Rewards programmes are popular among consumers, but how can they help to improve and leverage a brand's reputation?

Shopping has become a lot more strategic for the South African consumer. According to the 2019 Truth & BrandMapp Loyalty Whitepaper, loyalty and rewards programmes have become an integral part of the South African consumer's journey, with 75 per cent of economically active South Africans using loyalty programmes to determine their purchases.

Brandon de Kock, Director of Storytelling for WhyFive, which publishes the annual survey, says that the relationship between brands and loyalty programmes is symbiotic. "What we know from our research is that the single most important thing that consumers are looking out for when it comes to the companies and brands they support is that 'they deliver on their promises'," says de Kock.

Swaying the choice

Amanda Cromhout, CEO of Truth, co-publisher of the paper and advisory agency for loyalty and rewards programmes, says loyalty programmes have become an integral part of the consumer experience. "If a consumer wants to spend their money on a product that is offered at two retailers at the same price and in the same location, and the one retailer has a loyalty programme and the other doesn't, the customer is more likely to go with the retailer that has a loyalty programme," she says. "The retailer with a loyalty programme has most likely communicated to the customer in a personalised and relevant way. Therefore, the customer knows where to find the product at a price they expect to pay with the additional bonus of being rewarded for shopping at that retailer and the benefits of the loyalty programme."

Cromhout says loyalty programmes are intricately linked to the overall brand experience for the customer and have become part of the customer experience ecosystem. "The loyalty programmes is only one of the 10 Ps," explains Cromhout. "These are made up of the four Ps of traditional marketing: Product, price, place and promotion. The three Ps of service marketing are people, physical evidence and process. The additional Ps are personalisation, which comes from the data acquired through a loyalty programme; the philosophy of your brand and the programme itself."

What makes these programmes work?

While the consumer may be driven to brands with loyalty and rewards programmes, a brand's reputation is still important and will be what ultimately makes the consumer buy into the loyalty programme. "With all initiatives for any brand," says Cromhout, "word of mouth is critical and loyalty programmes are no different in this regard. Truth does not necessarily believe in stand-alone loyalty programme marketing. Brands that integrate their loyalty proposition into their brand proposition have more successful loyalty programmes."

Achieving Success

Cromhout and de Kock both agree that the following questions need to be honestly addressed for a programme to be successful:

  • Is the programme simple to use and transparent?
  • Are the people who work for the brand engaged in the programme?
  • Does it match the brand identity?
  • Does the value, appropriateness, interest the customer?

While a brand may see loyalty and rewards programmes as a way to attract customers, some things need to be considered before introducing one, says Cromhout. "At Truth, we have a number of steps to consider in the process to help companies design loyalty programmes. These include questions around the structure of the loyalty programme. For example, is it a closed-loop structure where customers are only able to earn and redeem within your brand's ecosystem? Does the brand want to offer a points-based system, instant discounts to their customers or differential VIP service for the top members of the loyalty programme?"

Other considerations are technical capabilities - can a brand offer a seamless customer experience or is it a multistep process for customers to extract value? Ultimately, brand loyalty is not just about making consumers like you; it's also about making it easy for them to like you.