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: So, welcome to episode 27 of Let’s Talk Loyalty.
Paula: These are unusual times.
Paula: It would feel remiss if I didn’t comment on them.
Paula: So, we will have a brief chat about that as we get into today’s episode.
Paula: Today, I am speaking to what I would say is one of the leading ladies of loyalty, a woman by the name of Amanda Cromhout, based down in South Africa.
Paula: Amanda is the founder and chief executive officer of a specialist loyalty marketing agency called Truth.
Paula: And so many people have told me that I must have Amanda on the show.
Paula: I’m absolutely delighted to have her online today.
Paula: So, Amanda Cromhout, welcome to Let’s Talk Loyalty.
Amanda: Thanks, Paula.
Amanda: Thank you very much.
Amanda: It’s an honor to be on your show.
Amanda: Thank you.
Paula: Great.
Paula: It’s super exciting.
Paula: And I know we’re having some internet difficulties, so let’s hope this records perfectly.
Paula: So, it seems there’s a lot going on in the world at the moment.
Paula: And before we came on air, Amanda, we were obviously briefly comparing notes about what is happening in each country, I suppose, with the coronavirus.
Paula: So, I’d love just to give a sense, because you’re in South Africa, we don’t have many listeners, I don’t think in South Africa, can you just give us a sense of what’s happening down in the market at the moment with this particular health situation?
Amanda: Yeah, sure.
Amanda: So, there’s about 60 confirmed cases.
Amanda: So, I know it’s significantly less than some of the other markets or other countries.
Amanda: But I’m very, very impressed with the South African government.
Amanda: The president, Silver Rampoza, last night declared a state of emergency and has put some very severe restrictions and policies in place, like closing the schools for a month, really saying only travel domestically if it’s absolutely critical, and no gatherings of over 100 people.
Amanda: So, we obviously are very, very concerned that it doesn’t spread further and doesn’t spread into areas of the country that’s where it could spread probably a lot faster.
Amanda: So, it’s really a big concern, but I think we’ve been able to copy the rest of the world and hopefully put stuff in place to curb it quickly.
Paula: That’s impressive to hear, Amanda.
Paula: So, thank you for that.
Paula: And yes, in fact, just before we also came on air, I was watching a fascinating talk that Bill Gates gave in 2015, and it’s almost like he literally could see this coming, which clearly he did.
Paula: So, I’ll put a link to that in the show notes, but it was incredible for him to have flagged that so long ago.
Paula: And yet, here we are learning from each other on the fly.
Paula: So, at least, I suppose, your country and your president is doing that.
Paula: So, okay, so on that note, let’s move on to our topic of loyalty.
Paula: And I suppose just for listeners, the main reason that we chose this particular time of year to talk to Amanda was because of a very well-respected white paper, which Amanda produces in conjunction with a number of partners.
Paula: I’m sure she’ll tell us about those.
Paula: And I know it’s the fifth edition of this loyalty white paper.
Paula: It is specifically focused on the South African market.
Paula: However, just because the show is all about ongoing learning, and as human beings, I don’t think we’re that different around the world.
Paula: I think there’s going to be really fascinating insights from this white paper that will be relevant to everyone listening.
Paula: So, Amanda, as you know, I always start with just asking for, I suppose, a favorite loyalty statistic, and you probably have loads given that the white paper literally came out last week.
Paula: So tell me first and foremost, what is your favorite loyalty statistic?
Amanda: It is very, very strongly that 72% of South Africans use loyalty programs.
Paula: Okay, fantastic.
Paula: And are you pleased with that number?
Paula: Do you think there’s potential for more or how does that feel?
Amanda: Well, that’s a great question, Paula.
Amanda: So thank you.
Amanda: So actually, versus last year, it has declined slightly from 75%.
Amanda: And versus 2017, it was 79%.
Amanda: But versus five years ago, it was 67%.
Amanda: So there’s been an overall slight increase, but a three year slight decrease.
Amanda: But I think in line with, you know, sort of shopping habits and consumer confidence, I think it’s expected.
Amanda: You know, the dominance of the loyalty programs with retail sectors, and less spending, less discretionary spending, it’s not surprising.
Amanda: You know, people are spending less, they’re using their cards less.
Amanda: But at the end of the day, I often say to marketeers, or press, or anyone who we talk about is, how many other marketing activities are in the marketplace and get a 72% usage rate?
Amanda: So from that point of view, that’s why it’s one of my favorite, because I think it’s incredibly powerful.
Amanda: It’s a strong number in its significance.
Paula: Yeah, yeah.
