#145: South African Consumer Loyalty Insights 2021

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.

AMANDA: Thank you.

PAULA: This episode is brought to you by Epsilon and their award-winning People Cloud Loyalty solution.

PAULA: Personalization should be integrated into the entire customer experience, including of course, your loyalty program.

PAULA: With this in mind, Epsilon recently released a guide outlining six key components that will put you on the path to personalizing your entire loyalty experience.

PAULA: This guide challenges you to do some housekeeping and reconsider how you think about your current and future loyalty personalization efforts.

PAULA: So to download your copy of the report, visit epsilon.com forward slash let’s talk loyalty.

PAULA: Hello and welcome to episode 145 of Let’s Talk Loyalty.

PAULA: Today, I’m back in one of my favorite countries in the world, both personally and professionally.

PAULA: South Africa is a fascinating country of over 60 million people with 11 official languages, three capital cities, and plenty of ethnic diversity.

PAULA: Amanda Cromhout is the founder of a boutique loyalty consulting firm called Truth.

PAULA: And she’s joining me today for a second time.

PAULA: We’re here to discuss the latest findings from the Truth and Brandmapp 2021 South African Loyalty White Paper, which was created from the country’s largest study of consumer behavior in the recent year.

PAULA: While the programs you will hear us discuss are obviously only relevant locally, the trends and insights are definitely relevant globally.

PAULA: So I hope you enjoy listening to my latest conversation with Amanda Cromhout from Truth in Cape Town, South Africa.

PAULA: So Amanda, first of all, welcome back to Let’s Talk Loyalty.

AMANDA: Thanks Paula.

AMANDA: Absolutely lovely to chat to you again.

PAULA: Great.

PAULA: Great.

PAULA: And I’m sure it’s been a hectic week since you launched the white paper last week, has it?

AMANDA: Yeah, it’s great.

AMANDA: It’s a important thing in the South African Loyalty Diary.

AMANDA: So yeah, it’s been everyone’s interested and that’s the response we needed.

AMANDA: So yeah, it’s great.

AMANDA: Thanks.

PAULA: Wonderful.

PAULA: Wonderful.

PAULA: So you’ve given me some incredible insights already, Amanda, on the key topics we’re going to talk through today.

PAULA: But let’s open, as we always do, with your favorite loyalty statistic with all of this amazing research hot off the presses.

AMANDA: Great.

AMANDA: Thanks.

AMANDA: So yeah, the survey that we have released, the white paper is in collaboration with a company called Brandmapp.

AMANDA: And well, the study is called Brandmapp.

AMANDA: The company is called Y5, and they survey online.

AMANDA: The responses are online.

AMANDA: So it does skew towards customers with a household income of 10,000 rand or more in South Africa, which is approximately what’s that in dollars?

PAULA: 650, I think I worked it out or 675.

AMANDA: Yeah, household income.

AMANDA: So household income.

AMANDA: So it really is the majority.

AMANDA: It’s certainly the majority of economically active South Africans.

AMANDA: 80 percent of consumer spend is captured in this survey.

AMANDA: So we are confident, Brandmapp and Truth, we’re confident from the data to be able to say that 74, the stats you’ve asked before, 74 percent, so 74 percent of economically active.

AMANDA: And I’ll stop saying that after this introduction.

AMANDA: Economically active South Africans are using loyalty programs.

AMANDA: So that’s an enormous quantum of all consumer spend is captured by loyalty programs in the South African market.

PAULA: Yeah.

PAULA: And I actually think you’re right, Amanda, to to emphasize the economically active because South Africa has, you know, very different demographics to, I guess, anywhere else in the world.

PAULA: So there are an awful lot of people who are not economically active and therefore won’t be relevant for loyalty program owners and certainly this audience.

PAULA: And so no problem with that being emphasized.

PAULA: But, you know, wow, what a statistic.

PAULA: 74 percent.

PAULA: Were you delighted?

AMANDA: Absolutely.

AMANDA: It is up versus last year.

AMANDA: So last year actually was 2019 data, but we released the white paper in March 2020 and that was 72 percent.

AMANDA: So that is an increase.

AMANDA: It’s not the highest it’s ever been, but it is an increase.

AMANDA: So the highest it’s ever been was in 2017, where we saw the statistic at 79 percent of consumer spend, active South Africans using loyalty programs.

AMANDA: But yeah, it is up.

AMANDA: And even so, even if it was at its 2019 data, at 72 percent, it’s still a gargantuan number.

PAULA: It is.

PAULA: You’re absolutely right.

PAULA: Yeah.

PAULA: And you also did explain to me before we came on air, I suppose the absolute numbers is about 30,000 people.

PAULA: And you also emphasized, which I think is useful for the audience to understand, it’s 100 percent of taxpayers in South Africa.

PAULA: So it really is the full addressable market from a loyalty perspective.

AMANDA: Yes.

AMANDA: And the Brandmapp study, I mean, research to 33,000 people is a solid piece of research.

AMANDA: You know, it’s robustly very, very solid.

AMANDA: And they’ve been doing their Brandmapp study for nine years.

AMANDA: So their actual study covers so much more than loyalty.

AMANDA: We’re just lucky enough to work with them in partnership to gather the loyalty data for our white paper.

PAULA: Wonderful.

PAULA: Yeah.

PAULA: I think you said to me, there’s 200 odd measures of consumer behavior that Brandmapp are capturing.

PAULA: And you obviously hone in on 20 or 20 or so questions which are relevant for your needs, for your clients, for your market.

