#303: Loyalty Insights from South Africa - 2022 Truth & Brandmapp Loyalty Whitepaper

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

This show is sponsored by Comarch, a global provider of innovative software products and business services. Comarch’s platform is used by leading brands across all industries to drive their customer loyalty. Powered by AI and machine learning, Comarch technologies allow you to build, run, and manage personalized loyalty programs and product offers with ease.

For more information, please visit comarch.com.

Hello and welcome to today’s episode of Let’s Talk Loyalty, featuring one of my favorite ongoing loyalty research studies, the South African Loyalty White Paper from Truth and BrandMapp. Joining me today, as always, to share their fascinating insights on this research is Amanda Cromhout, the founder and CEO of Truth in South Africa.

This latest release is the seventh edition of the White Paper and represents loyalty insights from over 33,000 South African consumers. It also includes a new focus on the mass market in South Africa with additional research conducted with the lower-income demographic in the country. Amanda shares the high-level trends and preferences, as well as detailed specifics on just how much impact consumers say the various programs are having on their buying behavior.

She’s also added in some fun new questions, which explain what South African consumers appreciate need, and expect when it comes to the programs. And of course, she reveals their absolute favorite program that they can’t live without. I hope you enjoy the insights on this incredibly mature and competitive market, and please do head over to the website for Truth in South Africa to download your own copy of the White Paper.

Paula: Amanda, welcome back to Let’s Talk Loyalty.

Amanda: Thanks, Paula. So great to be here and actually so great to be on the other side of the microphone.

Paula: You’re on both sides now, Amanda. And I was just thinking, actually, you’re, you’re my first, third time guest on, on that side of the microphone, so well done. You.

Amanda: Oh, lovely. Yeah, super great.

Paula: Very exciting. This is becoming an annual pattern, uh, talking about your incredible work, um, in terms of your White Paper, talking about the, uh, loyalty landscape there in South Africa. So, Dying to hear what’s come through in this year’s, uh, White Paper. So as usual, we’re going to start with our, uh, favorite loyalty program question, which you did answer for me very recently, but for people who weren’t listening and for any changes that have come about, will you tell the audience, Amanda, what is your favorite loyalty program?

Amanda: Yeah, thanks Paula. Um, it’s still British Airways Executive Club. I don’t think there’s anything for me that has changed since we last spoke.

Paula: Yeah.

Amanda:  It’s a strange one in a sense because I’m a, I’m at the end of Africa and British Airway does fly between the UK and South Africa, which obviously UK is my homeland, so I almost associate it a little bit with getting me home to see the family and friends as an emotional connection. Um, and there are obviously lots of other choices, but at the end of the day, the program does work for me just because of the basics of a frequent flyer program. Um, it is more challenging in the sense that locally there was a franchise through Comma with British Airways locally, which has come out of the marketplace after COVID, very unfortunately. So earning points locally has become much harder and that’s why I was actually super excited to see since we last spoke. They’ve released a subscription model that allows you with an annual, or I think it’s also monthly subscription to earn. To buy points through a subscription by Avios, let me get the terminology right. So it’s Avios. So you’re not subscribing to like a Emirates subscription. But you’re subscribing to the regular update, almost bolstering your Avios balance. And for me, that really makes sense because I’m no longer able to fly locally, domestically in South Africa, but I do value the program and I do want to, uh, I want to benefit from the points I’ve, the avios I’ve already got. So yeah, that innovation really, really interested me and they’re doing lots of other things in partnerships as well, which they haven’t done before. So, um, I think all kudos to them. They’re, they’re reaching outside of the normal FFP and doing interesting things.

Paula: Wow. I absolutely love that, Amanda. And I said to you off air, I actually didn’t see that announcement, so I’m thrilled to hear about it. Um, I’m a huge fan of the Avios currency anyway, but it does remind me of a conversation, and it was just, you know, I suppose with, um, with an alliance kind of mindset. I remember chatting with the, with the Star Alliance actually, about this idea of whether subscriptions would be relevant and the possibility of, to me, almost like the opposite of buy now, pay later. It’s almost like the inverse where I can build up the points bank and have them available when I’m ready to travel.

Amanda: Exactly. It’s exactly that. And as I said, for me it’s super interesting because my local go-to earning capabilities being diminished.

Paula: Yeah, yeah. But it shows that you do have, I suppose, the, the opportunity to, to give them the value of your loyalty upfront. I always think subscription is the ultimate loyalty because you’re committing to, to paying over a repeated month to month. So very clever stuff. Yeah. Sounds like it’s available globally, Amanda, am I right in, in understanding that?

Amanda: It, it must be. It definitely won’t be a South Africa only model because the because South Africa is just one of the markets and there’s no longer a local franchise.

Paula: Amazing.

Amanda: What I received would’ve been from Executive Club Global about it. Yeah. Yeah.

Paula: Amazing. Okay, well, sounds like I’ll need to get them back on the show as well, Amanda. So always the, um, the great result of that question. So we’re in the seventh year of your White Paper, Amanda. First and foremost, congrats. I know it is, uh, an astronomical amount of work for you to, to really work with your partners to understand what South African consumers value in terms of loyalty programs. So maybe just give us a, a starting point, Amanda, because you’ve done this with me twice before, so it is our third time talking about it. But tell us a bit about the, the overall scope of the project, for people not familiar with it.

