Labode: Consumers are Always Interested in Potentially Life-changing Cash Reward Schemes

Lai Labode is the Managing Director/Chief Executive Officer, CashToken Africa, a company that helps African businesses optimise sales and consumer loyalty investment through its universal gamification of rewards and expenditure model. In this interview, he speaks about the company’s services and its expansion plans. Obinna Chima brings the excerpts:

Tell us about Cash Reward Africa and what the company does?

Essentially, several years ago, we conducted this research called the patronage optimisation research and we wanted to be able to understand the most potent emotional disposition is 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 and decided 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 rewards that are cash. People want cash first. You can offer them anything you want as many businesses offer points and ask customers to go to their offices to redeem them, but consumers are interested in 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 source 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 reward 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, you reward that you will get is 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 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 cash token itself is really unique. Before you can receive a cash token, which is a reward for patronage, you need to make a purchase. That means before a business can give you one cash token, you must have met their business objective. I will give an example of one of our clients –MTN. Before MTN will gift you one cash token, 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 cash token is all about. So, MTN will pay us money to buy our cash tokens to offer their customers life-changing opportunities. Every time you get a cash token, it goes to 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 cash reward across all businesses. Now, when you receive the cash token reward, which comes as an SMS telling you that the company has gifted you cash token(s) and instantly you will receive some cash in your 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 us 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 cash token gifted to you by a business, instantly you have received N6 in your wallet. That means if all week you have 1000 cash tokens buying food, entering Uber, flying 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 ticket in the national consumer draw that happens every Friday. We call it La la le Friday. Of course, you can imagine that in the draw that would happen on Friday, we will make millionaires. Today, there isn’t a company in Africa that impacts people the way we have been able to do it. Consistently, every other week, we make loyal customers of businesses that have partnered with us millionaires. I can tell you that since Nigeria became amalgamated in 1914, I can tell you that there isn’t a company in Africa that has been able to do that consistently every week. Essentially, we are enabling businesses to be able to optimise their customer loyalty investments. Every time a cash token 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 where it is consumer takes all. We are also beginning to see governments come forward. Lagos State government became the first in Africa to establish universal rewards for its residents. It is called Eko Token. We partnered with Lagos State on that.

What is your assessment of the Nigerian cash reward industry? From available data, we understand that it is worth about $440 billion and the global space is about $61.5 trillion……?

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 cash token reward. 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. Fort that, we would 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, because we have a license in Zambia, is that for Africa, the importance of wealth redistribution becomes even more important with its young population and there is quite a bit of poverty still around the place. So, when you enable businesses to become more prosperous, when their customer loyalty investment is optimised and we can see the direct impact of that on the people, then it becomes really powerful. Africa is a ground that we are 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 with a lot of challenges and a lot of opportunities at same time. For us as CashToken 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 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 come into peoples’ lives.  The ripple effect of what we have created is quite massive. Ours is to ensure that every time our cash token 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 ingenious is always in the simplicity. So, you have to 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 them as long as you have met the purchase threshold. If you go on USSD, which is offline, you can also be able to have access to our service. If you buy your airtime from them, you will also get the cash token. Part of what we have also done is that we are also the first company to make reward services available on the go for all businesses. 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, you will see that as long as I met their purchase threshold, if you spend a minimum of N1000, and they say they are going to give you a reward of one cash token, all they need to do is to take their phone and dial a code on any mobile network and you receive your cash token immediately. So, they can see all the customers that they have given cash token over time. So, all of these channels are available across different platform of business and of course for different classes of people who are able to use them. We have also been able to go as low as getting scratch cards and customers can load it when they make purchases and receive their cash token rewards.

You recently secured $100 million from the 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 a 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. Of course, our expansion plan includes firstly to optimise what we have in Nigeria. While the cash token business is already successful in Nigeria, we have not done five per cent of our potential. 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 impact society at large. First of all, we would be spending a lot of money on marketing, improving our operations and also prepare 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 new talent 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 Reward Africa on the Nigerian Exchange Limited and on the New York Stock Exchange. It would be a dual listing to showcase what Africa has to the rest of the world.