Creating a new ‘open architecture’ Loyalty Coalition for Africa
- A market opportunity exists for the introduction of a leading international service provider to enter the South African market and consolidate the various loyalty programmes. Current market spend on loyalty rewards is estimated to exceed R10bn per annum.
- In addition to the direct loyalty market expenditure, target retailers are spending approximately 2% of turnover on marketing campaigns and product promotions. We have the ability to optimize the ROI of such market expenditure.
- Such opportunities would leverage global best practices, capital investments, insights and local knowledge.
- This would result in the development of a single loyalty currency and introduce a new mechanism for financial inclusion of South Africa’s middle-income customers
- The value thereof would be stored in an e-wallet and accessed directly by the member.
- Such value may be earned and redeemed from multiple participating merchants.
- The member may choose to store, transfer or redeem the e-wallet value according to her/his own needs.
How do Coalition Loyalty Programs work:
Coalition programs are loyalty systems that create customer engagement around a unique currency–points or credits that are earned and redeemed across a network of different brands. Around 2 billion consumers worldwide are members of coalition loyalty programs. This number has doubled since 2010. The key factors as to why consumers are so fond of loyalty programs are:
- Much more, faster rewards
- More choices to use their points
- More wallet space – one card/app fits all
From the company’s point of view, coalition programs bring:
- Customer exclusivity and increase sales
- Valuable decision support information by crossing data from different businesses
- Customer acquisition at marginal costs.