The Implications of SA's proposed ban on alcohol advertising
Written by Vanessa Clark
There is very little clarity over how extensive the proposed ban on alcohol advertising will be, with the draft plan due to be tabled to Cabinet at the end of July 2012, with several stages of consultation and public comment ahead. In March this year, the South African Press Association (SAPA) reported that the Deputy Minister of Trade and Industry, Elizabeth Thebethe, said that everything was still under discussion and that she would prefer to see the advertising companies and liquor outlets be more voluntarily responsible. A ban on alcohol advertising would be a “last, last resort” she said.
Fast-forward a month, in April 2012 Business Day reported that a leaked version of the draft bill had been described as “heavy-handed” and “prohibitionist” by the alcohol industry.
Meanwhile, in mid-July, South African Breweries’ (SAB) Castle Lager extended its 20 year sponsorship of the national football team Bafana Bafana by five years. The deal is said to be worth about R100 million and comes in advance of the 2013 Africa Cup of Nations, taking place in South Africa, and the 2014 FIFA World Cup. Read into that what you will, although the special advisor to the minister of social development told Business Day that it would be likely that the proposed legislation would make exceptions for existing sponsorship agreements.
Potential impact of the ban
In the months after the ban on alcohol advertising was first announced there was a frenzy of industry activity, with media, advertising and promotions agencies all trying to demonstrate the financial impact that the ban would have in South Africa. Squaring up against them was the health camp, speaking about the cost of not reducing alcohol abuse in South Africa. Each backed up their arguments with a series of surveys and studies supporting or denying the link between advertising and increased alcohol consumption.
Respected commentator and former ad-man, Chris Moerdyk, writing for Bizcommunity.com totalled the impact of a ban as follows:
- R1.8 billion in lost above-the-line advertising revenue, with the national media broadcaster, SABC, impacted by R400 million
- Total loss of revenue including sponsorship and below the line activities: R2.6 billion
- A conservative estimate of 2,500 job losses in the mass media, sponsorship and sports management sectors, impacting 30,000 dependents
- 5-8 percent drop in branded liquor consumption followed by a recovery by the brand leaders at the expense of second-tier brands
- VAT loss on advertising spend could be R280 million
As well as other knock-on effects such as compromising festive period drink-driving advertising campaigns, usually branded by the alcohol industry, and the inability to host international events with an alcohol sponsor.
In the opposite corner, Dr Joanne Corrigal, senior public health specialist at the Western Cape Department of Health, also in Bizcommunity.com points out that 130 people die due to alcohol related causes every day in South Africa. Alcohol related violence, crime, HIV and Aids, absenteeism, low productivity and jailing costs the country R38 billion per year. Dr Corrigal also points to a Department of Trade and Industry (DTI) study that suggests that the profits of the alcohol industry tend to line the pockets of the wealthy while the costs tend to affect the poor.
Both camps do agree, however, that more than just an advertising ban is necessary to curb alcohol abuse and related problems. As Moerdyk succinctly points out; crystal methamphetamine or Tik abuse is rife on the Cape Flats, but has never been advertised.
Do modern technology trends render whole debate irrelevant?
Meanwhile, there is another dynamic at work that might very well make this entire discussion irrelevant. Moerdyk points out, this time in Business Day, that the mass media is struggling to engage the 19 to 29 year-old market. They’re spurning traditional media in favour of social media, or, in other words, one-to-many communication in favour of direct, customised communication from brands.
Entrepreneurs such as Andy Hadfield see this as an opportunity for alcohol brands. His recently launched Real Time Winemobile app allows consumers to generate their own reviews of wines, giving guidance to others who are standing in the supermarket aisle unsure of which wine to choose.
“So this whole affairrevolves around how we've become obsessed with direct media or broadcast media. In the age of one-to-one, we're still hooked on one-to-many,” says Hadfield. “The wine industry has a hard enough job as it is, even harder if you cut off direct routes to market. We will be left to in-store price promotions, not great for premium value wine brands, and some kind of community engagement.”