PAULA: So as you said, it’s extraordinary to be able to piggyback and everybody gets the benefit.

AMANDA: Yeah, absolutely.

AMANDA: And the industry does as well, because the industry uses this and we’re able to use it to help clients throughout the year.

AMANDA: And a lot of the industry has been in touch with us already, saying, OK, great, let’s unpack it in more detail.

AMANDA: So, yeah, it is a win-win for sure.

PAULA: Great, great.

PAULA: And I was looking back, Amanda, because, as you said, the last study that you released was completed in 2019, and which I believe your appearance on my show was episode number 27, March 19, 2020, I think in Dubai, we were two days in lockdown.

PAULA: You were probably the same in South Africa.

AMANDA: Wow, goodness, I know there’s so many of those moments.

AMANDA: In fact, we were chatting on the launch last week.

AMANDA: Brandon, from who talked through, he works for Wi-Fi.

AMANDA: He talked through the Brandmapp results.

AMANDA: He said actually that we had a live event last year, and that was, I think, probably the last, certainly the last group gathering I’d been in for 18 months now.

PAULA: Oh, my Lord.

PAULA: Well, hopefully sometime soon again, Amanda, huh?

AMANDA: Yeah, and I think what I love about this year’s white paper, this release, it really is a view of life captured of consumer behavior throughout lockdown.

AMANDA: You know, so we’ve been able to see some fascinating results that really do reflect the 18 months or the 12 months because the data were the research went into fields in March and April.

AMANDA: So it captures 12 months of COVID’s impacted consumer behavior.

PAULA: Got it.

PAULA: Got it.

PAULA: So where should we start, Amanda?

PAULA: What is the first thing that you learned from this incredible piece of research that our audience would love to learn?

AMANDA: Yeah, so before I talk about the actual brands that have changed their sort of hierarchy of usage numbers, what we did find is that male usage is up dramatically.

AMANDA: And it has surpassed females, which has never been seen before in our marketplace, in the South African marketplace.

AMANDA: So 76% of the males from the survey are using loyalty programs, 72% of females.

AMANDA: And that number has never been higher, male versus female.

AMANDA: And that does, I really believe that does reflect COVID times, because everyone’s working from home.

AMANDA: Okay, I’ll go and do the shopping today, sort of behavior.

AMANDA: You share the household chores, the household consumer spend responsibilities.

AMANDA: And therefore, I think, the male consumers become more in tune to the benefits of loyalty programs, and particularly in retail.

AMANDA: When I unpack the different industry behaviors, you’ll see that, not surprising, retail has been on the up.

AMANDA: But yeah, we’ve seen higher male usage versus previously, and higher now versus female.

AMANDA: I know, fascinating.

PAULA: I was thinking back, as you were telling me, Amanda, to my, I suppose, media days, and when you’re booking advertising, for example, for brands.

PAULA: And we would always say, now, this was maybe 20 years ago, I will say, and in a digital context, so possibly skewered to a younger demographic, actually.

PAULA: But at the time, we always said that women made about 80% of household decisions.

PAULA: Like, we were that sure that it was just women who had the interest, had the time, and maybe just put the effort in.

PAULA: So it’s absolutely extraordinary.

PAULA: I think it’s the first time, actually, I’ve ever heard of a marketing study that has men more engaged and active than women.

AMANDA: I know, same, absolutely same.

AMANDA: So it’d be interesting to see if that continues as maybe normal life kicks back in.

AMANDA: But we’re delighted as well, because the relationship has been, brands can hold on to an existing relationship with their female or its female consumers.

AMANDA: And now maybe they can actually penetrate more of the more skeptical, more male consumers, being a bit more skeptical in the past of loyalty programs.

AMANDA: We see that in a boardroom discussion that often a boardroom might be even 50-50 or 80-20, whatever the statistics are.

AMANDA: And the guys are always the ones who say, oh, I don’t use loyalty programs.

AMANDA: And you have to unpack it for them and say, well, actually, the South African male consumer does.

PAULA: Yeah, yeah.

PAULA: Well, and I do think as well, as you said, for a brand that’s looking to influence household decisions, it’s one thing to be driving them through one member of the household, whichever one it might be, if there was a lead.

PAULA: But to have access, as you said now, to, you know, to people in the same household and, you know, getting the same communications, engaging with the same programs, I think it’s much more likely that the message will finally cut through, because I always think that especially has, you know, the number of programs increases.

PAULA: And I know you’ve seen growth in that as well.

PAULA: I definitely think, you know, the best programs are the ones that will be able to get their message, you know, in different ways to the same people in those households.

AMANDA: Absolutely.

AMANDA: So obviously, if you break it down brand by brand, which the Brandmapp study can do, we don’t publish it in the white paper in that level of detail.

AMANDA: But if we were breaking it down by every single one of, say, the top 25 most used loyalty programs, they will then give you an actual percentage split out of 100% of male versus female.

AMANDA: So we don’t publish that level of data, but it’s readily available.

PAULA: Yeah.

AMANDA: Super interesting.

PAULA: Yeah.

PAULA: So I loved the usage figure, and I also loved, Amanda, that you compared it to the recent US statistics.

PAULA: So obviously the Bond Brand Loyalty Report came out recently, and also versus some usage statistics from Australia.

PAULA: So will you share with the listeners exactly what’s happening in terms of the number of programs that South African members are connecting with or engaging with, or members of, pardon me?

AMANDA: Yeah, so the South Africans are now members of 8.7 programs on average.

