitepaper, 74 per cent of South Africans prefer to swipe a card to identify themselves for loyalty membership – using digital channels, such as an app or digital card, is rated almost three times less preferable than using a card.

Amanda Cromhout

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

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T ECHNOL OGY

DID YOU KNOW?

The 2022 Truth & BrandMapp Loyalty Whitepaper shows that 73 per cent of South Africans who are economically active are using loyalty programmes – and, on average, are members of 9.2 programmes.

loyalty programmes need a rethink, not only because of changing consumer expectations, but also because they have become expensive to run and difficult to unwind. The authors state: “Loyalty is the brand’s ability to be ‘top of mind’ in a customer’s head as well as to secure a sense of allegiance from consumers.

Allegiance is much harder to achieve at a time when every consumer has different expectations and responds to different triggers when it comes to engaging with a brand. Getting the customer ‘experience’ right has become the differentiating factor for many successful business models.

And the right loyalty strategy should help to deliver that experience.”

Images: istock.com/ Drazen Zigic, Supplied

DIGITAL CAN DRIVE REDEMPTION Cromhout cites redemption rates as a key driver to the success of a programme – and digital wallets help drive that. “The higher the redemption rate, the better value the programme delivers,” she says. “eBucks and Dis-Chem Rewards claim to have a 90 per cent plus redemption rate, and it serves nobody to leave money on the table. Better redemption means customers are enjoying the programme, are engaged, contributing and making good use of the rewards.”

Shelper says that international accounting standards also require loyalty programme operators to defer revenue to cover the value of points, miles or cashback provided to members.

“Thus, if managed properly, this should not be an issue for retailers. They can stimulate redemptions by making it easier to use points wherever members spend. They can also adjust expiry rules to try to force members towards a redemption.”

Philip Shelper

DIGITAL WALLET FUNCTIONALITY AND APPLICATIONS ALLOW USERS TO STORE ALL THEIR REWARDS IN ONE PLACE AND ALSO ALLOW ACCESS AT ALL TIMES. What’s the benefit to the retailer of deploying loyalty cards as part of a digital wallet? Shelper says that the big opportunity is collecting much more member data. With the right code and permissions, loyalty programme operators can find out a lot more about members, including what other apps they have on their phones, where they are visiting, how they are transacting, and much more.

Cromhout says individual retailers won’t get massive insights unless they’re signed up to aggregators, which aggregate info from various merchants to deliver insights. “In South Africa, payment link loyalty isn’t being done extensively, if at all, but some banks have their own programmes that offer them the ability to track spend – which they’d be able to do with credit card information anyway.”

Woolworths in Australia has an amazing digital wallet. Members can tap to pay and be recognised to earn their points at the same time.

They also receive a digital receipt tied to their account. They can view and activate bonus points offers that are artificial intelligence generated to maximise the relevance to them.

Members can also register a credit or debit card and pay through the app by scanning a QR code on the EFTPOS terminal. Points are credited to their account instantly when the transaction is completed, explains Philip Shelper, Loyalty & Reward Co. CEO and founder. “We love what Coinbridge by Nayax is doing. They have developed technology that can be loaded into any loyalty app to enable points, miles or cashback to be spent anywhere.”

THE 2022 TRUTH & BRANDMAPP LOYALTY WHITEPAPER R E A D N OW

FUTURE-GAZING Cromhout says that loyalty programme operators are currently generating plenty of great ideas about how to better engage customers.

“Rewarding members for signing up is part of the experience, but how you communicate and engage with them is going to be greatly influenced by gamification, the introduction of cryptocurrencies and nonfungible tokens,” she says. “Seamless engagement is the future of loyalty programmes – simpler is better.”

Shelper echoes her sentiments on gamification: “We’re really excited by the potential of digital games. Local companies, such as GamezBoost, have built incredible white-label solutions to support loyalty programmes in creating branded games for members to play and win prizes. This is a big trend kicking off all around the world.” He says that artificial intelligence is also transforming how loyalty programmes are run, supporting better personalisation, analytics and security.

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

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GLOBAL EXAMPLES

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ME T RIC S

MEASURING UP Measurement is at the core of any successful loyalty programme, but what are the right metrics to track? By STEVE BURNSTONE, CEO of consumer analytics and research agency Eighty20

Images: Supplied

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oyalty programmes have become the cornerstone of business strategies to retain customers and increase their lifetime value, especially with the rate of customers basing their purchasing decisions on loyalty benefits continuing to surge. In an era of mounting market competition, using intuition, creativity and a sprinkling of data to develop rewards and discount strategies is no longer enough to drive sustained performance, falling well short of recognising the complexities associated with driving customer loyalty.

The adage “You can’t manage what you don’t measure” applies to loyalty programmes

Steve Burnstone

as it does to all spheres of business. Many companies, especially their executives, have a surprisingly superficial understanding of the drivers of value within their loyalty programmes, their net contribution to the bottom line and their overall performance against the original business case. Understanding the true performance of your programme is essential to ensure it is optimally designed, profitable, and ultimately valued and loved by customers.

FAST FACT

A successful loyalty programme can boost customer retention, yielding great and tangible benefits for businesses. For example, research shows that the cost of finding a new client is five to six times greater than reactivating an old one.

Source: Harvard Business Review

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ME T RIC S

WHAT AND HOW TO MEASURE Firstly, key loyalty metrics that span the customer journey need to be identified and the appropriate benchmarks set. Metrics and benchmarks can vary depending on the industry, customer needs, business goals and loyalty programme design. Several benchmarks can assist businesses in making informed, customer-centric and SMART (specific, measurable, attainable, relevant, time-bound) decisions. The following are some key ones.

UNDERSTANDING BEHAVIOURAL CHANGE Unfortunately, simply measuring these loyalty metrics and tracking their movement over time is not enough. Businesses also need to understand how members are behaving differently because they are members of the programme or, in other

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UNDERSTANDING THE TRUE PERFORMANCE OF YOUR PROGRAMME IS ESSENTIAL TO ENSURE IT IS OPTIMALLY DESIGNED, PROFITABLE, AND ULTIMATELY VALUED AND LOVED BY CUSTOMERS. words, how the programme is driving customer behavioural change. Loyalty managers can use several techniques to determine this.

1. Comparison of members to nonmembers: comparing members to nonmembers or members’ behaviour over time is valuable, but can introduce a lot of bias. For example, self-selection will naturally cause more engaged customers to join a programme, while trending doesn’t always allow for seasonality or market shifts.

2. A/B control testing: employing controlled experiments to compare customer behaviour between members exposed to interventions and those not is typically the most basic approach to getting a truer sense of a programme’s impact.

3. Genetic matching of customer groups: using more advanced statistical methods to match programme members with nonmembers who share similar characteristics allows for a more detailed view of how the programme is driving behavioural change.

Loyalty managers then need to translate how members are changing their behaviour across the key value drivers (spend, frequency, churn, and so forth) into a clear understanding of the incremental revenue or “lift” being generated by the loyalty programme. Ideally, this view needs to be simplified into a “loyalty income statement” and tracked against the original business case. This tool, when used well, provides deep insights into what is working, not working or requires change.

EMBRACING THE DATA REVOLUTION As businesses and their loyalty programmes mature, so must their data collection and processing. Over the past decade, loyalty and customer experience have undergone a “data revolution”, bringing with it the opportunity to use data in new ways to understand and better engage with customers and drive improved customer experience and greater profitability.

This data revolution has unlocked a variety of new tools, including the following.

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Deeper customer understanding and profiling (using first- and third-party data sources) to improve product, price, promotion and place decisions.

• Modernised, granular and customer-centric segmentation to better understand market share and spend potential, and then identify growth opportunities.

• Improved customer lifetime value and marketing return on investment measures to help optimise customer relationship management journeys and marketing investments.

• Hyper-personalisation to create improved customer brand association and drive campaign performance.

Finally, it is important to remember that loyalty programmes are not one-size-fits-all solutions.

Different customers will have different needs and preferences, and organisations should be prepared to tailor their programmes accordingly. However, by identifying key measures and actively monitoring them, businesses can ensure they are proactive in addressing their current customers’ needs and preferences while also driving business success.