Paula: No, and that’s a really good point, Amanda, I hadn’t really thought about positioning it.
Paula: And actually, the reason I always ask that question is because I’ve often felt that we as as loyalty professionals have to defend our programs a lot of the time.
Paula: And we really do have to remind people very regularly in different parts of our businesses as to what we’re driving.
Paula: So, thank you for that, I think that’s a really good one.
Paula: So there’s lots I want to go through with you, Amanda, obviously, I know you’ll have loads of conclusions to go through with us.
Paula: But before we get into that, I’d love to just go through, I suppose, your own professional background.
Paula: I know, for example, you worked like me in British Airways for many years, and I have a feeling we must have overlapped.
Paula: I was 1996 to 2000.
Paula: Yes, but probably in different countries.
Paula: And we’ll probably chat about that more offline.
Paula: But you did, I think, a whole decade in BA and then some other amazing roles in South Africa in, I think, Woolworths.
Paula: So maybe just give us a sense of your loyalty background.
Amanda: Great.
Amanda: So, yes, I started British Airways on the graduate management program, marketing program.
Amanda: And it was simply the best career start I think any young professional could wish for.
Amanda: And literally, within the first three months, I was getting involved in what we called at the time the co-branded Frequent Flyer bank cards.
Amanda: So I used to fly around Europe, helping British Airways consolidate its relationships with banks across Europe and create the co-branded credit cards that now are still in place and extremely popular.
Amanda: So that was sort of role number one, and then throughout various other roles, everything we did revolved around the executive club.
Amanda: So I was never involved in the global brand of British Airways.
Amanda: I was always involved in the Frequent Flyer side.
Amanda: And ultimately, I was area marketing manager for Africa, Middle East and India, to the executive club for those three territories reported into the role I looked after for marketing.
Amanda: So that was a super, super exciting experience and a really good starting point, I think, for loyalty.
Amanda: And then my personal life brought me to South Africa, hence my surname Cromhout with a very English accent.
Amanda: So often confuses people in South Africa because they’re expecting a South African accent and I’m very British.
Amanda: And my husband’s South African and then we settled here.
Amanda: And I was very, very fortunate enough to work for Woolworths, which is a premium retailer in South Africa, often compared to Marks and Spencer’s in the UK, and food and non food.
Amanda: And I had a phenomenally exciting role where I looked after everything we called customer, which was CRM, loyalty, the MySchool program, data analytics, research, direct marketing, and so on.
Amanda: And that was a really great experience and a phenomenal brand to work for in a market like South Africa.
Paula: Well, truly extraordinary, Amanda.
Paula: I want to hire you already.
Paula: I know you can help me with stuff.
Paula: And yes, I mean, Woolworths was a brand in the UK market as well.
Paula: I think I’m right in saying, but without the same level, as you said, of premium positioning as Woolworths South Africa.
Paula: So that’s important, I know, to clarify.
Paula: In fact, do you know, does Woolworths in the UK still exist or I think it’s gone?
Paula: No, it’s long gone.
Paula: It’s gone.
Amanda: It’s long gone.
Amanda: I think it’s vastly different from the UK Woolworths, which was much more a mass market retailer.
Amanda: This is in South African terms, it is the premium retailer.
Paula: Yes.
Paula: OK.
Paula: And I know it’s hugely well respected and I know it is premium.
Paula: And again, I’ve talked about certainly the MySchool program on the show before.
Paula: And I’ve also talked extensively with the current head of the executive club in the UK.
Paula: So plenty of overlap.
Paula: It’s actually a very small world of underwear where loyalty is concerned.
Paula: So I know it is the fifth edition of your white paper.
Paula: I would imagine that there’s an extraordinary amount of work that goes into it, given what I’ve seen and some very exciting conclusions.
Paula: As I said at the beginning, I don’t think human beings are that different in the world, but we’ll get into some of the key conclusions around it.
Paula: But tell me first and foremost, I suppose, why did you start on such a big project?
Amanda: I think we were lucky enough to work in the marketplace with a phenomenal company called Y5, who are a research organization, and they produce an annual study called BrandMap, which has over 220 questions, 26,000 South Africans, so very significant volume of responses.
Amanda: And through the relationship with BrandMap or with Y5, we determined that there was a real opportunity to ask loyalty-specific questions, and as the years have developed, so over the five years, we’ve had more involvement in the loyalty questions and an opportunity to extract the different insights.
Amanda: So year on year, we’ve been able to produce the same responses, not the different responses, but to the same questions, so we get more of a longitudinal study.
