#106: Intense Competition Driving Loyalty Innovation by South Africa's Old Mutual

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.

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

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

PAULA: Hello, and welcome to episode 106 of Let’s Talk Loyalty.

PAULA: It’s May 13th, so first of all, Eid Mubarak to those of my listeners who are celebrating.

PAULA: As many of you know, I love to chat with global voices of loyalty.

PAULA: So today, my guest is in South Africa, a country with a very advanced, well-educated, and highly competitive loyalty industry.

PAULA: I’m chatting to Brett Cameron, who is head of rewards at Old Mutual, a premium South African financial services group with operations in 14 markets.

PAULA: In today’s show, we discuss their challenge to build something innovative in such a competitive market, and how their loyalty program is attracting new insurance customers as well as retaining the others.

PAULA: So Brett, tell me, what is your favorite loyalty statistic?

BRETT: For me, it’s got to be the frequency of engagement, particularly for this type of industry where we work in insurance and financial services.

BRETT: Our financial advisors, if they’re lucky, engage with our customers at least once a year.

BRETT: And we really need to build more frequent engagement with our customers.

BRETT: And the loyalty program is a good strategy to enable that.

BRETT: And if we can get to customers interacting with us weekly or daily, that’s a huge leadership from what they’re used to.

PAULA: Yeah, yeah, you’re absolutely right.

PAULA: I know for me, the insurance company, I tend to not look forward to those phone calls, let’s be honest.

PAULA: It’s usually have to pay money or figure something out.

PAULA: So you’re absolutely right.

PAULA: If there’s more pleasant ways to connect with each other, I think that’s a good goal.

PAULA: So the obvious question, I suppose then, is how are you going about achieving that from a loyalty perspective?

BRETT: That’s really interesting for us.

BRETT: It’s been the history behind the philosophy of our whole program.

BRETT: We recognize it’s quite hard to build engagement around our products.

BRETT: As you say, they may be boring and may be not something that people look forward to engaging around.

BRETT: And so the trick for us has been to almost borrow other own activities from a parallel domain to create those engagement activities.

BRETT: And for us, we’ve built it around helping people with their financial well-being.

BRETT: It’s a range of things from engaging in financial education, learning more about your finances, using various tools and calculators that we would give to people to get insight into their financial position.

BRETT: And ultimately, we’re trying to shift our customers’ financial behavior on a day-to-day basis.

BRETT: So they realize some benefit out of this rewards proposition we take to them as well.

PAULA: Yeah, absolutely.

PAULA: And again, listeners around the world, Brett, mightn’t be as familiar with the South African loyalty market, but we’ve talked about it before.

PAULA: You’re obviously based there, but certainly from my perspective, it’s an extraordinarily mature and commercial and effective part of the world where consumers have been, I suppose, lucky to benefit from programs like yours for maybe, I think, 20, 25 years.

PAULA: So they’re very, I would say, educated on the loyalty business.

PAULA: So I know you told me before, you’ve learned from that, you’ve leveraged it.

PAULA: It’s not your first attempt at building a rewards program, if I’m right, yeah?

BRETT: Yeah, so in South Africa, I think your loyalty programs are very popular in general.

BRETT: And in financial services, we’ve got some really, really strong competitors who’ve been innovating in the loyalty space.

BRETT: Discovery Vitality is a famous program in the insurance industry.

BRETT: F&Bs, E-Bucks is our strong program in the banking space.

BRETT: And yeah, they launched in the late 90s, and as a company, Old Mutuals, watched them over the years and tried to think about how to respond.

BRETT: And so, yeah, this is now effectively the third time we’ve made a serious attempt of trying to launch a program, and the first time we put it off the ground, and great to be competing in the race.

PAULA: Absolutely.

PAULA: So it’s what?

PAULA: It’s two and a half years old now, I think you said, the Old Mutual Rewards Program?

BRETT: Yeah, we launched in mid 2018, and we’ve now grown to close to a million members, which has been quite rapid growth for us in South Africa.

PAULA: Yeah.

BRETT: I mean, our sites are set much higher.

BRETT: We are, I think, the largest program since Africa have memberships of around 10 million members.

BRETT: So hopefully, one day in the future, we’ll get to that sort of scale.

PAULA: Absolutely.

