Are you a member of a loyalty programme? If so, can you imagine someone living on $1-2 a day being motivated by a frequent flyer-like offer?
Many of us have adapted our consumer behaviour to respond to loyalty programme incentives. The prospect of a free cup of coffee after ten purchases, or that upgrade after another 10,000 miles, or those American Express points that will help with your next purchase; the world of business has recognized and embraced this tactic to help drive consumer behaviour in a direction that suits the bottom line.
In the US alone, there were 3.3 billion loyalty programme memberships in 2014. According to the Loyalty Census carried out by Colloquy: “Engaged and devoted loyalty members form lasting and profitable relationships with brands and companies, spend more time and money with them, and spread the positive buzz to their friends.”
Marketers and advertisers see the return on investment for loyalty programmes. And we, the consumers do too. They are working to drive our behaviour.
I found myself exploring this phenomenon at a Shared Value Summit in New York, organized recently by the development consulting group FSG. Shared Value is a concept pioneered by Harvard Business School’s Professor Michael Porter, who describes the increasing convergence of business bottom-line interests with measurable social impact, at the magical meeting point of profit and purpose. It’s getting increasingly crowded at this meeting point, as major companies explore how to meet both stakeholder and shareholder demands in a socially responsible way while fulfilling the potential of the dynamic growth markets in the Global South and at the bottom of the socio-economic pyramid.
At this summit, I heard Adrian Gore of South Africa’s Discovery Insurance describe how fitness and wellness programmes for customers, with proper tracking and incentives built in, can yield lower premiums for consumers, higher profitability for Discovery’s shareholders, and better health outcomes overall.
And yes, we can take this concept into the very base of the pyramid — where my non-profit company Population Services International (PSI) operates — among these $1-2 a day consumers. Even at the base of the pyramid, consumers have choices and use their limited resources to make important decisions affecting the life and health of themselves and their families. They deserve the dignity of being marketed to — the dignity of choice in their decision-making — and loyalty programmes are an interesting way to reach them.
Let’s look at pregnancy and childbirth, the very human state of grace that carries such unacceptably high risks in the developing world.
We know the health infrastructure is weak or even nonexistent for these consumers. This does not stop women from getting pregnant, needless to say. Maternal mortality remains stubbornly high in many countries, even as infant mortality has fallen by about half over the last 20 years. Among the eight Millennium Development Goals (MDGs), the goal relating to maternal mortality, (Goal 5A) “to reduce maternal mortality by ¾,” will likely be the farthest from being achieved when all the MDG progress is tallied up at the end of this year.
Being a mother is unacceptably risky in the developing world.
One thing that has reached millions at the base of the pyramid, even among our $1-2 a day consumers — we call her Sara, our archetype — is cellphones. Not your and my smart phones, but early generation phones. Sara’s village is bound to have several, even if she doesn’t have one. And someone in her family likely does.
Imagine a loyalty programme that begins when Sara first sees a doctor or a midwife or a nurse or a community health worker or a pharmacist, because she’s learned she’s pregnant. Under this programme, Sara receives SMS text messages reminding her that it’s time for a prenatal check-up, or to take some vitamins that have been prescribed. She might need to monitor her blood pressure; a text message could give her the reminder, as well as a voucher to redeem at a participating pharmacy to get it done somewhere nearby. Imagine that she receives an incentive in the form of cellphone minutes or credits, every time she redeems a healthy pregnancy voucher.
And the programme would continue through to her delivery and birth. Sara might go to a network of midwives or health workers to help with her birth if she is getting reminded and incentivized to do so. Perhaps those incentives would include a stop at a participating hair and beauty salon nearby, as such spots are to be found just about everywhere people gather. Sara could treat herself to something she might not otherwise be able to afford. (At PSI we use such hair salons as a distribution channel for behavior change and reproductive health supplies including female condoms. Sara is a captive audience at the moment of a haircut, and no marketer should miss a chance like that).
A loyalty programme for healthy pregnancy and healthy childbirth is just one way that we can use early generation cellphone technology, and leverage the informal private sector to get consumers at the base of the pyramid to adopt healthy lifestyles and healthier behaviors. It’s also a way to get the formal private sector’s health products and services supplied through existing channels that often function far more robustly than the public health or international aid infrastructure can.
At PSI, we call this cellphone-voucher-consumer-supplier ecosystem “Movercado” after a programme we developed in Mozambique. Currently, we are rolling it out throughout Africa and Asia.
By combining best practices from the highly developed consumer culture in which so many of us take part with existing informal market infrastructure, we can address the toughest of health and development challenges.
Markets exist, and always have. They don’t always function well for Sara. But they are powerful systems that link consumers, suppliers, regulators, external actors, and the health of society in a complex fashion. Let’s make markets work better for Sara and the businesses that serve her. Loyalty programmes, infused with opportunities for Shared Value, offer a compelling example of how we can do this.
The World Economic Forum on Africa 2015 takes place in Cape Town, South Africa from 3-5 June.
Author: Karl Hofmann, President and CEO, Population Services International (PSI)
Image: A pregnant woman walks past healthcare workers of National Hospital Abuja, who are on strike to demand for better employee welfare, outside the hospital in Abuja March 5, 2013. REUTERS/Afolabi Sotunde