Paula: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals.
Paula: I’m your host, Paula Thomas, and if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.
Paula: This episode is brought to you by Epsilon, and their award-winning People Cloud Loyalty Solution.
Paula: Epsilon has actually just released a guide on the topic of contactless loyalty, which explores how marketeers can create human-like connections with their customers in an increasingly contactless world.
Paula: I would highly recommend you have a look.
Paula: So to download the guide, visit emea.epsilon.com forward slash let’s talk loyalty, and you’ll find the guide in the resources section.
Paula: So welcome to episode 63 of Let’s Talk Loyalty.
Paula: And truly in the spirit of global voices of loyalty, I am delighted today to be welcoming Jorge Mendes to the show.
Paula: Now, Jorge is the chief officer for the consumer business for Vodacom, which is a leading African communications company.
Paula: So he’s joining us today from his headquarters in Johannesburg.
Paula: So welcome, Jorge.
Jorge: It’s lovely to be here.
Jorge: Thank you very much for the invitation.
Paula: Not at all.
Paula: So as listeners will know, I spend an awful lot of time monitoring new loyalty programs that are launching around the world, as well as showcasing best practice for programs that have been around for a long time.
Paula: So when I saw a lot of the work, Jorge, that you’ve been doing launching Vodabucks, I got very excited.
Paula: And I know you launched the program just actually on August 31st this year.
Paula: So first and foremost, congratulations on launching the program.
Jorge: Thank you very much.
Jorge: I’ve been a long time in the making, so very exciting.
Jorge: Really, really fortunate and privileged to have done so.
Jorge: And exciting times ahead.
Paula: Indeed, indeed, Jorge.
Paula: So just to give listeners a sense of the scale of Vodacom, I saw on your website within South Africa, you have 37 million customers.
Paula: No doubt you have massive targets to connect with all of them.
Paula: Great to know you have the majority market share as well in South Africa.
Paula: So that’s great.
Paula: And clearly a very ambitious company, Jorge.
Paula: So as we get into talking all about your strategy, particularly within loyalty, let’s start with our usual question.
Paula: What is your favorite loyalty statistic?
Jorge: It’s a great question.
Jorge: Thank you.
Jorge: And that’s obviously a difficult one, because there’s a lot of statistics and performance indicators that you’d like to achieve.
Jorge: But I’d have to go with what I believe is really close to my heart, which is engagement.
Jorge: So I think that’s probably the highest statistic that I’d like to achieve.
Jorge: And when I talk about engagement, it’s the frequency at which customers that have opted in to our program visit us on a regular basis.
Jorge: And I would say that the more engaged consumers are on your actual platform, loyalty platform as such, loyalty and reward, that they find it intuitive, easy and value in their lifestyle somehow.
Jorge: And so for me, that would be the number one, would be the level of engagement.
Paula: Wonderful.
Paula: And I know you had pre-existing loyalty programs, Jorge, which I believe were more focused maybe on the prepay market.
Paula: But I know Vodabucks now very much is focused on your entire customer base.
Paula: And I think what I liked most, in fact, was you described that you’re moving from being a telco to a techco.
Paula: So I think that’s an extraordinary evolution.
Paula: And certainly there’s lots of people listening in the telco industry.
Paula: So I’d love to first of all get a sense of within that metric of engagement, Jorge, what kind of levels of engagement do you think will be successful for Vodacom for this particular program?
Paula: What are you aiming for?
Jorge: Yeah, it’s a good point.
Jorge: And what does success look like?
Jorge: Obviously, I would like maximum.
Jorge: I’m greedy that way.
Paula: Always good at business.
Jorge: Exactly.
Jorge: We would like to do the best of everything we can.
Jorge: But I’d go with saying that if we have consumers engaged 10 to 15 times in a month for some kind of activity on the platform, I’d say that would be a great start.
Jorge: Where would I like to land up?
Jorge: I would like to land up with a two-thirds engagement level on a monthly basis.
Jorge: And the reason why I say that is, as we shift from a telco to a techo, you also have customers that have multiple SIM cards.
Jorge: And if they engaged much more with my platform, there’s obviously little space to engage with other platforms.
Jorge: And so you start reducing the multi-SIM environment, which allows consumers to have multiple SIM cards, etc.
Jorge: So if they’re extracting a lot more value and they engaged on a more regular and frequency with us, then there would be no reason to go somewhere else.
Paula: And will you explain the multi-SIM piece, George, because that’s not something that I would be familiar with in my own background.
Paula: To me, it’s enough to have one SIM card from Ireland, for example, and one from here in the UAE.
Paula: But tell me, why do people swap their SIMs so much in your part of the world?
Jorge: So prepaid is a big portion of our market because of credit and risk exposure, etc.
Jorge: So the entry level into prepaid is quite simply just register with your details and you get a SIM card.