Amanda: But more excitingly, each year, we are able to probe particular issues or particular areas we want to investigate.
Amanda: So the brand map team are absolutely critical to this.
Amanda: This is their data.
Amanda: It’s their research.
Amanda: Amazing.
Amanda: And it’s part of a bigger project.
Amanda: So we ride on the back of that in partnership with them, but we write the white paper.
Paula: Nice.
Paula: Yeah.
Paula: Well, that makes I think everybody’s lives a lot easier, Amanda.
Paula: I can imagine now if you’re trying to conduct that study, as well as do the thought leadership piece, it probably would be too much for one agency.
Paula: So they sound like great partners.
Paula: And obviously you’ve done it now consistently year on year.
Paula: And I guess the next obvious question from my side is, if you’re probing a particular question each year, what was it that you decided to probe in the white paper that you’ve just released?
Amanda: There were two particular questions that actually there were three big questions, in my opinion, that were new to this year.
Amanda: And those are the one question we said, if you had to choose one loyalty program, which one would it be?
Amanda: So we forced members not to say, I’m a member of this one and that one and the other one.
Amanda: We said, okay, we hear that.
Amanda: But now you’ve got to choose one, which one is it?
Amanda: So that obviously caused a lot of excitement for the market to see which was the one.
Amanda: And then we also ask each year, we’ve realized each year that when we detract, we conclude that say 72% of South Africans do use loyalty programs, therefore 28% don’t.
Amanda: So we ask the question, why don’t you?
Amanda: So that’s also very important from a practitioner’s point of view.
Amanda: What is it that we’re getting wrong?
Amanda: How do we get around that and improve that?
Amanda: And then the last of the big three new questions is really helping those of us involved in helping brands design lots of programs to be commercially viable, is does it actually really change behavior?
Amanda: Is it just a gimmicky marketing tool or is it worth all the effort in the financial and time investment?
Amanda: So we asked the question, what attributes is it changing about your behavior because you’re part of this loyalty program?
Paula: And I’m going to have to start there, Amanda.
Paula: The first two are obviously fascinating.
Paula: But as I started with, a lot of people do end up defending loyalty programs a lot of the time.
Paula: So tell me, what did you conclude?
Paula: Does it change loyalty behavior?
Amanda: It does change behavior.
Amanda: So in the conclusion of the white paper and the last two pages, we’re able to unpack this.
Amanda: So we see, for example, that we see customers, the questions we asked is, does it change where you shop, what you buy, where you buy fuel, where you bank, or all of the above?
Amanda: So if I add all of the above to the actual number, the responses themselves because they are inclusive, we’re effectively seeing 91% of customers are saying, it does influence where I shop.
Amanda: Which is a phenomenally high figure.
Amanda: So we’ve never seen that sort of insight before.
Amanda: And then the products that I buy, we’re actually seeing 62% are saying, it also influences the products I buy.
Amanda: And fuel is 61% and where I bank is 56%.
Amanda: Wow.
Amanda: So you can see obviously it’s highest in retail and then the products I buy within the retail store.
Amanda: And no surprise that fuel and banking would be less because of human behavior about, will I drive out of my way to get a discount or a loyalty benefit?
Amanda: Or will I really change my entire banking setup for it?
Amanda: But still significant numbers and incredibly powerful for us to see that because it’s the first time we’ve seen it.
Amanda: And as you say, what I loved about your introduction, Paula, is I really believe that South Africans aren’t, they are a unique, wonderful nation.
Amanda: But in terms of loyalty behavior, I don’t believe they’re vastly different from the rest of the world.
Amanda: So I’m hoping these insights could be useful for some global markets as well, because I think the South African behavior around loyalty will be the same as, I’m sure we’ll see it maybe in other markets where it’s different competitiveness or a more mature market.
Amanda: It could be different.
Amanda: But otherwise, I think these are quite globally transferable.
Paula: Yeah.
Paula: Yeah.
Paula: And I completely agree.
Paula: And as I said, I don’t believe human beings are that different.
Paula: I think what I tend to think is, okay, let’s go with the assumption that at least 80% of what’s going on in one market is going to go on in most markets.
Paula: And then there’s the localization and tailoring.
Paula: And again, our common background in British Airways definitely would favor localization.
Paula: I’ve often described the South African loyalty market in talking to some people working down there like yourself, Amanda, as quite a mature market, though, for loyalty.
Paula: I mean, would you share that given that you, you know, I’m sure you’re looking around the world?
Paula: Do you feel that South Africa is a mature loyalty market?
Amanda: I do now, yes.