PAULA: And again, I suppose, you know, I wasn’t familiar with Old Mutual, you know, specifically as a company.

PAULA: And I think it’s just extraordinary.

PAULA: The company is 175 years old.

PAULA: So want to just acknowledge the incredible business that you’re working for.

PAULA: And also for being very honest, you know, I think there’s very few companies get it absolutely right the first time they launch Loyalty.

PAULA: But it’s usually an evolution, I think, in my experience of, you know, just, you know, evolving a proposition.

PAULA: But, you know, to kind of have a third go and to be finally getting it working, I think you must be super proud.

BRETT: Yeah, it’s great to have that part there.

BRETT: I think we’ve got a lot of learning to do and a lot of development to catch up with some of our competitors.

BRETT: But, yeah, I think it’s great to be out of the stocking blocks.

BRETT: And I think it brings a really interesting dimension to the to our business.

BRETT: Things that I think will be enable us to innovate in very interesting ways in years to come.

PAULA: Yeah, I think one of the things that really impressed me when we spoke before, Brett, was the policy or the decision you made about who can join your program.

PAULA: And I think we all know that loyalty programs’ primary function is to change behavior and to increase, you know, customer lifetime value.

PAULA: But actually, you’ve opened it up much more broadly.

PAULA: And I think what you said to me is that you don’t even have to be a customer of Old Mutual to become a member of Old Mutual Rewards.

PAULA: So I’d love you to just explain the thinking behind that and how that part of it is working.

BRETT: Yeah, when we’re building our program, we were faced with that decision.

BRETT: So who do we allow to join and what are the qualification criteria we have to join the program?

BRETT: And the first obvious answer is our customers.

BRETT: And our customers traditionally are people who have a product that we sell, are paying us premiums, investing money with us.

BRETT: And we realized actually we interact with lots of other customers who know our brands, they get financial advice from our financial advisors, they walk into our branches, and they don’t always walk out of those interactions having purchased the product.

BRETT: And so we said, well, why do we have to stick to this traditional definition?

BRETT: Why don’t we open up our program more broadly, use these as, use the rewards program as an opportunity to build on these relationships that have been created.

BRETT: And then we said, well, actually we’ve got a proposition in this financial well-being, financial behavior change concept that’s relevant to anybody that’s South African.

BRETT: So let’s say South African join the program and we can engage them on their financial well-being.

BRETT: We’re happy to give away some rewards points for doing that.

BRETT: And hopefully down the line, some of these people that have joined our program will become customers because we’ve been able to raise their awareness, open their eyes to some of their financial needs and to build that relationship with them that I hope in time they’ll pay us back by becoming a customer.

PAULA: Absolutely.

PAULA: And you’ve earned their trust as well, obviously then, Brett, because we’ve often had the discussion on the show before about who goes first essentially, because there was a great statistic somebody mentioned about the intention or expectation of a loyalty program is, as we said, for customers to buy more and stay with you longer.

PAULA: But actually, what customers think loyalty programs are for is for the company to demonstrate loyalty to them.

PAULA: So I think there is this slight confusion, I think, between customers and brands as to who’s paying for this and how is it supposed to all work, and who’s going to come out on the upside.

PAULA: But it sounds like, Old Mutual, you’re very clear on that and you’re there to add value.

BRETT: You remind me of some of the initial research we did with some customer focus groups, and we were presenting kind of the proposition to customers and all the amazing things that customers could get.

BRETT: And customers, they’re not stupid, they’re not, they would like everything for free, they would like their free lunch, but they also realize that there’s no such thing as a free lunch.

BRETT: So in the research they’re asking, but what’s the catch?

BRETT: Why is Old Mutual giving this away?

BRETT: And you almost need to be quite transparent with customers about what’s the trade-off?

BRETT: What’s the deal that they’re entering into?

BRETT: Because they do realize that, yes, they are expecting something rewarding, but the companies aren’t just giving handouts that they do have businesses to run, and they expect a trade-off.

BRETT: So it’s been quite common in many industries in South Africa for us to talk about a shared value model that we’re wanting to create value both for our customers and for the business.

BRETT: And any value that we’re creating for the business, we want to share back with our customers.

BRETT: And it does give them something back, but it also is something that we can leverage to create the incentives that loyalty programs bring.