Jorge: The regulatory environment allows you to have multiple SIM cards.
Jorge: So typically what would happen is one consumer could have four or five SIM cards depending on what proposition or day of the month or week of the month they would like to utilize.
Jorge: So if another network has a phenomenal offer on weekends, they could use that SIM card on weekends.
Jorge: If there’s another offer that’s fantastic for late night data surfing as an example, they could easily flip SIM cards and utilize that SIM card.
Jorge: So the more I could keep a customer engaged with me, for obvious reasons, that would add tremendous value.
Paula: So intensely competitive is what I’m hearing and a real depth of awareness of all of the core telco propositions.
Jorge: Absolutely.
Jorge: Super competitive.
Jorge: We have a very, very competitive environment.
Jorge: We have a market that is dynamic.
Jorge: And so you’ve got to be aware of everything that’s going on in the marketplace to it.
Jorge: And that’s why we consolidated our programs because we had very specific pre-paid programs and then contract programs for high value, et cetera.
Jorge: And it was very, let’s say, it was not well orchestrated and the synergy was not there.
Jorge: And we had to pull back a little bit and say, how do we look at this in totality?
Jorge: And hence why we delivered this new program.
Paula: Wonderful.
Paula: So tell us about the insights, Jorge.
Paula: What exactly are the, I suppose, high level strategic goals for Vodabucks?
Paula: And what’s then the consumer facing proposition?
Jorge: Excellent.
Jorge: Thank you very much.
Jorge: So the consumer facing proposition is quite simply driven on behavioral economics, where we’re trying to look at lifestyle and traditional non-core transactional activity only, but also behaviors.
Jorge: So we’ve now created circa 200 goals that could be achieved.
Jorge: And that’s through research and insight with our customers, rather than something that we’ve come up with.
Jorge: The benefits are quite ranging in terms of, because it’s such a diverse and almost unequal economy, if you compare to any other place on the planet, we have a magnitude of differences.
Jorge: So we needed to create something that suits everyone’s lifestyle.
Jorge: So we needed benefits for just simply being with Vodacom, as a Vodacom subscriber on the pure mobile or fixed voice and data services.
Jorge: Then we said, how do we sort of attract the broader family?
Jorge: So how do we attract more than one person that potentially belongs to Vodacom in some other way from a services perspective?
Jorge: I started looking at goals beyond just pure transactional activities.
Jorge: And from a reward perspective, we’ve signed up over 300 partners, and the rewards and benefits range from a simple discount on mail vouchers that exist at famous retailers, all sorts of retailers from a food perspective, but also shopping, groceries, cosmetics.
Jorge: And then we’ve looked at travel, fashion, reward, health, all those kind of initiatives.
Jorge: And we’ve created the capability to pivot very quickly, depending on circumstances.
Jorge: So a quick example is obviously COVID and the forced shutdown that we had, it would be a very big miss to award customers with travel vouchers and travel benefits because of the lockdown.
Jorge: So we shut very quickly to try and ensure that the health elements were catered for in a much bigger way.
Jorge: So virtual doctor consults, as an example, were free of charge.
Jorge: And those were some of the benefits.
Jorge: We have retailers that specialize in health care products.
Jorge: And we awarded a lot more of those kinds of points and vouchers to redeem for those products.
Jorge: The economy was under pressure.
Jorge: So a lot of shopping vouchers to make sure that grocery shopping, et cetera, was much more in the forefront rather than some other benefits that perhaps are not more relevant or as relevant during this time.
Paula: Yeah.
Paula: And I can imagine the complexity, Jorge, of, you know, developing a loyalty proposition, as you said, across the whole business, presumably started well before COVID was an issue and then having to evolve so specifically because I know travel is a core proposition for a lot of loyalty programs.
Paula: So to have to, I suppose, push that to the back of the table for now and change the focus.
Paula: But I love what you’ve done, obviously, in terms of virtual consultations, I know for doctors consultation, so lots of incredible rewards.
Paula: And you talked to me before we came on air as well, George, about, I suppose, the multiplier factor, which is certainly not easy across 300 merchants.
Paula: So tell me how big is your team and how do you go about sourcing rewards in order to deliver this kind of program proposition?
Jorge: Yes, actually, our team is quite small, but it’s growing.
Jorge: We opted for sort of the strategy that says, let’s keep everybody really fit and energetic, and we will grow this as we evolve.
Jorge: It’s by no means lack of ambition.
Jorge: To the contrary, I’ve said this before, and I’ll say it again, we would like to become the platform integrator of choice where all loyalty programs could integrate into what we’ve created because we think we have some really unique capabilities that I’ll speak about.
Jorge: But in a nutshell, it’s really important to give people the sense of ownership.
Jorge: And what we have is we have an amazing team that’s small but dynamic.
Jorge: I mean, we’re in the process of just employing another 15 people.
