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

Get innovative, or get left behind!

Last month, 8 innovative companies were recognised for their pristine efforts in loyalty…I’m talking the Annual Colloquy Loyalty Awards.  Not only do these awards recognise innovation & creativity in loyalty but also salute their overall contribution to the ever expanding loyalty industry.

The expansion of loyalty programmes both internationally and locally has made the loyalty playground a very cluttered and competitive one. Whilst customers are overwhelmed by choice in the market place, companies are grasping for share of wallet. Loyalty marketers can no longer ignore the loyalty clutter and promiscuity out there and The Colloquy awards, therefore, remind us that there is no reason why companies wanting loyalty from their customers should settle for a one size fits all strategy. Innovation is the key to inventing a unique, appealing, sustainable business wide strategy.

Let’s take a snapshot of this year’s winners:

Master of Enterprise Loyalty: Caesars Entertainment

“The Master of Enterprise Loyalty Award is presented to the company that executes an
organization-wide strategy that shifts its focus from the product or channel to the customer.”

Caesar’s Entertainment unlocked the power of its loyalty programme by enhancing its data capabilities to better segment its customer base and enhance its online presence and tier management strategies. This led to personalising not only the online experience but spread this new strategy across all customer touch points.
The business wide strategy incorporated 5 key pillars which led to a combination of results such as a 30 % increase in customer value, 20% faster redemption, increased revenue of 18% to mention a few.
The 5 pillars included:

• A completely revamped online presence to better anticipate and deliver on guest needs
• An attitudinal segmentation model – to identify guests by their entertainment motivations
• Tier recalibration – educated & encourage guests to move up the various tiers
• Real-time casino marketing - developing exclusive technology (proprietary of Caesars) that triggers messages to the guest as they visit various parts of casino and do certain activities in real time
• Choice hospitality – recognizing those members who reach elite status

Loyalty Innovation in Financial Services (North America): CitiBank

Citibank needed to revamp its loyalty programme’s online offering, Citi Thank You, as research showed that visitors to their website found it cluttered and difficult to navigate. A decision was made to move from a mass information style “the more we advertise the better” approach to a “less is more” web presence.
The most fundamental part of the puzzle was missing – the ability for members to redeem their points online and use those points towards their online shopping purchases.
The approach involved creating an online retail experience second to none, tailoring marketing communications and adverts to suit their customers’ individual needs and relooking their partner strategy to further add value to their rewards strategy.
By fine tuning their online presence, enhancing their customer experience and completing the Thank You lifecycle by allowing for online redemption, CitiBank Thank You saw a rise in the time spent by visitors to the website by 17%. Online orders rose by 32%, year on year, and they saw an astounding 47% increase in merchandise redemptions.

Loyalty Innovation in Financial Services (International): ANZ Banking Group

ANZ Banking Group (Australia) had come to realise that it needed to revitalise its loyalty programme, ANZ Rewards. The first port of call was to devise a retention and engagement strategy through relooking its overall value offering. This meant reminding their members of the overall value of their membership and how they can utilise it better. They also wanted to increase the participation in the programme among its members.
The plan included splitting their customer base into 4 segments based on profitability, using point expiration as the opportunity to start the conversation with their members. The campaign included re-engaging with their inactive members to make them aware of their point’s balances, when they were due to expire and what they could do to with their points.
It also included giving the members a gift card to the total of their total points balance or expiring points balance.

“It helped ANZ determine if customers were open to redeeming all their points at once and it showed which value best increased engagement."

This campaign saw a 45% response rate,which was 225% above their target.

Innovation in Loyalty Marketing (North America): Walgreens

Walgreens launched their loyalty programme, Balance Rewards, in September 2012. By May 2013, they had a membership base of over 72 million. The foundation of the loyalty programme was built on 3 key pillars: ease, value and wellness. Through determination to be not only be constantly innovative but also highly relevant to their customers, Walgreens successfully created a loyalty programme that features easy enrolment, instant points & rewards for online and offline purchases and wellness services as well as points for improving your lifestyle through healthy behaviour.

In a short span on 7 months, Walgreens saw their members making repeat purchases and increased engagement. They saw and increase of 4.3% over the same period the previous year. In addition, the average basket size increased by 4.7% over the previous year.

Innovation in Loyalty Marketing (International): Air Miles Rewards Management

Air Miles took advantage of the post-holiday period in the United Arab Emirates where consumers start to feel the pinch financially. They did this by multiplying the rate at which members earn miles. The plan here was to encourage spending with partners. Their key message for this strategy was “By spending money now, you could save in the coming year.”

However, not only did they offer to multiply the amount of points that could be earned, they attached 2 competitions to this campaign where members get entered into a lucky draw to earn one year’s worth of shopping vouchers (worth $ 7600) or stand a chance to win 5 million Air Miles through a radio competition.

The results speak for themselves. Air Miles saw a 360% return on investment which ended up being 36 times its expected target. In total consumers spent $110 million across the Air Miles partners, a 49% increase from the previous year.