Images: istock.com/ Thapana Onphalai, Supplied

1. Average spend: this can be split further into average transaction value, average units purchased, or products held – but understanding how members contribute to total revenue is essential.

2. Frequency of visits: frequency measured against a typical buying cycle (whether groceries, fashion or data top-ups) is a key measure of customer brand loyalty.

Understanding how ranging, location and promotion, among others, drive frequency is key to building loyal customers.

3. Penetration: member acquisition is often a primary target, together with the total percentage of customers who are members, or the contribution these members make towards total turnover. These metrics help evaluate the attractiveness of the programme and its ability to impact business performance meaningfully.

4. Active engagement rate: the proportion of members who engage with a loyalty programme can help identify if customers understand and value the programme.

5. Redemption rate: a loyalty programme’s redemption rate is the percentage of points or rewards used by the members. A low redemption rate indicates that the rewards are either not attractive or that there may be some blockage to members utilising them.

6. Churn rate: by measuring the rate at which members leave or stop using a loyalty programme (but remain active customers), loyalty managers can quickly and easily assess whether or not the programme is perceived as relevant and if changes are required.

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DATA

GETTING PREDICTIVE AROUND CUSTOMER LOYALTY In the digital age, new technologies offer companies the opportunity to predict customer behaviour and leverage this to drive deeper ties of loyalty. By RODNEY WEIDEMANN

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igital transformation continues apace across businesses and industries, and so new technologies are being leveraged to boost customer loyalty and improve those programmes that focus on this. Predictive analytics, in particular, enable brands to build better and more targeted programmes by making predictions based on customers’ demographic, purchasing and behavioural data.

Effectively using such data should enable organisations to develop targeted promotions and rewards for individual customer segments, enabling the business to improve its levels of personalisation – something that is increasingly in demand from consumers.

GETTING PREDICTIVE Mike Renzon, group CEO for inQuba, a customer journey management software provider, points out that loyalty in its simplest form means that companies can retain existing customers, attract new customers through promoter referrals, and successfully introduce these customers to new products and services. “However, it should be clear that no loyalty programme can make up for a poor customer experience and there is a real danger of the loyalty programme becoming the ‘product’ that customers value, even more so than the actual product or service the company supplies.”

Therefore, says Renzon, a loyalty programme should be designed as the cherry on top of an extraordinary product or service.

“Even better, it should be Orediretse Molebaloa integrated into the product or service experience itself, in much the same way as Uber One offers a flat-fee loyalty programme for regular users of the service.”

Cindy Carvalho, head of rewards and pricing at Investec Private Bank South Africa, notes that, just as in any industry or business, useful information can support decision-making and strategy. “When it comes to loyalty and rewards programmes, artificial intelligence (AI) and predictive analytics can assist companies in optimising the performance of a programme.

These technologies do so by forecasting the effects of tiering with more confidence, accurately targeting clients most likely to take up an offer, and managing the liability risk of unredeemed loyalty points.”

According to Orediretse Molebaloa, head of solution engineering at Infobip, a provider of predictive analytics solutions, the value of personalisation lies in being able to scrutinise certain data about the customer. “With this knowledge, you can hyper-personalise the customer experience, for example, by providing them with notification only at a time of their choosing, which adds an intimate kind of value to each customer.

“In addition, it opens the door to offering revolving, targeted rewards that can be used to help change shopping behaviours. It is also

“ORGANISATIONS NEED TO BE TRANSPARENT AND CUSTOMERS NEED TO FEEL SAFE AND UNDERSTAND AND AGREE TO THE BENEFITS THAT SHARING THEIR DATA WILL PROVIDE TO THEM.” – MIKE RENZON

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DATA

worth mentioning that a more personalised experience can provide data that can be mapped against fraud detection technologies to improve your overall security.”

“WHEN IT COMES TO LOYALTY AND REWARDS PROGRAMMES, ARTIFICIAL INTELLIGENCE AND PREDICTIVE ANALYTICS CAN ASSIST COMPANIES IN OPTIMISING THE PERFORMANCE OF A PROGRAMME.”– CINDY CARVALHO

Images: istock.com/ AndreyPopov, Supplied

CONSENT AND PRIVACY Regarding personal information, Molebaloa indicates that the key lies in properly managing consent and data privacy. Infobip, he says, ensures it aligns with key local and international privacy legislation and then also utilises encryption on its platform to ensure personal data remains private.

Renzon agrees that data privacy is at the heart of trust, suggesting that there needs to be an open and transparent handshake between businesses and each of their customers. “Put simply, organisations need to be transparent and customers need to feel safe and understand and agree to the benefits that sharing their data will provide to them.

“There is always a concern around ‘algorithm bias’,” adds Renzon, “but this can be managed with a ‘walled-garden’ approach, where AI only acts against content that is specific to a consumer or consumer segment and does not access the public domain of training data. Once again, individual customer context is extremely important as this context drives the engineering that generates prompts specific to an individual customer’s particular context at that point in their journey.”

AI systems require large amounts of high-quality data to learn and make accurate predictions, Carvalho says, and as such, some of the biggest challenges currently being faced are the quality of data, algorithm bias and data privacy. These can hamper the ability to quickly get actionable results based on the data. “Given that machine learning models are written by people and trained on socially generated data, it is important to compare and validate training data samples for accurate representation. Regarding data privacy, adhering to data protection policies is critical. Giving clients a view of how their data is used and the ability to opt in and out of certain instances is non-negotiable.”

FAST FACT

Asked about how to keep a “human element” in such a technologically heavy scenario, Carvalho says: “Companies should enrich the quantitative data with qualitative data such as client surveys and feedback through various channels. A feedback loop to clients also goes a long way in maintaining the human element. In the new digital marketplace, consumers expect intuitive user experiences and personalisation.”

A HYPER-PERSONALISED FUTURE Molebaloa believes that moving forward, businesses should look at implementing technology that enables the business to relate to customers across multiple channels via an omnichannel strategy. “Different

KEY IMPLEMENTATION CHALLENGES •

There is any number of potential implementation challenges, notes Orediretse Molebaloa, head of solution engineering at Infobip.

• Customer consent is a critical building block as you cannot optimise customer loyalty effectively without it.

• Data quality is vital, which means ensuring data received from multiple structured and unstructured sources is cleaned and structured.

• Skills remain a challenge as most commercial organisations do not have in-house data scientists.

• Cost also remains an issue as it is generally difficult to both optimise productivity and minimise cost.

Source: Infobip

In customer loyalty programmes, predictive analytics allows for far more than targeted marketing; it’s a window into how customers think and can help companies to predict a member’s behaviour in the future.

Source: Kyros

ADVICE FOR FIRST TIMERS •

Invest in the right resources that share your vision.

• Have a clear strategy of what you want to achieve and break this down into measurable goals.

• Start small and run tests based on your measurable goals.

Invest in technology integration to scale only once you see the desired results.

Source: Investec

customers have different channels of contact that they prefer – whether it is email, WhatsApp or online – and so businesses need to cater for the needs of all customers. In the end, you need to be able to reach all the different customer touchpoints if you wish to meet their needs. Personalisation will be followed by hyper-personalisation, with the latter achieving its full potential as digital transformation across industries progresses, and legacy systems are eliminated and replaced with AI and predictive analytics.”

Renzon agrees on the importance of channels such as WhatsApp and other super apps, but believes that the key to hyper-personalisation lies in context. “Implementing predictive analytics, AI and intelligent loyalty programmes without context will always lead to consumer disappointment, and ultimately to companies going back to square one.”

Carvalho agrees, suggesting that the world is entering an era of real-time, contextual rewards.

“Technology will enable the best reward at the right moment, creating seamless and engaging experiences that not only reward customers based on their changing preferences, but also keep them loyal.

“What it boils down to is that companies who aren’t utilising AI and predictive analytics should start sooner rather than later, as the opportunity to maximise client satisfaction and drive client lifetime value – and thus to differentiate your business while maximising customer loyalty – is huge,” Carvalho concludes.

