#120: Innovative Ideas Driving Banking Loyalty in South Africa

PAULA: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals.

PAULA: I’m your host, Paula Thomas.

PAULA: And if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.

PAULA: This show is sponsored by Comarch, a global provider of innovative software products and business services.

PAULA: Comarch’s platform is used by leading brands across all industries to drive their customer loyalty.

PAULA: Powered by AI and machine learning, Comarch technologies allow you to build, run, and manage personalized loyalty programs and product offers with ease.

PAULA: For more information, please visit comarch.com.

PAULA: Hello, and welcome to episode 120 of Let’s Talk Loyalty.

PAULA: Today’s episode is a great discussion with Dharmesh Bhana, the loyalty and rewards executive at Nedbank, which is one of South Africa’s largest banks and is publicly traded on the Johannesburg stock market.

PAULA: With 7.5 million customers, Nedbank operates in a highly competitive marketplace, with South Africa considered one of the most advanced in the world in terms of both banking and loyalty innovations.

PAULA: Their greenbacks loyalty program was initially started in 2005, and from its initial simple card swiping concept, it has now become a powerful business lever that drives emotional loyalty, behavioral loyalty, and also brand loyalty across the entire banking relationship.

PAULA: I really enjoyed some fascinating insights from my conversation.

PAULA: So I hope you all enjoy listening and learning from Dharmesh Bhana from Nedbank, South Africa.

PAULA: Okay, so Dharmesh, I’m super happy to be talking to you today, in, I think it’s a chilly Johannesburg, from what you’ve told me, yeah?

DHARMESH: It is indeed, Paula.

DHARMESH: Thank you for having me.

PAULA: Okay, not at all.

PAULA: And as I was just saying to you there, you are the very first bank that I’ve had on the show.

PAULA: So super excited to hear all about Nedbank.

PAULA: It’s not one I was familiar with at all.

PAULA: But yes, super exciting to hear all about your Greenbacks program.

PAULA: But before we get into learning about you, learning about the company, and of course, your loyalty learnings, tell me first of all, what is your favorite loyalty statistic?

DHARMESH: It’s got to be my earn to burn ratio that I’ve looked at over the years for our Nedbank Greenbacks loyalty program.

PAULA: Okay.

DHARMESH: It’s just such a good view of how customers are engaging with the program really.

PAULA: Ah, I love it.

PAULA: Okay, so you’re focused on driving engagement.

DHARMESH: Absolutely.

DHARMESH: Yeah, when we started the program, we had many customers with a fair amount of points, but we noticed that they weren’t necessarily redeeming the points or using the points.

DHARMESH: And through the evolution of the program, we’ve created new mechanisms by which customers can redeem their points.

DHARMESH: And we’ve literally just seen that ratio sort of grow exponentially.

PAULA: Well done.

PAULA: And it may seem maybe to newer programs that it seems like the obvious thing to be doing, but you and I have both been around for a while, I think, in business Dharmesh, where there was plenty of programs, certainly, that I worked on where the CFO’s intention was to minimize the cost, minimize redemption, and to keep whatever breakage was available.

PAULA: So really happy to hear that you’re driving that intentionally.

DHARMESH: Yeah, I think times have changed.

DHARMESH: And there’s most certainly a focus on ensuring our customers stay with us and stay engaged with the brand.

DHARMESH: I think it’s probably one of our more important metrics at the moment.

DHARMESH: And as we know, over time, it’s also showing positive profitability.

DHARMESH: So it may not help in the short term, but over a longer period of time, it’s most certainly one of the best measures that we can look at as a bank.

PAULA: You’re right.

PAULA: Yeah.

PAULA: And that’s a good distinction, Dharmesh, as well.

PAULA: I suppose the short term perspective, and I’m sure COVID focuses the mind as well for lots of people listening.

PAULA: But you’re right, it is a long term game, especially in financial services.

PAULA: So that’s super exciting.

PAULA: So because again, as I said, I’m not even familiar with the company, Dharmesh, I’d love you just to give me maybe just an overview and an introduction to Nedbank and a bit about your own kind of career with them.

PAULA: Sure.

DHARMESH: So Nedbank’s, bearing in mind, it’s an international audience as well, Paula.

DHARMESH: I’m going to say, Nedbank is a bank in South Africa.

DHARMESH: And it’s one of the big five banks within the South African context.

DHARMESH: And we’ve been around for many, many years.

DHARMESH: And we’ve got a corporate investment banking division, we’ve got a wealth management division, as well as a retail division, and we have in excess of, we have in excess of around seven and a half million retail banking customers.

PAULA: Great.

DHARMESH: And that’s the part of the bank that I sit in, which is the retail arm.

DHARMESH: And my career at Nedbank has been a very privileged one.

DHARMESH: I’ve really enjoyed my time at the bank, having started as an executive assistant and learning the ropes within banking, which is pretty much what I needed to sort of understand.

DHARMESH: And then moved into sort of customer value proposition, which is very different to the background and what I’d studied around finance and financial accounting and that type of thing.

DHARMESH: But I’ve got this real passion for understanding customer behavior, customer psychology, behavioral economics, et cetera.

DHARMESH: And I then looked after the youth segment and we looked to develop value propositions within that segment and grow market share in that segment.

DHARMESH: Thereafter, I moved into a funding role where we looked after the retail deposits, which is a very technical role at the bank.

DHARMESH: And from that point on, it was moving back into the consumer side of things and into the loyalty role.

DHARMESH: And I’ve been in this role since, I think it’s about 2015 or 2016, and it’s been a very fruitful six years almost in this specific role.

PAULA: And amazing, you said you started as an executive assistant.

PAULA: Do you mean like literally in an admin type role?

DHARMESH: Well, there’s two roles that were sort of defined at the bank.

DHARMESH: The PA role was more the personal assistant, and which looked after the admin.

DHARMESH: The executive assistant was more of a business role that linked up with quite a senior, with a senior executive.

DHARMESH: And my role was really to learn.

DHARMESH: So, you know, take a look after the businesses, understand how businesses are run within the financial industry.

DHARMESH: You know, there was so much learning that happened in that space.