AMANDA: Obviously, it’s an average, which in isolation doesn’t probably mean very much, but versus the 2019 study, it’s up by 50%.

AMANDA: So that’s massive.

AMANDA: It was 5.6 programs.

AMANDA: So we see a 50% increase there.

AMANDA: So we’ve seen this huge leap from 5.6 to 8.

AMANDA: In fact, when we first started tracking these number of programs was 2014, it was 3.6 programs.

AMANDA: So we’ve really seen the growth over the seven years.

AMANDA: But then if we do look at the comparative stats, as you suggested from, it was great that we had the bond study and the Australian figures had come out previously.

AMANDA: You see in the US, the US bond have tracked the US market at 16.7 programs, average Canadian 13.4, and then the Australians is a lot less at 4.4 versus South Africa at 8.7.

AMANDA: So it’s the first time we’ve seen actually that figure in South Africa go up so dramatically, and it’s good to see its comparison globally.

AMANDA: What we do see, though, even though I said that more male consumers are using loyalty programs than before and slightly more than female consumers, in terms of the actual number of programs, the females are members of more programs.

AMANDA: So the more males are using loyalty, those females that are using loyalty are members of more programs than their male counterparts.

AMANDA: But that gap is narrowed.

AMANDA: So if we track it year on year over the past six years, it used to be plus or minus 30% difference between the two genders, and now it’s 20%.

AMANDA: So males are members of 7.9 programs and females at 9.5.

AMANDA: So we’re seeing the gap narrow, but the females are still sort of more acutely aware of the number of programs they can participate in.

PAULA: So already I’m thinking we have to book you in for your annual appearance, Amanda.

PAULA: Totally, totally.

PAULA: Which I know you do.

PAULA: So that’s always what’s amazing.

PAULA: I think you said it’s the sixth year of your participation and publishing this white paper, isn’t it?

AMANDA: It is, yeah.

AMANDA: And I think that’s what makes it more and more interesting now because on writing this year’s paper, which I absolutely thoroughly enjoy doing because it really gets your head out of, you know, it just gets your head into a sort of strategic space for the market rather than per client.

AMANDA: Yeah.

AMANDA: We were able to really look at so many of the measures over time, which obviously we can now do so because we’ve got the longitudinal study coming from Brandmapp.

AMANDA: Brandmapp’s actually in its ninth year, and this was the sixth time we’ve issued the white paper.

AMANDA: And the history of the white paper is obviously the data, the most up-to-date data is relevant for this year.

AMANDA: But the previous stories, because each year we pick off different strategic loyalty stories, so I always say to our clients, if you actually just want a good old-fashioned loyalty read, you can download any of them, because they’ve all got different angles and different stories that we focused in on in that particular year.

PAULA: Yeah, you’re absolutely right.

PAULA: As long as we know when something is coming from, there are still conclusions that provoke interesting thoughts and thinking.

PAULA: So I know you keep all of those white papers from every year on the Truth website, Amanda, so people can go in and download any of them and all of them, I guess, if they want some bedtime reading.

AMANDA: Yeah, absolutely.

AMANDA: Quite a lot of bedtime reading, but yeah.

PAULA: Yes, we’re probably a bit too geeky, quite for bedtime.

PAULA: But anyway, the option is there.

PAULA: So listen, my favorite statistic, I think you described it as a million dollar question.

PAULA: And I’m not sure how many markets actually ask it as maybe as well as you do.

PAULA: But the particular question about, you know, does membership of loyalty programs actually influence where you shop and what you buy?

PAULA: So will you share with the listeners the incredible results you got on that question?

AMANDA: Yeah, so this is it’s a deliberate question to and because it’s a extremely important and B, it actually then is super helpful for brands to argue the cause within their organization later down the line.

AMANDA: So that particular question, exactly.

AMANDA: Does it influence behavior?

AMANDA: So the criteria we ask is how, you know, does it?

AMANDA: It’s as simple as that.

AMANDA: Does it influence your behavior?

AMANDA: So where I shop, the products I buy, where I buy fuel, where I bank, the places I eat.

AMANDA: And then there is a question in there that says all of the above.

AMANDA: And interestingly, 27% of respondents say all of the above.

AMANDA: So whatever stat I’m about to give you, you actually need to add all of the above to it.

AMANDA: So I could give you the stats with all of the above built into the answers.

AMANDA: So the results are 91% of the consumers who are saying they use loyalty programs are influenced where they shop by loyalty.

AMANDA: 67% of the products they buy are influenced.

AMANDA: 64% where I buy fuel.

AMANDA: 60% where I bank and 46% where the places I eat.

AMANDA: So in terms of, is the investment in loyalty worthwhile?

AMANDA: I know there’s a million other different criteria and measurements you can use.

AMANDA: This is a strong indicator of how people feel.

AMANDA: And what the Brandmapp study actually allows you to do if a brand wanted to, is to then go, OK, well, can I look at a consumer who is deeply using my product and how they feel about that?

AMANDA: Because they can then look at, OK, which consumer said they use brand X and how do they respond to this question?

PAULA: And I know what we always have to do, I guess, Amanda, as consultants is expect somebody to play devil’s advocate.

PAULA: So for the purposes of my amusement today, what I could hear, you know, some people may be commenting, maybe let’s say the more skeptical people.

PAULA: And we know that that is a very big problem in our industry, I will say.

PAULA: So what they might say is, well, people say things and then they do things differently.

PAULA: How do you respond and how would you, what would you recommend loyalty practitioners say if they get that kind of challenge internally about what customers say they do and what they then actually always do?