Hadfield intends for Real Time Wine to provide a platform for wine brands to do just that; engage with customers, promote their brands and run a community-style presence outside of broadcast media. This will be necessary anyway, Hadfield says, to cut through the noise and keep consumers’ attention.
“There is just too much noise out there. The easiest way to retain attention? Be valuable to a user. Provide utility & usefulness. Then you're not pushing a message, you're providing a service, and the revenue will flow from that.”
Ultimately the degree to which an alcohol ban is implemented and how it will impact on society and the economy remains to be seen. However it is clear that South Africa is setting a precedent that could soon become a global trend.
A journalist by training, Vanessa Clark thrives on telling the story of innovating companies. Because she has spent the bulk of her career in the tech industry, she is adept at translating geek speak into something interesting and accessible for the end-user. Her role at Mobiflock is to introduce the brand to target communities around the world, engage with these groups to build brand evangelists and generate user feedback for the company.
Over the last 10 years Vanessa has fulfilled a variety of marketing roles spanning PR, communications, branding, digital media and sales support. She has worked in Cape Town and London, dealing with businesses as far afield as Mumbai, Frankfurt, Sao Paulo and San Francisco, building brands in new territories.
Before joining Mobiflock as a founder member, she ran her own marketing and communications consultancy offering PR, branding, content creation, integrated communications and strategy services to a range of start-up and other interesting companies. Previously she managed the marketing and communication activities for Clickatell, the mobile messaging provider, as it grew its Internet and enterprise sales activities globally. Before that she helped London-based Band-X, the world’s first bandwidth exchange, to expand into eight countries; and was news editor at Total Telecom.com
A Capetonian by birth and at heart, for fun Vanessa bungles her way through the South African wine industry, looking for the most quaffable deals.
Re-defining the economics of CX in the new customer journey
There’s no shortage of customer service channels for the enterprise to select from today. Regardless of the many new metrics that have emerged – such as customer success, or empathy – cost reduction is still a primary driver in selection criteria.
There are many articles dedicated to how companies can turn customer service and customer experience (CX) from a cost to a revenue centre. The problem is, if you stop there and don’t look beyond cost reduction, you’re limiting the scope for CX to become an even bigger economic contributor in the enterprise.
There is every opportunity for customer service and CX to significantly influence the front end of business, particularly amongst direct-to-consumer subscription-based products and services, such as popular streaming services like Netflix, Amazon, Disney+, as well as sports subscription services like DAZN.
In these products and services and others, there are new customer journeys that may drive business growth and revenue. They start earlier and may last a lifetime, so getting things right at the start of the journey is key so that customers have the best experience from day one.
Not only will this help in making customers less likely to reach out for issues-based support further down the line, but these customers will be much less likely to churn, and much more likely to take up new services as they are offered throughout the lifetime journey.
So, what does the new customer journey look like for these services?
Opportunity waiting for the likes of Netflix & Disney
While consumers may have previously regarded customer service as a way to mitigate the inconveniences in their lives, the customer journey is expanding in scope every day. Today there are many more touchpoints available that put CX in a position to drive revenue.
For one-off purchases, traditional CX deployments have not changed significantly in the past few years. However, if you look at the change in the CX relationships we’re seeing with subscription-based products and services, particularly media-based streaming services, it’s clear that these companies lead what quickly become very multifaceted relationships with their customers. These have serious potential to evolve over time for increased economic benefit.
For any sort of subscription-based business, customer lifetime value is paramount, and the requirement to actively manage a continued positive customer experience is critical.
Every interaction is an opportunity, and every data point is a chance to offer more value. Introductory offers can convert to longtime customers. Longtime customers may take up opportunities to upgrade to more premium products or services. They may also appreciate incentives to invite family and friends to become customers. Consumers who like a particular service, for example, may appreciate a recommendation for another similar or complimentary service.
