Truth teams up with CNBC Africa to talk loyalty in South Africa

Truth is very excited to have been invited to interview for CNBC Africa focused on loyalty programmes. Interviewed by Lindsey Williams, anchor of the Business Tonight show, they delved into the explosion of loyalty in South Africa and where it’s heading.

Joining Amanda, was Jaco Oosthuizen, CEO of Momentum Multiply, providing insights into their loyalty programme and sharing his thoughts on loyalty in the financial services industry.

The discussion looked at the South African loyalty landscape, global trends, the next big thing in SA loyalty and a look into which loyalty programmes work best & why.

The show was broadcast live on CNBC Africa, Tuesday, 1 July 2014. If you missed it, be sure to watch the recording on YouTube here, covering about all things loyalty and rewards in South Africa.
https://www.youtube.com/watch?v=JhbwiOv31L0&feature=youtu.be

What is a coalition programme?

There are so many confused customers and loyalty brand managers out there, not really understanding what a coalition loyalty programme is, so we thought it would be worthwhile trying to best explain it.

The truth is, we could repeat what several chapters of exceptionally well written journals say to outline all the different types of loyalty programme structures.  For today, we decided to not compare coalition programmes to others, but to simply state what it is and how it works.

Globally, they have been in existence for quite a while, with global brands such as AirMiles, operating out of Canada (reaching 66% Canadian households) and Nectar (reaching approximately 50% of UK households) and Avios in the UK.  Truth’s definition is as simple as this:  It is a loyalty programme which collects the loyalty currency from multiple (often not competing) partners (brands) across a consumer’s wallet spend.  The coalition brand is the programme itself (i.e. independent brand to the merchant/partners).
 
An interesting coalition programme in South Africa is the MySchool | MyVillage | MyPlanet programme.This programme may be seen by many as Woolworths’ loyalty programme or 1 of Woolworths’ armoury of loyalty tools.

This is however not 100% strictly true. Whilst it is a subsidiary of Woolworths, it operates as a standalone subsidiary which has other brands such as Engen Foodstop, Kalahari.com, Waltons, Altech Netstar to name a few, as well as Woolies as partners.

Obviously, in MySchool’s case, the cardholder doesn’t take home the points, but allocates them to their beneficiary – e.g. kids' school, or a charity or environmental cause.

The MySchool | MyVillage | MyPlanet coalition programme, commended for their contribution to loyalty, won 3 awards at the 2014 Loyalty Awards in London. The awards included:
* Best Loyalty Programme of the Year Middle East and Africa
* Best Corporate Social Responsibility (CSR) Initiative linked to Loyalty
* Best Loyalty Programme Marketing Campaign of the year 2014

One of the main benefits for the consumer joining a coalition programme, is that it allows the collection of points & rewards faster; collect across many different brands into one pool of points for your loyalty reward.

There's been a buzz recently in the South African loyalty market place about the latest coalition programme: Avios, Travel Rewards Programme.

Avios entered the South African market place in 2013 and although being a global brand, it has been tailored to meet the needs and desires of the South African consumer by offering rewards opporunities both locally and internationally.

Earlier this year, Avios was named the Best Loyalty Programme of the year in the travel industry, across Europe, Middle East & Asia, by the 2014 Loyalty Awards in London.

You can also hear more about the Avios Travel Rewards Programme from the South African General Manager, Andries Zietman, also interviewed on the Expresso Show by clicking here.

Who says LOYALTY DOESN’T PAY??

So many articles were written last year, making reference to the fact that Loyalty doesn’t pay.  So many radio interviews, one of which I was part of, on Bruce Whitfield’s Money Show, were questioning whether loyalty pays.

You know what……..it does !!!  I am not saying that because I am loyalty professional or simply to keep this industry flying.  I am speaking from personal experience as a man/woman on the street.

However, before I launch into my big reveal, I do want to make the point that most consumers may well feel that loyalty doesn’t pay.  My synopsis of why we feel like that is, quite simply, because we don’t understand the loyalty & rewards programmes.  There are so many. They are all confusing. They have too many rules and hurdles.  Yes, I can respond to all those comments.  Therefore, the challenge facing our loyalty industry is not so much in creating fancy programmes, but rather in focusing our energy in simplifying them and communicating the benefits for the only important element of this equation: the customer…….but more on that later.

So, obviously, we at Truth, milk the programmes, because we understand them…but so can everyone.

Karen, in the Truth team, had the privilege of flying British Airways FIRST class with her husband to London in December.  How? A family member had so many Executive Club points that he simply cashed them in to gift such an extravagant present to Karen & her husband. Not only that, but Karen cashed in on her Nedbank Greenbacks rewards to get GBP 170 back in cash – hard cash to help ease the strain of the exchange rate for her trip.


Last November, eBucks emailed me to remind me to spend my eBucks as some of them were expiring….they made it easy for me to do so: 1 click of a mouse and my redemption options were ready & waiting.

I chose the Woolies gift card options (to ease the strain of our upcoming Christmas spend) and I am a hoarder loyalty player: i.e. I don’t cash in frequently, but when I cash in, I cash in large !!!!

So here it is: over R6000 worth of Woolies gift vouchers.  Now who can argue that loyalty doesn’t pay?  I could have earned even more if I truly concentrated on every FNB card swipe.

Now you may argue that we are two extreme cases but actually we are not.  We do understand the programmes (it's our job to) but we have benefited from loyalty programmes which work.

I have several credit cards in my wallet….not necessarily because I am desperate for credit but because they offer me real value which easily offsets the card annual fee or loyalty linkage annual fee.  My FNB card accumulates eBucks which, when the time is right, probably helps me get Woolies vouchers for an exceptionally rich rate. It also gives me free access to the SLOW lounge at local airports which is a win for my travelling schedule.  My Discovery card, allows me to earn Pick n Pay smartshopper points at an accelerated rate of at least x4 and gives me discounts at its partner retailers, which easily offsets any fee I incur to carry the card.  My Woolies black credit card, gives me 3% back on all of my Woolies spend (plus contributes to the charity of my choice: The Amy Biehl Foundation) as a beneficiary of the MySchool programme.  I receive from Woolies a cash voucher every quarter for at least R1000….happy days !  You may be arguing that I spend a lot…maybe, but not intentionally… at least I get rewarded for what I spend.  No-one should miss out on this, but why do they?

Quite simply, the average consumer doesn’t really care about the loyalty systems of our retailers and banks.  The loyalty programme challenge is for our high street brands to learn how to communicate the benefit (not the rules and restrictions) to the consumer and to simplify the opportunity to join, play and get rewarded.

It is my personal mission in 2014 to help the loyalty industry in this regard.  Lets give the power back to the consumer so they can understand the loyalty programmes out there and benefit from their loyalty swipes….If they don’t, they may simply be creating the loyalty industry tennis elbow from fruitless swiping of the plastics in their wallets.

Amanda Cromhout, Founder & CEO, Truth