DHARMESH: And it’s really a springboard then for getting into another role within the bank.

DHARMESH: So, you know, it’s an absolutely fantastic opportunity for anyone within the South African context, looking to get into banking, and then, of course, further their career.

PAULA: Well, you obviously loved it if you’ve managed to stay engaged, stay happy, and stay loving it for as long as you have.

PAULA: So that’s extraordinary.

PAULA: And I know the Greenbacks is the name of your loyalty program.

PAULA: So we’re definitely gonna talk a lot about that.

PAULA: But even before that as well, Dharmesh, what I’ve always loved about the South African loyalty market is really that it’s actually quite sophisticated.

PAULA: And most of the work I’ve done, at least in terms of writing articles about loyalty in your country has been in other sectors, let’s say in insurance, with obviously the famous Vitality program.

PAULA: And I know there’s lots happening in grocery retail as well from a loyalty perspective.

PAULA: So is the same thing true in terms of the banking sector from a loyalty perspective?

DHARMESH: Paula, it’s a fascinating question.

DHARMESH: And I’m assuming that you may even know better than me, but my perspective of the South African market, generally, in terms of loyalty, is one that I think is absolutely very sophisticated.

DHARMESH: And in fact, I’ll even go as far as saying it might even be one of the more sophisticated ones in the world when it comes to financial services.

DHARMESH: Be that insurance or banking.

DHARMESH: I mean, the banking sector’s insurance, I mean, the loyalty programs within the banking sector are incredibly strong within the South African context.

DHARMESH: And I’m not going to sort of talk to the other programs, but just to go, I mean, South African customers, banking customers expect their banks to have a program that is really competitive and makes it worthwhile for them to be at that specific bank.

PAULA: Yeah, yeah, absolutely.

PAULA: And I was looking obviously at the Nedbank website as well.

PAULA: Obviously Dharmesh, ahead of our conversation today.

PAULA: And I do agree with you.

PAULA: So I think it’s the first time I’ve actually seen any company, particularly as long as this has been in place, this is one of the key statistics, the first African bank to go carbon neutral.

PAULA: So I know it’s off topic from a loyalty perspective, but I think from a consumer understanding perspective and positioning, that’s extraordinary.

PAULA: So I was amazed to see carbon neutral operations in 2021, and then I looked back in the history to see that came about 11 years ago.

PAULA: So that’s amazing.

PAULA: Well done.

DHARMESH: Thank you very much.

DHARMESH: I think Nedbank is very proud of our green credentials.

DHARMESH: And believe it or not, our logo and everything is green.

DHARMESH: So we literally are seen as the green bank within the South African context, and it’s something we are exceptionally proud of.

PAULA: Yeah, well, it comes through, I can tell you, as I said, I was literally doing my research and that really came through.

PAULA: So that was amazing.

PAULA: And from a pure, I’ll say, let’s regional perspective here in the Middle East, we have a big dependency, for example, on things like checks.

PAULA: So I was also very impressed to see that you’ve discontinued, in fact, as a country.

PAULA: So, yes, again, lots of innovation.

PAULA: So people listing all over the world.

DHARMESH: No, that’s correct.

PAULA: Brilliant.

PAULA: So loyalty-wise then, I know greenbacks actually started before you, I think.

PAULA: Yeah, 2005?

DHARMESH: That’s correct, yeah.

DHARMESH: Started in 2005, and was predominantly a card swipe program.

DHARMESH: And what we mean by that is you swipe your card and you’re gonna get points.

DHARMESH: And because we have a good association with American Express, we would give you further points if you swiped your American Express card.

DHARMESH: But I mean, that was in essence as simple as the program got and had been for many, many years.

PAULA: Okay.

PAULA: And is that debit and credit cards, Dharmesh?

PAULA: You’re purely focused on the credit card sector.

DHARMESH: Look, it’s got more of a focus on our credit cards, but we do include what we call check cards at the moment.

DHARMESH: So no longer the debit cards, but check and our credit cards, yes.

PAULA: And how was it performing then when you came in?

DHARMESH: I think the program was performing well enough from a card swipe perspective, and we haven’t done away with the card swipe.

DHARMESH: If you look at our program, what we’ve done is constructed it into packages, which are linked to products.

DHARMESH: And the more packages you’ve got or the more products you’ve got, the higher your sort of level within the program.

DHARMESH: And we’ve decided to call it levels instead of tiers to sort of link up to the whole gamified aspect of the program.

DHARMESH: So that’s what we’ve tried to do.

DHARMESH: And of course, we’ve incorporated more products.

DHARMESH: So we’re starting to reward for things like your home loan, your vehicle asset finance, excuse me, your personal loan, as well as your savings and investment accounts as well.

DHARMESH: So what we’re starting to reward for is more of our client relationship with the bank, as opposed to just people who have a credit card or a check card with the bank.

PAULA: Yes.

PAULA: It’s a clever strategy actually Dharmesh, because I’m sure with your understanding of behavioral economics, which I guarantee you is probably more than mine, but I’m sure there is a sweet spot where the retention is directly related, certainly in your business, to how many products I hold with the bank, because it’s all well and good to have a current account and then change a bank.

PAULA: But we all know how confusing and difficult it is if there is multiple products.

PAULA: So incentivizing that using just really positive, reinforcing behaviors and packages is a lovely idea.

DHARMESH: Thank you.

DHARMESH: Yeah, absolutely.

DHARMESH: That remains our goal, Paula.

PAULA: Okay, okay.

PAULA: So how many levels then in total do you have?

DHARMESH: So at the moment, we’ve got four levels.

DHARMESH: And as I said to you, one package decides that…

DHARMESH: So the number of packages you’ve got tells you the level that you’re on, and we’ve got four packages at the moment, right?

DHARMESH: Do you want me to maybe just talk you through that a little bit, Paula?

PAULA: I would love to.

DHARMESH: I’d love to understand it.

DHARMESH: Maybe I’ll explain a little bit of…

PAULA: Please do, Dharmesh.

DHARMESH: Yeah, how that works.

DHARMESH: So the card swiper program is basically the old greenback set.