AMANDA: Absolutely, Paula.

AMANDA: I mean, that’s the challenge of any research study, isn’t it?

AMANDA: So it’s claimed behavior, not actual behavior.

AMANDA: So the only thing I can back that up with is well, therefore, rip up every piece of research you’ve ever read because it’s not just about loyalty.

AMANDA: But otherwise, you know, if you take global stats of change behavior, you know, you’ve had many a practitioner on your show that talks about the incrementality measurement of loyalty programs.

AMANDA: You know, I think I love the stat you had a few months ago from Epsilon, where the gentleman was talking about plus 10 percent incremental sales performance, which is such a massive number.

AMANDA: So that’s actually saying, OK, well, if I take 100 million turnover because of loyalty and nothing else, it’s going to become 110 million.

AMANDA: So we always whenever there are and that is probably the biggest intellectual debate we have around loyalty with clients is over.

AMANDA: Well, how do you prove the value of it?

AMANDA: So this, as you say, from our survey, from the Brandmapp survey is claimed change of behavior.

AMANDA: But it’s not just we’re not talking about five percent of people say this.

AMANDA: We’re talking about 90 percent.

AMANDA: So even if it was 50 percent wrong, it’s still a massive number.

PAULA: Well, actually, that was going to be exactly my own response going, yes, you can’t dismiss everybody.

PAULA: You know, we all exaggerate, but we don’t totally kind of lie.

PAULA: You know, that’s what we think we’re doing.

PAULA: You know, so there has to be a lot of truth in it.

PAULA: And again, human beings being human beings, it’s hard to know.

PAULA: But then, no, I think that’s a very good way of putting it.

AMANDA: Yeah, I don’t believe 91 percent of the respondents are wrong.

AMANDA: I’m not going to hang on to the 9 percent that said they aren’t influenced.

AMANDA: True.

PAULA: And tell us about the generational piece, because I think, you know, probably consistent with other markets, Amanda, there is, you know, certain cohorts that are more disengaged than others.

PAULA: So what did you find for South African consumers?

AMANDA: Yeah, exactly that, as you said, it’s quite similar to other markets.

AMANDA: When we read from the UK, the Ugov study from the UK, they also claimed this exactly the same insight around the younger generation is certainly less engaged in loyalty programs.

AMANDA: So we see if I go back to that first statistic of 74 percent of South Africans are using loyalty.

AMANDA: Yeah, that’s that for the 18 to 24 year old age bracket is 46 percent.

AMANDA: So it’s dramatically less.

PAULA: Yeah.

AMANDA: And what we’ve seen over time is it’s started.

AMANDA: It started off dramatically less when we started recording it in the white paper.

AMANDA: But and then it increased quite a lot and then it has dropped off further.

AMANDA: So it’s it’s it’s not quite as it’s at its absolute.

AMANDA: Actually, it is.

AMANDA: I’m just triple checking.

AMANDA: It is.

AMANDA: Last time we ran that measured it in 2019, it was also 46 percent.

AMANDA: So no change since pre COVID.

AMANDA: And that’s the lowest two years since we’ve been measuring it.

AMANDA: So, you know, we I read what came out of the the Ugov, the Mando Connect Ugov study and everything they said actually resonated with the same for the South African marketplace.

AMANDA: So, you know, it’s very much that if you look at what the younger generation want from loyalty programs, not dismissing the fact that everybody wants cash back.

AMANDA: Everybody still wants cash as their number one benefit from programs.

AMANDA: But if you look at the softer benefits and you look at the softer opportunities that brands can present to their membership basis, the younger customer is looking to share more, is looking to donate more, is looking to do more for social responsibility.

AMANDA: And brands just aren’t quite going far enough on that.

AMANDA: It’s almost like, well, OK, you can give your points away, but what about going a bit deeper?

AMANDA: Can we not really make a difference?

AMANDA: So I do think the younger generation that that’s certainly a comment that came out of the Mando Connect report from the UK is that there’s just not enough genuine connection with social responsibility.

AMANDA: But let’s not also dismiss the obvious.

AMANDA: A younger consumer earns less.

AMANDA: They’re either maybe just starting out in their career and all their students or whatever the position they’re in.

AMANDA: And if you earn less, you’ve got less to spend.

AMANDA: So you’re going to get less benefit and therefore use loyalty programs less, because there is a direct correlation between claimed income and usage, lots of program usage, but it’s not as dramatic as the age drop off.

AMANDA: So the younger customer drops down to 46 percent, but the lowest income bracket of this survey drops down to 68 percent versus 74 as the average.

AMANDA: So it’s not as dramatic a drop off you see.

AMANDA: So the youth of not only is it an income factor, income, therefore spend factor, but it’s also an approach.

AMANDA: You know, are these programs doing enough, but also the digital adoption in South Africa?

AMANDA: Yes, there is progress, but they’re not, you know, it’s not instant enough.

AMANDA: It’s not technically amazing enough for the youngsters to, you know, talk to my kids about it.

AMANDA: And they’re kind of like, what do you mean?

AMANDA: I’ve got to wait.

AMANDA: Or what do you.

AMANDA: In everything, not just loyalty programs.

PAULA: We shouldn’t be surprised, Amanda, huh?

AMANDA: Yeah, exactly.

PAULA: And one thing I would add as well, because there was just something I loved in a recent interview as well.

PAULA: And I don’t know if you’ve seen it, Amanda, but it was a fabulous guy, David Canty, very well known in the industry, particularly in the US.