Amanda: So we’ve I’ve been in the game of Truth, the company called Truth, for the last 11 years, very focused on purely on loyalty consultancy.
Amanda: So 11 years ago, I would have said less so, but over the 11 years, I’ve definitely seen a rapid expansion and uptake in loyalty from the from the brands that offer it and from the consumers.
Amanda: Where I think so I’ve always said this because I have the opportunity to, you know, like a few of us lucky enough to travel the world and see loyalty professionals and talk to them and so on.
Amanda: So I am able to compare them.
Amanda: So where I’ve said we’re comparable is the volume of programs as a penetration of the number of brands out there.
Amanda: But I think we’re less sophisticated in how we actually use the programs to the benefit of the brand operating them.
Amanda: I think there’s a lot more that the brands can do in terms of I think they’re very good at getting the signups, very good at talking about we’ve got lots of members who signed up and using it, but really engaging intimately with personalization and proper use, sense, you know, good use of data.
Amanda: I think we’ve still got a very long way to go.
Paula: Okay, okay.
Paula: Well, clearly that’s going to keep you busy for the foreseeable future.
Paula: So good to know that the small decline that you mentioned in usage doesn’t mean that we’re all going to not need our loyalty programs.
Paula: It sounds like we just need to run them better.
Amanda: Yeah, I think so.
Paula: I loved a particular statistic, Amanda, that I was reading in the White Paper.
Paula: And actually, I will mention at this stage, and obviously, again, at the end, we’ll put links and everything to the White Paper.
Paula: It is available free of charge on your website.
Paula: So maybe just give us your website address so that listeners can make sure they can access your White Paper as and when they’re ready.
Amanda: Yes, it’s very straightforward.
Amanda: And then to access the White Paper, it’s simply a forward slash articles forward slash White Papers.
Paula: Perfect.
Paula: Okay, forward slash articles forward slash White Papers.
Paula: And that’s free of charge.
Paula: Obviously, anyone can go in and have a read and download a copy.
Paula: Brilliant.
Paula: And that’s just important just to make sure we’re not teasing people with information they can’t go and access for themselves.
Paula: And yes, there is a fantastic statistic actually in there, Amanda, that I was just reading about.
Paula: You mentioned specifically a program that launched at the end of 2019, a grocery retail program, which I believe is called Extra Savings by a retailer by the name of Checkers.
Paula: And you gave a phenomenal quotation that they signed up a million people in one week when they launched.
Paula: So I’d love to hear anything that you can tell us about that program.
Amanda: Yeah, so we had the opportunity to…
Amanda: I was actually on a radio show the week it launched, and I was followed on the radio interview by Neil Shrouder, who’s the Chief Strategy and Innovation Officer at…
Amanda: It’s called ShopRite Group of Companies, and one of their retail brands is Checkers.
Amanda: And the other main retail brand that you may have heard of is ShopRite.
Amanda: And Neil released those stats, and then we actually interviewed him.
Amanda: It’s on page 14 of the White Paper.
Amanda: So what I think they did phenomenally well is they had a very quick sign-up process.
Amanda: They declared it was less than three minutes, and I personally experienced it to be so.
Amanda: And they had a multi-channel sign-up process, so you could sign up via WhatsApp, via the app, via USSD, via their websites, or in-store.
Amanda: So they really focused on an acquisition play because they’re quite late to market in a sense of, you know, they’ve just launched.
Amanda: But obviously, strategically, the timing didn’t seem to make any difference.
Amanda: But I think customers were waiting for it.
Amanda: Customers were excited by it because checkers didn’t have a loyalty program before, at this point in time.
Amanda: And yeah, the results, Neil’s claims is it was one million customers in the first week alone, which is great.
Paula: My goodness.
Paula: Well, he is a definite target guest now for me on the show, Amanda.
Paula: So that’s super exciting again, just to learn from the experts.
Paula: And one thing that I just, you know, again, as with my consumer hat on, just the simple fact that it’s called Extra Savings.
Paula: As a loyalty program, I mean, it really delivers on the simplicity of what is the value proposition.
Paula: So I think that they actually nailed it just with something as simple as getting the naming right, you know?
Amanda: Yes, and I think what they did at launch as well is the card color, the brand of the loyalty program is very, very standout orange.
Amanda: So literally, they painted the stores from top to toe in this bright orange.
Amanda: The card is a fluorescent orange color in your wallet.
Amanda: So they have massive standout appeal.
Amanda: I hope in six months’ time that physical presence is the same, that I walk around the store and go, there’s real value for me in extra savings.