DHARMESH: We’ve left that as is because we didn’t want to take that away from our customers, because as you mentioned, from a behavioral perspective, taking stuff away from customers creates a big sort of loss aversion within customer headspace.

DHARMESH: And so we’ve continued with cards.

DHARMESH: Yeah, we’ve continued with card swiper as a package.

PAULA: Okay.

DHARMESH: You know, another criteria or issue that banks face, especially in the South African context, I can’t talk for the rest of the world, but what happens is you find customers, you know, potentially coming into a bank, opening up an account, and then the account sort of going dormant or not using it for some other reason.

DHARMESH: And most customers, you know, within the South African context, would bank with more than one bank.

PAULA: Yeah.

DHARMESH: And, you know, the money manager account is looking to sort of, you know, ensure that we get our transactional or our check customers, you know, banking with Nedbank, but truly banking with Nedbank.

DHARMESH: So we look to reward our customers, in that instance, for making a deposit into the account, as well as doing at least five debits in the month, to ensure that we can see some activity and we can ensure that customers are, in fact, using our money manager package.

DHARMESH: And in using the package, we would sort of send communications to our customers, letting them know how they could potentially manage their money better.

DHARMESH: Now, we’re not there yet in terms of the final solution, but it’s something, you know, that we’re aspiring to and that we’ll get to at a point in time.

DHARMESH: When we look at our home loans, vehicle asset finance and personal loans, we bundle those products into a package called Responsible Borrower.

DHARMESH: And the way in which Responsible Borrower works is we just require our customers to stay up to date on their bond repayment, their car repayment or their personal loan repayment in full and on time per quarter.

DHARMESH: And every quarter, we enter our greenbacks members who have opted into that package into a competition where they can win their home loan vehicle asset finance and personal loan back.

DHARMESH: So, one of those products, a customer could potentially win back.

PAULA: Wouldn’t that be amazing?

DHARMESH: So, in fact, we’ve just had a couple of customers win their home loans back.

DHARMESH: And it’s probably some of the proudest moments in my career where you can see that the work you’ve done has literally changed or not that our team’s done.

DHARMESH: Has literally changed our customers lives.

DHARMESH: We had one customer who was actually retrenched at the back end of last year and won their home loan back this year.

DHARMESH: And so the relief that I could hear in the customer’s voice when we told them the news was just…

PAULA: Yeah.

DHARMESH: It’s something that I just wish more people could experience.

DHARMESH: It’s an unbelievable feeling.

DHARMESH: And that’s quite a nice way to reward customers other than points, which is the other thing that we’ve looked at.

DHARMESH: But we think that the utilitarian value of points is useful in some instances.

DHARMESH: So for repurchase behavior, let’s get people to buy their 10th coffee with us, etc.

DHARMESH: etc.

DHARMESH: So I think it works in that instance.

DHARMESH: But it doesn’t necessarily work for everything.

DHARMESH: So we’ve tried different mechanisms by which we reward our customers.

DHARMESH: And the competition mechanism is quite a nice way of doing that because you get many people to change behavior.

DHARMESH: And not everyone gets a chance to win.

DHARMESH: But the probability of customers winning this type of competition is a lot bigger than if it were any other kind of thing.

DHARMESH: So that works out quite well.

DHARMESH: And then, of course, as a bank, we want customers to save.

DHARMESH: And deposits are really what we thrive on as a bank.

DHARMESH: So we’re also rewarding customers for saving with us through our structured saver package.

DHARMESH: Which again, just looks to through a competition mechanism, customers could win up to $50,000 a month just by saving into their respective saving product.

DHARMESH: Now, from a behavioral perspective, we know that saving is probably one of the most difficult things for people to do in general.

DHARMESH: So how do we employ techniques to make it easy for our customers to save?

DHARMESH: And there’s a couple of things we’re working on, and we haven’t included them in the program as yet because they’re still in development.

DHARMESH: But in essence, it’s about how do you just make someone save without them having to think about it?

DHARMESH: So for example, if you were swiping your check card, we would give you the functionality that says, look, for every swipe that you make, you’d like to save 10% in a savings program, as an example.

DHARMESH: So every time you’re swiping to pay for something, you default it into, for example, saving, as an example.

DHARMESH: So the use of the default really, really helps customers save and is a really cool behavioral tool to get people saving and building up those balances.

DHARMESH: We haven’t implemented that yet.

DHARMESH: And it’s something we’re working towards, but you know, that’s the ethos.

DHARMESH: Of the program.

DHARMESH: And you know, over and above that what you mentioned earlier was, you know, the fact that we’ve gone carbon neutral and that we are the green bank.

DHARMESH: One of the things we promote as part of the program is what we call our affinities.

DHARMESH: And one of our affinities is called the green affinity, which is, it’s a venture between Nedbank and the WWF, Nedbank Green Trust.

DHARMESH: And as customers manage their money better, Nedbank will make a donation to the affinity of our customers’ choice at no cost to the customer, right?

DHARMESH: So we would make a donation to the WWF, Nedbank Green Trust.

DHARMESH: We would make a donation to the arts affinity if that was chosen, to the sports affinity or to the Nelson Mandela Children’s Fund.

DHARMESH: So the essence of the program is really around, you know, as customers get better at managing their money, society benefits as well.

DHARMESH: And, you know, the bank also benefits because, you know, it has to be a triple win, you know, there’s a win for the bank, there’s a win for our customers, and there’s a win for society.

DHARMESH: And if we’re getting that right, then we’re heading in the right direction.

DHARMESH: So that’s very much Paula, the ethos and what we sort of strive for every day within our team.

PAULA: You know, what I really love is that particular package you just mentioned, Dharmesh, you know, the whole concept of when they manage their money better, which comes back to, again, the principle of, again, what I’ve seen so much in in South Africa, this lovely idea of, you know, taking care of the customer in the, you know, making sure the customer’s interests are aligned with the business interest.

PAULA: So I think I don’t know what it is about you guys, but you have that lovely integrity around, you know, rewarding them for something that’s good for them as well, like rather than necessarily, let’s say, on borrowing, you know.

PAULA: So if I was spending more of my credit card and then you were giving donations to charity about to have the same positive spin, if you know what I mean, I think it’s amazing.