It all starts with customer interaction, and the customer experience journey becomes an opportunity to strategically affect the user base and resulting revenue - which is a far cry from the limitations of call center cost reduction or churn metrics.
How do companies support the new customer journey?
More and more, customers look at the new customer journey as engaging with brands as part of their lifestyles. Many companies are making brand ambassadors available before the traditional customer journey even starts, which is a marked change from a purely transactional relationship associated with a one-off purchase.
These ambassadors, who are often independent users of products or services, are providing trusted pre-sales advice, and that same trusted advice can also function to nurture the customer journey in a subscription-based relationship. Call it ‘GigCX’ or ‘crowdsourced customer service’ or even ‘peer-to-peer customer service’ - it doesn’t matter.
The key is in providing impartial, trusted advice from real users. Think about it: who would you rather get advice from? Someone who has used a product or service extensively, or someone who has been trained to provide customer service surrounding that product or service?
For services such as streaming media, advice from trusted experts with real product know-how could be invaluable. This may not be limited to technical issues, such as what to do when you can’t access your favourite show, or how to access services across various devices. It could be parents helping other parents who are concerned about how to restrict adult content from child viewers, or simply customers who have similar taste in programming who can comment on the benefits of upgraded or premium products. The point is, these experts are easily available at any touchpoint in the customer lifetime journey, creating more chances to add value.
It’s also about tipping customers from ‘passive’ to ‘promoter’ in the NPS scale. It’s an opportunity to turn neutral customers who may be vulnerable to competitive offerings into loyal enthusiasts who will keep buying and referring others, fuelling growth. It may ultimately help drive even further revenue by creating customers that are helping to sell the brand itself.
And, while chatbots and automation may play a key role, they are often not able to handle the more complex support needed in the new customer journey. Conversational AI is rarely as conversational as it claims to be, and in the new customer journey, most companies are finding that a mix of automation and people-centric service is an ideal way to nurture the many new touchpoints created.
It’s no longer about trying to replace human capital with automation: it’s about orchestrating a uniquely personalised CX, and proactively engaging during the customer lifecycle to enhance the experience, and to create more long-term value.
At the moment, we’re only seeing the tip of the iceberg in terms of the power to affect the economics introduced by the new customer journey. We’ll no doubt see this evolve rapidly particularly amongst streaming companies as they use human-centric connections in CX to support the full potential of customer lifetime value.
About Roger Beadle
Roger Beadle is an entrepreneur and business leader who is reinventing how customer service is delivered via the gig economy. After establishing several businesses in the contact centre industry, Roger co-founded Limitless with Megan Neale in 2016. Limitless is a gig-economy platform that addresses some of the biggest challenges faced by the contact center industry: low pay, high attrition and access to new talent. Previously, Roger and Megan helped to build one of the largest privately-owned outsourced contact center business in Europe, before selling the business to the global conglomerate Hinduja Group. Roger is an outspoken proponent of digital ethics, worker’s rights and the ‘good-gig:’ which encapsulates gig work for incremental pay versus full time work, skilled gig work, no unpaid time/downtime and zero expenses.
Named a Rising Star at Deloitte’s Technology Fast 50 program, Limitless is a gig customer service platform, combining crowdsourcing and AI to help global businesses address their biggest customer service challenges – rising costs, increasing attrition, variability in demand and the need for diversity. Brands like Microsoft, Unilever, Daily Mail Group and Postmates are using Limitless’ SmartCrowdTM technology to connect with their most engaged customers, and reward them for providing on-demand customer service that can flex in line with demand. Limitless is one of the world’s first global tech platforms to introduce localised platform terms to protect the rights of its gigging workers. Backed by AlbionVC, Downing Ventures and Unilever Ventures, Limitless is empowering people worldwide to earn money for providing brilliant customer service for the brands they love.