Do customer rewards/loyalty programmes actually work?

Do customer rewards/loyalty programmes actually work?

by Terena Chetty. Do “rewards” programmes really get the job done? From a shopper point of view, their level of popularity is plain. In accordance to The Fact & BrandMapp 2021 Whitepaper, 74% of economically lively South Africans are using loyalty programmes. This is an increase of 7% from the 2015 determine of 67% loyalty usage, implying that clients do, in simple fact, locate price in these programmes.

Brand rewards or loyalty programmes are aimed at attracting and retaining consumers by supplying some kind of gain to people in trade for employing their products and companies, specially on a normal basis. Loyalty programmes are prevalent across most industries, like banking, coverage, retail and leisure, featuring a vast variety of reward structures from immediate income-back again and savings, to details that can be made use of for several products and solutions and providers.

Most well known in the pack

Foremost the cost are the Decide n Pay out Sensible Shopper and Clicks ClubCard programmes, with Decide n Pay’s presenting having the top rated location by just 1% above Clicks. The Dis-chem Advantage giving normally takes the third place, with newcomer Checkers Xtra Price savings swooping in to secure 4th spot. Outstanding. The best 10 areas are dominated by retail, with the only exception being FNB eBucks in the quantity 8 spot all round, and the top rated place in the fiscal solutions group. When requested which single loyalty programme they would retain if they experienced to decide on just a single all round, surveyed respondents picked FNB eBucks as their major preference.

As can be expected, the onset of the COVID-19 pandemic resulted in higher usage of loyalty programmes as the population in common skilled greater economic strain. Persons welcomed the bargains, rebates and other economical added benefits offered by many benefits programmes. What is intriguing nevertheless, is that 2021 stats confirmed additional gender harmony than prior usage data. Traditionally, there was a far wider gap between male and woman usage, particularly when it will come to retail loyalty programmes. On the other hand, 2021 displays additional gender equity in this regard, potentially becoming pushed by pandemic-based economic constrains as well.

Actively playing your playing cards appropriate

Do loyalty programmes operate for vendors and makes? The answer is a resounding certainly. Exploration exhibits that loyalty programmes have a definite impact on shopper conduct. In simple fact, 64% of consumers say that it influences where by they shop and 40% say it influences the products and solutions they obtain.

For shops to get it correct, it is important to recognize what customers want the most out of a loyalty programme. Understandably, “cash-back” is a main incentive for rewards programme utilization, with the upcoming best thing currently being reductions. Women tend to emphasis a lot more on retail or searching-based added benefits, with guys positioning much more importance on position-dependent added benefits, these as airport lounge accessibility  or “higher-tier-level” status, than their feminine counterparts. Guys are also drawn to gas and banking advantages to a larger extent than gals.

In conditions of methodology, particularly within just the retail sphere, swiping a card is the mind-boggling desired process to declare rewards at a pay-level, with 76% of people today preferring this choice. It is followed at a distant second by scanning an application, which will come in at 27% of buyer votes.

Melissa Hanley, head of loyalty & strategic partnerships at Select n Pay out, succinctly expresses the benefit of understanding shoppers and the price it has resulted in for their model: “Historically, Intelligent Shopper has noticed a product sales participation of close to 63% ,and we improved this to 75% throughout our very last fiscal. Good Shopper had its most thriving 12 months at any time very last yr and we believe we attained this by providing our associates what they actually desired, when they needed it. The intentional strategy of Wise Costs drove massive demand amongst our customers and we contemplate this a major achieve on our benefit proposition. In addition, we keep on to spend in important partnerships which supply even more options for Good Shoppers to earn details and enhance their cashback even further – once again helping them save even far more revenue and realise the value of the Good Shopper offer.”

As inflation and other economical burdens continue on to rise, it will be intriguing to see no matter if manufacturers evolve their loyalty programmes in techniques that gain individuals to a more substantial extent. Based mostly on the stats, it is secure to say that this will boost manufacturer loyalty and purchasing behaviour in a measurable and tangible way.



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Terena Chetty is head of tactic at 1Africa Consulting, and has in depth experience in community relations (PR), built-in brand name technique and customer communications. She works carefully with both of those pan-African and world wide manufacturers, and holds a BA Diploma in Communication Science (cum laude).



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