Paula: That’s not that small.
Jorge: It’s growing quite quickly.
Jorge: Because the negotiations with partnerships or around these partnerships take some time.
Jorge: Whilst everybody genuinely believes in it, and there’s a huge amount of excitement upfront, commercial things take a little bit of time to sign on the dotted line, so to speak.
Jorge: But we’re really proud of what they’ve been able to achieve.
Jorge: We probably have around 15 people at the moment.
Jorge: And I’ll say that’s growing to about another 15 people.
Jorge: But we have a broader organization that is very much part of what we call joint delivery teams.
Jorge: So if you look at the way we structure it, we have a segment consumer marketing environment.
Jorge: And there we look at personalization.
Jorge: So everyone that we address is a consumer in their own right, and what are their likes and dislikes, as opposed to a payment method of prepaid and postpaid.
Jorge: Then we have a brand and comps team that takes it to market in terms of how does this get packaged.
Jorge: So they’re very much involved.
Jorge: Then we have a base management team that looks at the customer value management lifecycle and all the stuff around big data platforms and the intelligence around it.
Jorge: They form very much part of this reward and loyalty team.
Jorge: Actually, the other way around, the reward and loyalty team sit as part of this team.
Jorge: And so the standalone size may not look that big, although in some markets I guess it could look big.
Jorge: But it’s more that the support that they get from the various other areas of the business, which is totally within our control.
Jorge: And I think that’s what makes it really successful so far.
Paula: Yeah, absolutely.
Paula: And you told me as well the last time we spoke, Jorge, that you’ve even chosen to build your entire loyalty platform in-house, which we talked about, I think, is a huge decision.
Paula: As you acknowledged, it comes with a considerable amount of risk.
Paula: But talk us through your thinking just in terms of what you needed and what you decided to do.
Jorge: I think it’s a great question, and one that we struggled with, to be brutally honest, not an easy decision.
Paula: Totally.
Jorge: We flew around the world to a couple of places to look at different platforms and systems and programs that were up and running.
Jorge: And we saw some amazing things, to be brutally honest, really, really amazing propositions.
Paula: Yeah.
Jorge: But when we looked at underlying platforms and technology and so on, we didn’t find anything that was overwhelming as such.
Jorge: In fact, quite the contrary, we thought we could quite easily build this, and more importantly, we could retain the capabilities, the IP, rather than having to, in time, pay a huge fee on license fees and support and so on, and rather, we could extract all those costs and put them into the program itself.
Jorge: So if the running of the program through IT support and different suppliers and so on becomes very expensive, you’ve essentially taken away funding that you could put into the program itself.
Jorge: And that was the decision that we took.
Jorge: In the end, of course, pros and cons.
Jorge: I do believe we’ve made the right decision because cost is a fraction of the cost of having done it the other way.
Jorge: And most importantly for me is that the IP is retained within the organization.
Jorge: So if I want to make tactical changes and I want to perfect quickly and be super agile and really move with speed, I can do that.
Jorge: And I don’t have to do it via sort of an outsource provider and consultation process, etc.
Paula: Absolutely.
Paula: And I know as well, we talked about all of the insights.
Paula: Again, I love the fact that you flew around the world.
Paula: I know you mentioned you came here to Dubai, for example.
Paula: I think there’s huge value in that.
Paula: And all of the listeners will know I’m passionate about kind of sharing those insights and particularly capturing them.
Paula: And also, I know what you’ve managed to do is get a few great people from Vitality, the other very powerful, very well known South African program, including, I think you mentioned having an actuary or two in your team.
Jorge: Yeah, absolutely.
Jorge: We do still with Pride.
Jorge: We have in the total broader construct, we have about 17 actuaries that form part of the broader team.
Paula: Yeah.
Jorge: So some really smart people and thank goodness for them, they keep us honest with all the modeling and so on.
Jorge: But also getting skills, as we said, moving from a telco to a techo, you have to acknowledge what you have and what you don’t have.
Jorge: And therefore you need to go and recruit the absolute best in class to ensure that you deliver something that’s simply magnificent.
Jorge: And that’s what we did.
Jorge: We went and recruited skills from what we believe is the best loyalty programs in the country and certainly globally well recognized.
Jorge: And that’s proven to be a very good start.
Jorge: Obviously, we need to ensure that there’s a track record over a period of time.
Jorge: It’s the early phases, but yet in the very beginning stages, it’s proving to be the absolutely right decision.
Paula: Okay, wonderful.
Paula: And you’ve talked a bit about the rewards partnerships, Jorge.
Paula: And I’d love to just talk about the engagement because I know you have various goals, as you mentioned, for your members and for your customers.
Paula: And I know a lot of us based on gamification.
Paula: So that seems to be the underlying behavior, obviously, as well as, you know, choosing a particular price plan.
