Rewards Over Loyalty: South Africa's Loyalty Programs Face a Dilemma

Wed, 22/05/2024 - 15:47

South African consumers are joining loyalty programs more than ever, but the  2023/24 South African Loyalty Landscape report from Truth and BrandMapp reveals a worrying trend: they're more interested in immediate rewards than building relationships with brands. Our CEO, Charlie Stewart analysed the 2023/24 South African Loyalty Landscape report from Truth and BrandMapp and found this shift towards "deal loyalty".

Despite a marked increase in participation in loyalty programs among South Africans, the prevailing inclination seems to gravitate towards immediate gratification through rewards rather than the cultivation of enduring affiliations with brands.

The analysis highlights the risks of over-reliance on short-term deals. For instance, companies like Tesla attempted to attract customers through discounts, but this strategy led to a decline in sales. In contrast, Pret a Manger's transparent pricing adjustment for their subscription program was well-received. This comparison underscores the potential pitfalls of focusing solely on immediate rewards.

Nevertheless, amidst these challenges, there are beacons of promise. Initiatives like those undertaken by the Shoprite Group and Discovery Vitality illuminate the potential of loyalty programs that extend beyond mere discounts, offering substantial and lasting value to consumers.

Our CEO proposes ‘bothism’  as a potential solution to this loyalty shift, a concept coined by Mark Ritson. This approach advocates for organisations to consider both the economic constraints faced by consumers and the delivery of genuine value propositions that foster enduring brand loyalty. By adopting this dual perspective, companies can effectively respond to consumer preferences and economic realities, while building strong and authentic relationships with their customer base.

The analysis identifies key issues and provides a practical solution to help companies adapt and succeed in today's dynamic consumer landscape.


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