PAULA: But there’s a program there which is really, really relevant for the younger demographic because it’s based on rewarding rental payments.

PAULA: So if you rent an apartment or a house or even, I dare say, student accommodation, they’ve managed to find where the majority of that demographic are spending whatever income they have is probably on rent rather than luxury goods or going to the pharmacy or whatever.

PAULA: So I definitely think the relevance of categories does get, you know, it does increase, I guess, as we get older.

PAULA: So I thought there was a lot of insight there around, oh, yeah, rent is something that that demographic is spending their money on.

PAULA: So maybe loyalty is only relevant in sectors like that, you know?

AMANDA: Yes.

AMANDA: And yeah, I absolutely feel the power of that because we’ve done some really interesting work for a couple of clients here in South Africa, actually, who have really interesting accommodation, rental pools set up with really kind of great accommodation, like low cost, but modern and fresh and inspiring and no kind of 12 month lease period.

AMANDA: It’s more of a monthly come as you go kind of relationship.

AMANDA: And they’ve engaged with us on how loyalty can play its role in terms of rewarding great paying behavior and rewarding for payment on actually for paying rent.

AMANDA: And all the other stuff you can do as a great tenant.

AMANDA: So if you’re a phenomenal tenant, you look after the property, you give notice, you tell them when there’s a problem with electricity or whatever, whatever.

AMANDA: All of those non transactional behaviors around just living in a shared accommodation can be rewarded as well.

PAULA: Yeah.

PAULA: And I know we’re going to come on to talk about the categories of usage, Amanda, and banking is a really big one, obviously, in South Africa.

PAULA: And again, just as a final point on the rental concept, what I loved is certainly with built rewards, they’re building up the credit score for people who are, as you said, extraordinary tenants, paying their bills on time, and at some point will want that data to go, you know, and get a mortgage, please, God.

PAULA: So to get them onto home ownership.

PAULA: So I love that kind of giving back to the consumer for behaving again in a way that we want them to.

AMANDA: Yeah, yeah, it’s great.

AMANDA: It’s really, it’s great.

AMANDA: And it’s, you know, if you can capture the younger consumer at this age, then that’s a great lifelong relationship, hopefully.

PAULA: Exactly, exactly.

PAULA: So tell us about the cash agrees then, Amanda.

PAULA: I know who we talked before.

PAULA: It’s not surprising, obviously, that grocery retail is probably what benefited most, or we say it from our very unusual circumstances in the last 12 to 18 months.

PAULA: So maybe just give us a sense of what’s happening with loyalty usage across the various different categories of spend.

AMANDA: Yeah, so obviously, as you say, the one thing all of us around the world were allowed to continue doing during lockdown was eating.

AMANDA: And I think many of us did too much of that.

AMANDA: So the grocery retailers definitely all grew the most in terms of loyalty usage.

AMANDA: And we saw that the brand that came out as the most used loyalty program had previously been the most used loyalty program when we started the white paper series.

AMANDA: And then it dropped into second position, has now regained its top position only by one percentage point versus clicks.

AMANDA: Pick and Pay Smart Shopper is sitting with 80% of economically active South Africans using the Smart Shopper program, and they have grown by 22 percentage points versus 2019, which was not.

PAULA: And it’s quite a new program as well, isn’t it, Amanda?

AMANDA: It’s 10 years, plus or minus 10 years.

AMANDA: I think you may be thinking there is another big grocery retailer in South Africa with a new program, which is only 18 months old, which is Chequers.

PAULA: OK, that’s what I was thinking.

AMANDA: They’ve come straight into the market in fourth position.

AMANDA: So nothing to force with 60 percent using the program.

AMANDA: So they’ve done exceptionally well to come in so high so quickly.

AMANDA: They have an enormous footprint in terms of store coverage.

AMANDA: But the grocery retailers, you know, when I look at spa rewards who are in sixth position, they’ve grown by 16 points.

AMANDA: Macro has grown by 14 points.

AMANDA: So, you know, it’s really at Woolworths, which is a combination of groceries plus general merchandise and fashion is 14 points, percentage points up.

AMANDA: So they’ve all benefited.

AMANDA: Well, I wouldn’t say benefited.

AMANDA: They’ve all given the South African consumer what they needed and loyalty has been part of that proposition.

AMANDA: OK, so the other categories, I mean, what’s interesting, actually, is when you speak, we did an interview with Pick and Pay without letting them know they’d won.

AMANDA: Oh, and they were they were the loyalty person was great in terms of giving us some really great insights.

AMANDA: Melissa Hanley, she’s head of loyalty and strategic partnerships at Pick and Pay.

AMANDA: She announced that the sales percentage of loyalty, so loyalty users, percentage of their total spend has grown from sixty sixty three percent to seventy five percent.

PAULA: Well, it’s gone.

AMANDA: They’re putting it down to the introduction of the smart shopper program of something called smart prices.

AMANDA: So traditionally, the smart shopper program, it was a points based program with, you know, it was actually a half percent on grocery spend or not just grocery on any spend in Pick and Pay, plus personalized vouchers.

AMANDA: So they’ve been using the data for many years to offer relevant discounts to you on your shopping behavior.

AMANDA: But now they’ve introduced aggressively in store smart prices that is the very best price in the store is available to you.

AMANDA: And you can see it and it’s bold and it’s bright yellow in a traditionally blue store.

AMANDA: Their branding is blue.

AMANDA: But you have to be a smart shopper to get smart prices.

AMANDA: So they’ve really, really combined baseline points program with personalized vouchers with best price in store for members.