Paula: So what are the behaviors that you’re measuring with your members?
Jorge: Yeah, we try to ensure that gamification was quite a big part of it.
Jorge: And the reason why we did that is we actually tested it in our previous summer campaign.
Jorge: And it resonated really, really well with customers.
Jorge: So what we have at the moment is we have a shake mechanism using the capability of a smartphone device.
Jorge: And we have some really cool animation.
Jorge: So somebody jumping off a diving board into a swimming pool or driving a racing car, going through the finish line, a whole bunch of stuff.
Jorge: So once you’ve shaken the device, effectively, it will then unlock a benefit.
Jorge: And so that shake would then unlock a benefit.
Jorge: You then earn a certain amount of Vodabucks.
Jorge: And when you have a certain amount of Vodabucks, you can unlock a mega shake.
Jorge: And a mega shake is a bigger prize.
Jorge: And it unlocks a couple of things.
Jorge: One is a mystery box.
Jorge: So you can find a little bit of the mystery, because again, it sounds super simple, but a lot of research indicated that consumers actually like this.
Jorge: There’s an element of mystery and intrigue associated with it.
Paula: Totally, yeah.
Jorge: And then we’ve also created a puzzle element.
Jorge: So it gives one confirmation that they are winners.
Jorge: In other words, six pieces of the puzzle, you’ve collected one.
Jorge: You can see what the diagram is, the picture, the image that’s starting to unfold.
Jorge: And you can keep track of multiple puzzle pieces and the different puzzles that we have.
Jorge: So that seems to be resonating extremely well with consumers, the gamification element of it.
Jorge: Because it feels like a little bit of fun.
Jorge: And I guess with the kind of 2020 that the whole world has had, a little bit of fun is probably very well welcomed, if I can put it that way.
Paula: Totally.
Paula: And you’re in a sector, Jorge, which I’ve often said it’s a bit like the fuel industry.
Paula: Customers need it, but they kind of seem to not want to pay for it.
Paula: So we love our mobile phone, but then the bill comes and we’re all kind of giving out.
Paula: So to add fun into a particularly utility like you guys are operating in, I think it’s absolutely the right strategy.
Paula: So I think it’s really clever.
Jorge: Thank you.
Jorge: Thank you very much.
Jorge: And of course, some of the goals that we’re trying to ensure are one that consumers find the most cost-effective propositions for them.
Jorge: So we personalize things.
Jorge: The offers that we will present are on a personalized level.
Jorge: And of course, we want to make sure that customers get value for money.
Jorge: And equally, we look at different profiles and say, what are the best kind of rewards that would sort of suit that profile?
Jorge: Number one.
Jorge: Number two is, if we look at using MyVodacom app, which is a great rich experience versus perhaps USSD, sort of SMS or text based.
Jorge: If you use the app, we will reward you more because we know that that experience is so much better.
Jorge: So we really would like you to have that experience.
Jorge: So we encourage that.
Jorge: We have other goals.
Jorge: For example, if you just watch a COVID video, you automatically get a certain amount of Vodabucks.
Jorge: And that’s just to ensure that we are an ethical and responsible organization.
Jorge: Keep washing your hands, keep sanitizing, don’t touch your face, et cetera, et cetera.
Jorge: So for simply watching an educational video, you will be allocated a certain amount of reward points.
Paula: And that’s extraordinary because I know a lot of brands struggle with rewarding non-commercial behaviors, because finding the funding and making sure that that’s commercially viable is not something that every loyalty program is designed to do.
Paula: So I can hear you’ve built that into the strategy from the off.
Jorge: Yeah, exactly.
Jorge: I think it links to the proposition that I spoke about earlier, which is engagement.
Jorge: We built in a capability that allows for consumers, once they’ve earned their sort of Vodabucks, they can bank them, which makes them valid for 12 months.
Jorge: If I go a little bit into the program itself.
Paula: Yeah.
Jorge: And one would say there’s two schools of thought, I’ve already earned something, why are you making me bank them to keep them?
Paula: Yeah.
Jorge: I want a loyalty program that ensures a high level of engagement.
Jorge: I don’t want you to have earned something without you even knowing that you’ve earned it.
Paula: Yeah.
Jorge: Now, we do remind consumers regularly, all the way up to because they bank every week.
Jorge: So we are not intending to hope that they don’t bank to the country.
Jorge: We are reminding them on a daily basis, say please bank, please bank, please bank your Vodabucks, because then they’ll be valid for 12 months.
Jorge: Once they bank, it starts showing a very different level of engagement.
Jorge: And we can then unlock a whole bunch of commercial benefits to that consumer, because on banking day, they can convert and see exactly what they’ve got.
Jorge: And through multiple partners that we’ve got on our network, we can ensure that they provide a whole bunch of benefits when that happens.
Jorge: So of course they’re legible to it, but the banking ensures a high level of engagement so that you haven’t earned something that you’re not even aware of.