PAULA: Yeah.

PAULA: And again, your way ahead, because I have now seen in the UK, for example, that there are, for example, no strings attached consultations being offered to potential customers.

PAULA: And again, probably a little bit of cynicism in the beginning, but genuinely it works for both parties and genuinely it’s a shared value.

PAULA: Because if I do get good advice, then I feel comfortable, okay, I might move my business to these people.

PAULA: But I’m not prepared to take that leap until they’ve, I suppose, proven themselves first.

BRETT: Yeah, it doesn’t have to be a direct trade-off.

BRETT: It’s in the spirit of working together and working in both people’s best interests.

PAULA: Yeah, and I think the number that you gave me, again, if you’re happy to share it, about 20% of your members at the moment are not customers.

PAULA: So it is a significant percentage.

BRETT: Yeah, it has been good.

BRETT: And what’s really been heartening for us is to see how many of those members who aren’t customers are becoming customers.

BRETT: We have some amazing stories.

BRETT: People who’ve engaged with our financial education and all the tools that we’ve offered them.

BRETT: And at the end of the process, we’ll say, wow, this has really opened my eyes.

BRETT: I now know what financial needs I have.

BRETT: Interestingly, when they sit down with our financial advisors, they’re probably some of the best customers because they’re well-informed, they know what they want, and they’re actually quite easy for our advisors to sell to.

PAULA: Wow.

PAULA: And did the financial education exist before the loyalty program, Brett, or is it purely part of the loyalty program?

BRETT: No, it existed before.

BRETT: Old Mutual’s done lots of things with financial education over the years, some of it classroom-based.

BRETT: In this case, we leveraged a digital financial education capability.

BRETT: But what we found with the loyalties program space was quite difficult to get customers to engage with financial education.

BRETT: Somebody to engage with finances generally, it’s not an easy thing to attract people to.

PAULA: You’re right.

BRETT: But adding a few rewards and telling people you can earn a few rewards points for engaging this has been a dramatic shift in the level of people who are engaging with the financial education we’re offering.

PAULA: Wow, you’re right.

PAULA: It’s something I always kind of put off or I almost resent doing because I think I expect to be confused.

PAULA: So well done on putting that extra incentive in place because I probably need someone like that to educate me.

PAULA: Is it mainly video based then, Brett, in terms of the loyalty?

PAULA: I think you call it moneyversity, am I right?

BRETT: Yeah, so moneyversity was the platform that had been built a little animation studio here in Cape Town that does a lot of education based animation development.

BRETT: And they did a really good job with it.

BRETT: But to me, that’s part of the full education.

BRETT: There’s so many aspects of learning about your finances.

BRETT: Part of it is consuming some content, watching videos, reading articles, but we also put a bit of emphasis on practical application, giving our customers and members tools that they can use to get insights.

BRETT: One of our exciting sort of startup ventures has been a little budgeting app that we built in South Africa, where it’s one of those apps that links into your bank accounts and pulls all your transactions and automatically populates a budget for you.

BRETT: So that’s an app that Old Mutual owns called 227.

BRETT: And we’ve added rewards onto budgeting activities in 227.

BRETT: And so we’re giving our members very practical tools where they can actually do things and take action, and get insight and learning from that as well.

PAULA: And 227.

PAULA: Now, forgive me, but is 247 not what I would expect?

PAULA: What’s missing?

BRETT: It is 247.

BRETT: I think the history of the name was 22 divided by 7, which is a short way of writing that mathematical symbol pi.

BRETT: Oh, okay.

PAULA: Much cleverer than me.

PAULA: Okay.

PAULA: So you can tell I’m not the mathematical type.

PAULA: Well, I’m glad you’ve explained that to me.

PAULA: That’s brilliant.

PAULA: And I suppose just in general then, Brett, as I said, I love the fact that it is around education, shared value for members, not just customers.

PAULA: And I would love then just to get, for listeners, a sense of, you know, exactly the business areas that’s covered with the rewards program, because I was looking on the website and there’s actually a huge variety of things.

PAULA: So you’ve mentioned the tools, we’ve mentioned money versity, but there’s also, I suppose, product areas and that kind of side of the loyalty program as well.

BRETT: Yeah, absolutely.