AMANDA: Yeah.

PAULA: So it’s super compelling.

PAULA: Yeah.

AMANDA: It’s great to see the story come through over time.

AMANDA: I mean, they are 10 years old, so they’re not a baby in the program in the loyalty world, and they’ve developed it over time.

AMANDA: So it’s well, it’s good to see the difference.

AMANDA: And then the other categories that we we don’t deliberately go out and measure certain categories.

AMANDA: It’s just how the consumers respond.

AMANDA: So the other categories are obviously financial services, which has banking and insurance in there.

AMANDA: Then there’s the restaurants and the QSR environments.

AMANDA: Then we pull out travel.

AMANDA: And then actually, we have a fifth category of other because we can’t pull telco out separately because actually there’s only two or three brands in it.

AMANDA: So we can’t pull DSTV rewards, which is satellite TV because there’s only one brand with a loyalty program.

AMANDA: So they all get put together.

PAULA: OK, that makes sense.

PAULA: Yeah.

PAULA: And we’ll definitely link to that interview with Pick and Pay, Amanda.

PAULA: I think it sounds like Melissa is doing, as you said, incredible work.

PAULA: And I love when we get insights like that, that a brand is proud of and able to share.

PAULA: So I’m sure everybody listening to this show would love to hear more about that.

AMANDA: Yes.

AMANDA: So what I do like is they’ve been in the market for years.

AMANDA: They started off there.

AMANDA: They have a big footprint in South Africa.

AMANDA: Don’t get me wrong.

AMANDA: They are extremely proud South African brand.

AMANDA: And as they were number one in the most used program, as I said, but then Clicks Clubcard is over 25 years old, an extremely established loyalty program.

AMANDA: And held on to that number one spot.

AMANDA: But it really is only one percentage difference between them.

AMANDA: But I know it’s a fiercely competitive spot.

AMANDA: So pick and pay every game top spot.

AMANDA: So I won’t take that away from them at all.

PAULA: That’s amazing.

PAULA: Wonderful.

PAULA: And then I know one of your favorite questions as well is around, you know, what program do South African consumers say that they couldn’t live without?

PAULA: If they could only keep one of the, what did we say?

PAULA: 8.7 that they’re members of.

PAULA: So tell us the big news on that one.

AMANDA: Yeah, this is probably my favorite question.

AMANDA: So I think you said your favorite was the influence question.

AMANDA: This one is probably my favorite in the sense that it forces the consumer to say, OK, well, I’m a member of these 8.7.

AMANDA: Out of those, which one would I hold on to if you force me to?

PAULA: Yeah.

AMANDA: What is the most fascinating out of this?

AMANDA: So whilst we see in the most used loyalty program lineup, the top 10, within the top 10, there’s only one non-retail brand in there.

AMANDA: Whereas in this question, what comes out?

AMANDA: The top seven brands are all financial services, and then retail kicks in for the next two, and then another financial services.

AMANDA: So eight out of the top 10 are financial services.

AMANDA: So really, I’ll give you a lineup of who comes out top, but it really gives you a sense that the financial services brands are tying loyalty so strongly into their core value proposition that actually, if I had to stop swiping my credit card, I would lose the most rewards.

AMANDA: Because obviously, you can use your credit card, actual grocery retailer, and fuel, and so that multi-partner coalition type setup, even if it isn’t necessarily a multi-partner program, which most of them are anyway.

AMANDA: But even if it’s not, I can still get the most value out of the financial services loyalty program.

AMANDA: And right now in these torrid times, I need the most value.

AMANDA: So the company that came first last year in this question also topped the table again this year.

AMANDA: So it’s FMB E-Bucks.

AMANDA: They’ve been around for 21 years now.

AMANDA: 43% of South Africans said this is the one program they can’t live without.

AMANDA: But what’s really interesting is when you really dig under the layer of detail that we show.

AMANDA: So for example, Investec Rewards.

AMANDA: Investec is a bank in South Africa, a more affluent bank than MassMarkets.

AMANDA: They don’t even feature in the top 25 most used loyalty programs.

AMANDA: So what we see is, for example, only a small amount of South Africans, 3% of South Africans claim to even use Investec Rewards.

AMANDA: But those customers who do, when they’re asked with this question, 32% of them said, I would never give it up.

AMANDA: It’s the one I’d hold on to.

AMANDA: So they come in at the fourth most ranked program, the one they can’t live without.

AMANDA: So it really gives you a sense of the, almost the brand love that a loyalty program has created within its users.

PAULA: OK, gotcha, gotcha.

AMANDA: Yeah, I hope that makes sense.

PAULA: It does.

PAULA: And, you know, FNB, so First National Bank, is that what that stands for?

PAULA: Am I right with the acronym?

PAULA: OK, so First National Bank of South Africa, eBooks, which I believe is what, a 21 year old loyalty program.

PAULA: So again, super well established, isn’t it?

AMANDA: Very established, has been, you know, has been like Clicks Clubcard, one of the oldest, most longest standing programs in the market.

AMANDA: And, yeah.

AMANDA: You’ll, you know, Johan Milman, their CEO, talks very openly about two things resonate with what he always says is, number one, we are here to serve the bank, obviously to serve our customers, but ultimately, yeah, we’re part of the bank.

AMANDA: We’re not a standalone loyalty program.

AMANDA: Our strategy is the bank’s strategy.

AMANDA: So if the bank is following a digital, innovative first approach, e-Bucks will make sure we reward customers for that kind of behavior.