Amanda: Great. Thanks Paula. Yes. So you’re right, it’s the seventh year, so we are now creating a really powerful longitudinal study, um, over actually eight years cause we missed the covid year. So we, it’s eight years of our seventh edition, but eight years of data. And we are in partnership with BrandMapp, which is a study in South Africa that looks at 33,000 respondents in the survey, looks at consumer behaviors across every aspect you can imagine in South Africa, and commercial behaviors. So, So their, their, they have this extremely robust study, and we extract a small number of the questions for the loyalty White Paper. For the first time ever, we’ve actually also partnered within the, within the same structure with another company called MoyaApp, to actually get the viewpoints towards loyalty of a much lower income customer because the BrandMapp results skew to a slightly more, slightly wealthier customer of 10,000 Rand household income. That is still incredibly low, $550 plus or minus household income. So imagine that’s not per personal income. Household income. But there is a huge number of South Africans who are considerably, considerably below that income level. So the MoyaApp study, which is robustly being tested to be the same indicators as BrandMapp, um, offers us a new chapter to the seventh edition, the last chapter where I capture that mass market responses. So, um, we haven’t yet incorporated the two studies together, which I think will be our plan for 2023, so that we get a full spectrum of income, through every measure we look at. But because we have two separate study approaches, we kept them separately just for this edition so that it’s clear and transparent. But the, the, the company WhyFive that run the BrandMapp study have been our partners for the seven years, seven editions and produce incredible insight that we are able to extract into the White Paper.

Paula: Incredible, My goodness. And I’ll be very keen to, to particularly understand that new demographic, Amanda, because I think for, for brands it’s often where, you know, we do focus on our top tier and the ones that are more, let’s say, economically active. So to actually understand the impact at mass market, particularly at such low income, and I know South Africa does have a huge population, um, falling within that. So, so brilliant to see that you’re evolving the thinking to see what brands need to be thinking about in terms of appealing to that demographic as well. So, so that’ll be super interesting. So, so kick us off then, um, first of all, I know you’ve got lots of different oversights in detail, but what would be the, the broad insights that, um, you, you see in terms of South Africans engaging or enjoying loyalty programs and our entire industry there?

Amanda: Yeah, so I think you’ve often said as well when you talk to any South African company on, on your show that South Africa is a mature market, and we are really seeing that now. So, we’ve seen it for a while, but what we are able to track, obviously is this over time behavior. So since 2015, the first time we published the White Paper, we saw that 67% of South Africans use loyalty programs. And then very quickly it jumped to 71% in 2016. And actually since then, it’s been incredibly stable. This year it’s at 73%. So it was 74% last year. So it’s only declined by one percentage point, which is just not really worth analyzing. So this stability is now showing us that it’s just a very mature part of the consumer behavior. And, but it’s still an enormous number. 73% of South Africans use loyalty programs, and actually in the mass market, that number goes up to 82%. So I’ll talk about that later when we talk about the mass market. But, um, it doesn’t decline, you know, It’s, it’s, it even more necessary for the consumers in the mass markets.

Paula: Yeah.

Amanda: So what does change, however, though, which has increased more than this percentage of usage, is the number of programs consumers are members of. So when we first started this study, they were only members of 3.6 programs, and now in 2022, South Africans are members of 9.2 programs, so that has gone up. But that must be a reflection as well, that there are more programs, right?

Paula: I was just about to say, you probably built half of them, Amanda.

Amanda: Yeah. Well, we’ve had our hand in a few of them. So, so, um, yeah, for sure. We’ve, we’ve seen great expansion of really good quality programs in South Africa and just to get through your daily life, you would really be missing out if you weren’t members of them. So, so that number’s great to see increasing, but I think, um, last year’s White Paper actually compared that 9.2, it was less last year, but versus global averages. We do know the Australian market, certainly last year was much less, like almost half that at 4.4 average programs. But then you got markets obviously like the US at 17 plus or minus programs per, per consumer. But then I, in your, if you remember when you, we were, um, at the Comarch user group in Paris. In September, you were interviewing the team from Greens Stamp, and they talked about this insane stat that the Japanese consumer are members of 120 programs.

Paula: Honestly.

Amanda: It’s incredible and I haven’t been able to, challenge that down or challenge whether there’s another market higher than that, but actually regardless, that statistic is insanely incredible.

Paula: Totally, wonderful.

Amanda: It’s a little bit less than that at 9.2 programs, but still, it’s still really impressive.

Paula: It’s very impressive. And I will ask you, because I know when we talk about the US for example, um, and again, they’ve been on the show, we do talk about members of versus engaged in, and I’m not sure if that’s a, a distinction that you make in your White Paper. Um, but you’re absolutely right. If there’s anybody listening in, uh, the Japanese loyalty, uh, industry. We’re super curious, uh, and keen to, to hear all about the incredible industry that’s going on. We’ve had no guests directly from, uh, Japan here on the show as yet, but 9.2 is very impressive in terms of, uh, South African members, um, or yes, people being members of 9.2 programs Amanda. Do you have insights in how many they say they engage with, or is that not something that you ask?

Amanda: That is an engagement stat actually, because the original question is which programs do you use?

Paula: Use?

Amanda: So they’re actively using, So there might be, there might be members of, um.

Paula: Even more.

Amanda: Yeah, but the ones that they’re me actively members of, so, yeah.

Paula: Okay. Um, super. Wow. Well that is a very high stat actually, and I’m glad we, we, um, we clarified that distinction because, you know, we all do join and, and disengage or, or forget to engage, let’s say, when it’s not done well. So engaging in nine programs, definitely to me would signal that that is something as I think you’re alluding to, whether it is fuel or airlines or grocery, that’s a lot of programs, that’s almost must be every area of everyday life.