DHARMESH: Thank you, Paula.

DHARMESH: And I think I think most businesses in South Africa do worry about the context and the societal context.

DHARMESH: You know, I think I think South Africa and most people will know our history, you know, comes from a very dark history.

DHARMESH: And you know, I think we all work within the economy at the moment to to make things better, not just for for us, but for everyone.

DHARMESH: You know, so and I think that remains the ethos of corporate South Africa for some reason or the other.

DHARMESH: And I think it’s a great ethos that we should continue maintaining.

PAULA: And again, and I’m super happy that we’re able to share it on this show, because again, I don’t think the world gets, you know, the understanding of how powerful and the ethos, the corporate ethos, as you said, is in South Africa.

DHARMESH: Yeah, you know, I think the world is moving towards a place where, you know, if you look at the younger generation, the millennials, you know, I think society is starting to worry more and more about, like, are you really being real?

DHARMESH: You know, are you true to what you’re talking about?

DHARMESH: You know, are you really making a difference?

DHARMESH: You know, in South Africa, what we’ve learned as an example is, you know, when we talk about loyalty, you know, loyalty is not about giving people a whole bunch of points, right?

DHARMESH: I think it helps to a certain extent in your business, but loyalty is very much an emotional thing.

PAULA: Yeah.

DHARMESH: And you know, that’s what we’ve been trying to build towards in this sort of program is how do we get to this sort of emotional loyalty, where a customer truly believes in the brand, you know?

DHARMESH: So you get someone that’s come through and they say, look, you know, we love Nedbank because they’re green and that’s why I’m going to bank with them.

DHARMESH: And they don’t bank with you because, you know, not because your products are better or because you’ve given them a better rate on their home loan, potentially, but they bank with you because of your cause.

DHARMESH: You know, what do you stand for?

DHARMESH: Does it resonate with the customer cause?

DHARMESH: And I think more and more that’s becoming the norm for corporates, not just not just in South Africa, but globally.

PAULA: And to be honest, I mean, I really wasn’t expecting again, a conversation about banking to have the words emotion attached to it, you know?

PAULA: It’s one of those things that comes up in retail or let’s say in general lifestyle.

PAULA: But you know, again, my perception from the outside is that banking is much more commercial, much more transactional to your point about the card swiping.

PAULA: But it feels like, you know, there is that much more holistic sense of what you’re trying to do.

DHARMESH: Absolutely, Paula, and I mean, we definitely view money as being an emotional aspect.

DHARMESH: You know, money is not, you know, as we, I think we think of it as being very transactional and we use it as being transactional.

DHARMESH: But when we get deeper into sort of the psychology of money and how people think about money, you know, you very quickly realize that money in itself is just a completely psychological thing.

PAULA: You’re right, actually.

PAULA: Yeah.

DHARMESH: You know, why do people buy a Ferrari as an example or a Porsche as opposed to, you know, something else?

DHARMESH: It’s completely psychological and understanding that is the key to unlocking, you know, better financial management for our customers.

DHARMESH: And you know, if people are managing their money better in South Africa and not just with Nedbank, but across the sphere, you know, again, just, you know, it just works out better for South Africa as a country, right?

PAULA: Yeah.

DHARMESH: So it’s absolutely in our interest to ensure that customers are, you know, managing their money well and understand what’s happening with their banking.

DHARMESH: You know, you mentioned earlier about the credit cards.

DHARMESH: I mean, card swiper does reward you for swiping your card, right?

DHARMESH: But what we’re trying, I mean, as you know, as part of that package is that in South Africa, there’s a huge cash market.

DHARMESH: So cash is still a predominant mechanism within the economy, right?

DHARMESH: And we’ve got quite a big informal economy, which is completely cash-based.

DHARMESH: But we also have a high amount of theft and people losing their money through theft.

DHARMESH: So the narrative of the package is really around, yes, swipe your card, but it’s not about swiping your card more.

DHARMESH: It’s about, swipe your card instead of using cash, guys, because it’s safer.

DHARMESH: So it’s about tying into the narrative that our customers are experiencing daily.

DHARMESH: And it’s not, I mean, we don’t always get it right.

DHARMESH: I’ll be the first to admit it.

DHARMESH: I mean, we’ve tried and failed on many things.

DHARMESH: And if you want me to talk to some of that, I will.

PAULA: Well, I think we have to.

DHARMESH: So I mean, in developing the new program, there were things that we worked with some really, really smart people who suggested we do this.

DHARMESH: We tried that and lots of science and lots of psychology that we looked at as well.

DHARMESH: And I’ll give you an example.

DHARMESH: One of the things we thought would be quite easy is having a separate greenbacks app for our customers, okay?

DHARMESH: And we tested that with customers as well.

DHARMESH: And customers in the testing loved it.

DHARMESH: And we went to market and it’s been a complete failure.

PAULA: I had exactly the same experience, Dharmesh.

PAULA: I’m feeling reassured I wasn’t the only one.

DHARMESH: Our customers absolutely disliked it and were quite vocal about it.

DHARMESH: And you know, for me, listening to what our customers say to us and the, let’s call it the criticism we get for the work we’ve done, I think is probably one of the best things we can experience, right, in our jobs.

DHARMESH: Because it says to you, listen, you’ve got it wrong, you need to fix this.

DHARMESH: And so, you know, as much as you sort of think about stuff, and you think you’ve been very smart, and you’ve tested it with customers, by the way, and they’ve said to you that they love it.

DHARMESH: Yeah, when you go live and people really experience it, you know, it may just not work out.

DHARMESH: And then it’s being able to actually turn around really quickly and fix it, right.

DHARMESH: So, I think that’s the phase we’re in on the app is we’re going to at a point in time, discontinue that, but make sure that the functionalities on our main banking app, which, believe it or not, people do visit all the time.

PAULA: Yeah.

DHARMESH: And, you know, it’s understanding these really small nuances in the customer headspace, you know.

DHARMESH: So, when asked, well, why don’t you want this app?

DHARMESH: Well, you know, it was first about, you know, I’ve got to use data to download this app, which is not, you know, it’s not cheap.

