June 5, 2024

From perks to profits – why loyalty programmes are essential tools for merchant success and growth

A recent whitepaper by Truth & BrandMapp revealed that 76% of South African consumers actively participate in loyalty programmes on a daily or weekly basis. This underscores the strategic importance for merchants of offering gift and loyalty solutions to their customers in order to maximise benefits.

The Marigold ‘2024 State of Loyalty Report’, containing data from its ‘2024 Global Consumer Trends Index’, states clearly that “loyalty is the rock savvy marketers can count on to protect their business.” A loyal customer base provides tangible benefits such as increased customer retention, steady revenue streams, and a reduced burden to acquire new customers.

The adumo Engage Gift and Loyalty solution is an innovative platform designed to enhance customer engagement and provide significant value to merchants. Lood du Plessis, Technical Product Manager for Customer Engagement at adumo, highlights the company’s unique market position, which integrates payment systems with gift and loyalty on the retail point of sale, offering unique features that benefit both merchants and consumers.

Combining gift and loyalty with payments

A key advantage of adumo is its service consolidation. It combines integrated payments with two major sets of value-added services: gift and loyalty platforms, and alternative payment options. As a result, adumo offers you a one-stop-shop where you can process card payments, accept alternative payments, and offer gift and loyalty through one provider. This streamlined approach consolidates all adumo services into a single cohesive solution, simplifying business processes such as reconciliation, settlement and support.

What is important to understand about gift and loyalty programmes is that they are part of a broader consumer landscape that is constantly evolving. According to Marigold, marketing tactics have evolved in tandem to provide more human experiences – more personalisation, relevance, and timeliness. Consumers have developed a taste for these experiences and are rewarding responsive brands with their loyalty.

In challenging economic times, this loyalty becomes a major differentiator, as consumers value brands that offer relevant incentives and make them feel appreciated. “It is not uncommon for consumers to use loyalty rewards to make it to the end of the month,” says Lood. “In sectors where spending is discretionary, a loyalty programme can be the difference between a successful and an unsuccessful sale.” Consequently, the Truth & BrandMapp 2023/4 whitepaper reveals that up to 32% of consumers are using loyalty and rewards programmes more than they did the previous year.

Gift cards drive customer acquisition and cashflow

Gift cards provide merchants with a closed-loop solution ensuring funds remain within their business environment. When a customer purchases a gift card, the money must be spent within the merchant’s store or group of stores. This not only drives new customer acquisition, especially since gift cards are primarily given as presents, but also improves cash flow by securing the funds upfront.

Additionally, gift cards can serve as stokvel-saving solutions in industries like butchery and hardware. “Gift cards can also be used effectively as a refund mechanism, thereby keeping the funds within the merchant environment,” notes Lood.

Loyalty programmes enhance customer retention and insights

Loyalty programmes are where adumo Engage truly shines, particularly with its integration capabilities. “Our integrated loyalty solution is designed to increase recency, frequency, and value of customer interactions,” highlights Lood.

Standalone loyalty solutions reward customers based on total basket value after a payment is made. However, integrated solutions dig deeper, offering rewards on individual products or departments based on detailed basket information.

This integration allows merchants to tailor rewards and marketing strategies more intelligently. “For instance, we can reward customers for specific product purchases or purchases on certain days, etc., enhancing customer satisfaction and driving sales,” says Lood.

Integrated vs. standalone loyalty

The significant advantage of adumo’s integrated loyalty solution is the access to detailed basket data, enabling more precise and personalised rewards. This contrasts with our standalone loyalty solution, which only provides rewards based on total spend without insight into specific purchases. Our loyalty platform is designed to be scalable and flexible, enabling merchants of all sizes to implement and derive benefits from the solution, regardless of whether they are using an integrated or standalone system.

Compliance with POPIA and the CPA for extra peace of mind

While the primary goal is to boost sales through incentives, the platform also allows merchants to leverage zero-party data to enhance their marketing strategies. It offers the opportunity to capture valuable data to pinpoint customer interests and deliver personalised rewards. Partnering with an accredited and experienced vendor like adumo ensures that merchants can trust their customer data is handled responsibly and in compliance with legal standards. adumo operates in a PCI DSS compliant environment and applies this security framework to loyalty to facilitate POPIA.

Benefits beyond rewards

The adumo loyalty programme goes beyond traditional rewards. Trends like corporate social responsibility (CSR) and gamification are significant new drivers of customer engagement. “We see a lot of retailers matching loyalty rewards with CSR initiatives,” he says. “Our value-added services not only differentiate us in the market but also provide substantial value to both merchants and their customers,” concludes Lood.

Ready to enhance your customer experience? Discover the benefits of adumo’s innovative solutions today: engage@adumo.com.


Press contacts, for and on behalf of Paul Kent

Other articles you might like