Amanda: Yeah, I think so. And if you look at the top 25 programs, and we can get into which brands are seem seemingly are being most used versus less so, um, you can see a great mix of different programs, but I’m not going to deny the fact it’s so heavily dominated by retail and then financial services without question.

Paula: Okay, okay, so obviously the most important thing, um, you know, after joining the programs and saying that they’re using them is the, the influence of those programs on their behavior. And again, that’s, I suppose, the whole point of our industry. And I know you have some really incredible stats in terms of how they’re actually driving consumer behavior. So will you tell us a bit about that side of it?

Amanda: Yeah, that’s probably one of my favorite parts of this paper is the actual, cause it translates for us in our consultancy work over when, when clients say well is this investment worthwhile? Like, I’m gonna spend all this investment on CapEx and then OpEx.

Paula: Yeah.

Amanda: How are we gonna change behavior? And we’ve got stats. You and I have talked about this before of global practitioners talk about a four to 6% increase. Some guys talk about 10% incremental revenue increase, but actually what a consumer’s saying, and we’ve, our data, the data from BrandMapp is showing that it heavily influences behavioral change. So, um, you’ll see here where I shop, it’s influenced to the level of 84% of customers who responded they use loyalty programs are saying it does influence where I shop. 56% the products I buy, 53% where I buy fuel, cause fuel rewards is very, um, very competitive here in South Africa, where I bank is 49% our influence. And then we added in a few extra questions this year. So the places I eat comes in at 34%, how I travel 34%, and where I buy insurance, 23%.

Paula: My god.

Amanda: So cause insurance is off, There’s quite a few big insurers who do loyalty programs. So we pulled that question out again as well. But that is like, It’s not like there’s just one of those statistics that’s saying it does influence behavior, like over half of them are enormously impactful.

Paula: Yeah, and I really remember you making that point as well last year, Amanda. You know, of all of the various levers and tools and techniques within a marketer’s toolkit, you know, there is absolutely nothing that compares, you know, whether it’s TV campaigns or social media, which seems to get a lot of the budget these days, um, and the attention, let’s say, because it is, you know, I suppose so dominant, but actually loyalty programs seem to be the most powerful of all of the tools out there.

Amanda: I mean, obviously I would say yes, I’m quite biased.

Paula: You’re totally biased.

Amanda: Um, I don’t have comparable stats for traditional media, but I know from my younger marketing days, I would’ve dreamt a fraction of the removed the decimal place one way I would’ve been happy with the numbers. So yeah, we did ask another question about most, like about behaviors, which is a brand new question, which is also really, really interesting around which of these loyalty statements most apply to you? And we put in place questions like, um, I want to be instantly rewarded by my brand. So like, you know, that instantaneous gratification. Or I, I prefer to build up points for bigger rewards or I am motivated to spend more, to earn more rewards. So there’s some crossover of the questions with other parts of the White Paper. Some of the questions went down to, um, oh, I always let my points expire, like silly me. And then the funniest question is I mostly use them because my partner tells me so. So with these, these are more like natural emotional statements that the BrandMapp team put in place, but what comes out is just fantastic for, from a loyalty program design point of view, because it’s so heavily dominated as a result across three main areas. And the first area is I want to be instantly rewarded. Not quite as heavily voted for so to speak, but just behind, so marginally behind, I build up my points for big rewards. So suddenly you don’t have either or it’s both. And then we actually cross tabulated the results equally. In those two were customers who said, I want to be instantly rewarded, and I like to build up my points. So basically as a loyalty practitioner, you’re a bit confused because wow. Customers are saying everything, and I’ve always said this in our consultancy work, when we sit with clients that, Yeah, most customers want both. So don’t, don’t polarize the design of your program to do one or the other. And the best programs really do manage to address both like the, the opportunity to earn points for a greater gain, saving up maybe for the fest of season, um, versus a cup of coffee this week. Thank you for your, Thank you for your loyalty, or a partner reward. And the BrandMapp team then went into analyzing a little bit more about the customers who want both. So they’re the most demanding. So they are the customers who are very much the most demanding, they want all the benefits on offer. And they’re more likely to be female and they’re more likely to be using much more the retailer programs. So, and that’s not surprising cause the retailer programs do offer both of those ways of earning points, like long term points for bigger rewards versus instantaneous reward here and now. So it’s a really, um, it almost backs up a lot of what we’ve been saying on gut reaction and theory, but uh, it gives us a statistical evidence on it, which is always, always what we want to see.

Paula: Yeah, and, and what I’m thinking as you’re telling us about that, Amanda is. That’s exactly the kind of ammunition that I think this audience needs because it’s one thing for a loyalty manager or director to have that gut instinct, but of course we all have to build a business case and we’ve gotta, you know, get it signed off by the board. So I think that that’s fantastic that there is that insight. And I was also thinking back to what you started telling us about and what we’ve talked about, the maturity of the South African market. So. I’m almost kind of thinking it’s because clearly there’s a, a very well educated and I mean loyalty educated consumer in South Africa, that understands that actually they are valuable to the brand and that there are different ways and if they pay attention, they can play the game and they can benefit so much more. So of course they expect more. I think that’s the way the world goes.