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RE WA RD S

I WANT IT NOW

Loyalty programmes offering instant rewards are gaining in popularity and attracting appreciative members, writes VUKANI MAGUBANE

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n today’s world of instant gratification and consumerism the loyalty rewards cards in our wallets or the virtual cards on our phones can instantly make us feel special and bring immense joy. As times have gotten tougher and consumers struggle to stay afloat, they are looking for ways to stretch their budgets with instant cash savings and rewards.

The promise of instant gratification – getting what I want when I want it – is one of the most appealing aspects of brand loyalty programmes.

While some consumers want to build up points and move up tiers for bigger rewards, others want and expect to be rewarded immediately for their loyalty.

country’s fastest-growing programme among cash-strapped consumers because it allows customers to save money instantly on up to 1 000 grocery items. The programme is not based on loyalty points but offers instant savings at the till.

“Customers need instant cash savings to help manage their household budgets amid ever-increasing living costs. The Xtra Savings programme offers deals and discounts on products they want and need in every store Checkers Xtra Savings aisle,” states Checkers.

The Clicks ClubCard is a perennial favourite, consistently ranked as one of the country’s top their loyalty programmes this year to meet loyalty programmes. “Everyone likes to pay less consumer expectations. for products, especially during times such as The new SPAR Rewards Programme is these when households budgets are stretched,” one example. “This year, we revamped our says Dr Mel van Rooy, head of SPAR Rewards programme, offering Clicks marketing. “Instant rewards, shoppers instant savings on hundreds such as the exclusive Clubcard-only of products in SPAR and TOPS deals, are an essential part of the at SPAR stores, with every saving Clubcard offering, which drives loyalty automatically reflecting on their till engagement and enables customers slips,” explains Natasha Talbot, loyalty to earn even more cashback when manager at the SPAR Group. “The they swipe their cards or tap their special SPAR Rewards prices are virtual cards.” clearly marked on products in-store, Dr van Rooy says the and cardholders need only to swipe ClubCard Loyalty programme their card at the till point to ensure Natasha Talbot has remained true to its core value they pay the exclusive SPAR since it was launched in 1995.

Rewards price.”

“The programme remains freely To create excitement, additional benefits of the accessible for all customers, and it is new SPAR Rewards card include automatic entry easy and simple to understand the into competitions such as Win A Car and the Clicks brand promise of feeling good Grand Cash Giveaway. Additionally, shoppers can and paying less.” use their new card across all SPAR stores and will As brands continue to adapt pay the same discounted price on all promotional to the changing landscape of products. Talbot says nearly 40 per cent of the customer expectations and our programme’s active users are customers who are addiction to instant gratification, new to the programme. instant rewards will be a key In South Africa, retail brand loyalty programmes driver of customer loyalty are the most popular and are well-suited for Dr Mel van Rooy and appreciation. instant rewards. Checkers Xtra Savings is the

“Customers need instant cash savings to help manage their household budgets amid ever-increasing living costs.” – Checkers

Images: supplied

REVAMPED VERSIONS OFFER INSTANT REWARDS Instant rewards feature prominently in the updated and revamped versions of much-loved brand loyalty programmes in 2023. In today’s highly competitive retail landscape, brands – large and small – recognise the immediate value of loyalty programmes in attracting and retaining customers. Responding to our instant gratification addiction, several South African brands have come to the party by revamping

DID YOU KNOW?

According to the pleasure principle in psychology, humans are innately prone to seek immediate pleasure and avoid displeasure, a form of tension that results from not having our immediate desires met.

Source: Very Well Mind

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EXPERIENTIAL REWARDS Experience-based rewards can be the currency of true brand loyalty. We unpack why it is one of the biggest trends in loyalty this year. By MART-MARIÉ DU TOIT

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onsumer preferences have moved away from purely transactional rewards (discounts, cashback, points) towards experience-based rewards that provide them with memories and bragging rights – things with which a purely transactional benefit can never compete.

MAKE IT PERSONAL “Experience-based rewards provide consumers with exclusive, personal, meaningful and memorable experiences, in the process creating an emotional connection with the brand providing them,” says Gordon Wilson, principal strategist for client business consulting at Achievement Awards Group. “These offerings include exclusive access to VIP events, moments of surprise and delight, personalised services, actual experiences, such as skydiving, and even gamification.”

David Sand, CEO of Uwin Iwin International, David Sand an incentive and rewards

company that provides employee rewards and incentive offerings for leading corporations, says personalisation is vital.

“Individuals seek to create lifestyles and opportunities that reflect who they are and what is meaningful to them.

Experience-based rewards are by far the most memorable and ensure that a lifetime of memories is associated with a brand. Huge brand and emotional engagement can be created in a well-defined and customised experiential reward,” explains Sand.

Personalisation is at the core of every great loyalty experience, says Amanda Cromhout, founder and CEO of specialised loyalty consultancy Truth. “You can either turn on a customer completely by getting it right or turn off a customer completely by getting it wrong.

So, it requires great data capability and listening to your customers on every platform.”

THE DRIVING FORCE Janet du Preez, MD of Engagement Dynamics, believes this trend has multiple potential drivers.

“Organisations are increasingly realising that money in itself is not a motivator and are taking more interest in what that end might be. And ‘experience’ has become a significant buzzword

and part of our collective awareness. The ethos of customer-centricity places the customer front and centre of concern, and their reported experience becomes a measure of the success of customer-focused activity. By natural progression, experience is becoming a natural part of the reward system.”

Wilson adds: “There is a shift in values favouring experiences over possessions driven

by Millennials and Gen Z, a trend to prioritise memories, seek novelties, and gain new perspectives over material possessions. The prevalence of social media has made sharing experiences easier and more common, with shares, likes and comments forming a social currency.”

DESIGNING THE PROGRAMME “A well-designed loyalty programme meets people where they are at,” Wilson says, “always starting with empathy by developing an understanding of customers as real people with genuine problems.

“HUGE BRAND AND EMOTIONAL ENGAGEMENT CAN BE CREATED IN A WELL-DEFINED AND CUSTOMISED EXPERIENTIAL REWARD.” – DAVID SAND 38

Janet du Preez

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RE WA RD S

FAST FACT

There’s a big disconnect between how much personal data businesses collect from their users and how much data those users are willing to share to get a personalised experience.

While only 4 per cent of businesses say they don’t collect personal data, nearly one-fifth (18 per cent) of consumers say they’d be unwilling to provide it in exchange for a more personalised experience. Older consumers drive this number. Nearly one-quarter (24 per cent) of baby boomers would not share any data, but that number is just 15 per cent for millennials and drops to 10 per cent for Gen Z. Source: PwC Customer Loyalty Survey 2023

Images: istock.com/ AlexLMX, Supplied

A great loyalty programme has a blend of transactional and experiential rewards to appeal to the entire customer base – across the spectrum of those desperately needing the discount or cashback right through to the affluent customer craving an immersive and memorable experience.”

Cromhout agrees. “A great loyalty programme should offer a choice of experiential benefits. Think about an airline.

The main softer benefits are preferential queuing, maybe at check-in or no check-in, or free upgrade or lounge access. They are all experiential things critical to the traveller’s journey. But, obviously, you cannot offer that to everyone. So typically, in programmes that are tiered, the higher tiers get these benefits.”

A great example of an experiential benefit that doesn’t need to be tied to a tier is having the option to donate your cashback reward to charity. “Customers feel great and want to donate their rewards,” says Cromhout. And it’s a win for the company as your charitable experience doesn’t cost them time or money in planning a personalised experience for you.

DID YOU KNOW?

The benefits most enjoyed by South African consumers are: • Double points • Points redeemed into cash • Birthday benefits • Travel/flight discounts • Free gifts/samples Source: The Truth & BrandMapp Loyalty Whitepaper

WHO DOES IT WELL? If you rack up enough Emirates Skywards miles, you can maybe cash in your miles for a bid to get front-row seats at the Formula 1 Grand Prix – an experience money can’t buy! But for ordinary folk, the benefits can be fun, educational and time-saving.

Cromhout says: “Some transactional brands, such as eBucks, offer value-added services such as educational courses, security benefits and help with kids’ mathematics homework. They are seeing massive engagement on their app. Almost half of their app users are engaging with the extra experiential benefits they offer.”