Loyalty Innovation in Retail (Global): Coles

Coles retail chain, the National Australia Bank and Shell formed the Flybuys rewards programme in 1994. However, over the last few years, Flybuys saw a drop in retention and a low investment which led to Coles buying full ownership of the programme which led to its re-launch in 2011.
The new approach for Flybuys was to simplify the programme and offer more compelling rewards based on the data they collected about their customers.
Some key changes were made which included:

• Simplifying the programme meant that the average person on the street should be able to understand the earning and burning process with limited grey areas of understanding
• Providing more points, partners and rewards
• Enhance the Flybuys card by allowing members to load cash onto the card and let it serve as a gift card

“In 2012, Coles sent out 17.3 million new Flybuys cards, enough to stretch from Melbourne to Brisbane, to virtually every household in Australia.”

Results showed a 12 fold return on its marketing investment and an increase of active cardholders of 47% (6.9 million).

Loyalty Innovation in Travel/Hospitality (Global): The Hertz Corporation

Hertz, one of the leading car rental agencies in the world, used to offer 2 distinct loyalty programmes. One was focused on service based opertations, the other, points based. Participation in the service based programme was higher than that of the points based programme.

With little to no clear differentiation between the two, Hertz decided to create a new loyalty programme called Gold Plus Rewards where they migrated their existing members from the original two programmes all into one.  The aim: to improve customer rental service and serve members with one streamlined loyalty programme.

Benefits of the new programme include:

• mobile alerts “called Carfirmation” – confirming all bookings in real time via mobile devices
• eReceipts e-Return  services Hertz Gold Choice, a service that allows customers to change their vehicles on the spot

Hertz spread the  launch campaign through multichannel approach, ensuring that the news and education of the new programme would reach all customers where they were.
Hertz saw incredible results such as a 99% increase in enrolment over the previous year. A 178% increase in members using points on their rental transactions.

Loyalty Innovation in Other Industries (Global): St. John’s Transportation Commission

Canada’s Metrobus’s m-Points loyalty programme was the first of its kind and proved that a loyalty programme works for the industry of mass transit. After many years, the programme began to lose its spark. Metrobus therefore felt that a compelling approach to reignite the programme was to re-launch with a joint partnership with Canada’s Air Miles Reward programme.

The combined offer included one reward mile for every two taps of a passenger’s m-card on Metrobus. An integrated communications strategy was delivered via each partner’s communication channels.

Air Miles helped boost Metrobus ridership with an increase of 6% and saw an increase of 54% in the online purchases of the m-card.
According to their latest findings, 44% of Metrobus riders opted into earning Air Miles instead of m-points.

Ros Siddle, Marketing & Loyalty Research Manager, Truth

Acquisition stats are so passé!

Hooray! You have 20 million loyalty members! But how many of them are active and what does this mean for your business?

Colloquy release a consolidated annual report of loyalty activity in USA called The Loyalty Census. Each year they analyse membership growth and factors attributing to this growth. This year's census saw a massive increase in loyalty memberships across the US (up 26.7% to 2.65 billion).

Being in the loyalty industry, I can’t help but notice how South Africa has adopted this rise in loyalty programmes with every industry wanting a piece of the loyalty pie! Unfortunately, we have no official stats for the South African market place to compare with the U.S.

However with the expansion of loyalty programmes and therefore number of members, how many of these are really active? Despite the fact that loyalty programmes are aimed at incentivising members for shopping or engaging with your brand, why is there a decline in active memberships as reported by Colloquy?

Active membership refers to the number of times a member has engaged with the programme (at least once) over a period of 12 months or otherwise stipulated by the programme. The number of members vs. active members shows a large divide.

“4.3% is the drop in loyalty programme active membership between 2010 and 2012.”

Naturally, there is huge acquisition at the initial sign up process but the drop off rate in months to come is almost equally as huge. Based on these facts, it is clear that the active numbers are not aligned and the hard work starts when needing to retain these customers after acquisition. It’s all about engagement!

“Typically, new programmes acquire members and can’t keep them engaged…..both new & existing programmes are failing to strike the chord with members.” Colloquy 

With competition so rife in the loyalty industry across all sectors, how do you ensure your loyalty programme is top of mind? What’s causing your loyalty card to be shoved behind your competitors’ card? Here are just 4 suggestions for consideration:

1. Loyalty is no longer solely “owned” by the retail and airline industries. There is rapid growth in loyalty in other sectors which can be attributed to an increase in partner programmes with competing brands to offer a more compelling loyalty offering together with the expansion of innovative loyalty programmes using real time POS technology.

2. The competition is heating up.  There is no limit to the amount of programmes your customers can join and it is just so easy for them to do. Companies are eliminating the barriers to complicated sign up processes and are really tallying up members with a quick & effective registration processes via in-store, online or via mobile. Also, with so many choices for programmes offering similar benefits for similar behaviour in the same sector – how do you make sure your programme is top of mind? 