AMANDA: It’s very closely to trying to drive the bank’s strategy, but obviously, they proudly say they give maximum value back to consumers.

AMANDA: So they don’t charge a monthly linkage fee, and they claim to have over 90% redemption rate of e-Bucks.

AMANDA: So, you know, Johanne speaks very openly about that.

AMANDA: And for the last two years, since we’ve been running the White Paper series, they’ve been the top non-retail brands.

AMANDA: So retail always comes out top, but they’ve always been the next brand of e-Bucks.

AMANDA: And then for the last two years, we’ve asked questions about which program can you not live without?

AMANDA: E-Bucks has come out top.

PAULA: And thanks to your kind introduction, just so that listeners know, we do have an episode coming up with e-Bucks.

PAULA: So very excited to get into that full story, because as you said, they’re so often quoted as just the golden child of really taking care of those customers.

PAULA: 90% redemption rates is extraordinary, and obviously consumers feel that love and then feed it back to them.

PAULA: So yeah, I think they just must be super proud.

PAULA: It’s an incredible story.

AMANDA: Yeah, it’s great to report and to see it over time.

AMANDA: But if we look at the financial services sector separately from retail and separately from that question about most loved loyalty program, the second program is Discovery Vitality, which I know you featured a few times, maybe not directly by talking to them, but featured.

AMANDA: If you speak to the Vitality team, they don’t see themselves as a reward program.

AMANDA: They’re an enabler for better wellness, but Discovery has a Discovery Bank and a Discovery Insure product.

AMANDA: It’s not just about health and wellness.

AMANDA: The Vitality program supports all of their product pillars, whether it’s health, whether it’s banking, whether it’s insurance.

AMANDA: And then the retail bank, Standard Bank, Ucount has done well this year.

AMANDA: It’s become the second, you know, it’s come in ahead of ABSA Rewards, and then Nedbank, Greenback.

AMANDA: So the traditional banks have all come in.

AMANDA: And then I know you interviewed a while back, Brett, from Old Mutual Rewards.

AMANDA: They see themselves in sixth position in terms of financial services rewards programs.

PAULA: Yeah, yeah.

PAULA: Brilliant, brilliant.

PAULA: So again, it’s absolutely fabulous.

PAULA: And I will say Discovery is definitely on the wishlist.

PAULA: So please, God Come 2022, we’ll be able to have a discussion with them as well.

PAULA: So loads going on, Amanda.

PAULA: And I guess my final question was around the most surprising piece of research or the surprising conclusion, which came through in terms of, you know, how South African consumers like to identify themselves at the point of sale.

PAULA: I think you were equally blown away with this one, huh?

AMANDA: Yeah, Paula, it’s just fascinating.

AMANDA: So we’ve been asking this question in the Brandmapp study for three years now.

AMANDA: What is your preferred identifier?

AMANDA: I don’t think we use that exact question.

AMANDA: What do you prefer to show yourself in a store?

AMANDA: Is it a card?

AMANDA: Is it app?

AMANDA: Is it your cell phone number?

AMANDA: Is it your ID number?

AMANDA: Because ID numbers are very prevalent in South Africa.

AMANDA: And every year, a card identification has become first.

AMANDA: But we’ve expected the percentage to decline dramatically.

AMANDA: And especially on the back of a COVID year, the year of the pandemic, we were trying to…

PAULA: Totally, contactless and everything, not leaving the house.

PAULA: I mean, it’s just an obvious assumption.

AMANDA: Obvious assumption.

AMANDA: So if I was a betting woman, I would have put money on it.

AMANDA: And thank goodness I didn’t, because it’s gone even further in the reverse direction.

AMANDA: So 76% of South Africans are saying, we’d rather swipe a card than use app, cell phone, ID number or other.

AMANDA: And then the app usage is 27%.

AMANDA: It’s slightly up since 2019, which was 23%.

AMANDA: Remember, consumers could choose either or.

AMANDA: We haven’t forced the one only.

AMANDA: Do you like to use app?

AMANDA: Do you like to use card?

AMANDA: So that’s why it doesn’t add up to 100%.

AMANDA: Yeah, it’s just incredible, actually.

AMANDA: And it really shocks brands when we work with them over how to develop the best customer experience.

AMANDA: These are the stats that come through.

AMANDA: But again, if you work with Brandmapp and you dig beneath the surface, you can’t take that as a blanket response and apply it to every brand, every sector, because if you’re a British Airways Executive Club member, that number is dramatically different and pro app rather than card.

AMANDA: So it does depend on the sector and the brands we’re talking about, but overall, it’s 76%.

PAULA: And yeah, I mean, I just don’t know where to go with it, Amanda, because when we’re both ex British Airways, which is one lovely thing we have in common as well.

PAULA: And I’ve often said on the show, actually, what I remember from my, you know, very long, you know, it was 20 years ago now, but I do remember that gold card holders loved showing the cards.

PAULA: So I’m sure there’s also a different tier status.

PAULA: Again, if you dig into Brandmapp, I’m sure you’d find, you know, that, you know, maybe British Airways gold card holders love to swipe.

PAULA: Maybe blue card holders don’t, you know, I don’t know.

PAULA: But for me, there was, you know, the reason for swiping there was around flashing the gold card.

PAULA: So the element of prestige was obviously an app and being digital is just easier.

PAULA: But I do think there’s an element of app fatigue as well.

PAULA: Like, this is why I’m really not sure how I would think about identifiers.

PAULA: Like, as a consumer, my favorite identifier is my phone number, because I just I always know it.