DHARMESH: Yeah.

DHARMESH: So, I don’t like that.

DHARMESH: I also don’t have a phone that has lots of space.

DHARMESH: So again, I don’t want to download an app that’s going to take up space.

DHARMESH: Okay, then it requires me to log in, but you want me to put in a password.

DHARMESH: And I don’t remember what that password is.

DHARMESH: Why can’t I use my fingerprint?

PAULA: Yeah.

DHARMESH: So the client experience, the user experience in the current day and age is absolutely critical.

DHARMESH: And if customers are used to using an Apple phone or used to watching Netflix, where the user experience is just so beautiful, that any sort of standard below that, which customers are experiencing daily, creates a huge, creates huge angst for customers.

DHARMESH: And so that forces us to become really good at things like CX and UX design, as an example, which are things that I had no idea about and have had to learn very quickly as part of the role.

DHARMESH: So I think that that’s one of the learnings that’s most certainly come out of out of this experience.

PAULA: Yeah, it’s a great one.

PAULA: And I’m curious to know Dharmesh, because, you know, and again, actually, it wasn’t me personally, I was actually the agency delivering the proposition.

PAULA: But you know, it was in the telecoms industry in Ireland.

PAULA: And the view was, and this, you know, admittedly was 10 years ago.

PAULA: But the view was that the main app needed to be very light to download.

PAULA: And if we added in too much functionality, like the whole loyalty program, that actually would detract from the user experience of the core business.

PAULA: So therefore, they they thought and they probably being, you know, let’s say generally IT people, and they thought that actually made more sense to have a couple of light apps.

PAULA: So have you had any concern about, you know, integrating the loyalty and almost backfilling it into the main app?

PAULA: Or is that something that is a good experience?

PAULA: I don’t know where you are in the development phase.

DHARMESH: Yeah, so we’re busy scoping that, that sort of journey out at the moment, Paula, we will probably look to do that in the next six months.

DHARMESH: Yeah, in terms of what it what it looks like.

DHARMESH: But but you know, we’re very much going to prototype test again, see how that plays out.

DHARMESH: Yeah, I think the key thing is not having, as you mentioned, we’re not going to have the whole loyalty experience on the main money app.

DHARMESH: I think it becomes a secondary experience, but I think as it should be within the banking sort of the context, you know, and, you know, what we’re also seeing is this drive, you know, so we can do it.

DHARMESH: But I think a key thing is around how do you make sure that you personalize, you know, so so if someone’s buying coup, baked beans, don’t send them Heinz as an example.

PAULA: Yeah.

DHARMESH: And, and so, you know, it’s getting really good at that.

DHARMESH: Our personalization is obviously something that everyone’s talking about.

DHARMESH: And, you know, I don’t think any of us have gotten that right completely.

DHARMESH: Because, you know, the data work requires to get to a point where we know that Paula, you know, likes coup baked beans, as opposed to Heinz, yeah, takes takes quite some doing, you know, takes a lot of doing.

DHARMESH: But but when we able to render offers that are specific to Paula when she logs into Money App, I think that’s where we’ll start seeing.

DHARMESH: And again, I say, I think that I don’t know that just yet.

PAULA: Yeah, of course.

PAULA: Yeah.

DHARMESH: You know, I think that’s where it’ll play out in our customers favor, where the journey sort of is a lot more seamless.

DHARMESH: And customers have said to us as well, you know, don’t give us things that that we don’t really care about.

DHARMESH: You know, your rewards have got to be relevant to my life and to what I’m doing and add value to my life.

PAULA: And for example, then does that apply to things like birthday, you know, rewards?

PAULA: Do you have concepts around that or is that something that that you don’t do?

DHARMESH: We’ve thought about it, Paula, we haven’t done it yet.

DHARMESH: And one of the reasons we haven’t done it is because everyone’s sending you a birthday message at the moment and you get lost in all the messages at the moment.

DHARMESH: So we found that, you know, I think it’s something that we’ve still got to do.

DHARMESH: And we’ll work out how we do that best.

DHARMESH: But it’s not something we’re doing at the moment.

DHARMESH: But it’s very much part of our strategy and the design and all the rest of it.

DHARMESH: But, you know, as we’ve learned, the execution of these strategies is what counts, you know?

PAULA: Yeah.

PAULA: Yeah.

PAULA: Well, and, you know, sometimes it is frustrating, Dharmesh, I don’t know about you, but the fact that you did test your, you know, green bags app directly with customers, you know, you went to the full effort and expense and time to ask real customers what they thought.

PAULA: And then, you know, they contradict themselves when it went to market.

PAULA: I mean, that is quite frustrating because, you know, we all do everything, you know, best intentioned and you put all of that work in and to try and get a realistic view on whether something’s, you know, exactly what customers want.

PAULA: It really is hard to tell until you actually go live.

DHARMESH: So, so, so right, you know, I’ve just learned that you learn through experience, you know, you’ve got to do to learn.

DHARMESH: And I think that’s it, you know, take the plunge.

DHARMESH: And if you need to fail, then do that very quickly.

PAULA: Yeah, and I actually, and I do think customers are very forgiving.

PAULA: But on the topic of the birthday one, just Dharmesh, as you’re thinking about it, and I, you know, have often talked on this show about my relative frustrations about that, because it seems like the most obvious data point that, you know, if you’re going to personalize, you know, that should be something where the opportunity is there.

PAULA: And, you know, I do get lots of messages, so I definitely take your concern about just sending another happy birthday.

PAULA: But I had a lovely one here.

PAULA: And the program, it’s essentially like a coalition program.

PAULA: It’s a group of brands here called Blue Rewards.

PAULA: But they do have a cafe chain within the program.

PAULA: So they sent me basically a voucher for a free coffee and a cake within a week of my birthday.

PAULA: And I thought that was lovely and probably funded by the partners.

PAULA: So again, I think you have partners on the program.

PAULA: You might be able to execute something like that, that it feels like a gift.

DHARMESH: Absolutely, Paul.

DHARMESH: I mean, that is obviously the concern is how do we look at, how do we manage the cost of sending out a reward for, you know, circa north of seven and a half million customers per annum, right?

