Nompumelelo Mokou
Nompumelelo Mokou

Building a better loyalty programme

by Nompumelelo Mokou. Retailers need to think beyond loyalty programs and towards blockchain and co-creation.

by Nompumelelo Mokou. In a struggling retail sector, customer loyalty and customer retention have become vital. It is perhaps time though, for retailers to think a little beyond what we understand today as a loyalty programme and lean towards two other ways of thinking: blockchain and co-creation. One involves technology and the other engages people.

The COVID-19 pandemic, and its resultant lockdowns, has had a devastating effect on what was already a sluggish South African economy. Thousands of jobs have been lost in what was an already weak job market and some estimates suggest the economy as a whole has contracted by up to 7% in 2020. A recent McKinsey report says 78% of consumers have changed the way they shop and suggests retailers “…will have to work hard to meet ever-evolving customer experience requirements in order to win and remain relevant.”

A crisis like this can be a good opportunity for any retailer to assess how they relate to their customers; and find new and innovative ways of helping customers in a way that builds long-term loyalty and brings long-term benefits to a retailer. While loyalty programmes themselves are not new, any retail chain worth its salt has some kind of loyalty program. You, as a consumer, buy something and are rewarded for this purchase in a number of differ ways usually through vouchers, benefits or special deals. But how do we use these and what do they mean?

I am sure you have a wallet full of loyalty cards, but do you ever bother to redeem what you have earned. One word: airmiles. As far back as 2016, a study by Colloquy suggested that US consumers held 3.3 billion memberships in customer loyalty programs. That is a lot of loyalty being tested.

Let’s think though for a minute about how one can improve loyalty programmes that offer a unique experience to a customer. Hubspot found that 93% of customers are more likely to be repeat customers at companies that provide them with excellent customer service. On top of great service, customers also want a personalised shopping experience.

A good loyalty programme uses data and technology to offer great, personalised customer service. This is done easier through online shopping channels and the shift towards this form of shopping that has been accelerated by Covid lockdowns is an opportunity for retailers. Extending your online presence and introducing omnichannel experiences to one’s customers are logical responses to the changing patterns of consumer behaviour. Combining tech and data can also enable the creation of communities that don’t focus on products, but rather on shared experiences and common challenges. A crisis such as this is also an opportunity for retailers to think out of the box.

New paths to customer loyalty

I think that blockchain and co-creation offer new paths to customer loyalty in this highly competitive and increasingly important field. IBM defines blockchain as “…a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved”.

Blockchain is relevant to the retail sector in that the technology enables a number of benefits to both the retailer and the customer. Blockchain loyalty tokens are convenient, they never expire or lose value, and can easily be implemented by smaller business. Blockchain loyalty tokens are also flexible and can be redeemed in a variety of ways over multiple loyalty programmes. Blockchain offers the consumer transparency, security and convenience. As blockchain is the machine component of this new thinking about customer loyalty, so co-creation is the human component. In this context co-creation lies at the opposite end of the loyalty building spectrum from blockchain.

Co-creation has been defined by Christine Crandel, writing in Forbes way back in 2016, as the “purposeful action of partnering with strategic customers, partners or employees to ideate, problem solve, improve performance, or create a new product, service or business”. The idea of co-creation has been around since 2000 but has still not hit the mainstream in South Africa. I understand the challenges of this kind of thinking. Many retailers find it difficult to imagine sharing data and transparently interacting with partners and customers, a scary prospect. At the same time partners and customers rather see this interaction as a retailer wanting ideas and input for free.

Crandel writes that done correctly, co-creation can lead to the defining and establishing of new markets, building a corporate culture that pushes it beyond its comfort zone, and creating a business environment that is both honest and transparent. In this age of fake news and global pandemic this last point is surely incentive enough to consider the concept of co-creation.

Loyalty programmes need a re-boot and the global economic crisis precipitated by Covid is an opportunity for retailers large and small, global and local, to think anew about customer loyalty in ways that will provide hyper-personalisation on the one hand; and convenience and flexibility on the other.


Main image credit: Photo by Lidya Nada on Unsplash.


Nompumelelo Mokou, Executive: Intelligent Customer Experience, Dimension Data. Mokou is a Chartered Accountant by profession but has always been known for her love for business. She joined Dimension Data in 2016 and is constantly inspired and challenged by imminent change. She believes that greatness is not achieved alone but through multi-faceted people, expertise, contributions and opinions. This is what makes teams work. Her core philosophies by which she lives her life are to have faith and courage in all seasons and to never be afraid of challenges, no matter the size or complexity.


– Receive the Retailing Africa newsletter every Wednesday • Subscribe here.