PAULA: It’s not going to fail.

AMANDA: Yes.

AMANDA: So this marketplace, same for me.

AMANDA: But in the South African marketplace, interestingly, the use of an app and this data issue.

AMANDA: So consumers are concerned about using data because it’s a cost.

PAULA: OK, it’s a cost.

PAULA: Yeah.

AMANDA: But secondly, a lot of like I know my local grocery store.

AMANDA: There’s never any cell phone coverage.

AMANDA: I feel like I’m in a FBI safe house.

AMANDA: I’m like literally locked down.

AMANDA: I can’t use anything.

AMANDA: So that’s another issue.

AMANDA: And then using a cell phone number for some customers, there’s a lot of cell phone SIM swapping.

AMANDA: So maybe more affluent customer less.

AMANDA: So that’s there’s a lot of cell phone multi-SIMS customers.

AMANDA: So it seems an obvious single identifier to a lot of markets.

AMANDA: But in South Africa, that can be sometimes problematic.

AMANDA: Oh, I understand.

AMANDA: Maybe the card is just the safest.

AMANDA: It’s the simplest.

AMANDA: It’s the, you know, but it still leaves me a little bit speechless each time.

PAULA: Well, yeah, as I said, you know, I think these are the fascinating discussions to be had as we go forward.

PAULA: And, you know, as we’ve alluded to, please God, as we all get out of our houses back to, you know, hopefully full normality.

PAULA: But I know I did say to you, and again, you know, listeners may have heard on the show, there was exactly the same conclusion from the Australian market in terms of the identifier of choice was very much a swiping of a card.

PAULA: And that’s thanks to our friend Adam Posner, who’s done his own, you know, again, equally comprehensive study there.

PAULA: So you’re certainly not unique.

PAULA: I think we all need to probably put our thinking caps together to understand exactly, you know, what is the driving force behind that.

PAULA: But certainly cards are going nowhere from what we can hear.

AMANDA: Yeah, well, that’s I think it’s I can’t say it’s good necessarily because of the environment, but we can’t deny that’s what the results are saying.

AMANDA: So we will continue to work with it.

AMANDA: Yeah, absolutely.

PAULA: Well, listen, that’s it from my side, Amanda.

PAULA: Again, it’s a master class in strategic thinking.

PAULA: So first of all, thank you for your extraordinary work.

PAULA: I would expect that this must be well, it clearly is a labor of love, but must be a huge thing that that takes up an awful lot of your time every year and obviously adds immense value.

PAULA: Is there any other aspect of the study that I’ve missed out on that you want to mention?

PAULA: And obviously, we’ll make sure then to to tell people exactly where they can find the study if they want to read it themselves.

AMANDA: And thanks, Paula.

AMANDA: The only other section that is a section in its own right, actually, is we introduced a new question through Brandmapp this year for multi-partner usage.

AMANDA: How do consumers feel about multi-partner programs?

AMANDA: Because obviously, worldwide, they’re huge, and South Africa, they’re very, very all over the place.

AMANDA: You know, all brands are starting to go outside of a closed loop setup.

AMANDA: So there’s a few that still remain closed loop, but multi-partner.

AMANDA: But most fascinatingly, most South Africans don’t understand what they are.

AMANDA: There’s a 34%, not most, but more than any other response.

AMANDA: 34% of South Africans responded.

AMANDA: I don’t know what a multi-partner program is.

PAULA: Interesting.

AMANDA: But of those customers who did know what they are, 25% said they thoroughly enjoy them because they can earn points faster.

AMANDA: So it’s an education process at the end of the day.

PAULA: Okay.

PAULA: Well, also good because I do think as loyalty professionals, we know education in so many areas, but it’s interesting that multi-partners particularly one, obviously, that’s causing confusion.

PAULA: So definitely ones for brands to focus on for the future.

AMANDA: Yeah.

AMANDA: Yeah.

AMANDA: To keep it simple and well explained.

PAULA: So tell us, where can listeners find the study then, Amanda?

AMANDA: Yeah, it’s very straightforward.

AMANDA: If you go on to the Truth website, so it’s www.truth.co.za.

AMANDA: And the first thing you’ll see is a click here to download the white paper.

AMANDA: So truth.co.za.

AMANDA: And then you can download all of them if you wish.

AMANDA: But the most obviously 2021 is the recent release with Brandmapp.

PAULA: Yeah.

PAULA: Yeah.

PAULA: And I know I’ve often just typed in Truth Loyalty South Africa, if I couldn’t remember the domain name.

PAULA: So always super easy to find.

PAULA: Wonderful.

PAULA: So obviously in the show notes as well, Amanda, I’ll make sure that we link to the Truth website.

PAULA: I’ll link to you on LinkedIn.

PAULA: Obviously, if anybody has any questions, I’m sure they can reach out to you or to me.

PAULA: I guess is that the best thing?

PAULA: Is LinkedIn the best place to contact you?

AMANDA: Yes, with pleasure.

AMANDA: All my email direct, I’m not too concerned.

AMANDA: Direct, it’s Amanda at truth.co.za.

AMANDA: So any questions, please.

AMANDA: Yeah.

PAULA: Wonderful.

PAULA: Well, listen, that wraps up another fabulous show.

PAULA: Thanks again, as I said, for all of the work, all of the insights.

PAULA: So Amanda Cromhout, founder and CEO of Truth South Africa.

PAULA: Thank you so much from Let’s Talk Loyalty.

AMANDA: Thanks, Paula.

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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