Amanda: So that’s their challenge is to keep up the energy and keep up the customer excitement about it.
Paula: Yes, you’re absolutely right, Amanda.
Paula: And I think as long-term professionals, both of us have seen programs going through that life cycle, I guess, of high investment, high energy, high excitement, and then something else comes along, which is shinier and newer and sexier, and all of a sudden loyalty feels like a bit more of a chore.
Paula: So I totally agree.
Paula: Let’s keep the energy.
Amanda: Yeah, absolutely.
Paula: Great.
Paula: You mentioned the three topics, Amanda, so I’d love to go back to the second, I suppose, key area that you probed in this year’s report about why South Africans don’t use loyalty programs.
Paula: So tell us what you learned from that particular area of questioning.
Amanda: Yes, so there are two parts of this question.
Amanda: The first one was to customers who said they don’t use programs, and we asked them why don’t you use the programs.
Amanda: And then we asked customers who said they do use programs, what do they find frustrating about programs?
Amanda: So there’s a lot of similarity in both, actually.
Amanda: So I’ll answer the first one and then add anything extra that comes across from the existing users.
Amanda: So the main reason why they don’t use programs is I don’t spend enough to earn decent rewards.
Amanda: So obviously, we talked to the fact that you could actually put in place interventions that help customers feel value sooner rather than a long waiting game.
Amanda: The second one is I’m just not interested, so I don’t really want to labor too long on that one.
Amanda: But then there’s a few other measures worth mentioning.
Amanda: So they are too hard to understand and they are too much hassle, were also named as reasons why I don’t use.
Amanda: Obviously, those of us in the industry know that you’ve got to keep the program simple and hassle free.
Amanda: There’s some response around personal information, like they want too much personal information or I don’t like the way they spam you, which actually is answered in a lot more detail in the white paper, because we did ask actually also new questions around how consumers feel about the use of personal data in loyalty programs.
Amanda: That’s also a very interesting section of the paper, which was very topical for all of us.
Amanda: And then probably the last, I know there were two other points worth mentioning.
Amanda: It’s too hard to redeem points, so that’s great old, you know, I’m not getting value from the redemption, but it’s just a mission, so that’s being felt.
Amanda: And the last point which we debate separately in the white paper is around what is your identifier to be in the loyalty program?
Amanda: Do you have to swipe a card or use an app?
Amanda: Well, and some customers here said, I don’t like the cards in my wallet.
Amanda: But what is fascinating when we actually asked the direct question over which identifier do you want to use, we found an overwhelming 73% said, I want to use a card.
Amanda: And only 23% said, I want to use an app.
Paula: Wow.
Amanda: So still very, very sort of traditional, out of the digital age and still wanting to use a traditional card.
Amanda: And if I move to the other question that we asked actual users, what do you find frustrating about the program?
Amanda: A lot of the responses were similar, but the other ones that came out separately were offers aren’t relevant to me.
Amanda: So that’s a big frustration, obviously, and expiring points, which is obviously a huge frustration and a great topic for lots of debates.
Amanda: And then actually a complicated registration process.
Amanda: And because of that, that’s almost why we highlighted checkers, extra savings, and what a great job they’ve done in the sign up process.
Paula: Great, great.
Paula: Well, we’ll definitely have to explore that some more.
Paula: But amazing insights there, particularly on the identifiers piece, Amanda.
Paula: And I’d love to ask just as a general thing, I doubt it came out or I doubt you worked on it in the research, but just in general in South Africa, has anyone started doing, for example, payment linked loyalty as using your payment card as the identifier and not needing an app or a plastic card?
Paula: Or is that still not happening in your market?
Amanda: There are a few restaurants.
Amanda: Does the term QSR work globally?
Amanda: I’m not sure.
Amanda: Quick service restaurants.
Paula: Correct.
Paula: Quick service restaurant.
Amanda: So more of the QSR offerings have integrated payments and loyalty in an app.
Amanda: So you preload your credit card and use your app to pay and accumulate loyalty benefits.
Paula: Great.
Amanda: So that is actually becoming more and more commonplace in QSR, which is great to see, but less so, interestingly, in traditional programs.
Amanda: So we are, yes, exactly.
Amanda: And then the actual payment linked loyalty to a credit card is not, apart from financial services offerings, like the retail banks obviously have their loyalty points linked to the credit card or debit card.
Amanda: But in terms of a retailer, there are talks of it coming to the marketplace, but it isn’t in existence yet.
Paula: OK, good to know.
Paula: Good to know.
