#115: Loyalty Research and Insights from 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.

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PAULA: Thinking Caps videos are published several times a week and are available on Apple podcasts.

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PAULA: In today’s episode of Let’s Talk a Little Loyalty, I’m sharing my learnings from one of the world’s leading ladies of loyalty, Amanda Cromhout, based in South Africa.

PAULA: Amanda is the founder of a specialist loyalty marketing agency called Truth, which researches the loyalty market in South Africa.

PAULA: We recorded this episode in March 2020, as Truth had just released the fifth edition of this research.

PAULA: As usual, we started by discussing Amanda’s favorite loyalty statistic, which was that 72% of South Africans actually use loyalty programs.

PAULA: Amanda highlighted the sheer strength of the number, with so few marketing activities, getting anything like a 72% usage rate.

PAULA: So it is an incredibly powerful number.

PAULA: Amanda then talked us through her background and love of loyalty, starting in British Airways, where she worked with the Graduate Management Program, negotiating the portfolio of co-branded frequent flyer bank cards across Europe for their executive club members.

PAULA: Later, when she moved to South Africa, she joined Woolworths, which is a premium grocery retailer there, before then setting up her own loyalty agency called Truth 11 years ago.

PAULA: Each year, Truth partners with a research agency that conducts comprehensive consumer research with over 26,000 South Africans, including a specific category on loyalty questions.

PAULA: For the research conducted in 2019, there were a number of big new questions.

PAULA: One specifically was asking customers whether the loyalty programs they use, they think actually influenced or changed their behavior.

PAULA: Amazingly, 91% of customers were saying that it does influence where they shop, plus another 62% said it also influences the products they buy.

PAULA: Amanda then shared with us some superb results announced by a new program that launched in the market at the end of 2019.

PAULA: A grocery retail program called Extra Savings from the ShopRite group, which managed to sign up an incredible one million members in just one week when it launched.

PAULA: One of the key reasons for this incredible Sinox success was the simple signup process with members able to join in under three minutes.

PAULA: Customers could sign up by WhatsApp, by the app, by USSD via the website, or of course in store.

PAULA: Amanda then talked through some insights from customers who said they don’t use programs in order to understand why not.

PAULA: The main reason they said is that they didn’t think they would spend enough to earn decent rewards.

PAULA: Other feedback from customers is that programs are too hard to understand.

PAULA: They are simply too much hassle, they don’t want too much information, or members often say they don’t like the way they are marketed to with their data.

PAULA: And unsurprisingly, they dislike when their points expire.

PAULA: Amanda then highlighted the most popular loyalty programs in the country.

PAULA: Led by a pharmacy and health and beauty store program called Clicks, followed by Pick and Pay, which is a grocery retailer program.

PAULA: The first financial services brands at number five was the e-books program from FMB Bank.

PAULA: Finally, we discussed one alarming change in feedback from younger consumers aged 18 to 24.

PAULA: Now, of course, the usage from this demographic is generally lower, as their disposable income isn’t as high.

PAULA: But in this report, usage had dropped again from an already low 67% to just 45%, with the biggest impact in the fashion category.

PAULA: So this clearly highlights a huge issue and perhaps a big opportunity for loyalty programs in South Africa, who either are not speaking to youth or perhaps this age group has switched its spending behaviour overall.

PAULA: As an insight, South Africa has been identified by Nielsen as the second most price sensitive market in the world.

PAULA: So in tough economic times, loyalty programs really need to connect in a more powerful way, if it’s going to make a difference to any segment of the market.

PAULA: In closing, I will simply say that there are loads more insights to enjoy in this episode.

PAULA: So if you’re interested in hearing more and getting access to the full white paper, just head over to letstalkloyalty.com and find episode 27 with Amanda Cromhout.

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.

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