Sanlam Reality makes purchases such as life insurance an engaging experience through experiential rewards catering for a full spectrum of customers, from day-to-day savings, health benefits and entertainment to personal services such as education and tax returns. Add airport lounge access and a host of travel benefits, and you’ve got an attractive package that creates a memorable brand experience and lasting customer impressions.

Wilson likes Discovery’s Vitality programme.

“It brilliantly uses data analytics and rewards to help people make healthier choices. Every single touchpoint of its programme is an experience itself and reflects its core purpose.

So, whether it’s cashback on healthy food, local travel, skipping the long security queue at the airport, watching a movie together as a family, or even playing the weekly gameboard, which makes reaching goals fun, it creates emotional connection and builds customer loyalty at every turn.”

VodaBucks from Vodacom gives instant tangible rewards for achieving personalised behavioural goals linked to usage and spend, and it is incorporating gamified elements to drive customer engagement and boost loyalty.

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THE ART OF EXPERIENCE

From a human behaviour perspective, psychologist, author and winner of the Nobel Prize in Economic Science Daniel Kahneman explains in his book Thinking Fast and Slow that as humans, we have two selves: the experiencing self and the remembering self. According to Kahneman, people are biased towards remembering brief periods of profound joy, particularly at the end of an experience – known as peak moments – more so than remembering longer periods of ordinary bliss. His work reinforces the behavioural economics concept of mental accounting, which explains how we, as humans, remember the impact of a reward.

“An example of this is that your experience of sipping champagne on a catamaran while gazing at the beauty of Table Mountain is far more memorable than the experience of paying your Eskom account with a rewards cashback bonus,” says Gordon Wilson, principal strategist for client business consulting at Achievement Awards Group.

From free daily Unlocks where customers can win to earning VodaBucks for completing personalised goal challenges, it is building emotional connection as it focuses on improving the lives of its customers.

Experiential rewards will help you build emotional brand loyalty, making customers fall in love by rewarding them with uniquely memorable experiences.

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T OW NSHIP S

LOYALTY TO LOCAL ON THE RISE IN SOUTH AFRICA’S TOWNSHIPS Township residents are increasingly supporting and buying from local businesses in their communities. MONGEZI MTATI, brand strategist at Rogerwilco, a digital marketing agency, unpacks what businesses need to do to capitalise on this trend

Images: istockphoto.com/ poco_bw, supplied

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ome to almost 12 million residents, South Africa’s townships represent a thriving ecosystem of economic activity worth an estimated R178-billion annually. Within this ecosystem, there’s a growing trend towards consumers spending their hard-earned income closer to home. But what draws loyalty from these consumers, and how can businesses tap into this potential?

One of the most striking trends from our latest Township CX Report for 2023, developed in conjunction with market research company Survey54, is the heightened trust consumers have in township entrepreneurs and their businesses. Whether it’s fashion, delivery services or general shopping, consumers are leaning towards local offerings, with 22 per cent of respondents this year saying they had bought clothes, furniture and other services created in their townships.

The “Made in the Township” badge is no longer just a label, but also a symbol of pride, trust and community support.

Now in its third year, the Township CX Report polled Mongezi Mtati more than 1 000 individuals living in townships countrywide to better understand their spending and saving habits. The results highlighted clear changes and trends that provide invaluable marketing evidence for brands.

UNDERSTANDING VALUE One important shift is a growing preference for value over brand affinity as people adapt to several economic challenges, including high unemployment, power cuts, poor service delivery and rising food prices. For many, a significant

portion of their salaries is spent on transportation, leaving little for essential food, clothing and personal care. Brands that understand this and offer genuine value earn more than just trust; they earn loyalty. Asked about their motivation for choosing a particular brand, 59.3 per cent of respondents considered price the decisive factor, 24.9 per cent emphasised the importance of a brand’s understanding of their needs, and only 10.4 per cent mentioned advertising as a motivating factor.

Convenience also plays a pivotal role, evidenced by the rising popularity of local establishments such as spaza shops. These shops, numbering around 200 000 countrywide, are an integral part of daily life for many township residents. More than half of our respondents mentioned they bought produce from spaza shops daily due to the convenience, affordability and familiarity on offer – up 7 per cent from 44 per cent in 2022 (meanwhile, supermarkets attracted a mere 28 per cent of daily shoppers).

This is a testament to the trust and value that spaza shop owners have built over time, adjusting to consumer needs and preferences by offering locally tailored solutions. These include repackaging items into smaller quantities, weigh-and-pay options, and even buy-now-pay-later solutions for regular customers.

MOVERS AND SHAKERS We’re also seeing township delivery services gaining traction. While national giants, including Uber Eats, Checkers Sixty60 and Mr D, have historically dominated the market, there’s a surge in popularity for local platforms, such as eKasi and Delivery Ka Speed, which cater specifically to last-mile delivery in townships. Other platforms, such as Zulzi and YeboFresh, are tailoring their offerings to meet township-specific needs, introducing competition and reshaping the dynamics of local delivery.

The allure of home-grown fashion brands is undeniable among township consumers.

In 2022, three-quarters of those surveyed indicated a stronger preference for local fashion if they could access it via store cards at their regular shopping spots. This year, the survey explored the actual spending habits around these local fashion items. Close to 17 per cent of participants said they spent between R1 000 and R2 000 on local designers, while nearly 6 per cent shelled out more than R3 000. Brands rooted within these communities, such as Bathu, Drip and Amakipkip, are making strides, representing a premium status and reflecting the aspirations and identities of township residents.

Products and services crafted by familiar faces carry a special value. This growth is making waves within South Africa and across the continent.

Townships are proving to be hubs of economic innovation with immense potential. As we see a shift towards a more value-driven market where local really is lekker, businesses looking to thrive in these areas will need to earn the trust and loyalty of their target audiences by understanding, adapting and integrating with the local fabric of these thriving, resilient communities.

LOAD H ER WN E DO

TOWNSHIP CX REPORT

MORE THAN HALF OF OUR RESPONDENTS MENTIONED THEY BOUGHT PRODUCE FROM SPAZA SHOPS DAILY DUE TO THE CONVENIENCE, AFFORDABILITY AND FAMILIARITY ON OFFER – UP 7 PER CENT FROM 44 PER CENT IN 2022.

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L UXURY

Smartly designed loyalty programmes stand to benefit consumers at both ends of the income spectrum – and the brands that run them. By MICHAEL LEVINSOHN, MD of Legacy Lifestyle, a high-end rewards programme

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ow that the coronavirus pandemic is officially behind us, South African consumers are adjusting to the new normal and, in many ways, it’s not as appealing as the old normal. Unemployment rates, household debt and interest rates are up, and load shedding has become a perennial problem. The 2024 national election is not too far away and anxiety abounds.

How has all of this impacted the market for loyalty programmes, particularly the luxury end of the market? As it turns out, loyalty programmes look to be benefitting from these tough times, but for counterintuitive reasons. Hard-up consumers are trying to extract every benefit they can from the loyalty programmes they belong to while more affluent consumers are starting to spend some of the money they held onto during the pandemic. Some of this might feel like pure sentiment, so what does the data show?

MONEY IS NO OBJECT The rich are, apparently, still rich, and have the disposable income to prove it. According to the 2022 BrandMapp SA Lifestyle Survey, 5 per cent of South African households generate just over 50 per cent of the disposable income earned annually. That adds up to a mind-blowing R1.5-trillion. The high-end loyalty programmes serving this market segment are seeing improved spend at a retail level and more especially in the travel sector, where hotel occupancies have picked up dramatically year on year. The airline industry is also forging ahead, with more and more people flying into and around the country. International tourists are up 70.6 per cent for the first seven months of 2023, over the same period last year, according to the government.