Paula: OK, well, I love that insight and amazing that they’re saying one thing and yet, well, I suppose contradicting themselves in that saying, yes, we don’t like our wallets stuffed, but actually, can I please have a plastic card, another one, to add to my stuffed wallet?
Amanda: Yes, but kind of that actually was one of the smallest reasons why they don’t use it.
Amanda: It was the smallest.
Amanda: So it was quite correlates.
Amanda: It corresponded quite nicely, but still for us, a real shock that it came out 73% of people prefer a plastic card.
Paula: OK, so our journey to digitalization is clearly still in its early infancy, let’s say.
Amanda: And obviously, the BrandMap team or the BrandMap study looks at the data across gender, age, income, and we do see slight changes across different demographic groups, but not enough for us to move dramatically away from that main stat.
Amanda: We do see demographic differences have impacts on other parts of the paper, but ironically, we expected the youth to be sort of, no, we must have an app, and cards are for dinosaurs, and none of that came out at all.
Paula: Oh, my goodness.
Paula: Well, I suppose it proves the point of the importance of doing white papers, and doing them as regularly and as professionally as you guys do.
Amanda: Thank you.
Amanda: Yes, thanks.
Paula: Cool.
Paula: And then I suppose the one big area you probed, as you said, the big question in terms of if you had to choose the one, tell us what program or what card or what overall proposition came out top?
Amanda: Well, I think just before I answer that, there is another question that has been in the white paper for five years, because if I only answer the one, I’m not doing credit to the overall most used program.
Amanda: So we always ask the question year on year, what is your most used Lord’s program?
Amanda: And Clicks Club Card, which Clicks is a pharmaceutical health and beauty store, so a bit like Boots in the UK.
Amanda: And they have been top of the ranking for the last three years.
Amanda: And they are the same again this year.
Amanda: And then Pick and Pay, which is a grocery retailer with a lot of other merchandise categories as well.
Amanda: It’s not just grocery.
Amanda: Pick and Pay is number two, and in third place, we see Dischem, benefit program.
Amanda: They are also a competitor to Clicks with the health and beauty environment.
Amanda: So the top three, we see health and beauty retail, and then health and retail, grocery retail, and then Dischem, which is health and beauty again.
Amanda: And then obviously, we see the first financial services brand appear at number five, which is F&B E-Bucks.
Amanda: F&B, you must have heard of, I’m sure, in your show previously, as one of the big retail banks in South Africa, and E-Bucks is their program that’s been around for many years.
Amanda: So that leads nicely into the next question, which was, well, which one can you simply and utterly not do without?
Amanda: And the cross-check we put in place was if a customer set a particular loyalty program, we had to make sure they were actually a member of the program by their previous responses.
Amanda: We didn’t want someone saying, I can’t live without Clicks Clubcard, but maybe haven’t ticked Clicks Clubcard earlier as a brand that they are allowed to bring their own member of.
Amanda: Would that make sense?
Amanda: So they have to be using the card or the program.
Amanda: So the overall winner for the program you can’t live without is F&B E-Bucks.
Amanda: And what’s particularly interesting about this question is the top six brands are all financial services.
Paula: Wow.
Amanda: So in the previous question over what are your most used loyalty programs, the top four brands are retail and then number five is retail banking.
Amanda: And then in this one question of what can’t you live without, the top six are financial services.
Amanda: So I just love that because actually if a brand like F&B E-Bucks or number two is Standard Bank, you can’t, also another retail banker.
Amanda: And then Discovery Vitality comes at number three because I know you’ve recently done a show about Vitality.
Amanda: So what’s fascinating about that is they’re obviously getting it right in the sense of the integration to the core product and service proposition that makes up their brand.
Amanda: It’s not an add-on.
Amanda: It is an integral part of everything else I do with that brand.
Amanda: And therefore to separate that brand and the loyalty program is too difficult.
Amanda: So they’re the one.
Amanda: If I enjoy using Vitality or I enjoy using E-Bucks or FMB, then E-Bucks is that loyalty program that I can’t live without.
Paula: Okay.
Paula: Well, well done, E-Bucks.
Paula: Sounds like they’re doing an incredible job.
Paula: So definitely, as I said, another one to put on the research list to make sure that we understand it in more detail.
Paula: And I guess then, I mean, they’re the main areas.
Paula: I know the report.
Paula: I think it’s what 48 pages, Amanda, in total?
Paula: Something like that.
Paula: 42.
Paula: And again, having read it myself, there’s an incredible amount of more value and the insights that you’ve already shared here today.