DHARMESH: So you’ve got to manage that.

DHARMESH: And I think you spot on if we were to do it, we’d most certainly look at a partner funded way in which we do that.

DHARMESH: And I think to add to it, you know, I absolutely agree with you.

DHARMESH: I think a birthday is most certainly an aspect of personalization that really does work.

DHARMESH: You know, the other piece that we do have sight of as a bank is, you know, we also know where customers live or the first house that they bought, or, you know, when they’re taking out a personal loan for the engagement ring, when they’ve got their first car.

DHARMESH: And you know, it’s potentially looking at these other sort of, if you want to call them moments of sort of celebration or truth, that we could really link in to celebrate our customers and thank them for and appreciate them and congratulate them for the live stage or the moment that they’re sort of going through.

DHARMESH: But that also sort of engenders, you know, true loyalty.

DHARMESH: You know, I know for a fact that customers that get a home loan, irrespective of the bank they get it at, remain very loyal to that bank because, you know, it’s literally changed their lives.

DHARMESH: And it is a significant moment of truth in many customers’ lives.

DHARMESH: That time where you’ve bought your first home or your apartment, or whatever that may be.

DHARMESH: It’s a really big moment in people’s lives.

DHARMESH: And it’s one that we could potentially leverage a lot better from a loyalty perspective.

PAULA: You’re right.

PAULA: Yeah.

PAULA: It’s a very special time in life, you know.

PAULA: It doesn’t matter how many times you move home or move house, you know, later on.

PAULA: But that first one is a very special and actually very expensive as well.

PAULA: Clearly, you know, getting on the property ladder, you know, whatever you can do will certainly drive incredible loyalty.

PAULA: So I think that’s a very good insight.

DHARMESH: Thanks, Paula.

DHARMESH: I was just going to add, it depends on where in the world you are as well.

DHARMESH: I guess it’s probably a lot more expensive in New York City than it is in downtown Johannesburg.

DHARMESH: But yeah.

PAULA: But it’s all relative.

PAULA: You know, the customer who’s going to buy in downtown Johannesburg, I’m pretty sure, is also struggling to get the deposit together or whatever.

PAULA: And certainly from an Irish perspective, I can tell you, it’s an extraordinarily difficult thing to do because the market went through an almost the opposite where at one point, pre 2008, I’m going to say, so early 2000s, where the banks had decided to give out like mortgages for 110% of the property value.

PAULA: So you can imagine the disaster that followed when everybody was totally over leveraged.

PAULA: And then 2008 happened and all of a sudden your house is valued at half as was.

PAULA: So I don’t need to tell you the risks involved.

PAULA: But I think you’re right about the insight.

PAULA: If you can, as a bank, have an insight on the key moments of your customers as human beings in their lives and find a way to celebrate that with them, I think that would bring extraordinary loyalty.

DHARMESH: Yeah, we just got to do it now, Paula.

PAULA: Well, it sounds like you’re doing loads.

PAULA: And you sent me stuff in advance as well, which I really liked as well, Dharmesh.

PAULA: And I can see there’s a real fan of you are a fan, for example, of simplicity.

PAULA: And I’d love to explore that with you.

PAULA: Why did that come through so strongly as something that you wanted to focus on?

DHARMESH: You know, Paula, so I mean, I’d send you a one page that sort of put our whole program on to one page, right?

DHARMESH: And I’ve got to tell you that it probably took me and my team seven to eight months to get to that point, because it was taking all the complexity of the program.

DHARMESH: And, you know, we’re very clever internally, you know, it’s like, okay, we’re going to do this and this loss aversion, and we’ve got to use the heuristics and etc.

DHARMESH: And it’s all this behavioral talk, and there’s all the data talk, and it becomes very technical.

DHARMESH: And, as bankers, we love all that, all the technicalities and the numbers and, you know, so the problem with all that is that customers don’t care or actually understand that, right?

DHARMESH: So and actually don’t, maybe they do understand it, but maybe they don’t want to care too much about it because they’ve got enough on their on their sort of minds.

DHARMESH: And the trick about that is how do you communicate what your value proposition is really simply right so that everyone can get it.

DHARMESH: And it is probably one of the most difficult things to do just by just by trying to get it all onto one page was our first learning.

DHARMESH: And then our second learning is, of course, you know, as part of the program, there’s just too many places where it’s not working out because we’ve made it too complex, you know.

DHARMESH: So I think, you know, through the role, you know, one of the sort of, if you want to call it values that I’m not sort of living by is one of how do we just simplify guys, you know, so take all the complexity that we’ve got, but really simplify that for our customers so that so that they understand it’s simplified for our bankers who are, you know, talking to our customers day to day selling our program to our customers, that they understand and advocates of it because, you know, you could have the best, you could probably have the best rewards program ever, but if it’s like badly, badly communicated, and it’s too complex, it just misses everyone.

DHARMESH: And so that’s most certainly all our journey that we run, we by no means masters at that yet, but I think we’re getting there.

DHARMESH: We’re getting there slowly, but surely, you know.

PAULA: Yeah.

PAULA: Well, well done, Dharmesh, because again, awareness is half the battle.

PAULA: And of all of the shows I have done, and I’m up over 100, as you know, at this stage, my number one most listened to episode, the topic is simplicity.

PAULA: So this is definitely an issue and it’s not just within banking.

PAULA: I think everyone, you know, again, is trying to build clever propositions and to make them super exciting and appealing and, you know, enough fresh content, enough consistent content.

PAULA: And all of a sudden, you’re kind of your head spinning a little bit, you know?

DHARMESH: Absolutely.

DHARMESH: Absolutely.

DHARMESH: We’ve we’ve found ourselves in that space so many times that, you know, and I think if you keep that simplicity as you’re too north, and just keep keep, you know, you keep sitting back from your sort of Excel spreadsheet or from the PowerPoint that you just put together and put your head put your hands behind your head, look at it and say, OK, yeah, does this make sense?

DHARMESH: You know, just ask yourself the question.

DHARMESH: Does this make sense?

DHARMESH: And the answer to that is no, then we’ve got more work to do.