Jorge: Rather, I want to stay in frequent contact with you.
Paula: Absolutely.
Paula: And was that a controversial one, Jorge?
Paula: Or was that a difficult decision to make?
Paula: Because again, you know, what we tend to preach, I suppose, as loyalty practitioners is remove friction.
Paula: And clearly there’s a manual step now.
Paula: And I can hear the thinking behind it, but did you test it?
Paula: Were you worried about it?
Paula: Or is it working?
Jorge: All of the above.
Jorge: Was I worried about it?
Jorge: Absolutely.
Jorge: Did we test it?
Jorge: Absolutely, many times.
Jorge: Did we have to tweak it in terms of the procedure, in terms of the how?
Jorge: Absolutely.
Jorge: So we did need to make it a positive spin as opposed to another hurdle.
Jorge: And that takes a great amount of effort.
Jorge: Now, one is not trying to sprinkle sugar on a lemon, so to speak.
Jorge: One is really trying to ensure through a difficult path.
Jorge: And I do believe this very firmly.
Jorge: No good decisions are taken very lightly and very easily without some pain.
Jorge: I know that this is not the norm, but I absolutely believe in my heart that it’s the right thing.
Jorge: And my heart’s not good enough, so we tested it and untuned it.
Jorge: And asked customers a little bit more, a little bit more, a little bit more.
Jorge: And I think we got to a position where it’s very well accepted.
Jorge: And I mean, if all indications so far of what we’ve got, you know, we have over 5 million customers banking weekly.
Jorge: So if it’s not working, then I don’t know.
Jorge: But statistically, it certainly is indicative of something that’s working.
Jorge: And it’s early days.
Jorge: So is there work to be done?
Jorge: Absolutely.
Jorge: But we do believe that’s a very, very critical step to ensure a high level of engagement and therefore a great level of reward to customers.
Paula: Well, I was going to ask you about the take up, Jorge.
Paula: As we said at the start, you only launched to the 31st of August.
Paula: So you’re about eight or nine or ten weeks old, depending on what date this is being released.
Paula: But literally five million people banking already, literally as a brand new program.
Paula: That’s amazing.
Paula: Congratulations.
Jorge: Thank you very much.
Jorge: We’re super excited about it.
Jorge: So far, so good, as I say.
Jorge: Of course, we’re going to keep our feet firmly on the ground.
Jorge: We’ve just got going.
Jorge: So there’s a lot still to be done.
Jorge: But as I said, through a lot of effort and nerves, as I said, I didn’t take it lightly.
Jorge: It was a very, very tough decision.
Jorge: In fact, we were going to make a different decision many, many times.
Paula: I’m sure.
Jorge: And in the end, we persevered with what we believe is absolutely the right thing and just keep on improving the journey.
Paula: Super, super.
Paula: Well, it’s certainly food for thought for listeners, Jorge.
Paula: So thank you for talking us through that and for being honest enough to admit that it was a scary one at the same time.
Paula: I’d love to ask you now about two, I suppose, small channels, but they fascinate me just from a practical point of view.
Paula: And again, I haven’t worked in the loyalty market in South Africa, but I’ve done some market research there and two things come to mind.
Paula: One is USSD, which I think is absolutely fascinating.
Paula: And I’d love you to explain because many listeners, I’m sure, will not be familiar with that approach.
Paula: And the other one I saw actually was WhatsApp.
Paula: I can see that customers can connect with Vodacom using WhatsApp.
Paula: So I’d love you just to talk through those two channels and any observations you have on how useful they are in the overall mix.
Jorge: It’s a great question and a great observation.
Jorge: USSD is effectively unstructured supplementary services.
Jorge: It’s really just texting.
Jorge: So a short code, if I put it into layman’s terms, you text the message to a short code, it could be star 100 hash, and it would drop down the menu that says balance, buy bundles, et cetera, et cetera.
Jorge: So it’s an engagement channel.
Jorge: It’s our biggest volume channel by a long shot.
Jorge: And it would be the same for my competitors as well in the telcos space.
Jorge: And why it exists largely is because of the level of smartphone penetration.
Jorge: So if you look at historically 2G phones and then eventually 3G, so smartphone penetration has been relatively low.
Jorge: It’s increased significantly over the last while as we look at the affordability and different propositions around smartphones.
Jorge: So USSD as a channel is a big, big volume driver, largely 2G and 3G focused, 2G and 3G device users that use that channel.
Jorge: Then we have, so I would say that’s sort of step one.
Jorge: Then step three would be the My Vodacom app, which is a very rich experience.
Jorge: And obviously that has real rich capabilities, audiovisual and full smartphone capabilities.
Jorge: Effectively, you can do whatever you would have done on a PC or a tablet, full internet connectivity, and you can do pretty much anything.