TECHNOLOGY ENABLES THE DELIVERY OF PERSONALISED, LIMITED-TIME OFFERS AND GENERATES MASSIVE AMOUNTS OF DATA USED TO REFINE CUSTOMER OFFERS. 44

MONEY IS AN OBJECTION At the other end of the market, price-conscious consumers are joining loyalty programmes to get deals on items ranging from food and clothes to airtime and even bus tickets. Demand in this segment is illustrated by the success enjoyed by the Checkers Xtra Savings and Capitec Live Better programmes, both of which are focused on the more price-sensitive end of the market where there is less disposable income and more demand for deals and cashback. Jointly, these two programmes have over 40 million members – three times the number of actively working people in South Africa, even with some duplication of customers. This gives them the scale to aggregate and pass on substantial benefits to customers through their loyalty programmes.

THE TECHNOLOGICAL EDGE Big investments in technology are also starting to pay off for brands in the loyalty space because technology enables the delivery of personalised, limited-time offers and generates massive amounts of data used to refine customer offers. Once a customer has downloaded your app, you can quickly build trust by delivering relevant offers based on their historical shopping behaviour. The more you know, the better the offers that you can provide.

Mobile apps provide a direct-to-consumer channel where the entire travel experience can be managed, from searching for a hotel at your chosen destination to booking your flights, car hire, accommodation and excursions. It’s all in the palm of your hand. Literally!

With spending by the rich on the up and continued demand from the less affluent, the future of loyalty programmes looks promising.

Image: istockphoto.com/ NicoElNino

LOCAL IS LEKKER IN THE LOYALTY PROGRAMME BUSINESS

As soon as COVID-19 restrictions lifted and passengers could travel again, Legacy Hotels & Resorts refocused its entire offering on local offers, with a “When you’re ready, we are here for you,” theme that showed immediate results. With more time on their hands and their passports safely locked away, consumers started to look at what was available locally.

Using digital tools, it was easy to see where areas of interest were and then tailor more personalised offers for guests. The Legacy Lifestyle loyalty programme was a core component of the promotional campaigns, with the best deals reserved for Legacy Lifestyle members and anybody who joined the programme. Legacy Lifestyle’s award-winning travel offering is the most used travel loyalty programme in South Africa, according to the 2022 Truth & BrandMapp Loyalty Whitepaper, and the number of members has continued to grow post-COVID-19.

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From cash rewards to app engagement, retailers are working hard to retain customer loyalty. By PETER HOIJTINK, partner, and MAX BRUEGGEMANN, senior director customer experience at global strategy consulting firm Simon-Kucher

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oyalty programmes play a pivotal role in fostering customer engagement and retention for South African businesses. In a market characterised by an expanding middle class and their willingness to invest in discretionary purchases, there is substantial potential for businesses to connect with customers. By offering personalised value in challenging economic circumstances, companies can not only engage with their audience, but also cultivate lasting brand loyalty.

Following the pandemic, the South African retail sector is encountering notable difficulties.

In the first quarter of 2020, sales in retail and food services experienced an 8 per cent decline compared to the fourth quarter of 2019 and

have been gradually recovering to reach pre-pandemic levels. Consumer trust witnessed a staggering 50 per cent decline, with over 40 per cent of marketing leaders cutting their budgets. Additionally, diminished service quality resulted in a decrease of over 20 per cent in customer satisfaction.

Addressing these obstacles, loyalty programmes have gained heightened significance in terms of engaging and retaining customers for South African businesses.

This article delves into the current landscape of loyalty programmes in South Africa, their operational dynamics and the impending challenges. It also examines specific loyalty programmes worldwide and assesses their implications for the South African market.

IN THIS LOYALTY-DRIVEN MARKET, CASH REIGNS SUPREME AS THE MOST VALUED LOYALTY REWARD, WITH POINTS CONVERTED INTO CASH AT THE TOP OF THE LIST.

LOCAL LOYALTY DYNAMICS

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The South African market stands out for its high receptivity to loyalty programmes when compared to global counterparts. According to the 2022 Truth & BrandMapp Loyalty Whitepaper, an impressive 84 per cent of South Africans are inclined to alter their

shopping choices based on loyalty programme incentives. In this loyalty-driven market, cash reigns supreme as the most valued loyalty reward, with points converted into cash at the top of the list. Notably, traditional card swiping is preferred over digital channels such as apps.

Pick n Pay has introduced its new Smart Shopper app, revolutionising its loyalty programme in South Africa. This app eliminates the need for a physical loyalty card, allowing seamless registration and virtual card access for both in-store and online use.

What sets this apart is that shoppers can now convert their loyalty points into airtime and data, courtesy of Pick n Pay Mobile, the retailer’s mobile virtual network operator. The app also offers digital receipts immediately after transactions. Additionally, there’s an app-exclusive “Smart Shopper Happy Hour” with vouchers offering up to 50 per cent discounts on shopping bills, enhancing customer engagement and convenience.

The Pick n Pay Smart Shopper app illustrates how initial digital innovations set the stage for future app growth and increased personalisation, making shopping more streamlined and rewarding, whether using a physical or virtual card. International best practices reveal that the most significant benefits for retailers come from seamlessly integrating loyalty into the brand ecosystem.

With retail apps, customers anticipate a seamless integration of all services.

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THE EVOLVING FACE OF RETAIL LOYALTY

RE TA IL

GLOBAL LOYALTY EXCELLENCE Lidl Plus is an excellent illustration of how a unified app experience enhances customer relevance and significantly boosts app engagement. Lidl – a renowned German global discount supermarket chain with operations in various countries – is known for its commitment to providing a wide selection of grocery items at competitive prices. Lidl Plus boasts prominent loyalty features, notably a monthly savings meter. Achieving individual spending thresholds, such as €50 (R1006 at the time of publishing), entitles customers to complimentary items or discounts on their entire purchase. Exclusive participation in targeted campaigns is another perk exclusive to Lidl Plus users. These elements along with occasional gamified features, such as virtual wheels of fortune or scratch card promotions, stimulate engagement.

The incorporation of digital receipts, exclusive partner deals and the ease of in-app payments enhances the overall app experience. Along with the prominent display of exclusive benefits and in-store offers, the Lidl Plus added value is obvious to all customers. The percentage of revenues linked to a Lidl Plus account varies, ranging from 30 to 75 per cent depending on the country of operation.

Images: istockphoto.com/ Wachiwit, istockphoto.com/ Atstock Productions

APP-CENTRED ECOSYSTEMS Lidl and numerous other retailers, quickservice restaurants, petrol stations, and similar businesses have successfully transitioned customers from traditional card-based systems to app-centred ecosystems. Many brands faced challenges when attempting to shift their customers from physical to digital platforms, often because there was little to no distinction in the benefits offered through each channel. Brands that achieved success in this endeavour introduced sophisticated apps that provide seamless experiences with exclusive services and tangible benefits that genuinely enhance the customer experience.

These brands didn’t eliminate the physical option, but customers naturally found it more advantageous to embrace the convenience and value of the digital realm, rendering the “old world” option less compelling.

Digital loyalty platforms confer a substantial advantage by effortlessly acquiring transaction data linked to individual customers, providing businesses with a valuable resource for

DIGITAL LOYALTY PLATFORMS CONFER A SUBSTANTIAL ADVANTAGE BY EFFORTLESSLY ACQUIRING TRANSACTION DATA LINKED TO INDIVIDUAL CUSTOMERS, PROVIDING BUSINESSES WITH A VALUABLE RESOURCE FOR EFFECTIVE CUSTOMER ENGAGEMENT. effective customer engagement. This information forms the cornerstone for shaping marketing and engagement strategies, enabling the creation of customised and individualised experiences for customers. For instance, businesses can utilise insights into customers’ spending habits and preferences to craft offers and discounts that precisely align with their unique needs and interests.

This engagement, in turn, contributes to the nurturing of brand loyalty and the enhancement of customer lifetime value through the development of tailored offers and campaigns that deeply resonate with customers. By offering incentives for positive behaviours, such as adopting healthier lifestyles, choosing specific stores or making purchases, companies can inspire customers to prioritise their brand over competitors.

This strategic approach not only fosters enduring customer loyalty, but also stimulates recurring business.