Amanda: Yeah, absolutely. And some of the really successful brands here, and you’ll see it when I go through which brands are coming out as the most used, um, really are able to do both. You know, they’re doing both. And this, I always argue the same customer. Like if I take myself, You ask me my favorite loyalty bragger I talked about in an airline, which is a buildup so I can eventually redeem for the family to go on holiday. Versus, I absolutely love it when I can get an instant discount on a, on either a coffee, you know, coffee at the coffee shop. And I’ve always said I can afford to buy a coffee, but nothing feels better than a free one. And, um, and then, or here’s a quick discount on a e-commerce site. Thank you. You know, the 50 Rand off, just because we value you.

Paula: Totally.

Amanda: I think, as the same human being, I, a sample of one of myself, but this is not a sample of one. This is a sample of 33,000 people, are saying I like both.

Paula: Yeah. Yeah. And, and I know I have this behavior as well, I’m sure there’s a, a proper kind of jargon or marketing industry term for it, but, you know, the, the, I suppose the whole kind of culture from an e-commerce perspective of promo codes, for example. So, so for me, one of the behaviors that I’m doing, increasingly, if I am spending particularly on a new e-commerce website, I will nearly always go just to do a Google search for a promo code for that website before I complete my first transaction. So for me, it’s, it’s like that, I feel I want the feeling of being savvy. It’s not the 20 Dirhams or the $5, it’s actually, I, I just wanna feel like I’m beating the system in some way.

Amanda: Yeah. I do the same. I do the same. Yeah.

Paula: What do we like? My goodness. And I do remember reading, uh, I think it was on the Wise Marketeer website, just the same idea that you’re talking about there. So instant gratification versus what they were calling constant gratification. So I can hear that as being, you know, coming through again with your research in this White Paper of, yes, I want to be, um, getting these, these various different types of things. And sometimes it’s perhaps just that the novelty factor as well, rather than just, because I think in the past points have become a little bit jaded when, you know, if they’re not getting investment or if they’re not being optimized. Um, and campaigns are not being rolled out on a regular basis. I don’t if that would be your experience.

Amanda: Yeah, I think so. I think it, it, it really does help address all of what you’ve just said. Like it’s, um, very much so, so actually I need to be, make sure I’m completely factual and obviously the exact stats are in the White Paper that of the 33,000 surveyed through the BrandMapp survey, 73% say they use loyalty programs and of those users um, we obviously see statistics around this, these motivations. And the section two of the White Paper, when anybody’s ready, can download it now off the truth.co.za website.

Paula: Great.

Amanda: Yeah, I mean it’s ready, readily available right now.

Paula: Perfect, yeah.

Amanda: So, but of those, it’s a distinct, a third, a third, a third are saying instant gratification. Build up my points for bigger reward or both. So, it’s, it’s just the, the both element is showing me that it’s, that is equally important and demands a deeper thought process on the design of your program.

Paula: Yeah, which is good I think for us as loyalty professionals because you know, while it could be perceived as being expensive, I do think there’s very creative ways, and again, I’m sure you’ve built a lot of those kind of solutions where, you know, whether it’s a partnership or something else. There are creative ways to, to fund those points. It’s not necessarily that the brand themselves has to double up on the rewards budget, for example.

Amanda: Yeah, exactly, exactly.

Paula: Perfect, perfect. So tell us a bit about then the, the different demographics. Amanda, I know you have a whole section around what are the preferences in terms of, you know, rewards, what type of rewards and then exactly what kind of mechanics, um, your consumers, your 33,000 research consumers like to experience.

Amanda: Yeah, so we, we ask a set of questions every year around the preferences, um, across the different demographics. Actually, the, the previous points we’ve made about usage does change a little bit, but not surprisingly, so female customers use programs more, but marginally so than male. Okay. And that, that’s really changed over time with COVID. I think the lockdown period encouraged our, our male, our male partners to engage in daily shopping and so forth more so they started to appreciate. Although I do need to share with you the stat that made me laugh is I mostly used them because my partner tells me when I split that by gender. The males are five times more likely to choose that option, which just made me laugh.

Paula: Oh, that’s totally hilarious.

Amanda: I think my husband would fall into that category as well. Like, Use your card. Use your card. Um, but if you look at the, if you look at the preferences, we, we do ask every year. Um, What do you want from loyalty programs? And this is probably the most powerful section for when we actually sit with clients and say, This is what people want. You know, We’re not second guessing it. And every year what comes at top without question is cash. Cash back. But we’ve unpacked that a little bit more this year because it was skewed towards just this one word cashback. So what we’ve done, this show we’ve split the question into is, is it points redeemed into cash. Is it cash back on your credit card or is it instantaneous cash at the store? Discounts at the store. What comes out still right at the top is points redeemed into cash. You know the programs that sort of, often a boardroom discussion is, oh, nobody wants points. Well, 48% of the respondents are happy with points as long as it can get them cash at the end of the day. And then what’s really interesting, the top five is, next is double points. Next is the birthday offer. Then you’ve got travel and flight discounts and then free gifts and samples. And I really like that cause it’s actually such a mix of points. But then treat me on my birthday versus free gifts and samples, and then quite a serious and well established reward mechanism in this market, and I’m sure in every market, particularly for credit cards and banks, is your travel and flight discounts. That particular top five does change quite a bit with the mass market customer, which I can cover in a moment. But, um, this cash back remains king. It doesn’t matter which way we slice and dice this question; it still remains most definitely. And that it is agnostic to demographic, so we don’t see, you know, across age income, um, gender, it’s always cash at the top of the pile.