3. Racking up the memberships at a fast pace at the registration step is one thing…staying fully engaged & relevant is whole new ball game.  Companies who get the engagement element right are streets ahead of those who focus their energy on other activities in the loyalty lifecycle.

“Talk to me about what I want and need, not what YOU decide is what I want and need.”

4. Data is the kryptonite of loyalty. There are more channels than there have ever been to collect data. Data obtained by companies is wasted if not mined properly. Use your data to be relevant and offer your members an experience tailored to their wants and needs.

True engagement focuses on customer loyalty not acquisition stats.

                                                                         By Ros Siddle, Marketing & Loyalty Research Manager, Truth

The untapped power of social data: The new social customer & how they impact your current marketing strategy

The future (very near future) of loyalty is social and mobile…this was the headline of a conference Truth attended earlier this month, hosted by Marketing Mix.

In fact, global players in loyalty have already adopted mobile as a core offering in loyalty…Walgreens is a great example of how a brand amplified their member base through its innovative mobile app offering. Mobile platforms allow for real time points earning & redemption which is one of the key benefits a customer rates a loyalty programme by…real time rewards.
However, it goes beyond mobile… 

Has it ever occurred to you that the information your customer provides to their social networks may be of some value…more valuable than the “like” or “following” to your brand?
Amanda Cromhout, CEO of Truth, highlighted this in her presentation at the conference. It’s no longer enough to look in isolation at age, gender, intention to purchase and basket size. We now need to look one layer deeper.... social data! Social data includes information such as relationship status, brand/competitor likes, interests & circle of influence.

Overlay demographic data, psychographic data, transactional data AND social data to create the bigger picture of your new customer…the social customer.

Use the new insights derived from the combination of data listed above to market to them about what is relevant, making their entire experience with your brand far more meaningful across all touch points of their life.

This is particularly significant to the loyalty industry. The loyalty game itself is evolving. The basics of loyalty was to “swipe, collect & earn” whether it be via a loyalty card swipe, coupon collection or mobile application. We're now in a new era of share and earn….using social media platforms to reward customers for their social media behaviour & engagement relating to a brand.

 MJ Khan, head of social at Quirk delved into the new persona of the social customer and how they impact our strategies as marketers. The social customer is someone who has taught us to improve online reputation management strategies and use social CRM as an opportunity to improve this.

The social customer can offer your brand more than you know:

1) One of the most powerful attributes is the power of brand advocacy. When your brand doesn’t  have the time to respond to on social media, your community of social customers jumps in & responds for you

2) We tend to forget that social media is about people not technology. The premise of social media is not new to humans because connecting to others is not new. So let your customer connect with you and other customers about things that interest them…brands need to move beyond using social media as a selling tool and use it as an engagement tool

3) Engagement is not a strategy…engagement should be used as a tool

4) Yes we like to listen, yes we like to learn...but can these new social customers' input change business output? Leverage what you can learn from the social customer through your new engagement tool

Ignore your brand's social customer insights at your peril!

                                                                         By Ros Siddle, Marketing & Loyalty Research Manager, Truth

MySchool comes out tops at International Loyalty Awards

The Loyalty Awards recognize excellence, innovation and best practice in the loyalty industry across Europe, the Middle East and for the first time this year, Africa. The event is hosted by Loyalty Magazine and  their key sponsor Aimia. 

Homegrown CSR loyalty programme, MySchool MyVillage MyPlanet has won the ‘Best Corporate Social Responsibility Initiative Linked to Loyalty’ award at the Annual Loyalty Awards held in London earlier this month.

The winning campaign ‘Doing Good Is Good Business’ made it onto a shortlist of 200 programmes from 20 different countries with more than 80 leading brand names. MySchool went up against leading global brands such as Turkey’s leading telecommunications network, Turkcell and UK’s Pets at Home company’s VIP rewards programme which is linked to CSR.

 “For MySchool MyVillage MyPlanet to receive international recognition is testament to the impact the programme has had and an example of how ordinary citizens and retailers can jointly contribute significantly to society at large”, says Pieter Twine, MySchool MyVillage MyPlanet General Manager.

MySchool MyVillage My Planet is a coalition programme (multi partnership) as well as a leading CSR initiative where by members select a beneficiary (schools/charities) they would like to support. Every time a member swipes their MySchool card at participating retailers, up to 5% is donated to their beneficiary.

Winning performance:

• Since it started in 2009, the programme has donated over R 200 million to its beneficiaries
• In 2012 alone, it raised more than R36 million for over 10 000 beneficiaries
• On average, the programme gives back R3 million every month
• The programme has over 700 000 active members
• The programme signed up 136 new beneficiaries in 2012 which saw the value of funds raised increase by 23%

Well deserved MySchool! It's grear to see a South African programme came out tops!

                                                                          By Ros Siddle, Marketing & Loyalty Research Manager, Truth