UNIFIED APP AND SERVICE ENCOUNTERS IN FAST-FOOD AND COFFEE CHAINS Fast-food establishments and coffee houses are leading the way in providing unified app and service encounters, with the Starbucks app, for instance, encompassing capabilities, such as mobile ordering, loyalty programme incentives, in-app payments, store finding and personalised promotions for patrons, prompting numerous other brands to adopt similarly streamlined approaches.

Overall, several success factors for the further evolution of South African loyalty programmes need to be considered: • Seamless integration: loyalty programmes must seamlessly integrate with mobile apps, making it easy for customers to engage and earn rewards. This integration simplifies the customer experience, making it more attractive and convenient.

• Personalisation: tailoring rewards and offers to individual customer preferences enhances the effectiveness of loyalty programmes. South African businesses should leverage customer data to provide personalised incentives.

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• Convenience and value: loyalty programmes should provide genuine value to customers.

This can include discounts, early access to sales or exclusive products, all easily accessible through mobile apps.

Moreover, embracing digital loyalty programmes requires overcoming certain challenges: • Accessibility: ensure your digital loyalty programme is accessible to a broad audience, including those without smartphones. Consider options such as SMS-based loyalty rewards.

• Education: educate customers about the transition to digital. Provide clear instructions on how to use the app and link it to the loyalty programme.

• Data privacy: be transparent about data usage and reassure customers about the security of their information. Comply with relevant data protection regulations.

• App quality: invest in a user-friendly and reliable app. Test it thoroughly to ensure a smooth customer experience.

South African brands have not only adopted effective practices from other markets, but also forged innovative paths.

The challenge of transitioning customers from physical cards to app usage, however, remains a significant hurdle in the market. South African brands stand to gain immense opportunities by studying global best practices to propel the evolution of their loyalty programmes.

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HO SPI TA L I T Y

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THE SKIFT REPORT

Opportunities abound for the South African hospitality industry to stimulate local travel through loyalty and rewards. By STEPHANIE ABOUJAOUDE, senior area director, marketing and communications, Middle East, Africa, Turkey and Mediterranean at Radisson Hotel Group

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omestic travellers are an important and growing segment and the increase in domestic travel has helped boost local hotel occupancy rates.

The hospitality industry cannot afford to take this market for granted.

During a period of high inflation and rising interest rates, players across the sector must do everything possible to foster loyalty among domestic travellers in particular. Here, rewards can be a powerful tool, not only for growing loyalty, but also for further stimulating the local travel industry.

Image: istockphoto.com/ ViewApart

Images: Supplied

A WORTHWILE INVESTMENT Loyalty is important in hospitality. Some of the benefits are obvious, not least the fact that returning guests means fewer rooms need to be sold in a specific period. But there are other benefits too. Loyal hotel guests also spend more than casual visitors and are more likely to recommend the hotel to others, according to a Bloomberg Tech whitepaper. Small wonder then that Skift research found members of loyalty programmes contribute between 30 and 60 per cent of room revenue, and tend to pay higher average day-room rates than nonmembers.

There’s a clear hunger for loyalty programmes too. The report reveals that the rate of global leisure travellers who were loyalty programme members of the hotel they stayed at during their last trip grew from 41 per cent in 2020 to 47 per cent in 2021.

A good hotel loyalty programme is something worth investing in. But for it to be effective, it has to provide the right kinds of rewards.

The Radisson Hotel Group’s Radisson Rewards programme, for example, aims to be the most personalised in the industry, offering choices based on guest preferences and previous requests. This is achieved by creating a comprehensive member profile that allows member benefits to be customised and tailored per booking without annual membership fees.

STIMULATING LOCAL TRAVEL That’s where the ability of rewards to act as a stimulant for local travel comes into play.

Remember, rewards aim to provide an enhanced customer experience. For leisure travellers in particular, that may mean looking beyond the confines of the hotel.

While business travellers may spend most of their time at the hotel – going between their room, the dining area and the conferencing facilities – leisure travellers are likely to spend a lot less time in the hotel itself. That means that, while rewards such as room upgrades and future discounts are important, hotels can achieve even more by enhancing guests’ experience of the town or city they’re visiting.

That may, for instance, mean inking partnerships with local restaurants that

A GOOD HOTEL LOYALTY PROGRAMME IS SOMETHING WORTH INVESTING IN. BUT FOR IT TO BE EFFECTIVE, IT HAS TO PROVIDE THE RIGHT KINDS OF REWARDS.

allow guests to eat at discounted rates. It could also mean including discounted or even free vouchers for local must-do experiences and must-see places.

These kinds of rewards also have the effect of growing the businesses that provide these experiences, allowing them to invest and make their offerings even better. Over time, this attracts more people to the destination and widens the pool of potential hotel guests. So, not only does the hotel benefit from reward programme guests being more likely to return, but it also helps stimulate travel that benefits the local economy.

A hotel can also use customer data to ensure rewards are as personalised as possible.

This enhances the experience further and increases the likelihood of guests returning to an establishment.

MAKING FULL USE OF A FAMILIAR CONCEPT Properly tailored loyalty rewards programmes have much to offer the hospitality industry and can be a powerful tool for stimulating local travel.

Many economically active South Africans are members of some form of loyalty programme (most frequently in the retail space), so it’s clear they’re happy to partake in programmes that benefit them. The hospitality sector players that are best able to tap into that desire for enhanced experiences and familiarity with rewards programmes are likely to reap serious rewards.

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Employee recognition and rewards are a missed opportunity for building a high-performance workforce, writes KEVIN SKINNER, business director of employee engagement at Achievement Awards Group

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ffective employee rewards and recognition programmes help businesses achieve their strategic objectives by attracting and retaining talent, increasing employee engagement, aligning employee behaviour with business objectives and fostering a sense of ownership and accountability.

In Aon’s 2018 Trends in Global Employee Engagement Survey, the leading determinant for employee engagement was rewards and recognition, with senior leadership, career and development, employee value proposition and enabling infrastructure also playing a part. Aon’s research also showed that a 5-point increase in engagement is linked to a 3 per cent increase in revenue.

A 2020 Gallup study Kevin Skinner

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EMPLOYEE REWARDS AND RECOGNITION PROGRAMMES ARE ONE OF THE MOST UNDERUTILISED ENGAGEMENT LEVERS FOR ACHIEVING BUSINESS OBJECTIVES. showed that when comparing employee engagement levels, the top and bottom-quartile business units had the following differences in business outcomes – 81 per cent less absenteeism, 18 per cent less turnover for high-churn organisations, 43 per cent less turnover for low-churn organisations, 64 per cent fewer safety incidents, 41 per cent fewer quality defects, 10 per cent better customer retention, 18 per cent better productivity and 23 per cent better profitability.

Yet, despite their proven efficacy, employee rewards and recognition programmes are one of the most underutilised engagement levers for achieving business objectives by driving

organisational culture and behaviour change.

This stems from several factors: • Lack of appreciation for the return on investment that employee recognition programmes offer.

• Internal programme ownership.

• Leadership involvement and role-modelling.

• Dated or inadequate enabling technology.

• The communication and activation strategies needed to keep the programme current and top of mind.

For businesses that get it right, there is real opportunity to drive engagement, communicating how rewards are tied to performance and making employees feel valued and part of something they can get behind.

The key benefits of employee recognition and rewards programmes include: • Increased motivation and engagement: employees who feel valued and recognised are more likely to be motivated and engaged in their work.

• Improved retention: employees who feel appreciated tend to stay with their current employer, which means increased loyalty and retention.

• Better performance: motivated and engaged employees perform better.

• Positive workplace culture: a workplace that recognises its employees is more likely to have a supportive culture that feeds into better teamwork, communication and collaboration.

• Align employee behaviour with strategic business objectives: rewards and recognition provide a clear path of how employees can support business objectives.

• Ownership and accountability: a recognition programme creates a sense of ownership and accountability, leading to employees performing at a higher level.

ALIGNING STRATEGY AND CULTURE In developing employee recognition and rewards programmes, the Achievement Awards Group points to the importance of aligning two key fundamentals: 1. Strategy: focusing performance-based recognition around metrics, such as service, sales and quality, relating to strategic goals, objectives and tasks.