Paula: Yeah. And it even reminds me of my, O2, Amanda. That’s exactly what we would’ve had even with VIP customers. And it was, it was interesting and I’ll be, you know, curious to hear if you have any insights on this from your clients. But as a brand, O2 didn’t want to get into the discounting as a reward, uh, particularly for VIP customers because what we wanted to do was have an experience that perhaps they wouldn’t spend on themselves. And I mean things like we were booking afternoon tea and we were doing, so I guess it was, you know, I suppose a play for the emotional side of loyalty versus the transactional side. Now, I guess with that said, of course every market is getting so much more price sensitive. Um, and that’s, you know, even with the pandemic almost in the rear view mirror, the energy sector of course is the next big thing. So, so I just think there’s financial pressure globally. So, Yeah. Yeah. What’s your experience with..

Amanda: Very much so. This market is no different. Like, if anything, I would say it’s as extreme, if not more extreme than a lot of markets. What we are seeing, for example, is the war of the fuel rewards. So obviously travel in car, you know, it’s like one of those things you can’t get, you can’t reduce that cost if you’ve got go to work,  or take kids to school, and so on. So the fuel rewards play as very aggressive. All of the banks participate with a fuel partner. A couple of the fuel companies themselves have got their own standalone programs. And then you see some crazy offers coming out that are tactical, um, playing to short term tactical play, but just to really drive home value to the, to the end user. So we definitely see some heavy competitive behavior in a good way. And the fuel rewards that’s coming either from the banking environment or even the retail environment and the actual fuel companies themselves. The reason the fuel companies themselves aren’t all doing their own program. That’s caught a lot of, um, tight legislation in South Africa against, um, discount. You can’t discount fuel price at RRP. And typically, loyalty programs used to be deemed as a reduction of fuel price and therefore prohibited, But there are ways of getting around it now that a couple of the big brands here have successfully circled and launched their own program.

Paula: Okay, so it sounds like the brands are having, I suppose, to listen to, to what, you know, the questions and the, the insights you’re providing so there, there must be quite a lot of these kind of cash back programs in terms of, as you say, points, the translated discounts and giving them essentially some discounts in through, through the loyalty program.

Amanda: Absolutely, but they’re also very successful programs that don’t have points at all. But at the end of the day, they’re still giving cash as a, as a mechanism, whether it’s instant discount off the price pauses, for example, or an ability to add up your behaviors that get converted into a cashback of sorts. So they’re avoiding possibly the word points. But it’s still the same thing. Um, so, you know, like for example, there’s a, you know, there’s two QSR brands here in South Africa. Who just operate with a cash back straight into your digital wallet. So it, but it still worked out as a 5% or a 2% off your transactional spend. But there’s no points for you to convert or allow to expire. It just goes straight in as a cash into your digital wallet.

Paula: Which at least means you directly of course spend it back with the brand. Um, yeah, and I’m thinking of two others, for example, I can’t remember which program, but I do remember in South America there was I think a coalition program that was doing cash back into the members’ bank account. Um, Yeah, Which is a whole different ballgame. And the other one I’m thinking, I know in the US for example, with fuel rewards, um, if you are a member of, and again, I can’t remember which program I’m talking to so many right now, but essentially the price rolls back on the, you know, essentially when you’re refueling the car, if you’re a member of the loyalty program, the price automatically changes, um, at the, at the fuel point so a really nice experience. Exactly.

Amanda: Yeah. Lovely. Yeah.

Paula: And I know you had some good insights as well about what, um, what younger people, uh, want, I suppose, in terms of what the propositions are delivering. So, you know, whether it’s things like status. So will you share a bit about what, what, uh, younger consumers are saying?

Amanda: Yeah, absolutely. South Africa’s quite a young market, so this is why we pull out the, the younger generation a little bit more maybe in the demographic mixes. So we do it in some of the things like what benefits they want, which, uh, brands are over indexing in the younger customer. So, the benefits most enjoyed by the really young, like under 25, so they’re able to be economically active, but they’re not necessarily mature in earning capability. They also still want monetary based rewards. So as I said, cash back remains king for everyone. But they really want status, which makes sense, you know, I wanna like, I want to be recognized.

Paula: Nice.

Amanda: So tiers or preferential boarding if they are able to travel. But then what’s really interesting, the next two really, uh, are really lovely, are the younger generation. And it completely fits to the discussions we had at the Paris Comarch user group around value based behavior they want to share. So they want to share either to others, so share their points or their cash back to others, or to charity or to environmental causes. So, that really comes out strongly. And then the last one is they want educational courses. So if the loyalty program can bring me away of having, uh, better educational courses, and that’s starting to come into this marketplace quite nicely as a, we care about you, we want to help you on the road to life, as well as give you points for your business or cash back for your business. Here’s another way that we can bring value to your life and educational courses. It’s the first year we’ve asked the question, so I can’t give you any growth rates versus last year, but it’s come through really quickly, as a preferred benefit. And equally it comes through for our lower income mass market customer as one of the top benefits that they want from the programs.

Paula: Wow. I really love that one actually, Amanda, and, and definitely the first time I’ve heard it researched so, well done. I, I suppose in identifying that that is an upcoming need and it totally resonates because, you know, when I think of younger people that I know, you know, lucky enough to be under 25, like at that stage of our life, we’re all super ambitious, hungry for, you know, building our, our, our lives. You know, cause so much of it is in front of you. And that is the kind of thing that I think loyalty programs can, can easily go and partner with these educational content providers. And it’s a real partnership, a real benefit that they can offer. You know, because there’s so many digital courses out there that you can provide for, I suppose essentially a closed user group of people who are hungry and asking for it.

