Do customer rewards/loyalty programmes actually work?

Wilton Vinck

by Terena Chetty. Do “rewards” programmes essentially work? From a shopper point of view, their popularity is undeniable. In accordance to The Truth & BrandMapp 2021 Whitepaper, 74% of economically active South Africans are utilizing loyalty programmes. This is an increase of 7% from the 2015 figure of 67% loyalty usage, implying that consumers do, in actuality, obtain price in these programmes.

Brand name rewards or loyalty programmes are aimed at attracting and retaining clients by providing some form of profit to consumers in trade for employing their items and providers, particularly on a normal basis. Loyalty programmes are common throughout most industries, like banking, insurance policies, retail and entertainment, offering a broad selection of gain structures from direct dollars-again and discounts, to factors that can be used for many products and solutions and products and services.

Most well-liked in the pack

Top the cost are the Decide n Spend Good Shopper and Clicks ClubCard programmes, with Decide n Pay’s providing having the leading place by just 1% in excess of Clicks. The Dis-chem Reward supplying can take the 3rd place, with newcomer Checkers Xtra Savings swooping in to safe 4th spot. Spectacular. The major 10 spaces are dominated by retail, with the only exception getting FNB eBucks in the amount eight location general, and the prime spot in the monetary providers group. When questioned which single loyalty programme they would retain if they had to select just one particular general, surveyed respondents picked FNB eBucks as their prime preference.

As can be envisioned, the onset of the COVID-19 pandemic resulted in increased utilization of loyalty programmes as the inhabitants in standard skilled improved economic strain. Men and women welcomed the special discounts, rebates and other financial advantages available by a lot of rewards programmes. What is intriguing even though, is that 2021 stats confirmed additional gender balance than preceding use details. Traditionally, there was a far broader gap involving male and woman usage, particularly when it comes to retail loyalty programmes. Having said that, 2021 exhibits a lot more gender equity in this regard, possibly staying driven by pandemic-dependent financial constrains as perfectly.

Enjoying your playing cards ideal

Do loyalty programmes work for merchants and makes? The reply is a resounding certainly. Research exhibits that loyalty programmes have a definite impact on buyer conduct. In point, 64% of customers say that it influences the place they store and 40% say it influences the products and solutions they purchase.

For vendors to get it appropriate, it is key to have an understanding of what clients want the most out of a loyalty programme. Understandably, “cash-back” is a top incentive for rewards programme utilization, with the next greatest matter getting discounts. Women of all ages are likely to focus extra on retail or buying-primarily based gains, with guys putting much more worth on standing-centered added benefits, this sort of as airport lounge entry  or “higher-tier-level” prestige, than their woman counterparts. Males are also drawn to gasoline and banking added benefits to a larger extent than girls.

In conditions of methodology, notably in the retail sphere, swiping a card is the overwhelming most well-liked technique to assert rewards at a pay back-issue, with 76% of persons preferring this choice. It is adopted at a distant next by scanning an app, which will come in at 27% of customer votes.

Melissa Hanley, head of loyalty & strategic partnerships at Decide n Pay out, succinctly expresses the worth of knowing buyers and the price it has resulted in for their brand name: “Historically, Clever Shopper has found a profits participation of close to 63% ,and we increased this to 75% during our final fiscal. Good Shopper experienced its most productive yr ever very last year and we believe that we obtained this by providing our customers what they seriously needed, when they necessary it. The intentional strategy of Sensible Costs drove enormous need among our customers and we look at this a significant obtain on our price proposition. In addition, we keep on to invest in crucial partnerships which present further possibilities for Wise Consumers to make points and improve their cashback even even further – once more serving to them preserve even extra cash and realise the worth of the Clever Shopper supply.”

As inflation and other money burdens go on to increase, it will be interesting to see regardless of whether brand names evolve their loyalty programmes in means that profit shoppers to a more substantial extent. Based on the stats, it is protected to say that this will enhance manufacturer loyalty and buying behaviour in a measurable and tangible way.



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Terena Chetty is head of approach at 1Africa Consulting, and has substantial practical experience in public relations (PR), integrated brand method and client communications. She is effective closely with equally pan-African and world models, and holds a BA Diploma in Interaction Science (cum laude).



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