BRETT: And that’s the core of Old Mutual’s business is the products we take to market.

PAULA: Yeah.

BRETT: Old Mutual’s historically been an insurance and investment company, but these days is more of a broad financial services company getting into the banking space.

BRETT: We do short-term insurance.

BRETT: Pretty much every financial need a customer could have, Old Mutual is able to provide for them.

BRETT: And another thing that’s been one of our big success factors is for such a broad organization dealing with so many different products, so many different customers, Old Mutual also does business from the lowest income customer in South Africa to the highest income customer.

BRETT: It was important for our success that we did.

BRETT: We created a program that reached across the group.

BRETT: It would be quite easy to build a program that applied to one product set or one customer segment.

BRETT: But to be able to integrate everything into one program was really critical for us.

BRETT: And that will enable us to build scale.

BRETT: It will enable us to leverage the program more effectively across the group.

BRETT: And it’s probably enables us to drive what I see as our primary definition of loyalty is encouraging customers to come back and purchase from us again.

BRETT: Not just the same product they might have bought before, but a product in a new category, a new financial need.

BRETT: To do more business with us as a result.

PAULA: Yeah, lovely.

PAULA: And I know you have five tiers, isn’t it, in the rewards program, Brett?

BRETT: Yeah, so while we have the primary driver of value is points that you can spend, so the points currency.

BRETT: We do have a tiering system.

BRETT: Five tiers are based on the number of financial needs that you have with Old Mutual.

BRETT: And as you meet more financial needs, you earn more points.

BRETT: So we give customers a percentage of every premium they pay back in points.

BRETT: And the top customers get quite significant percentages of every premium back.

PAULA: Wonderful.

PAULA: And I saw you also talking about new channels coming to market.

PAULA: A new app I know is coming, Whatsapp, one of my favorite tools.

PAULA: And also another favorite of mine, USSD, which I know lots of listeners may not be familiar with.

PAULA: So I wanted to just get a sense from you how important you think USSD is.

PAULA: And maybe even if you don’t mind explaining it, Brett, because I think it’s something very dominant in Africa, but not really in other parts of the world.

BRETT: Our program is very digital, so all these digital interaction channels are really critical for us.

BRETT: USSD is something new for us to build, but it’s been around in Africa for many, many, many years.

BRETT: It’s very popular in banking and loyalty programs, generally, but also the mobile networks use it very actively.

BRETT: Basically, what it is, it’s sort of a short text message service where you effectively dial a string of numbers and it presents you with a text interface where you can choose options.

BRETT: Menu item one, menu item two.

BRETT: I think it’s used because the billing works slightly differently.

BRETT: It’s based on the voice minutes of your cell phone contract rather than using data.

BRETT: It’s very effective at database type interactions in areas where there’s maybe poor connectivity and a traditional website might struggle to load.

BRETT: So, USSD has been very effective across Africa where data connectivity might be a challenge.

BRETT: So, customers in Africa are quite well-versed in using USSD for just going on to their mobile network, buying airtime and in many markets doing banking, being able to see their banking balance, to be able to make payments to all those types of transactions.

BRETT: And increasingly, loyalty programs are leveraging that capability.

BRETT: So, what we’re going to allow our customers to do is to be able to file USSD see their status on the program, the tier they’re on, the points balance they have, and to be able to redeem those points.

PAULA: Yeah.

PAULA: Lovely.

PAULA: Yeah.

PAULA: And I know, again, just from talking to various people in various countries, and not even in South Africa, actually, in perhaps less developed countries, I think from a brand’s perspective, some of them were concerned that it would be seen as maybe a step backwards, because it’s quite a dated technology.

PAULA: But certainly, my view is, it very much does cater to people who don’t even have a smartphone.

PAULA: So they have an older dumb phone, as we used to call it in the telcos industry.

PAULA: So it does make a loyalty program extremely accessible.

PAULA: And as you said, customers in all of Africa really know that function.

PAULA: It’s very intuitive.

PAULA: Once you’ve got the menu numbers, people know how to use it.

PAULA: So I really do think it’s a good option for loyalty programs.

PAULA: I think it’s fantastic that you’re including it.

BRETT: And we’re building WhatsApp in parallel, which is going to have very similar functionality and probably more modern interface, but it’s going to work very similar way.