Amanda: Absolutely. There’s a, there’s, you know, there, there are companies that actually work in this way, that they provide the content, the educational content to the loyalty practitioner. For, for free. But once I’ve signed up to my first course, I’ve obviously become a customer of that provider.

Paula: Totally.

Amanda: And then they can cross-sell and encourage you to take out more courses at a paid subscription. So the business model’s really clever and actually really interesting for companies looking to add that extra value add through their program.

Paula: Totally. And, and certainly what I hear a lot on this show, Amanda, I know you do as well, and it does, I suppose, particularly come through with them again, more mature sectors like airlines is this idea of positioning themselves as more of a lifestyle program. So how can we be relevant when people are not flying or not shopping? So I think education is a brilliant insight and can really, you know, plug a huge gap in terms of what people are looking for from us.

Amanda: I do as well. And the recent conversations we’ve had with our clients, there’s a lot of, a lot of interest in it. And now we’ve got the data to back it up. So it’s lovely.

Paula: Amazing, amazing. Now I think, you know, my favorite one, Amanda, uh, from your White Paper from the last couple of years, there seems to be an insatiable appetite for swiping plastic cards, for some reason. Tell us about this year’s stats on the preference for physical versus digital.

Amanda: Oh my goodness. Honestly, it floors me every year and every year I phone the Brandon who’s the genius behind these stats at WhyFive and go, come on, show me the, I’m also fascinated by it. And he just laughs. He goes, It’s not moving, and it is not moving. The South African market wants to swipe a card. Um, they, 74% of South African loyalty users are wanting to swipe a card and then the next, the next registered sort of identifier is scanning an app at 28% or providing a cell phone number also 28%. We also asked a couple of other channels that show like, do you want to scan or swipe a digital card that’s at 23% or a digital loyalty wallet, you know, like a. Stocard brand. I don’t know if you know Stocard internationally. But they exist here. Um, that drops right down to 14%, providing your ID number, which is obviously sometimes where people worry about privacy as 11%. So, And this stat doesn’t change by demographic. Everybody wants to swipe a card this, the, the second lot of second, third, fourth place does change a bit by demographic. So the lower income customers are less likely to say scanning an app because, maybe not because of the cost of the digital download, but because of the storage capacity of a lower grade smartphone.

Paula: Got it.

Amanda: This 74% and it’s just not changing like year on year. We see it right up there at three quarters of the base, so, yeah. I keep, I think the card providers in the market are super happy to see this result every time.

Paula: Totally, totally. Well, I think next year you’ll have to dig a little bit more again, Amanda maybe, just to find out why it’s so compelling.

Amanda: I think so to, yeah, absolutely. Like, um, or maybe it could be a separate piece of research that we sponsor with some of the card providers. I don’t know. Like it’s just, but also, you know, think about, I think about myself. Like I really don’t want to have 30,000 cards in my wallet, but, I also don’t want a separate app per loyalty program necessarily.

Paula: Definitely.

Amanda: I know my key programs that I love are my go-to programs I use daily or weekly. I don’t mind having those as separate apps, but separate app for every, you know, maybe if I’m only visiting the store once every three months, cause my requirement is only that much, not because I’m using another competitor. It’s just that I don’t need to too frequently. You know, like buying my dog food for example. I buy it in bulk and then I only go back when it runs out. I don’t need to go back to the store more frequently, so why would I need a separate app?

Paula: Totally. Yeah. Well, and I’ve definitely also shared that Amanda, because you know you have to earn your space as an app. And I think anyone who’s ever built and launched one knows the cost of discovery, you know, marketing the actual app, you know, the behavior, I think it’s underestimated how challenging it is to get people to do that. Um, so definitely I’m not the person jumping up and down saying you need an app. And with my, I suppose, Irish experience, which is where I’d probably have more, you know, you know, I suppose consulting experience in the past, you know, I was always a fan of the, the phone number, you know, because it’s the piece of information everybody knows off the top of their head, doesn’t feel intrusive. We have good GDPR, uh, rules in Europe, so I always felt it was safe enough. So interesting. Yeah, maybe over time, um, that’ll happen in South Africa, but for now..

Amanda: That that’s come through for the, um, more lower income customer, actually the cell phone. And we’ve, we’ve created a couple of programs recently that the cell number becomes that unique identifier, and it definitely comes through as the second preferred choice. So, swiping a card, 78%? Yeah. And the MoyaApp data shows providing a cell phone number at 36%. So you know much higher than the app usage of the previous broader survey.

Paula: Okay. Okay. Fascinating stuff. Okay, so what’s your next section then, Amanda? Um, you know, I know there’s always kind of one program where you literally say, you know, people can’t live without, so is that, is that your favorite one, I think in terms of your whole research project?

