Loyalty programmes rely on tech and trends

Point of sale provides vital consumer information for retailers. (Delwyn Verasamy, M&G)

Point of sale provides vital consumer information for retailers. (Delwyn Verasamy, M&G)

Cromhout is the founder and CEO of Truth, a consulting business specialising in loyalty strategy, programme design & implementation; CRM & customer centricity.

“From sticking stickers on the card wine glasses at the petrol station, when I was a young girl, through to today’s version of Engen's doggie and Big Five toy stickers campaigns, to card swipes with my bank card (all the big SA banks have this) or retailers, which often have a combination of loyalty and financial services cards,” she says, loyalty programmes are not a new thing.

The thrill of earning points and getting rewards is gone, however, and companies are having to reinvent their programmes to keep up with customers that are better informed, more engaged, more sceptical, and not particularly loyal.

“The trend seems to be away from complicated points, miles and earnings mechanisms to a more simplistic behavior and reward scheme, and towards less confusing cash back rewards aligned with positive behaviour. If you fall into the category of ‘ideal customer’ for a bank or medical aid you are rewarded with bigger discounts and better options and privileges,” comments Adrian Zanetti, MD of Next Solutions, a company that specialises in the sale of annuity programmes.

Angelina do Santos-Barrett, loyalty product manager at Innervation, a company that provides value-add services in the customer engagement arena, says the company’s retailer customers are starting to think differently about rewards.

“They want to decide when to reward customers, perhaps they don’t want to reward every single customer that buys regularly, maybe they want to reward them randomly, or with products, or airtime. They want to be flexible in terms of when they reward their customers and what they reward them with,” she states.

WiGroup marketing and commercial head Howard Moodycliffe says mobile has changed the game dramatically.

Existing card-based systems are mobilising, to the benefit of both retailer and customer.

Says Moodycliffe: “Instead of a card the customer has an app on their mobile phone. When they go to make a purchase they open the app, hit the ‘earn points’ button, and get a code, which the cashier types in, so you can get the points.”

The Pick n Pay Smart Shopper app, for example, lets consumers use the app rather than the kiosks to view balances and select vouchers, Moodycliffe says. Using a mobile app means consumer don’t have to carry cards, and they can view points earned immediately rather than waiting for statements as well as redeeming rewards immediately, he says.

And for the retailer, he comments, an app is much more engaging than a card, it allows the retailer to communicate with the customer (one or two way) and “enrich the experience”, for example, allowing customers to earn points by doing things other than buying goods.

eBucks Rewards CEO Jolandé Duvenage agrees: “More and more rewards programmes have extended their offering onto online, mobile and tablet platforms. In some instances these environments are used for content purposes only, but we will see an increase in programmes making use of these platforms to assist with redemption and also helping customers understand their unique rewards status.”

Popimedia CTO Gil Sperling says technologies like social media and analytics are allowing retailers to close the loop on redemption of rewards.

“Social media campaigns can be converted very quickly into revenue, and data can be collected and analysed for more effective development and deployment to consumers of future products. It is easier to target campaigns extremely accurately as well as develop new products that you know your consumers want,” he comments.

Companies are taking the data collected by their point of sale systems and using that to learn about their customers’ habits, wants and needs.

Says dos Santos-Barrett: “One of our customers was considering discontinuing a product that never sold, until analysis of its point-of-sale and loyalty data revealed that a particular customer came in regularly at the end of every month and bought 20 of the items.

The retailer has since ensured that there are always enough of the item on the shelf in that store.” Retailer merchandising management systems don’t reveal this sort of information, she adds.

Integration isn’t just happening between POS and loyalty systems, however. Says Sperling, “Integration to social platforms such as Facebook, Twitter and others encourages use of loyalty programs as users see their network engage.

"On the brand's side, the data collected and mined through this combination becomes more powerful than before, including user data, redemption data and social data.

"On Facebook, for instance, you can issue coupons directly linked to point of sale devices in many South African retail stores.

"So, when consumers quote their electronic coupon number in a store anywhere in the country, they get the reduced price or a free product. Consumers are rewarded for redemption and friend referral enabling the brand to put product in fans hands, build loyalty and drive high quality acquisitions.”

Digital is the way forward, and not just because it takes the cost of the card out of the system.

Col’Cacchio has launched its loyalty programme online through a mobi site, forgoing the card route completely. It signed up 7000 customers within six weeks of launch (about two months’ ago).

Customers earn vouchers for doing things – so R20 on sign up, or when they transact, which they can immediately use at the restaurant.

Mobile removes the hassle of carrying multiple loyalty cards, amongst other things, something that prompted the launch of the Cardless app, which digitally stores of all your loyalty card details so you don’t have to carry them around with you.

“The ultimate is one app for a customer which handles ALL my loyalty cards, and allows me to switch points between the programmes, etc,” says Cromhout. “There are some attempts at this in the marketplace, but no-one has fully cracked the technology of doing this perfectly yet…..we wait in anticipation.”

Although this article has been made possible by the Mail & Guardian's advertisers, content and photographs were sourced independently by the M&G supplements editorial team. It forms part of a larger supplement