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The Truth about loyalty

The 2018/19 Truth & Brand Mapp Loyalty Whitepaper analyses changing consumer attitudes towards loyalty programmes and unpacks factors influencing loyalty programme. And from their research, they found that health and beauty retailer Clicks, with its ClubCard loyalty programme, soared ahead as the most used loyalty programme in South Africa, with 72%. Pick n Pay’s Smart Shopper took second place (60%) and Dischem’s loyalty programme, Dis- Chem Benefit, came in third (49%).
Through dialogue with Clicks and Dis-Chem, researchers discovered that both retailers successfully surpass industry average in terms of percentage of overall sales through their loyalty programme. A strong loyalty KPI is reaching two thirds of company turnover through the loyalty card. Dis- Chem Benefit members represent 70% of overall Dis-Chem sales, while Clicks ClubCard state that for them this is 77% – both highly impressive statistics.
Dis-Chem offer a 1.5% base earn rate to members as well as donate a portion of eligible spend to the Dis-Chem Foundation, while Clicks offer a 2% base earn rate and 4% to members who reach a spend threshold of R1,000 over a two-month period.
Coincidentally, both companies have partnered with fuel retailers – Clicks with Shell and Dis-Chem with Total. Other fuel partnerships include Standard Bank’s uCount programme with Caltex, FNB’s eBucks programme with Engen, and Absa’s Cash Rewards programme with Sasol.
Given that loyalty programmes are working well for retailers, where members receive points that convert to cash back rewards as well as instant savings offered by some programmes, should fuel retailers follow suite and create their own loyalty programmes to entice customers to their pumps (and shops)? At face value, it would seem to make sense, but there are more factors to consider.
According to Truth, a boutique consultancy specialising in loyalty, CRM and customer centricity strategy development, many loyalty programmes are launched to convert an unknown customer into a known customer. “However, that alone is not enough,” it says. “Nothing less than personalised, relevant and timeous engagement will help you realise the true value of your greatest asset: your customer.”
“Large corporates have taken consumer data analytics and information gathering to advanced levels, having recently introduced FREEMIUMS as its conduit, a concept that has grown double exponentially across all economic sectors. It remains to be seen to what extent FREEMIUMS have been tested for legal compliance,” says Vishal Premlall, National Director of the South African Petroleum Retailers’ Association (SAPRA).
“Is the ‘spirit’ envisaged in affecting legislation superseded by blatant abuse of loopholes within legislation?
“Whilst the advent of loyalty programmes in petroleum retailing has drawn much consumer favour, mostly attributed to the current difficult economic climate consumers are faced with, SAPRA is concerned about the far reaching impact loyalty programmes have and will continue to have on retailer sustainability. Petroleum retailers have raised many concerns on the topic, to which end SAPRA is busy investigating and will provide comment in due course.”