In Pursuit Of Performance

In an already fast-changing loyalty landscape, the COVID-19 pandemic fundamentally changed consumer needs and preferences, and customer loyalty isn’t what it used to be. The Global Customer Loyalty Report by Antavo indicates that only a third of loyalty programmes measure performance, while more than 90 per cent of those who do say that their programme has a positive return on investment (ROI). So what metrics should programme managers use, and how do they shift their loyalty programme from a purely transactional model to one that emphasises emotional engagement and experiential rewards?

Let’s go shopping 

Dr Melanie van Rooy, head of marketing at Clicks, shares insights into the oldest loyalty programme in the country. “The iconic Clicks ClubCard loyalty programme launched in 1995 and is currently South Africa’s second-most-used loyalty programme. It has an active membership of over 9.5 million, which has grown by 600 000 in the last year. The spend by Clicks ClubCard members accounted for 80.1 per cent of Clicks sales in the past year alone, and the programme paid out R590-million in cashback. Over R5.5-billion has been paid to loyal members of the programme since inception.”

The programme’s sustained growth and longevity can be attributed to its easily redeemable rewards and relevance to today’s consumer with its continued focus on convenience, value, and differentiation.

Clicks has specific key performance indicators (KPIs) in place to assess the commercial benefits of ClubCard:

Incremental spend and shopping frequency from the ClubCard member base versus customers who are not ClubCard members; Membership growth (including across key loyalty segments such as baby and seniors);

Affinity partner performance (ClubCard member take-up); Customer sensing to evaluate customer attitudes and associations; and Promotional activity performance, including ClubCard-only promotions and personalised My ClubCard promotions.

Competitor Dis-Chem launched its rewards programme eight years after Clicks. Lynne Blignaut, head of loyalty and customer rewards at Dis-Chem, says their Dis-Chem Benefit programme is inextricably linked to a positive ROI. “It changes consumer’s behaviour and interactions with our brand in that loyal customers shop more frequently, and typically, we see bigger baskets and greater spend due to their frequency. We can attribute 73 per cent of all our transactions to our loyalty customers.”

They had two KPIs to start. “At the time, our target was to reward our existing shoppers and customer acquisition.” That has not changed, and performance is now measured “via contribution to turnover, average basket and spend of a loyalty consumer versus nonloyalty,” Blignaut adds.

Bonus for banking 

Darryl Adriaanzen, group executive: operations for African Bank, says the bank is taking a definitive step towards improving its customers’ financial wellbeing by introducing a new, updated loyalty programme, Audacious Rewards. The new scheme will incentivise positive financial behaviour, such as customers improving their credit scores. “Our motivation is to match benefits for the bank – retention, increased usage, and so forth – with benefits to our customers and hopefully, in so doing, strengthen the connection between our customers and the African Bank brand. We closely measure the uptake of rewards and the consequent changes in customer behaviour.”

Standard Bank’s UCount Rewards launched in 2013, and Fayelizabeth Foster, executive head: loyalty and rewards at Standard Bank, says the landscape has undoubtedly changed. “Rewards programmes are no longer a marketing cost; they have to make business sense and drive increased lifetime customer value. This is measured on an ongoing basis to ensure the ROI is being achieved.” Although she keeps mum about its KPIs, she says Standard Bank’s focus is on building an emotional relationship with its customers. “Happy customers are more likely to recommend your product or service to others.”

The insurance ecosystem of health management programme 1Life Pulse, a partnership between 1Life Insurance, Samsung South Africa, and LifeQ, creates happy customers by incentivising a healthy lifestyle. The programme is backed by leading wearable and app technology and enables consumers to grow their life insurance cover by making better lifestyle choices. Anton Keet, head of Risk Services at 1Life Insurance, says they measure performance by sales and utilisation. “Utilisation is the most important KPI – this is broken down to levels where we look at the number of downloads of the app as well as physical utilisation of the benefits.”

B2B benefits 

QR Payments company Zapper was founded in 2014 for merchants to offer quick, cashless payments. Shortly after that, the digital loyalty and voucher offering was launched to provide a way in which merchants of all sizes could easily and quickly offer rewards to their customers without the expense of a bespoke programme. CEO Mike Bryer says: “Once a loyalty programme is configured for a merchant, Zapper users will automatically receive their rewards by merely paying using Zapper.

In addition, the merchant can target its most loyal customers with additional vouchers that offer immediate discounts, rather than the frequency-based loyalty programmes.” Its KPIs are tailored to each merchant. “The KPIs provided to merchants vary based on the objectives of the campaigns. Apart from the common financial metrics and ROI measurements, the rewards programmes are intended to drive more customers (volume) to spend higher amounts (value) with the business,” he says.

Innovative new fintech Dashpay also helps businesses with smart app-based solutions for attracting and maintaining customers. Pinki Hoohlo, executive: strategy payments at African Resonance and Dashpay says they use specific KPIs for “customer registrations, repeat purchases, redemptions and customer churn reduction or customer retention. Customers want to know and understand the loyalty benefit they are receiving. Once received, it should be tactile and have a tangible benefit.”

The world of loyalty programmes is changing. Businesses must tailor their KPIs to suit the loyalty programme and prioritise customer loyalty. Great experiences define great brands, so you need personalisation with rewards that are convenient to redeem and tiered programme structures that are more easily reached. This is how you earn and keep customer loyalty.