Amanda: Yeah, so there’s a, we asked the question over which programs do you use, so that’s the most used list, and we break it down by category retail, FS, QSR, restaurant and so on. But I don’t want to ignore the most used before I go onto the one you can’t live without. So the most used comes out as Clicks ClubCard. It’s a big, um, pharmaceutical brand here in South Africa. And out of the seven years that we’ve run this White Paper, this is their fourth year at being, first, last year they were nudged out of place by Pick n Pay Smart Shopper who are number two this year. Marginally, so last year, and then marginally ahead of Pick n Pay. So interestingly, the two brands have tag tailed each other across the series one year one, one year, the other, But Clicks is coming out as the most used, and it’s a very long established program here. It’s one of the most, it’s been in the marketplace 25 plus years and is extremely well known, extremely well executed with a quality team. So, and the same with Pick n Pay, actually, they’re, they’re, um, been around for over 10 years. But we do see new players like Checkers Xtra Savings. It’s only been in the market a couple of years now, and Checkers Xtra Savings actually won the Best South African Retail loyalty program at the South African Loyalty Awards recently, have come in at number three after only being in the market for two years. So that’s a big, you know, that’s straight in there. They come in at number three, so the top 10, all retailers apart from FNB eBucks. And they come in at number eight. So they’re successfully breaking the top 10 being retail only. And they come out as the most used financial services brand by a long way as well.

Paula: Phenomenal.

Amanda: So that’s the most used. And we do break it down by category. So it’s, you know, it allows the, maybe smaller brands, but to get recognized in the sense that there might be a travel company or rec QSR. And then, and then we obviously we look at that by gen, by different, um, demographics. As I said, we pulled out the under 25’s cause certain brands are over-indexing in under 25’s. But then if we look at the program, you can’t live without. So the question is, is if you can only keep one loyalty program, which one would it be? You know, it really forces the customer to choose one. And then we cross-check to make sure. They already said they use it. So just to double check, they’re not fantasizing over a program they don’t use. So they’ve already said, Yes, I use this program. And what it allows the results to show is some of the smaller programs are coming up really highly, whereas they don’t even feature in the top 25 because they just don’t have the volume of customers using them. So what we see is in first and second place, but literally marginal difference. So I call them the equal winners really is Discovery Vitality is first, and then marginally behind it like decimal places, not even. It’s Standard Bank UCount, which is a another banking loyalty program. And then third place is FNB eBucks, who previously always came out as first place. So we’ve seen a new, new, two new brands take that sort of top place of this loyalty program I can’t live without, which is Discovery Vitality, and UCount rewards.

Paula: My goodness. Yeah, and I’m a huge fan of course of Discovery Vitality because it’s so well-known and I’ve talked about it so many times. We’ve talked about it together as the program that feels like it absolutely has the member’s interests at heart in every single thing they do. In fact, since their very inception, which from memory is like 25 years ago or something, am I right?

Amanda: I’m not sure the length of time, but we actually had, um, Celeste Williams from Vitality at our Leaders in Loyalty summit panel.

Paula: Amazing.

Amanda: And I quote, it was fantastic. And we quote, I quote her in the White Paper from the, from the Leaders in Loyalty Summit that she talks about we are a multidimensional ecosystem. And we, we nudge people towards healthier habits, whether that’s healthier lifestyle habits, um, healthier health habits, healthier banking habits, and so on. Um, so yeah, very robust, um, substantial program

Paula: Incredible.

Amanda: It’s, it’s, it’s good to see them recognized in this question.

Paula: Exactly. And good to see Standard Bank as well, and I haven’t heard of the UCount program, but sounds like they’re, they’re giving them a run for their money.

Amanda: Definitely there’s not, you know, Discovery can’t sit there saying they won this outright because there’s literally splitting hairs between them.

Paula: Nipping up the heels. My goodness. Again, all good for competition. So what is your final section then, Amanda? You talked about the MoyaApp and you’ve developed a whole new lens, I guess, around this new demographic. So tell us a bit about what you learned about the mass market. Yes, it’s provided by MoyaApp. Um, they, it’s, we do describe what MoyaApp does, which is really worth a read. It’s a data free platform. Um, so I’ll leave that for readers to look on page 41 of the White Paper. But the key, the key highlights are that 82% of these customers who earn either 10,000 Rand around household income or less are using loyalty programs. So higher than the, the slightly wealthier or much wealthier customers. And interestingly, it’s completely homogenous across demographics of gender, age, or sub income brackets. So what it’s basically saying is, Everyone at a lower income level needs loyalty programs, wants to use, are using loyalty programs. Um, and it is strongly influencing those other indicators. I, we ask the same question, so it’s very strongly influencing the where I shop, where I bank, the products I buy and so on. Less so places I eat, where I buy fuel, where I travel because they’re luxuries I can’t afford to have. But where I shop, where I bank and products I buy are very influenced by loyalty programs.

Paula: And that’s an it’s an important just distinction. Sorry to interrupt you Amanda, but you know, you used the word they need loyalty programs and that is actually I think, a very important point because, you know, I think middle class, you know, traditionally it is something we do as we talked about. You know, it’s, it’s a bit of fun. It’s, it’s, you know, we get to feel better, we get to feel the status, but needing a loyalty program almost to fund your, your month to month, you know, household budget is quite different.

Amanda: Definitely, and it is that Paula, it’s exactly that. And when we ask the question over your loyalty statements. Um two thirds of the respondents say, I like to build up my points for bigger rewards. So there’s a very much a mentality for a lower income customer around, um, I’m going to build up, I’m going to build up, and then I can afford my child’s uniform for, back to school in January. Or I can afford that extra treat for the festive season and so on. So, it’s really amazing to see that the programs can help, help along the way. Great quotes from South Africans. You know, some of the icon leaders of South African retail talk about everybody. You know, less wealthier customers need discounts. Everybody loves discounts. So for loyalty programs are a bit like the same that everybody can love a loyalty program cause everyone can benefit. But the lower income customer needs this, this boost to their income.