2. Culture: focusing values-based recognition on company values, practices and behaviours.

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Images: fizkes/istockphoto.com, celiaosk/istockphoto.com, supplied

RECOGNISING AND REWARDING EMPLOYEES CAN DRIVE BUSINESS SUCCESS

S TA F F INCEN T I V ES

The best business strategy is unlikely to be achieved if the business culture is not right and the workforce is unengaged. The alignment model recognises this key aspect, hence the programme drives both performance and culture with equal measure.

RECOGNITION IS VITAL While tangible rewards and compensation benefits are an essential part of any employee engagement strategy, nonmonetary recognition is equally important, if not foundational.

When formulating an employee recognition strategy, seven key principles to optimally drive behavioural change apply.

1. Inclusivity. Recognition needs to be inclusive, touching staff at every level.

2. Frequency. Recognition needs to be done at the right frequency to have sufficient impact.

3. Visibility. People need to see and experience recognition to be motivated to be part of the process.

4. Immediacy. Recognition should be immediate, with a clear line of sight between the performance and the recognition.

5. Authenticity. Recognition needs to be genuine, meaningful and heartfelt.

6. Autonomy. Give participants the choice of how they fulfil their rewards rather than second-guessing what they might want.

7. Agility. Good recognition programmes are agile, focusing recognition on what is most important in the business and keeping pace with evolving priorities.

A recognition and reward framework spans both informal and formal recognition, from nonmonetary, social recognition at base level, which drives company values and behaviours, then performance recognition, where a reward value is layered into the recognition, thereby driving company values and business goals, to celebrations and events encompassing divisional recognition, and an annual pinnacle event with CEO recognition for top performers the business can’t afford to lose. Each stage of recognition increases in its formality.

In making recognition and rewards a strategic priority, ensure your programme addresses the key aspects of alignment with business objectives, leadership support and sponsorship, rigorous implementation processes, communication planning, resourcing, measurement and feedback.

While tangible rewards and compensation benefits are an essential part of any employee engagement strategy, nonmonetary recognition is equally important, if not foundational.

Images: fizkes/istockphoto.com, celiaosk/istockphoto.com, supplied

ANATOMY OF A BEST PRACTICE PROGRAMME Achievement Awards Group has developed a “nine-box systems framework” – a blueprint that ensures focus on each component of a successful recognition programme.

1. Programme management. Most recognition programmes fail by not having resources to drive, manage and role-model the programme, along with C-suite buy-in. The involvement of line managers is fundamental – research shows that employees appreciate recognition from their immediate manager more than anybody else.

2. Employee recognition and engagement goals. Have a clear strategy that is aligned with the business objectives you want to achieve, and factor in the alignment model’s performance-based recognition (strategy) and values-based recognition (culture).

3. Programme metrics. A measurement framework is essential to keep track of the programme and understand what

does and does not work, providing a structure for reporting back to the C-suite and demonstrating the programme’s tangible impact on the business.

4. Pre-launch, launch and onboarding.

What is your plan to prepare your people, launch the programme and onboard them, getting buy-in and take-up?

5. Communication and programme sustainment. An ongoing communication plan is a must, playing a key role in sustaining your programme and providing emphasis for specific initiatives.

6. Training and equipping. Training on the programme should be customised for the needs of employees at different levels. It must cover the functionality of the platform, programme objectives, how employees can engage and participate and, most importantly, what’s in it for them.

7. Rewards. Rewards add important traction and incentive. How much budget should be allocated to rewards?

A good benchmark is to allocate between 0.5 to 3.0 per cent of the salary budget to rewards.

8. Enabling technology. Technology is an essential component of running a successful programme, ensuring that employees can access the programme anywhere, at any time, in the cloud, on their desktop or their mobile device.

For example, The Achievement Awards Group’s bountiXP platform provides a single interface to enable best practice recognition and manage every aspect of the recognition programme.

9. Feedback systems. Feedback and measurement capability are built in, allowing measurement of what has been achieved, what worked or did not, and how the programme stacks up in terms of engagement and business outcomes.

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AWA RD S

BEST OF THE BEST The stellar performance of three South African brands at the recent International Loyalty Awards has firmly entrenched this country’s loyalty programme market as among the best in the world. Two of the winners share the secrets to their success with ANÉL LEWIS

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cooping five awards at the recent International Loyalty Awards, held in London in June, has helped position South Africa as a global leader in the loyalty programme sector. “We are absolutely one of the powerhouse loyalty markets in the world,” says Amanda Cromhout, founder and CEO of specialised loyalty consultancy Truth and winner of this year’s International Loyalty Personality of the Year.

Images: fizkes/istockphoto.com, supplied

Images: Supplied

GLOBAL LEADERS Two local loyalty programmes – FNB eBucks and DStv, with Ogilvy South Africa – competed against programmes from 102 other countries and 170 finalists to take home awards in four categories. One of South Africa’s longest-running loyalty programmes, eBucks, won Best Use of Technology, Best Programme Middle East & Africa, and Best Long-Term Loyalty Programme.

Cromhout, the founder and judging chair of the South African Loyalty Awards, says South Africa is on par, if not a leader in some spheres, when it comes to loyalty programmes. The 2022 Truth & BrandMapp Loyalty Whitepaper describes South Africa’s loyalty market as “mature and stable” with consumers using, on average, nine different loyalty programmes.

This maturity was underscored by eBucks’s clean sweep at the international awards.

Named each year since the whitepaper series highlighting loyalty trends was started in 2015 as the most-used financial services loyalty programme in South Africa, eBucks was the only brand to clinch three awards in London.

It also collected six of nine trophies at the 2023 South African Loyalty Awards held in September. “This has not been

achieved before, and the South African judging committee honoured the eBucks team with Best Loyalty Team of the Year in recognition of this outstanding achievement,” says Cromhout.

“Our growing list of awards pays tribute to our strides towards developing industry-leading innovations in a loyalty programme that millions of South Africans have benefitted from for the past 23 years,” explains FNB eBucks CFO Bathandwa Mbovane. “They represent our pioneering efforts to provide meaningful rewards to help our customers’ money go further.”

DStv and Ogilvy South Africa were recognised for the Best Short-Term Loyalty Initiative for a campaign that gave fans of reality show Big Brother control using DStv Rewards.

THE PARTNER EFFECT Mbovane says eBucks has distinguished itself by partnering with brands across several categories to offer benefits that meet customers’ changing needs. “FNB has benefitted handsomely from creating new relationships with the largest grocery, fuel and pharmacy groups across South Africa and Africa.” The FNB app also allows customers to access programme benefits, tips and rewards easily and safely. “A strategically optimised platform, the app focuses on providing carefully mapped user journeys that bring the best of eBucks features and benefits to our clients.”

RECIPE FOR SUCCESS A successful loyalty programme rests on three key characteristics, explains Cromhout. It has to make sense for the customer, be rewarding, and also simple and transparent. “If it is too difficult to understand, customers

“OUR GROWING LIST OF AWARDS PAYS TRIBUTE TO OUR STRIDES TOWARDS DEVELOPING INDUSTRY-LEADING INNOVATIONS IN A LOYALTY PROGRAMME THAT MILLIONS OF SOUTH AFRICANS HAVE BENEFITTED FROM FOR THE PAST 23 YEARS.” – BATHANDWA MBOVANE

THE BUCK STOPS HERE FNB’s eBucks programme, with an average earn-to-spend ratio of 95 per cent (meaning that in any given month, 95 per cent of eBucks earned are spent), has paid out R20-billion since it launched 23 years ago. The programme has also had more than 292 million unique engagements on the FNB app in the past year, says Bathandwa Mbovane, FNB eBucks chief financial officer.

will disengage.” And, there has to be buy-in from the brand’s whole organisation. “It can’t just be a marketing push.” There must be positive returns for the business.

Cromhout notes that globally, brands are shifting towards money-saving loyalty programmes for their customers. “In tough economic times, loyalty programmes make a difference.” She says eBucks’ partnerships help consumers buy fuel and food with discounts on groceries at Shoprite/Checkers. “It makes a difference to help your money go that much further. This is one of the biggest benefits of loyalty programmes.”

