Do customer rewards/loyalty programmes actually work? – Retailing Africa

Do customer rewards/loyalty programmes actually work? – Retailing Africa

by Terena Chetty. Do “rewards” programmes actually operate? From a consumer point of view, their reputation is simple. According to The Fact & BrandMapp 2021 Whitepaper, 74% of economically lively South Africans are employing loyalty programmes. This is an boost of 7% from the 2015 figure of 67% loyalty use, implying that buyers do, in actuality, locate benefit in these programmes.

Brand rewards or loyalty programmes are aimed at attracting and retaining customers by supplying some form of benefit to people in trade for making use of their items and providers, particularly on a standard basis. Loyalty programmes are widespread across most industries, which includes banking, coverage, retail and amusement, providing a broad vary of profit structures from direct income-back and reductions, to details that can be made use of for many products and companies.

Most common in the pack

Main the charge are the Decide on n Shell out Wise Shopper and Clicks ClubCard programmes, with Pick n Pay’s presenting using the top spot by just 1% above Clicks. The Dis-chem Profit providing usually takes the 3rd spot, with newcomer Checkers Xtra Discounts swooping in to secure 4th location. Outstanding. The top 10 spaces are dominated by retail, with the only exception becoming FNB eBucks in the range 8 spot over-all, and the best place in the financial products and services category. When questioned which single loyalty programme they would continue to keep if they experienced to pick out just a person overall, surveyed respondents picked FNB eBucks as their leading option.

As can be envisioned, the onset of the COVID-19 pandemic resulted in greater use of loyalty programmes as the population in general experienced greater economic strain. Folks welcomed the discounts, rebates and other financial added benefits made available by many rewards programmes. What is appealing even though, is that 2021 stats showed extra gender equilibrium than preceding usage knowledge. Historically, there was a much broader gap concerning male and feminine use, especially when it comes to retail loyalty programmes. Even so, 2021 demonstrates extra gender fairness in this regard, possibly becoming driven by pandemic-primarily based money constrains as very well.

Enjoying your cards suitable

Do loyalty programmes perform for stores and models? The remedy is a resounding indeed. Study shows that loyalty programmes have a definite affect on consumer behaviour. In truth, 64% of individuals say that it influences where by they shop and 40% say it influences the goods they acquire.

For vendors to get it correct, it is vital to fully grasp what consumers want the most out of a loyalty programme. Understandably, “cash-back” is a major incentive for rewards programme usage, with the upcoming most effective factor becoming discounts. Women tend to concentration extra on retail or procuring-dependent added benefits, with adult males inserting more relevance on position-based gains, these types of as airport lounge obtain  or “higher-tier-level” status, than their feminine counterparts. Adult males are also drawn to gas and banking positive aspects to a bigger extent than gals.

In phrases of methodology, especially within just the retail sphere, swiping a card is the too much to handle preferred method to assert gains at a shell out-issue, with 76% of individuals preferring this option. It is adopted at a distant second by scanning an app, which arrives in at 27% of client votes.

Melissa Hanley, head of loyalty & strategic partnerships at Pick n Pay, succinctly expresses the value of being familiar with customers and the benefit it has resulted in for their manufacturer: “Historically, Smart Shopper has seen a revenue participation of about 63% ,and we elevated this to 75% throughout our very last fiscal. Sensible Shopper experienced its most successful calendar year at any time previous 12 months and we imagine we realized this by offering our associates what they actually wanted, when they needed it. The intentional approach of Wise Prices drove massive desire amongst our associates and we consider this a sizeable obtain on our benefit proposition. In addition, we keep on to invest in crucial partnerships which provide additional prospects for Intelligent Purchasers to receive points and raise their cashback even even further – once again encouraging them save even a lot more cash and realise the benefit of the Smart Shopper present.”

As inflation and other economic burdens continue on to rise, it will be attention-grabbing to see no matter whether models evolve their loyalty programmes in means that gain consumers to a bigger extent. Dependent on the stats, it is harmless to say that this will increase brand name loyalty and paying for behaviour in a measurable and tangible way.



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Terena Chetty is head of technique at 1Africa Consulting, and has in depth practical experience in community relations (PR), integrated brand technique and customer communications. She performs intently with each pan-African and international manufacturers, and retains a BA Diploma in Interaction Science (cum laude).



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