Purchasing airtime and electricity, paying bills, and drawing money - most South African retailers have added new services in addition to their standard offerings. Larger chains even allow the booking of flights and offer loyalty programmes; however, this is not always the solution to encourage customer loyalty.
So says Ian Steyn, executive: products and services at Innervation, who adds: "Companies have realised that a cookie-cutter approach to loyalty - where every store hands out cards and points that can be redeemed - definitely doesn't work for everyone. A retailer that takes customer engagement seriously needs to be asking itself: what drives MY customers' loyalty?"
It is the existing infrastructure that they should be focusing on, getting the most out of what they already have, rather than bundling an array of conveniences together. "Value-added services should be used more broadly to include a host of other virtual services that make life more convenient for the customer or help in other ways to keep them coming back," says Steyn.
Loyalty programmes are widespread, with many more chains considering adopting them - points-based discounts or sticker-filled vouchers have proven successful over the years, but many exist only because of a fear of missing out, says Steyn.
He believes the real answer should be tailored specifically to a certain store. "For a computer store, support house calls and maintenance plans might keep your customers coming back even when the competition is offering deep discounts. For a high-end clothing store, maybe it's a free wardrobe evaluation; a pharmacy might offer an annual cholesterol test. It's about what's relevant to the customer."
He argues that adoption of a generic loyalty programme is insufficient. "Every retailer should know its own customers well enough to know what works - and fortunately, the tools to support that knowledge are now available," he says. "You should be able to track, in real time, exactly what vouchers have been redeemed, when every gift card is presented, and how much extra is spent, as well as what loyalty rewards have been claimed.
"These services should be driven by an overarching customer engagement strategy that's carefully attuned to the needs of the business. Duplication, wasteful ad-hoc projects that go nowhere, and services that work against each other don't belong in this picture," he says.
Concluding, he says: "What does belong is intimate knowledge of the customer, enabled by real-time measurement and reporting of how marketing efforts are reflected in sales at the till. Without that, value-added services are anything but."
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