Lai Labode, managing director, CashToken Rewards Africa, in an interview with Seyi John-Salau spoke about the impact of the electronic reward and the company’s expansion drive. Excerpts:
Tell us about CashToken Rewards Africa and what the company does?
Essentially, several years ago, we conducted this research called the patronage optimization research and we wanted to be able to understand the most potent emotional disposition that would trigger increased patronage for any goods or services.
We were also looking for solutions that could potentially help Africa redistribute wealth and potentially tackle poverty. We were also looking for the best way to help businesses to be able to impact society. So, we established this model called the Socialist Smart Business model to lead a new generation of businesses that would become socialist smart. By socialist smart, we mean the marriage of successful enterprises and social development.
Part of what we found in the course of our research was that as long as people are making purchases and people expect that they get good services and products, they also expect to be rewarded. We were wondering what kind of reward would make them buy more because by buying more, businesses become more prosperous and successful, and they are able to pay more taxes and impact society.
Our research essentially led us to something that was quite interesting, not necessarily out of this world, but it was the nuances from the research that became so critical, which was that consumers are highly interested in Cash rewards.
People want cash first. Many businesses offer points and ask customers to go to their offices to redeem them, but consumers are interested in a cash reward.
We also found something that is interesting. Consumers are interested in not just Cash Rewards, but they are interested in potentially life-changing cash rewards. Now, all of us have some kind of dreams in our hearts – somebody wants to send their child abroad, somebody wants to marry a new wife, among other sources of dreams – and they are all looking for cash to actualise that. Now, in Nigeria and other African countries, people know what to do with their cash.
So, when they were telling us during the research that what they actually wanted was an opportunity for life-changing rewards, it meant that we needed to create a product that would meet the expectations of consumers and help businesses understand what consumers wanted and how to optimise their customer loyalty investments. This led us to the creation of Africa’s first universal Cash Rewards as a service.
Essentially, we became the first company to establish a universal reward wallet. It meant that consumers in Nigeria and across Africa would have a single cash reward wallet that would work with every business. So, imagine that you have a single wallet, when you buy airtime from mobile networks, the reward that you will get is the same as when you go to a store to buy groceries and across all businesses and even when you enter Uber.
Now, in order for us to meet the results that we found during the research, aside from establishing the universal cash Reward as a service, we needed to establish a product that would help us execute what we created. So, we created our flagship product called the CashToken.
The CashToken essentially is an electronic reward commodity that offers consumers life-changing cash opportunities. The CashToken is really unique. Before you can receive a CashToken, which is a reward for patronage, you need to make a purchase.
That means before a business can give you one CashToken, you must have met their business objective. I will give an example of one of our clients –MTN. Before MTN will gift you one CashToken, you must meet the business objective. Now that you have met their business objective, MTN believes that you have basically helped their business to become more prosperous.
So, they are basically saying as long as you continue to do that, you deserve a life-changing opportunity, which is what CashToken is all about. MTN will pay us money to buy our CashTokens to offer their customers life-changing opportunities. Every time you get a CashToken, it goes into your universal reward wallet, which is unprecedented. So, it is the first time anywhere in Africa where you have a single wallet for reward, and it is a cash reward across all businesses.
Now, when you receive the CashToken reward, which comes as an SMS telling you that the company has gifted you CashToken(s), instantly you receive some Cash in your Reward Wallet. We call it Guaranteed Instant Cash. But simultaneously, you also receive a ticket into a weekly National Consumer Draw. Now, this National Consumer Draw is what offers the consumer a chance to win between N5,000 and N100 million.
That is the life-changing opportunity that is involved here. If you have received a CashToken gifted to you by a business, instantly you have received N6 in your wallet. That means if all week you have 1000 CashTokens buying food, riding in Uber, flying on an airline, paying for electricity, same rewards in your wallet, that means in a week you have N6,000 instantly. That also means you have 1000 tickets in the National Consumer Draw that happens every Friday.
Every time a CashToken is received, the business has surely made money or met their business objective and of course the consumer has received his reward. The future of consumer rewards is very much in Universal Gamification of Sales and Rewards. We are entering another era of Hyper Consumer Centricity where the consumer takes all. We are also beginning to see governments come forward. Lagos State government has become the first in Africa to establish a Universal Reward for its residents. It is called The Eko Token. We partnered with Lagos State on that.