DHARMESH: Thank you for that, Paula.

PAULA: Yeah.

PAULA: Yeah.

PAULA: We used to have in one company which I worked in, which was a technology company, we used to call it the Johnny Test.

PAULA: And Johnny was just one of our, you know, investors who really didn’t really, you know, get what the tech was trying to do.

PAULA: So we would always test everything just with him.

PAULA: And if he looked, you know, confused and glazed over, I think you actually need to have that friendly face to kind of go, does this make sense to you?

PAULA: And he was like, no.

PAULA: So, yeah.

DHARMESH: That’s great.

PAULA: It really is.

PAULA: It’s fun, you know, sometimes it’s the granddad test or whatever, you know.

PAULA: But anyway, I’m going off track.

PAULA: But and I want to ask you, next Dharmesh, about your rewards and the whole incredible way that the Greenbacks members can enjoy their rewards.

PAULA: But just before, just to finish on that point, there’s a book I’ve often mentioned on this show and the contents are totally irrelevant to our conversation.

PAULA: But the title is perfectly relevant and I have recommended it to so many people.

PAULA: It’s a 20 year old book.

PAULA: So, when the internet essentially was first invented, let’s say, to your point about CX and UX, the book is called Don’t Make Me Think and I think that is absolute genius because we’re all totally overwhelmed.

PAULA: We don’t care about your loyalty program or your whatever.

PAULA: So if you can do something that doesn’t make me think, it’s just incredible relief.

DHARMESH: I’m definitely going to read that, Paula.

PAULA: I think you’d love it, especially because you’re into the whole UX thing.

PAULA: As I said, it’s old, but genius.

PAULA: So the title got me.

PAULA: But anyway, the big other area that I think you’re doing extraordinary work, Dharmesh, is the whole range of options that your members have in terms of what they can redeem and the channels and the just extraordinary ecosystem.

PAULA: So I’d love you just to explain that for listeners.

DHARMESH: Yeah, sure.

DHARMESH: So, you know, we previously had what we had called the Dreambacks Mall.

DHARMESH: And if you want to think of that, that was an e-commerce mall, customers could go into the mall and use their points to buy sort of goods that were discounted for our Greenbacks members.

DHARMESH: And we’ve sort of, you know, we’ve moved away from having a Greenbacks Mall.

DHARMESH: And the bank has got a prep proposition now called AVO, which is really an e-commerce store, not just for Greenbacks members, but for South Africans in general, right?

DHARMESH: So it’s an e-commerce store that, you know, people can go on to and find really, really cool deals.

DHARMESH: And what we’ve done is, you know, we’ve created, we’ll be creating a page for our Greenbacks members on the AVO Mall.

DHARMESH: So we just, so let me just ensure that all our sort of the client experience all happens in one place as opposed to, you know, jumping about between certain things.

DHARMESH: So we’re busy fixing that, but that’s some of the new developments that we’ve got in play.

DHARMESH: And that’s that ability.

DHARMESH: We call that shopping on AVO, so you can use your points to shop on AVO.

DHARMESH: Okay, one of the things that was introduced before my time in the business, but that has worked wonderfully well is something called the shop card.

DHARMESH: Okay, now, all the shop card does is it’s a normal like a normal debit or check card, if you want to think of it that way.

DHARMESH: And all your points are basically converted into cash.

DHARMESH: So you could use that card at any merchant that accepts an American Express card, you could go to an ATM and draw out this cash.

DHARMESH: And literally, you could use those points as you wish, as long as the merchant is accepting American Express.

DHARMESH: So that actually started seeing redemptions really take off.

DHARMESH: And that remains probably one of our best redemption mechanisms today.

DHARMESH: It’s still one of the higher ones, but it’s starting to get eaten by some of the other stuff that we’ve put into play.

DHARMESH: So we’ve also allowed customers to take the greenbacks points and invest it into bank products, right?

DHARMESH: So invest it into a unit trust, invest it into a savings or an investment product, invest it into My Pocket, use your points to pay for your bank charges.

DHARMESH: One of the other pieces we found is in South Africa, and that’s probably a global phenomenon as well, but airtime and data is ubiquitous and everyone needs it all the time, right?

PAULA: Totally.

DHARMESH: So we’ve allowed customers to use their points to buy things like airtime data and prepaid electricity, which is also really taken off of really nicely.

DHARMESH: And then we have the ability, of course, to donate your greenbacks points to the causes that I mentioned earlier, and one of the other ones that we’ve just enabled was we enabled it last year, it’s called the Solidarity Fund, which our president had set up as part of our COVID-19 relief efforts for businesses in South Africa.

DHARMESH: So greenbacks members can donate to that fund, and by doing that, are supporting keeping small businesses alive within the South African context as well.

DHARMESH: So there’s some really, those are the really cool sort of mechanisms.

DHARMESH: And we know, having said to you that I look at the burn to earn ratio, and seeing that increase, we know that what we’ve implemented has really, customers have really seen value in it.

DHARMESH: So that’s been really, really cool to see.

PAULA: Yeah.

PAULA: And just on a practical note Dharmesh, the shop cards that you mentioned, is that a physical plastic charge card?

PAULA: Or is it a digital form?

PAULA: Or what does that look like in reality?

DHARMESH: Yeah, it’s a physical card at the moment.

DHARMESH: But you could use that card to make purchases online if you needed to as well.

DHARMESH: So yeah, it’s like your normal checking card if you think of it that way.

DHARMESH: Yeah.

PAULA: It makes it very real, very tangible, you know, that this is my rewards card.

PAULA: Like it’s here.

PAULA: The value is already here.

DHARMESH: Yeah, absolutely.

DHARMESH: And I think that’s the reason why it had been created.

DHARMESH: It remains within the brand, you know, so it’s got the greenbacks branding on it.

DHARMESH: When customers buy something using that branded card, you know, the psychology is the one that says I’ve got it for free or greenbacks has given it to me, you know, and I think that’s quite a nice narrative to sort of build on from a consumer hate space perspective.

PAULA: And of course, I guess it can be gifted as well if you did want to, you know, give that off to somebody, you know, whether it’s a child or whatever.