Jorge: And then in the middle is what we would call the bridge, and that’s WhatsApp.
Jorge: So we’ll use an OTT service.
Jorge: A lot of consumers are utilizing it.
Jorge: So we’re basically saying we have USSD.
Jorge: We have a WhatsApp channel as an engagement.
Jorge: So you could also send a message to WhatsApp channel, and we will then take that information and we will ingest that data into our platforms, and we will provide the same feedback.
Jorge: What we’re launching shortly is we have Tobii, which is our chat bot.
Jorge: And I mean, Tobii is really I bot spelled backwards.
Paula: Well done.
Paula: I love it.
Jorge: So Tobii is our chat bot, and Tobii will be featured into a lot of the journeys as well.
Jorge: We’re busy just testing voice at the moment.
Jorge: It’s been text primarily.
Jorge: We’re testing voice at the moment, and we should go live imminently with that as well.
Jorge: So we’re just trying to enrich the experience.
Paula: So you mean voice on WhatsApp?
Jorge: Voice on multiple channels.
Jorge: So you could engage in one other format, and we could respond in voice.
Jorge: You could also come in via voice, and then we could respond in voice, which is making sure that from a language perspective, that’s all sorted out, because we have 12 official languages in the country.
Jorge: So we have to start with a few of the main ones.
Jorge: Otherwise, we have a little challenge.
Paula: Oh my goodness.
Paula: So how many languages is your loyalty program currently in, Jorge?
Jorge: So at the moment, it’s in English.
Jorge: We’ve started it purely in English.
Jorge: We already have some elements in a couple of languages.
Jorge: But we started it in English, which is effectively the most common language in terms of business communication.
Jorge: But it will evolve.
Jorge: It will evolve for sure as we expand on the personalization.
Paula: Absolutely.
Paula: Well, I’ve already talked to Toby today.
Paula: Toby was clever enough to know that I’m not a Vodacom customer.
Paula: So wouldn’t send me any Vodabucks, unfortunately, here to Dubai.
Paula: But anyway, I did try.
Paula: But even USSD actually, it’s almost just for me personally reassuring, because I just find that it’s important to cater for all ends of the market, even now.
Paula: So I know every loyalty program that wants to launch wants to be super slick and very sexy.
Paula: But at the end of the day, you need the volume and you need the scale.
Paula: And certainly in most of Africa, I believe USSD has to be a channel that’s included.
Paula: So super happy to hear you’ve included that.
Jorge: Yeah, and it’s tricky.
Jorge: You know, these things are.
Jorge: Let me give you an example.
Jorge: If I can just take it down to a practical level.
Jorge: How do you show a puzzle on a USSD string on a text?
Jorge: It’s really difficult.
Jorge: So you almost have to play.
Jorge: I don’t know if you remember the sort of Scrabble or Hangman, if you like, where you’ve got one letter, a couple of spaces, another letter, and you’ve got to sort of join the dots.
Jorge: And you’ve got to fill in the missing letters.
Jorge: You have to find very unique and creative ways of how to try and create a puzzle element on a text format, because now you don’t have the visual capability.
Jorge: And that in itself is quite intriguing.
Jorge: And there’s a huge amount of creativity behind trying to make sure that at an execution level, it’s actually relatively easy.
Jorge: But from an algorithm and so on in the back room, it’s quite complicated.
Jorge: It’s just how do you present it in an easy way to consumers, in a frictionless way.
Paula: Of course, of course.
Paula: And given the capabilities, for example, with WhatsApp, do you see that also becoming a channel that people can check how many Vodabucks they’ve got and bank their Vodabucks?
Jorge: Yes, for sure.
Jorge: We will obviously allow that.
Jorge: Our primary choice would be the MyVodacom app, because it’s a much better experience.
Jorge: But absolutely, if I have a choice of what would my preference be for everyone to engage with us, it would be MyVodacom app, because it’s a beautiful experience.
Jorge: But you have to cater for the entire market and what channels are available and the most appropriate.
Paula: Yeah, and I think we also have to cater for phones with low memory.
Paula: So I might have a smartphone, but I might not have the capacity to download another app.
Paula: So certainly I’ve looked at programs in the Philippines, for example, and that’s been a core issue.
Paula: If I’m asking a member to subscribe or download, they’re going to have to delete something off their phone.
Paula: And where I live, that’s not an issue.
Paula: In Ireland, where I worked, it wasn’t an issue.
Paula: But again, that’s why I love talking to Global Voices of Loyalty.
Paula: Great.
Paula: The other, I suppose, final area from my side, George, that I wanted to talk about was this idea of coalition.
Paula: So you’ve mentioned levels of ambition.
Paula: I know Vodacom has, as we’ve already said, dominant market share, a very excited proposition and excited team.
Paula: But what do you see the opportunity for coalition?
