March 29, 2023

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Do customer rewards/loyalty programmes actually work?

Do customer rewards/loyalty programmes actually work?

by Terena Chetty. Do “rewards” programmes really work? From a buyer viewpoint, their popularity is simple. According to The Fact & BrandMapp 2021 Whitepaper, 74% of economically lively South Africans are making use of loyalty programmes. This is an boost of 7% from the 2015 determine of 67% loyalty utilization, implying that clients do, in actuality, locate value in these programmes.

Manufacturer benefits or loyalty programmes are aimed at attracting and retaining buyers by presenting some kind of gain to customers in exchange for employing their products and products and services, significantly on a standard basis. Loyalty programmes are commonplace throughout most industries, such as banking, insurance policies, retail and enjoyment, featuring a broad selection of benefit buildings from direct income-back and savings, to factors that can be utilized for a variety of products and solutions.

Most well-liked in the pack

Foremost the demand are the Pick n Spend Good Shopper and Clicks ClubCard programmes, with Select n Pay’s featuring having the top place by just 1% in excess of Clicks. The Dis-chem Profit offering takes the third place, with newcomer Checkers Xtra Savings swooping in to protected 4th put. Outstanding. The major 10 areas are dominated by retail, with the only exception remaining FNB eBucks in the range eight place all round, and the leading place in the monetary services group. When requested which solitary loyalty programme they would preserve if they had to opt for just a person in general, surveyed respondents picked FNB eBucks as their major decision.

As can be envisioned, the onset of the COVID-19 pandemic resulted in greater utilization of loyalty programmes as the population in general experienced elevated economic strain. Persons welcomed the reductions, rebates and other economical positive aspects available by lots of rewards programmes. What is exciting although, is that 2021 stats showed additional gender equilibrium than previous utilization info. Traditionally, there was a far broader hole amongst male and woman utilization, particularly when it arrives to retail loyalty programmes. Nevertheless, 2021 reveals a lot more gender fairness in this regard, perhaps remaining driven by pandemic-based mostly economic constrains as very well.

Playing your cards right

Do loyalty programmes function for suppliers and manufacturers? The solution is a resounding of course. Exploration shows that loyalty programmes have a definite impact on customer behaviour. In point, 64% of customers say that it influences where by they shop and 40% say it influences the products they acquire.

For shops to get it right, it is important to understand what clients want the most out of a loyalty programme. Understandably, “cash-back” is a primary incentive for benefits programme use, with the next very best issue staying special discounts. Women of all ages are inclined to emphasis extra on retail or searching-based mostly added benefits, with adult males putting much more value on status-based added benefits, this kind of as airport lounge accessibility  or “higher-tier-level” status, than their female counterparts. Gentlemen are also drawn to gas and banking added benefits to a larger extent than ladies.

In phrases of methodology, significantly in the retail sphere, swiping a card is the mind-boggling most popular process to assert positive aspects at a pay back-stage, with 76% of men and women preferring this choice. It is followed at a distant 2nd by scanning an app, which comes in at 27% of consumer votes.

Melissa Hanley, head of loyalty & strategic partnerships at Choose n Shell out, succinctly expresses the value of being familiar with buyers and the benefit it has resulted in for their brand name: “Historically, Clever Shopper has found a profits participation of about 63% ,and we enhanced this to 75% through our very last fiscal. Sensible Shopper had its most productive 12 months ever previous year and we believe that we achieved this by giving our customers what they definitely necessary, when they necessary it. The intentional system of Sensible Charges drove substantial demand from customers among our associates and we take into account this a major attain on our value proposition. In addition, we continue to spend in crucial partnerships which present additional possibilities for Wise Purchasers to gain factors and boost their cashback even more – yet again helping them conserve even extra cash and realise the benefit of the Good Shopper supply.”

As inflation and other fiscal burdens proceed to rise, it will be attention-grabbing to see no matter whether manufacturers evolve their loyalty programmes in means that profit individuals to a much larger extent. Dependent on the stats, it is risk-free to say that this will increase manufacturer loyalty and buying behaviour in a measurable and tangible way.



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Terena Chetty is head of system at 1Africa Consulting, and has extensive expertise in community relations (PR), integrated manufacturer system and consumer communications. She functions closely with the two pan-African and global makes, and holds a BA Diploma in Interaction Science (cum laude).



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