PAULA: I think it’s, you know, again, it’s a physical thing.

PAULA: So I think that’s amazing.

DHARMESH: Yeah, we’ve seen we’ve seen our customers using it in all sorts of ways.

DHARMESH: You know, in some instances, I’ve got some colleagues who’ve given it to their mom.

DHARMESH: And their mom uses the points or some people have given it to their children and they use the card.

DHARMESH: So yes, it’s got many uses.

DHARMESH: And it’s definitely, you know, it’s definitely something that’s worked.

DHARMESH: And you know, customers have said to us, well, why don’t you just put it into our check account, you know, because, you know, we can then just use our normal banking card.

DHARMESH: So yeah, we’re thinking about that.

DHARMESH: But we haven’t decided just yet.

PAULA: And that’s a big decision, actually.

PAULA: I can see where logically, you know, for a customer, but I can also definitely see it would be lost and missed because I know I get cash back on a couple of bank products and I never even appreciate, realize that they’ve come in.

PAULA: So, you know, I definitely think there is something about keeping it separate.

PAULA: Again, this will be no right answer.

PAULA: But yeah, it’s a very real and practical way that you’re doing it.

PAULA: So I’m sure you’d be nervous.

PAULA: You don’t want to be changing something like that if it’s one of your dominant redemption mechanisms.

PAULA: You know, people love it so much already.

DHARMESH: Yeah, absolutely.

DHARMESH: And you’re so, you’re so spot on.

DHARMESH: I mean, that is part of the thinking.

DHARMESH: And then, of course, you know, the points, there isn’t any breakage on that, right?

DHARMESH: So you’d have to then.

PAULA: Yes, of course.

DHARMESH: You know, so there’s most certainly a financial sort of impact on that as well, which we have to consider because we, you know, we are running a business, too.

PAULA: Yeah, yeah.

DHARMESH: But so you say, yeah, I mean, you know, it’s just very much the triple win.

DHARMESH: You know, it’s like we’ve got to win as a business.

DHARMESH: Our customers have got to win as customers.

DHARMESH: And society’s got to win and let us stick to that, you know.

PAULA: Yeah, yeah, yeah.

PAULA: And again, just to emphasize the shopping store, I think I saw a number of one hundred and forty thousand outlets, you know, wherever American Express is accepted.

PAULA: So just the usage and availability and flexibility, I guess, of that product.

PAULA: But also, I don’t think I’ve seen, you know, a non telco, let’s say, offering things like airtime and data.

PAULA: So I don’t know if that’s been done in other parts of the world or electricity, in fact.

PAULA: So but again, I think it’s a really nice, very practical and something that I would really feel.

PAULA: Oh, my goodness, Nedbank is paying my phone credit this month.

PAULA: I mean, I just think that’s brilliant.

DHARMESH: So we do that with in partnership with, you know, the telco or the electricity service providers, and we would make a commission of that to our customers.

DHARMESH: But absolutely pull it to your point.

DHARMESH: So we don’t actually do it ourselves.

DHARMESH: It’s not like Nedbank, Airtime or Nedbank data.

DHARMESH: Yeah.

DHARMESH: So it’s in partnership with a third party provider or a telco.

DHARMESH: And yeah, I mean, it’s just such a cool mechanism for our customers.

DHARMESH: And some of our customers with small amounts of points, can in fact buy things like data, Airtime electricity.

DHARMESH: I mean, you know, we have Airtime sort of, what do you want to call it, categorizations, yeah, like packages of like 10 rand, I mean, 10 rand is not even a dollar.

DHARMESH: And you know, people buy that all the time, as an example, because there’s interchanging of some cards and you know, the way our customers operate in South Africa is just, it’s incredible.

DHARMESH: And so trying to keep up with that is probably our biggest job.

PAULA: Yeah, yeah.

PAULA: But you’re right.

PAULA: I mean, you don’t need to go into the telcos business to facilitate that.

PAULA: So your role as the, you know, the client, I suppose, essentially is to facilitate the digital transfer, make it easy, make it seamless, and make sure the customer gets to burn their points in a way that really, really matters to them.

DHARMESH: Exactly.

PAULA: Wow, wonderful.

PAULA: Well, Dharmesh, I think I’ve exhausted all of the questions.

PAULA: I was super excited to hear all about the program.

PAULA: Are there any other key things that you wanted to share before we wrap up?

DHARMESH: Well, I know not from me.

DHARMESH: I just it’s been an absolute pleasure being on your show.

DHARMESH: And thank you.

DHARMESH: Thank you so much for having me.

DHARMESH: And thank you for everyone that would listen to it, I guess.

PAULA: Absolutely.

PAULA: And on that point, actually, Dharmesh, are you happy for me to link, for example, to your LinkedIn profile?

PAULA: If people want to reach out to you directly?

DHARMESH: Absolutely.

PAULA: Wonderful.

PAULA: You never know what kind of conversations come up.

PAULA: I always find it fascinating, you know, just to check back in with people who have been on the show.

PAULA: So that’s amazing.

PAULA: So listen, thank you very much for all of your insights, all of your work.

PAULA: I love the Greenbacks program.

PAULA: Definitely think listeners are going to love it.

PAULA: So I just want to say Dharmesh Bhana from everyone at Let’s Talk Loyalty.

PAULA: Thank you so much.

DHARMESH: Thank you, Paula.

PAULA: This show is sponsored by The Wise Marketeer, the world’s most popular source of loyalty marketing news, insights and research.

PAULA: The Wise Marketeer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 170 executives in 20 countries as certified loyalty marketing professionals.

PAULA: For more information, check out thewisemarketeer.com and loyaltyacademy.org.

PAULA: Thanks so much for listening to this episode of Let’s Talk Loyalty.

PAULA: If you’d like me to send you the latest show each week, simply sign up for the show newsletter on letstalkloyalty.com, and I’ll send you the latest episode to your inbox every Thursday.

PAULA: Or just head to your favorite podcast platform.

PAULA: Find Let’s Talk Loyalty and subscribe.

PAULA: Of course, I’d love your feedback and reviews, and thanks again for supporting the show.