Paula: Because South Africa historically hasn’t had a coalition program.
Jorge: Yeah, I think there really is an opportunity for that.
Jorge: And the reason why I say that is, if you look at the customer base, our size that we have, then you look at the capability that we have in terms of billing and collecting.
Jorge: So very, very few, if any, have that kind of capability.
Jorge: Then if I look at tender methods or payment methods, and I’ll say you can redeem by airtime, you can redeem by Vodabucks, you can redeem by a debit or credit card, you can redeem by a store value, or you can redeem via an AdvanceMe, because I’m in the financial services space as well.
Jorge: We have a very strategic play there.
Jorge: And we will be integrating that into our latest program, which will be Vodapay.
Jorge: It’s a partnership we’ve done with Alipay, Alibaba.
Jorge: And we intend to go live sort of just at the end of quarter one, beginning of quarter two, next calendar year.
Jorge: And Vodabucks will play a vital role in integrating all of that from a reward and loyalty perspective.
Jorge: So I think that a retailer would absolutely love to put one of their products onto my Vodabucks eShop because of the amount of traffic.
Jorge: And we have a number of products already that have shown phenomenal sales.
Jorge: Kuwai is one of our retailers that we have in South Africa that typically are based in the gyms.
Jorge: They’ve got very much a health food range and smoothies and things like that.
Jorge: And we did a significant amount of turnover in three days where we had them phone us up and say we’ve never done this kind of turnover.
Jorge: And the reason why that happened is we had a launch initiative where if you had X amount of Vodabucks, you could go and redeem for a smoothie of your choice at one of the kuwais.
Jorge: And they’ve never seen this.
Jorge: We’ve just closed off a deal with another retailer for just Coca-Cola as an example.
Jorge: So we’ll be giving away hundreds of thousands and they will be redeemable at a massive footprint around the country.
Jorge: It’s almost creating a marketplace, if you like, through the capability that we have.
Jorge: And when we fully integrate this into Vodapay, then you really have a marketplace because that unlocks all that capability.
Jorge: And then you have the Vodabucks reward program that is the cotton thread, if you like, through this entire organization.
Jorge: So we have an enterprise player, which obviously is public sector, SME, SOHO and so on.
Jorge: We have a financial services player, which is lending, payments, insurance and investments.
Jorge: Those are the four pillars of the strategy.
Jorge: Then we have a consumer player, which cuts across all the segments.
Jorge: We have mass, family and household, et cetera, fixed, mobile, converged.
Jorge: Then we have Vodapay, which effectively creates the marketplace, and Vodabucks will be the underlying loyalty program and reward program throughout.
Jorge: Now, if you think of the partnerships that we have, there’s a wonderful opportunity to co-create, to compete, and we understand that in some instances with one partnership, we will compete on one hand, but we will co-create and we will support each other on the other hand.
Jorge: And I think that flexibility in the new world, in terms of the way we conduct business, is going to be really, really powerful.
Paula: Indeed, and there’s been quite a few conversations on this show, Jorge, which would say exactly the same.
Paula: You know, coalition as a model can be complex because there’s questions about who owns the data and all of these very big questions that have to be answered.
Paula: And as you’ve already acknowledged, you know, negotiating with partnerships does take considerable time, especially at this early stage.
Paula: And obviously those relationships build over time, but it certainly sounds like you have a very big vision for the future.
Paula: And what I particularly like actually is that, you know, online to offline, that footprint you mentioned.
Paula: So what kind of retail stores, is it just the smoothies for now or if you got other partners in the physical world space with rewards?
Jorge: No, we have a massive amount of partners.
Jorge: So just in the food space alone, we have probably in excess of 400.
Jorge: In the retail space, we have over 10,000 in terms of the footprint because of the partnerships that we have in place today.
Jorge: So you could go and redeem one of these retailers for multiple products, which is fantastic because again, the mechanics of the program is that I don’t have to carry any inventory at all.
Jorge: I carry inventory for my core products, which is what I’m good at.
Jorge: It’s what I know.
Jorge: It’s what I understand.
Jorge: But I have zero ambition or skills to sell clothing or smoothies or tinder beans or a Nando’s chicken or anything else for that matter.
Jorge: That is not my core competency.
Jorge: So I rather leave that up to the partners that we’ve partnered with to deliver on their core competency.
Jorge: And we’ve just created this amazing partnership, which will allow this footprint, as you said, to go from online to offline and really get great execution.
Jorge: And we see the redemption of these products or the vouchers for these products being phenomenal uptakes.
Jorge: It’s really, really proving to be successful.
Paula: Indeed, yes.
Paula: We dabbled, I would say, with similar experiences with O2 and with 3 in Ireland, mainly in the coffee space.