Mbovane agrees, adding that loyalty rewards have become an important buffer for customers battling cost-of-living increases. “We aim to ensure customers get value from the programme while embracing our advice-led approach to helping them better manage their money.” eBucks rewards are tailored to meet the “real needs of consumers across all income segments”.

Bathandwa Mbovane

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L ONG-S TA NDING L OYA LT Y PWC SURVEY R

IN IT FOR THE LONG RUN Giving without gain goes against the loyalty and rewards grain, but MySchool MyVillage MyPlanet continues to buck the trend, 26 years on. By TREVOR CRIGHTON

Images: Mukhina1/istockphoto.com

Images: Supplied

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he MySchool MyVillage MyPlanet programme has grown from a solution developed by a parent to help his child’s school easily and sustainably raise funds into a successful community loyalty programme. Since its inception 26 years ago, the programme has given back over R1-billion to more than 8 500 schools and nongovernmental organisation beneficiaries at no cost to its supporters.

“MySchool was the first community loyalty programme of its kind – solely focused on doing good at no cost to our supporters. It continues to work daily to meet the urgent needs of our beneficiaries that touch the lives of hundreds of thousands of South Africans in myriad important ways,” says that parent, MySchool MyVillage MyPlanet general manager Pieter Twine.

Together with its partners and just one swipe of a MySchool card, the programme helps feed children, train teachers, protect the environment, rescue and care for animals and build food sustainability that wouldn’t be possible without the supporters who share a vision to have a genuinely positive impact on society.

“Traditional loyalty focuses on personal gain, yet true brand bonding and transactional loyalty are achieved only when there is an added emotional connection,” explains Twine. “The desire to make a difference and understanding

GROWING GAINS The MySchool programme raised R2 253.45 in its first year (1997). By year ten, swipes were contributing nearly R15-million. The programme marked its second decade with more than R78-million in contributions and, having added more than R90-million to its total last year and nearly R54-million so far in 2023, supporter swipes have helped worthy causes to the tune of over R1-billion over the past 26 years.

the impact of every swipe helps build emotional loyalty to our brand and programme. By linking MySchool to our partner programmes, we provide sustainable transactional and emotional rewards for our cardholding members. This is supported by a recent PWC consumer insights survey, which shows more than 70 per cent of consumers will choose to spend their money with retailers whose focus is beyond profit.”

THE MECHANICS The programme channels funds to deserving beneficiaries every time a supporter swipes

“THE DESIRE TO MAKE A DIFFERENCE AND UNDERSTANDING THE IMPACT OF EVERY SWIPE HELPS BUILD EMOTIONAL LOYALTY TO OUR BRAND AND PROGRAMME.” – PIETER TWINE

E AD MORE

their card at a partner retailer. The retailer donates a percentage of the sale to the selected beneficiaries.

“Our 26-year history of inspiring change, remaining sustainable throughout recessions, economic crashes, load shedding, and other challenges to continue delivering support to our beneficiaries is a testament to the commitment of our team to making each of those supporter swipes count, as well as the continued goodwill of our programme partners who share our vision to help improve people’s lives,” says Twine. “We have shown that turning the traditional loyalty and rewards system on its head can help deliver real change.”

INNOVATING GIVING Twine says the programme’s straightforward mobile app helps to remove delays and gives supporters instant control over the causes they choose to support. “New supporters can join our programme and receive a virtual card that can be scanned to give back immediately. Existing supporters can use the same app to change or update their beneficiaries with one tap.”

MySchool has also established a digital beneficiary portal that allows new and existing beneficiaries to digitally upload all take-on requirements, removing paper-based limitations as far as possible. “Beneficiaries can also publish feedback on the portal and immediate alerts will be deployed to their supporters via in-app notifications,” says Twine. “This means they can build a personalised and emotional connection to their supporters.

“It’s hard to focus on just one area in the face of so much need in so many sectors across South Africa. Our supporters’ kindness knows no bounds, and our retail partners must be recognised for donating, at no cost to our members, with every linked card swipe.

Collaboration is the key to solving our country’s challenges – and the partnership that starts with our supporters is translated through our retail partners and realised by our beneficiaries, forming an invaluable support network for worthy causes in our country daily,” concludes Twine.

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GA MIF ICAT ION Gaming elements accessed through loyalty apps can be powerful marketing tools.

“Brands can run promotions, such as deals and specials, as prerolls, thus using the game as a marketing platform,” says Mark van Diggelen, founder and CEO of GameZBoost.

“Another option is to include surveys to get user feedback and perform market research, providing the brand with valuable data.”

Mark van Diggelen

PLAYING FOR LOYALTY Gamification – the use of game-like mechanics in other contexts – is a hot topic in the loyalty industry. CARYN GOOTKIN looks at how and why brands are incorporating games and play into their loyalty programmes

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amification is widely regarded as a top trend for loyalty programme strategy.

“It’s been on our radar for the last 12–18 months, but we are now seeing it in practice and witnessing the real results,” says Amanda Cromhout, founder and CEO of specialised loyalty consultancy Truth.

Marketing often interrupts what the consumer is doing: think adverts on TV, radio or social media. “Impact games are voluntary – they pull the customer rather than pushing a message onto them, which shows the brand values their customers’ time,” says Glenn Gillis, founder and MD of animation, gaming and augmented reality business Sea Monster Entertainment. “We use games to drive loyalty beyond rewards and put the customer at the centre of the experience, sharing knowledge in a way that is meaningful and useful to the consumer. Games are a way for brands to show that they stand for more than price, by sharing what is authentic about the brand based on its purpose.”

LEVELLING UP Most loyalty programmes offer extrinsic rewards, such as discounts and cashback, but loyalty beyond rewards is the ultimate aim. “Changing a customer’s experience of a brand promotes brand equity,” says Gillis. “In the game dynamic, customers tell you what is important to them,

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GAMIFICATION FOR AN AFRICAN REALITY Most South Africans use entry-level smartphones without space for large apps. “Add the high cost of data, and marketers need to find new ways to deliver to the majority,” says Glenn Gillis of Sea Monster Entertainment.

“Technology allows for websites with app-like functionality through a browser, no download needed – low friction, low bandwidth. Access to games can be via scanning a QR code or clicking a link, making them accessible to as many people as possible.”

then you can tell them what you are doing regarding their higher purpose, thereby creating connectivity. Using the knowledge about a customer to do things that are good for them – even at the expense of a short-term business goal – makes long-term business sense.”

“Many global brands are using gamification effectively, but for the first time this year, the South African Loyalty Awards – announced in September – has a category dedicated to the best use of gamification for loyalty,” says Cromhout. “Discovery Vitality’s Active Rewards programme won this category. Gamification is central to its overall strategy and goes to the heart of what Vitality is about.”

Highly commended went to TFG Rewards, which did a gamification set of activities, including transactional and nontransactional behaviour. “The customers who engaged in the activities got better benefits from the overall TFG Rewards programme,” adds Cromhout.

Sea Monster is behind the TFG Rewards games. “Mini games are used to land a particular message and get you to come back, helping brands unlock value in a way that is relevant to the customers,” says Gillis.

Pushing the envelope in the loyalty space, eBucks, with gamification at the heart of its programme, received third place, says Cromhout.

GameZBoost is the white-label gaming platform behind the eBucks gamification strategy. “Including games on a granular level in your loyalty programme offering is one way of using gamification in your marketing strategy,” says van Diggelen. “eBucks offers all clients free access to a suite of games in a ringfenced environment. They log in to a branded eBucks game site with games that appeal to the whole family, and, as an additional value proposition, if you log in once per month you earn eBucks towards your loyalty level. The games are not related to its core financial service offering; they’re purely a value-added service to its diverse range of clients.”

“WE USE GAMES TO DRIVE LOYALTY BEYOND REWARDS AND PUT THE CUSTOMER AT THE CENTRE OF THE EXPERIENCE, SHARING KNOWLEDGE IN A WAY THAT IS MEANINGFUL AND USEFUL TO THE CONSUMER.” – GLENN GILLIS

Images: anyaberkut/istockphoto.com, supplied

HIGH SCORES

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