Bigger And Better

The saying “Money can’t buy you love” has never rung truer for brands trying to establish loyalty by only offering financial rewards. Post-pandemic consumers want more from their brands. They want engagement and emotional connection.

The average South African belongs to, on average, 8.7 loyalty programmes across brands, according to the 2021 SA Loyalty Landscape Whitepaper. Faced with such fierce competition for brand loyalty against a backdrop of rising living costs and increased social awareness, loyalty programmes need to go beyond traditional transactional rewards to build deeper, longer-lasting bonds with customers. A few free coffee vouchers are not going to be enough of an incentive for a customer who wants to engage meaningfully with a brand.

Consumers come and go

Glenn Gillis, CEO of Sea Monster Entertainment, notes that consumers typically are not loyal and that it can be difficult to establish brand equity through “fractions-of-a-second engagement” on social media. “When you look at most of what is out there, you will mostly find reward schemes that give cashback for a purchase, but that’s not necessarily driving brand equity. I think the pandemic has really sharpened the importance of customers having an intrinsic connection with the brand.”

This kind of emotional loyalty leans towards nontransactional activities, personalised experiences, and relevant rewards, says Lauren Venter, consultant for Truth Loyalty. “Brands need to understand more about their customers by looking beyond their transactional behaviour, such as shopping or swiping, to offer them the personalisation and relevance they want.” Old Mutual Rewards, Discovery Vitality, Standard Bank UCount and FNB eBucks are just some local brands offering rewards for nontransactional activities. Old Mutual rewards good financial behaviour, explains Venter, including using its financial tools and calculators, completing surveys and financial surveys, and signing up for Moneyversity courses.

Loyalty may be fleeting if there is no meaningful engagement with a brand, as Tamas Oszi notes in Customer Loyalty Programs: A Definitive Guide With 13 Actionable Steps. Customers are willing to switch brands after a single transaction unless convinced otherwise, so rewarding them only for buying a certain product is not going to secure enduring loyalty. However, by incentivising them beyond the buying cycle, there is a greater likelihood of fostering loyalty.

“When you recognise the members of your loyalty programmes for a variety of interactions – not just transaction-related – they will feel good about your brand far more frequently,” notes Oszi. This means rewarding customers who engage with social media content, take part in competitions and events, or write product reviews.

A multipronged approach is more effective

This is not to say that there is no longer a place for traditional loyalty programmes. According to the 2021 SA Loyalty Landscape Whitepaper, cashback is still South African consumers’ preferred loyalty benefit, closely followed by discounts. However, these discounts need to be personalised and customised to meet customers’ specific needs to establish enduring relationships that will extend beyond a transaction.

“When consumers choose your brand over competitors in the marketplace, you need to try and delight them while you have them, and then reward them for choosing your brand by incentivising them to come back,” says Samuel Nassimov, managing director of Premier Hotels. “The trick is to offer rewards to customers for purchasing your product outside of their typical buying periods.”

Omnichannel marketing can build brand equity by keeping customers engaged and entertained at all touchpoints of their buying experience, says Gillis. “There is a need to design ways to connect what customers are doing in the real world and the digital world to reward them for their time and engagement.” This means offering incentives for customers to share their insights as they interact with the brand online and in real life. The modern definition of brand loyalty is that there is no loyalty, adds Gillis. “Rather, there is a recognition of how to maximise the lifetime value of a customer on the one hand, and how to build brand equity on the other.”

Innovation drives loyalty 

Gillis says brands must find novel ways to build brand equity or consumer awareness. “In the past, brands just needed to say that they were doing something. Now, we want to see brands deliver on the promises that they make to us, whether these are promises of customer experiences or purpose-led promises.”

One way of improving customer engagement is by “segmenting the database to better understand customers’ needs, wants, behaviours and trends,” says Nassimov.

Sea Monster uses games to drive brand equity. “Games are voluntary activities, and when you put users at the centre of an experience, you can effectively create a continual change of value between brand and customer,” explains Gillis. This could be in the form of providing entertainment, sharing knowledge, or rewarding them for their time and engagement. “There is growing acknowledgement that games can, and do, offer a new and serious marketing channel for brands, and we hope to see them gain even more traction in the world of marketing going forward.”

Customer-centric rewards

Brands must also keep their loyalty programmes current and relevant, says Venter. They can do this by personalising their communications, offering relevant rewards, and ensuring customers always know what’s in it for them. Pick n Pay’s Smart Shopper programme, named in the 2021 SA Loyalty Landscape Whitepaper as the country’s most-used rewards programme, offers personalised vouchers and strategic partnerships that make it possible for shoppers to earn even more points.

Gillis says that brands recognise that they need their customers’ data and insights to retain their loyalty and deliver a competitive service. “When it comes to anything that is data-driven, the consideration process (of the marketing funnel) should be where much more effort is invested because this is where the magic happens, and this is where omnichannel marketing in its truest form can offer a solution.”