Paula: In fact, we didn’t have a big budget or a huge program plan in the same way that you have, Jorge, but it was incredible to see people and how much more I think they valued, not just a currency and an app, which, yes, might be a beautiful experience, but at the end of the day, you’re not sure maybe what it’s worth.
Paula: But then when you go and show up in the juice store, the coffee store, and you get your free drink or your free smoothie, it suddenly becomes actually even viral, I would say.
Jorge: Absolutely.
Jorge: We’ve seen that.
Jorge: It’s been amazing.
Jorge: I’m not even sure what words to use, but it’s humbling and so rewarding and fulfilling at the same time.
Jorge: When you look at some of the social media comments about how chuffed somebody is because they got awarded a Nando’s chicken or the Kauai shake smoothie.
Jorge: In our test phase of this program last year through the summer campaign, as I mentioned earlier, we actually redeemed over a million ice creams.
Jorge: Because we have ice creams as part of a…
Jorge: And obviously an ice cream in summer is just a perfect match.
Jorge: But that’s the kind of volume that you could deliver, given the right partnerships and the good fit.
Jorge: Yes, of course.
Jorge: And making sure that through your big data analytics, the machine is always learning and providing real capability to personalize everything.
Paula: Yeah, absolutely.
Paula: Well, I’m amused, just as you mentioned, big data, Jorge, because clearly we talk about it extensively.
Paula: But I’ve just had a message from my bank about Diwali.
Paula: And culturally, that’s not my thing.
Paula: So I’m just kind of going either somebody’s being lazy or I don’t know what, but I wait for my birthday every year to judge all the loyalty programs of a member of and tell them they’re terrible.
Paula: Anyway, I’m sure you’re doing a much better job, George, than the ones that I’m dabbling with.
Paula: But anyway, listen, it’s an extraordinary program.
Paula: I love what you’re doing.
Paula: Is there anything else that you wanted to mention, George, from your side before we wrap up?
Jorge: No, thank you for allowing me to be on your show.
Jorge: I really appreciate it.
Jorge: It’s an absolute honor to just openly have a discussion around what we’re doing.
Jorge: I’m really confident and nervous at the same time.
Jorge: We’re definitely on the right track.
Jorge: There’s no question about that.
Jorge: We’re doing the right stuff.
Jorge: It’s about execution and so on.
Jorge: These are big bold steps.
Jorge: As I said, nothing ventured, nothing gained.
Jorge: We really are prepared to take those risks.
Jorge: We’re putting our money where our mouth is.
Jorge: We’re building real capability.
Jorge: I’m super excited.
Jorge: I think it’s phenomenal.
Jorge: It’s extraordinary.
Jorge: We intend for it to be hugely successful and we will do everything in our power for that to happen.
Jorge: It will evolve.
Jorge: This is the early stages.
Jorge: I just hope that our consumers, that’s the real measure, really love the program.
Jorge: As I say, early days, they’re saying, yes, it’s amazing.
Jorge: We love it by the level of engagement, etc.
Jorge: So it’s on us to ensure that we keep the journey, keep evolving, listen to our customers.
Jorge: I’m really, really, really passionate about customer centricity.
Jorge: The voice of the customer is key.
Jorge: It’s not about what we think.
Jorge: We test everything before we take it to market.
Jorge: And so for me, that’s the real sort of gain.
Jorge: If we can make a difference in someone’s lives and maybe just in ending, we’ve already issued two 500,000 rand prizes towards a dream house to two lucky consumers.
Jorge: Very heartwarming when you hand that over and you touch someone’s life in that way.
Jorge: It’s really, really significant.
Jorge: We’ve already issued over four and a half million in prizes.
Jorge: So there’s real value flowing through.
Jorge: This is not a spreadsheet exercise or a PowerPoint exercise.
Jorge: This is touching people’s lives in a very real way.
Jorge: And that’s for me the beauty of the program.
Paula: Yes, yes.
Paula: Well said, Jorge.
Paula: And I can see not just in the everyday moments of fun and joy that you’ve created, you know, just to kind of get the program up and running.
Paula: But I did read the press release about the last 500,000 rand giveaway, which just for listeners, maybe it’s about 30,000, 32,000 US dollars as a prize, you know, just for shaking your phone.
Paula: So again, at the very early stages of the program, it’s incredibly rich, definitely making a huge difference in customers’ lives.
Paula: And what I was thinking, as you were saying that, Jorge, there’s a phrase that I saw from Jeff Bezos, who really described the Amazon Prime program, that he has this idea that he wants to build something that’s so good that you would be irresponsible not to join.
Paula: So that’s exactly what I’m hearing with Vodabucks.
Paula: It’s like, you know, we’re just going to keep making it better.
Paula: So yeah, I think you’re doing extraordinary work.
Paula: I’d say Vodacom is very lucky to have you.
Paula: So just from my side, Jorge Mendes from Vodacom Africa, thank you so much from Let’s Talk Loyalty.
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.
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