Paula: Is there anything, I suppose, that really surprised you, given that you’re kind of five years in, and again, you’ve got, you know, an incredible amount of expertise with your partners in Wi-Fi and BrandMap?
Paula: Is there anything that I suppose surprised you in this year’s White Paper?
Amanda: I think the two areas where we were a little bit surprised, one I’ve already spoken about, which is the loyalty card versus app or cell phone numbers.
Paula: Yeah.
Amanda: So that really surprised me, because last year we asked the question, and I’ve spent the last 12 months talking this circuit with, or working with clients saying, oh, we’ll see this change next year.
Amanda: And now it hasn’t changed.
Amanda: So that is a pity in a way, but it’s the reality, so great.
Amanda: We’ll report on the reality.
Amanda: And then the other area that is a surprise, I don’t know if it’s a surprise, but it is quite an alarming change, is we started to see the younger generation, so that’s 24 and under, so 18 to 24, we’re always tracking behind the overall average user.
Amanda: So not surprising, because there’s less disposable income, they’re spending less, they’re using programs less, but we were starting to see the gap narrow quite significantly year on year, whereas this year, it has just fallen straight back, like dramatically back.
Amanda: So overall, in last year, we saw, or say two years ago in 2017, because the data obviously was run in 2019, we saw 67% of the under 25 saying, yes, I use loyalty programs.
Amanda: That’s fallen right back to 45%.
Amanda: And where we’ve seen the biggest impact is in the trendy fashion retailers, which typically are overindexed by usage for the under 25.
Amanda: So they are still spending as much as they always have in the essentials like grocery or health and beauty, but have dramatically cut back on their disposable fashion or the fashion spend basically.
Amanda: So that’s because of financial pressure or possibly also the new…
Amanda: Do I really need to have a new outfit?
Amanda: I’m actually fine in this outfit because there’s a lot of things going on in the world and I want to be conscious that I don’t need to keep changing my beautiful clothes.
Amanda: So I think it’s almost disappointing that it’s fallen back because we have started to see this gap getting less.
Amanda: But the reality is that the loyalty programs in South Africa are not speaking as well to…
Amanda: Well, I don’t know if the reality is because they’re not speaking as well to the youth or simply that the youth have switched their spend behaviour overall.
Paula: Yeah, I mean, that is alarming to hear, Amanda.
Paula: And again, if you are running that research right now, given how dramatically the world is changing, there might be other explanations.
Paula: But obviously, this research was conducted throughout 2019.
Paula: And if there’s a massive and critical upcoming generation, which is disengaging, that’s definitely an alarming statistic.
Paula: And another thing actually I did learn just from reading the white paper as well is you mentioned that South Africa is the second most price sensitive market in the world.
Paula: And again, I know there’s been tough economic times.
Paula: Indeed, there may still well be.
Paula: So it almost sounds like there’s a bit of a perfect storm going on right now for South Africa.
Paula: Would that be fair to say?
Amanda: Definitely.
Amanda: So the statistic of the second most price sensitive comes from a study by Nielsen.
Amanda: And very much so.
Amanda: There’s very much pressure on the consumer spend.
Amanda: And I do need to add that this study is based on individuals whose average household income, which the international markets might not mean very much, but the household income is 10,000 rand.
Amanda: But just to put that into context, basically, it isn’t a requirement for you to do this survey, but that is what is the result of the participants of the survey.
Amanda: And that basically means that economically active.
Amanda: And the statistics within the whole of South Africa means that the 10,000 rand household income cut off represents about 82% of total income of the country.
Amanda: So it’s only 18% of the country that isn’t captured from this research effectively.
Paula: And I’ve checked on just what that is in international currency.
Paula: That’s about $615 US monthly household income.
Paula: So that’s basically the profile of the people that you were speaking to.
Paula: And as you said, that’s the vast majority of the, as you said, commercially active South African consumer market.
Amanda: Yes.
Paula: Well, definitely some learnings there, as you said, some concerns in terms of whether, as you said, it’s the underlying zeitgeist, whether there’s a more socially conscious trend emerging underneath.
Paula: It certainly sounds like there’s something like that going on as well.
Paula: Or maybe it is that the programs are just feeling irrelevant to that particular demographic.
Paula: But again, a lot more work to be done is what I’m hearing.
Paula: And again, something that we can check in our own markets around the world.
Paula: I guess the final question I wanted to ask Amanda, and obviously then you can add in anything else that you feel listeners would be interested in.