What is your assessment of the Nigerian cash reward industry?
The size of the industry is pretty huge. Of course, we are just starting to explore it. We are currently in a partnership with Mastercard. We helped Mastercard establish a sub-Saharan African platform for all Mastercard holders in Africa. We aggregated merchants across Africa that offer the CashToken Rewards.
Now, our pilot phase includes Nigeria, Ghana, Kenya, Tanzania, Cote D’ Ivoire and Uganda. That puts us in six countries and that is ongoing as we speak. From these countries, we intend to continue to grow across Africa. So, when we talk about wealth redistribution in Africa and poverty alleviation, using a model that is in partnership with all businesses, you know that something big is about to happen.
That is because the impact is not based on charity, it is based on the impact on the objectives of businesses. So, what we are doing in those six countries and Zambia inclusive, (we have a license in Zambia), is that for Africa, the importance of wealth redistribution becomes even more important with its young population especially because there is quite a bit of poverty still around the place.
When you enable businesses to become more prosperous, and their customer loyalty investment is optimised and we can see the direct impact of that on the people, then it becomes powerful. Africa is a ground that we are currently exploring.
Covid-19 came with lessons, both good and bad, as an organisation, what were the lessons you learnt from the pandemic?
Covid-19 came simultaneously with a lot of challenges and a lot of opportunities. For us as CashToken Rewards Africa and for the industry, there has never been a time when purchases stopped. People would continue to buy and as long as they are making a purchase, there is opportunity for us. As people were buying during the Covid-19, they were still getting their rewards and the draws were on.
So, it brought us opportunities. But beyond the opportunities for us as a business in terms of making money and making our shareholders happy, we are very conscious of the gratification that comes into peoples’ lives. The ripple effect of what we have created is quite massive. Ours is to ensure that every time our CashToken is used, you get some value for money and the society is positively impacted.
What are the unique products and services offered by your organisation and the channels through which you offer these services?
First of all, when you are creating a product in Africa and generally, the genius is always in the simplicity. So, you must think about the different categories of those who are going to use the services. The big businesses want things automated and simplified. Now, you can either go online and buy from us or you can receive the CashToken from our partners as long as you have met the purchase threshold. If you go on USSD, which is offline, you can have access to our service by simply dialling *6700#.
Part of what we have also done is being the first company to make reward services available on the go for all businesses. Consequently, there is no SME in this country that wants to start a reward programme and cannot start in five minutes. That is unprecedented. There is no other company in the world where you can start a reward programme in five minutes.
Today, if you go to an amala spot for example, you will see that if you meet their purchase threshold, and they decide to reward you with one CashToken, all they need to do is to take their phone and dial a code on any mobile network and you receive your CashToken immediately. We have Offline and Online channels available across different platforms and of course for different classes of people who can use them. We have also been able to go as low as getting vouchers (scratch cards) and customers can load it when they make purchases and receive their CashToken rewards.
You recently secured $100m from a global emerging market, what is your expansion plan, and do we expect mergers and acquisitions?
We are quite excited about the commitment. $100 million is big money for an African business to be able to expand and showcase what it has, not just to Nigeria or Africa, but of course to the world. Our expansion plan includes firstly to optimise what we have in Nigeria. While the CashToken business is already successful in Nigeria, we haven’t begun to scratch the surface of our potential as a company.
The business is much bigger than what anyone can imagine. That is because it is a business that helps businesses optimise their value, helps customers optimise what they get back and impacts society at large.
First of all, we would be spending a lot of money on marketing, improving our operations and also preparing our business for the next level in terms of technology. Another thing we would be doing is also investing in people so that we are able to attract and retain talent.
We shall also be expanding across Africa, which is what we have started with Mastercard. We are also looking at how the Cash reward business operates in the United Kingdom and the United States. I was in New York last year, exploring the industry and looking at what is on ground. So, we have a path to about nine countries with the $100 million and those nine countries include a number of African countries.
Then the bridge between Africa and the rest of the world is the United Kingdom. We have a robust plan that we have already put into gear. One of the key things for the access of our $100 million is the listing on the stock exchange. So, we are currently on the path of the listing of CashToken Rewards Africa on the Nigerian Stock Exchange and on the New York Stock Exchange. It would be a dual listing to showcase what Africa has to the rest of the world.