PAULA: It’s going to do the same thing.

BRETT: It’s going to support chat, present menus, and allow customers to redeem their points via WhatsApp.

BRETT: I think it’s going to be very exciting to do.

PAULA: Wonderful.

PAULA: It sure will.

PAULA: What’s your time frame on that part of it, Brett?

BRETT: So some of it’s already live.

BRETT: Our customers can already see their points balance on all these channels.

BRETT: And in the next few weeks, the redemption part of it will be live as well.

PAULA: I’ve been talking a lot about WhatsApp recently, and there’s not many people even at that stage that you’re at, Brett, in terms of having the points balances available.

PAULA: So well done on getting that part live.

PAULA: Was it complex, can I ask?

BRETT: It took a while to get the baseline technologies in place, but to actually do the development has been quite swift.

BRETT: We’ll have to see how we enhance it into the future.

BRETT: If it’s easy to keep using, then maybe we’ll find other uses for it.

PAULA: I’m sure you will.

PAULA: Absolutely.

PAULA: I will be playing close attention.

PAULA: My final question for you then is, I saw that you had mentioned somewhere about the next phase of your partnerships.

PAULA: I know you have lots of partnerships already for the Old Mutual Rewards Program.

PAULA: And I saw you talking about points for becoming physically fit or maintaining your fitness, which again, I know it’s not the first time it’s been done in South Africa, but I love to see that you are building that, I suppose, behaviour incentive into your own business and into your own program.

BRETT: Yeah, so I’ll be focused on the financial wellbeing.

BRETT: Many of our competitors have a strong element of health and fitness in their program.

BRETT: So as an insurance company, it’s something very important for us to do.

BRETT: And we are going to be developing that out over the next few years.

BRETT: For now, we’re giving some of our customers some additional value if they’re participating in fitness events and endurance activities.

BRETT: It’s something we’re going to continue to expand on into the coming years.

PAULA: Yeah, and I definitely think again, as we please God emerge from this pandemic sometime soon, physical health will only become more important.

PAULA: But I also think things like mental health as well.

PAULA: So I’m sure that’s on your roadmap as well, because again, it’s happening in other kind of loyalty programs.

PAULA: And I know you’re looking globally.

PAULA: But I think it’s important for all of us to kind of see what we can do to support our members and our customers in ways that particularly aren’t directly relevant to your business, as you’ve said.

PAULA: But at the same time, it does just respect them, I suppose, as human beings and supports them overall.

BRETT: Yeah, absolutely.

BRETT: And that comes back to that shared value at the end of the day.

BRETT: If we can create value for our customers, not just by giving them points, but also to create solutions that encourages good behavior and behavior change.

BRETT: Customers are very interested in engaging with those type of propositions.

PAULA: For sure.

PAULA: Absolutely.

PAULA: Well, listen, that’s all the questions, Brett, I have from my side.

PAULA: It’s clear you’re doing amazing work with a million members, two and a half years in, and really feels like you’re building something now that’s working for you.

PAULA: Is there anything else that you wanted to mention before we wrap up?

BRETT: I think, yeah, it’s been a really exciting journey.

BRETT: Great to be part of an interview like this.

BRETT: I think there’s so much that we can learn from each other.

BRETT: It’s actually been really interesting talking to you and listening to some of your other podcasts around how we’re all in very much a similar situation, managing these programs and learning from each other.

BRETT: I look forward to listening to more kind of interviews and seeing what ideas I can borrow from some of your other podcasts in the future.

PAULA: Well, you know what, Brett?

PAULA: There’s a phrase I’ve heard in another industry called Steal with Pride or Copy with Pride, and that’s absolutely what this show is totally here to do because none of us have all the answers, and at the end of the day, somebody’s found solutions that we all need.

PAULA: So I definitely hope it’s useful.

PAULA: So in closing, I’ll first of all thank our friends in Comarch for introducing us.

PAULA: I know you’ve been doing great work with them over the past number of years.

PAULA: And from my side, I just want to thank you for your time, for your thoughts, and for your amazing work.

PAULA: So Brett Cameron, head of rewards at Old Mutual, thank you so much from Let’s Talk Loyalty.

BRETT: Thanks, Paula.

BRETT: Great chatting to you today.

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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