Paula: Is there anything else that you think, I suppose, in terms of trends for loyalty practitioners listening that they should be thinking about going forward now, let’s say for the next three, four, five years, that you felt that came through in your research, that people are asking for more of, or even that you hear, I suppose, even day to day running your own agency?
Amanda: Yes, so the age old question is what do consumers actually really want out of a loyalty program?
Amanda: And year on year, we’ve seen no change in the domination of cash, please.
Amanda: We want cash.
Paula: Yeah.
Amanda: But at the end of the day, as loyalty practitioners, we’ve got to be able to make this commercially viable to last more than a short-term campaign.
Amanda: So it’s really being able to balance.
Amanda: So on page 28 of the white paper, or 27 and 28, we unpack all of the other opportunities of what consumers would be happy with.
Amanda: And then we break it down by demographic mix.
Amanda: So I think without doubt, money is the main currency, without question.
Amanda: And I know that in some international markets, that maybe is slightly less the main main currency.
Amanda: So I think in our market, that very much still dominates.
Amanda: But there are other opportunities.
Amanda: And I think brands can get super clever if they are more creative and prepared to use their data, like all consultants, I’m afraid we have a few buzz terms.
Amanda: So we’ve got what we call the overt versus covert.
Amanda: It’s not really a truth saying, but in your overt strategy, shout about the money, but in your covert strategy, look at what your consumers want to use your data and give them extra value, give them love.
Amanda: I often talk about one of my favorite experiences when I was General Manager for South Africa for British Airways years ago.
Amanda: One of the most powerful thing we did covertly was we picked up the executive club list.
Amanda: We looked at who our top customers were, and as an ex-go, we phoned them, and we talked to them.
Amanda: We said, you fly on us a lot.
Amanda: How can we help you?
Amanda: I’m the General Manager of this country for British Airways.
Amanda: How can I help you?
Amanda: And I promise you, there is no more powerful strategy.
Amanda: So if a brand can just do that to scale if necessary, or maybe not necessarily to scale, and just make it happen, instead of just this commercialization, just really get to the heart of your consumer.
Amanda: And the data is there.
Amanda: It’s always there to be able to understand.
Amanda: Brands sometimes just don’t go into the covert space enough.
Paula: Yeah, and I love that recommendation, Amanda.
Paula: I really think it shows a lot of integrity.
Paula: And as a consumer, I know for sure that if any senior person in a brand that I’m engaging with took the time to make that happen, there’s just a wow factor that no marketing communication that’s obviously scaled would ever be able to achieve.
Paula: So I think it’s brilliant advice.
Paula: And at the end of the day, we know the Pareto principle.
Paula: We know those numbers are actually quite small.
Paula: And if it’s only to sit down once a week for an hour and to say, I want to talk to my customers, I mean, surely that has to be the simple, single most important.
Paula: And again, loyalty managers can do it.
Paula: It doesn’t have to be the managing director or C-suite.
Paula: You know what I mean?
Paula: So it is just somebody senior enough to go, I genuinely care.
Paula: So tell me what you think.
Paula: I just think that’s a lovely idea.
Amanda: Great, great.
Paula: Wonderful.
Paula: So that’s certainly it from my side, Amanda.
Paula: Was there anything else you wanted to mention for listeners?
Paula: You can obviously just remind us of your website address for people who do want to download the white paper.
Paula: But are there any other kind of key points that you think are important before we close?
Amanda: I think one area we didn’t touch on, but I’ll leave it for the listeners just to read in the white paper, is the use of data because obviously everyone’s terrified of consumer response to the use of data.
Amanda: Yeah.
Amanda: And what we saw is actually, I think if you use it responsibly, there are some customers who say you shouldn’t use it at all.
Amanda: You must not.
Amanda: I’ll avoid programs that use my data.
Amanda: But also equally, it was, I don’t mind as long as it results in a better offer or better deal for me.
Amanda: I don’t mind as long as I know you’re doing it.
Amanda: And we saw some slight differences in the age groups and gender groups over how they feel about that.
Amanda: So it’s something not to run away from and not to assume that it’s just the big, bad data approach.
Amanda: That as long as you’re transparent and honest and do it with respect and make sure it yields with a better response for the member, then get on with it, but do it properly.
Paula: Yeah, yeah.
Paula: More great advice.
Paula: Amanda Cromhout, I’ve learned so much today.
Paula: It’s been an absolute pleasure having you on the show.
Paula: So I just want to say thanks a million from Let’s Talk Loyalty.
Amanda: Thank you.
Amanda: Thank you very much.
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.
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Paula: Of course, I’d love your feedback and reviews, and thanks again for supporting the show.
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