Paula: My goodness.

Amanda: Yeah. What’s really interesting though in this, in the lower income study is, um, It’s a very different set of brands that are coming out as the most used programs. So it’s dominated by ShopRite Xtra Savings. So people who know the market would not be surprised by that. Pick n Pay Smart Shopper come still at number two. So they’ve managed to feature at number two on both studies. But then interestingly number three is Capitec Live Better and Capitec is a banking brand, brand new program. It’s been in the market now about 18 months and comes straight in at number three. And they were the winner of the Best Financial Services loyalty program at the South African Loyalty Awards announced last month. Um, so we are seeing a different, different mix of brands in the lower income customer group. And then that one question about which program can’t I live without? Number one is ShopRite Xtra Savings, and then number two is Capitec Live Better. So, those two brands are heavily dominating this segment. And actually number three is Pick n Pay Smart Shopper. Fourth, FNB eBucks. Yeah.

Paula: So grocery obviously first and third, and then financial services, as you said in second and fourth. So yeah, essential everyday services, I guess. Huh?

Amanda: Absolutely. Yeah, absolutely.

Paula: Yeah. Well, well that’s definitely gonna be a piece I think that your clients are gonna love and of course the whole South African market, I guess, in terms of loyalty professionals and certainly everybody listening to this show, who’s thinking about, you know, what have they not thought about? I guess it’s, um, super useful. So I guess my final question is, Amanda, You know, of everything that you have, all of the work, the hours that you’ve put in, as you said, the seventh edition now of the White Paper, what would you say was the most surprising thing that came out in this year?

Amanda: So we asked another question, um, so there’s quite a lot of new questions in the report, um, and this question’s around which, which of the programs give me offers and benefits, which are personalized. So measuring relevance, and this might not be a surprising set of answers, but it’s super insightful. So what comes out, the brand that comes out one and the brand that comes out two is Discovery Vitality, and Standard Bank Ucount. So we’re seeing that direct correlation in the top two spots of. The program I can’t live without. Now what is it? So then I did a, an analysis. If I look at the top 10 programs and this, which program is most relevant to me? There’s an 80% correlation with the results of the top 10 of the program I can’t live without. So very, very strong correlation. If I look at these results of relevance against the most used top 10, it’s only a 40% correlation. So usage obviously is driving acknowledgement of size of customer base and obviously relevance and to or, or preference because I’m using the program, but absolutely the program I can’t live without and are they relevant to me, are so tightly correlated that we all talk about personalization being a buzzword. It’s not just a buzzword, it’s the, It has to be the central theme running through your program design, because without it, Yeah, customers have choices and they’re gonna, they’re going to say, thanks, but no thanks. I’ve got other choices and other brands are doing it better, and I’ll go to them. Yeah. So it’s no longer just that thing that some loyalty consultants talk about needs to be, the DNA of everybody’s loyalty program.

Paula: Totally. Yeah. And actually it almost brings us back to where we started, Amanda, because we talked about how many programs am I actually engaging with. So we all know that there’s absolutely no point bringing people into the program if they’re not going to actually use it. And personalization is clearly what we actually feel when we’ve signed up, and what am I actually experiencing? So therefore, what am I gonna use? So very compelling to hear that coming through in this White Paper.

Amanda: Yeah. Lovely. Thank you. Thank you.

Paula: Wonderful. So will you just tell us again, Amanda, single most important thing is where can people access this? I know it’s your website, so maybe just give out the, the web address again for everybody listening.

Amanda: With pleasure. So it’s www dot truth t r u t h. Really simple, Truth.co.za. and we’ll have it as the banner homepage banner for many months. I mean, it is really is our go to.

Paula: It’s your flagship.

Amanda: Everyone seems to search it, yeah.

Paula: Absolutely.

Amanda: And it’s part of, actually it’s the, this White Paper is part of our educational series, so we, we run a, we run online courses in loyalty programs and data for loyalty marketeers, and we find that this is part of that series that really helps educate brands. In loyalty or brands supporting loyalty like vendors or data companies to better understand loyalty and how to approach their clients and so on. It’s fundamentally part of that, um, customer academy education series.

Paula: Got it. Yeah. And when I think about my own loyalty career, Amanda, and coming in, you know, from another marketing discipline in and having responsibility for a program, there is nothing like getting your hands on, particularly all of the White Papers, and again, all of them I know are still live. You know, way back to the first one, which I think was 2015. I’m just scanning down the website, so, so I know anybody who is feeling that they need more education and inspiration, which is exactly what we do on this show. Um, it’s all available there on your website. So listen, uh, it’s been a wonderful conversation as always, Amanda. Is there anything else you wanted to mention before we wrap up?

Amanda: No, I think I’ve taken more. More of your time or your audience’s time. So thank you for the opportunity to talk about it again. It’s, um, a fun subject and I hope everyone enjoys the read.

Paula: Absolutely. You should be very proud. So, Amanda Cromhout, founder and CEO of Truth in South Africa. Thank you so much from Let’s Talk Loyalty.

Amanda: Thanks Paula.

This show is sponsored by The Wise Marketer, the world’s most popular source of loyalty marketing, news, insights, and research. The Wise Marketer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 245 executives in 27 countries as certified loyalty marketing professionals. For more information, check out thewisemarketer.com and loyaltyacademy.org.

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