2020 Loyalty Trend Data to Drive ROI
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2020 Loyalty Trend: Data to Drive ROI

By Nathea Nicolay, 15 November 2019

Loyalty programmes will have to up their game to attract and retain high-value customers if they want to remain competitive. At the heart of their focus should be superior engagement strategies and customer segmentation.

With this in mind, the loyalty space should improve their use of business intelligence and data analytics in 2020, to bolster resilient returns. Data analytics and Customer Relationship Management (CRM) have become buzz words in a South African financial market competing for an ever smaller size of the consumer’s wallet. Return on investment in loyalty will become more challenging to proof without the efficient use of data analytics and Customer Relationship Management (CRM).

At Sanlam Reality – winner of the Best Data Analytics / CRM Applications category in the 2019 South African Loyalty Awards – we are intentional about personalisation in customer engagement. We understand the imperative to use data intelligently to create relevant solutions for our clients and create wealth.

All industries demand deep, data-led client-centricity. People want simple solutions with long-term value, plus frictionless engagement across all touchpoints. Much of this stems from smartly implemented data insights.

Using data to inform rewards can add real value to people’s lives. Clients want loyalty programmes that offer benefits in the short and long term. Often, this could be helping someone entrench a desired behaviour – like becoming better at saving. We’ve seen this in the retirement savings space, where Reality members have saved 33% more of their salaries for retirement than non-Reality members. Reality members are also 15% more likely to save adequately for retirement which proves the impact of the programme on financial behaviour. This is evidence that the right offering can have a positive, sustained impact.

Going forward, it’s important to:

  • Segment high-value clients from walks of life and income bands and ensure these individuals are retained through appropriate benefits. Whether you are a corporate executive or a hard-working teacher, Sanlam Reality helps you build your wealth and provides you with rewards that suit your lifestyle. Client segmentation allows for more targeted, personalised rewards that add real value – and drive the desired ROI. For example, Sanlam Reality uses segmentation and data to tier members for differential cash-back offers and to drive lower loan default rates and early settlement rates on integrated Sanlam Personal Loans.
  • Monitor key impact metrics to ensure that loyalty aligns to business goals. A key metric for Sanlam, for example, is persistency improvements in high-quality insurance cover. Sanlam’s flagship risk product, Matrix Premier, which is integrated with Sanlam Reality has seen impressive persistency improvements for the insurer and access to affordable high quality insurance cover for death, disability and severe illness for the Reality member. Reality members with integrated Matrix Premier products had lower lapse rates even after allowing for the selective effect of income and education. Upsell has improved as illustrated by sales on new business that is integrated with Reality.
  • Continuously look for opportunities to innovate, iteratively. It may be worth testing a new reward with the targeted customer segment, then tweaking based on real-time feedback.
  • Keep testing the UX. User experience and navigation is crucially important and needs to be optimised across all devices, at every touchpoint.

In 2020 and beyond, data will continue to play a huge part in driving ROI. More importantly perhaps, it plays a major role in catalysing positive member outcomes through relevant rewards. The Sanlam Reality programme empowers its members to make responsible financial choices through a simple but effective benefit and tiering structure. We use customer segmentation and data insights to drive better financial behaviour.

The South African Loyalty Awards win is testament to our data-driven approach. The awards celebrate loyalty, excellence and innovation. Given the strong contenders in the Data Analytics and CRM space, we were especially proud to be acknowledged as industry leaders who are helping to move loyalty forward in the digital age. One of the judges of the competition said that what made the award category so interesting was the requirement to prove Return on Investment and that customer segmentation were driving results: “Sanlam Reality achieved this exceptionally well, which is most worthy of its winning position, given it operates in an essentially grudge purchase business segment.”

At Sanlam Reality we not only help customers focus on their long-term financial plans to create wealth, but we reward them generously for doing exactly that, every day.

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