eBucks grows with popularity of loyalty points
In South Africa the eBucks coalition loyalty programme has reported an increase in popularity both of the points awarded to consumers by the programme, and of the recently introduced eBucks auctions.
The programme's highest unique bid auctions (see 3 Aug. 2006), in which winning bids are paid for using the eBucks loyalty currency, received over 10,000 online bids in less than two months after launching.
The initiative was launched with a one-off 'Italy in a Ferrari' experience, valued at over R350,000 (approx. US$47,000). For a fraction of the true package value, eBucks members were able to bid for the luxury trip to Italy that ended with VIP entrance to the 2007 Monaco Formula One Grand Prix. The ceiling bid amount was eB14,800, and the winner's highest unique bid was eB14,676 (equivalent to R1,467.60 in cash - or approximately US$195).
A total of 28 auctions since closed, ranging from iPods and home theatre systems to spa packages, retail vouchers and home barbecue kits. According to eBucks' chief executive officer, Lezanne Human, "The high volume of bids placed in the short space of time clearly indicates that members perceive real value in the offering."
Programme statistics During the last financial year, eBucks allocated some R193 million worth of eBucks to members (bringing the total value of eBucks issued since the programme's launch to R683 million), and reported a 36% growth in the amount of eBucks redeemed (compared to the previous year).
According to Human, annual member growth currently stands at 14% (with nearly 1 million members now signed up), and the programme's spend:earn ratio is above 70% (up from 62% last year).
Growth factors When asked about the key factors in the programme's growth, Human said that the growth in the amount of eBucks spent has been a result of an expanded retail partner base, which offers members more earn and spend opportunities, as well as higher member activity levels which led to an increased earn:spend ratio. "But perhaps more important than the growth in the member base is that we have found that members have a higher cross-holding of products and are earning more eBucks from more partners," said Human.
Human also noted that part of the programme's growth can be attributed to the tremendous credit growth experienced in South Africa because of the low interest rates that have prevailed recently: "With First National Bank being our biggest reward partner, some of the allocation growth we have seen in the last financial year can be attributed to the growth in credit demand."
Improvement strategy But the increased amount of eBucks earned and spent during the past year was also partly a result of the programme's strategy to improve the quality of its member base and encourage increased activity at retail and financial partners. "We have worked hard to make our members' experience of the programme more rewarding by enhancing the data mining and CRM capabilities of the organisation. We also focused on direct interactions with our members and launched the Very VIP programme in which select members are invited to exclusive events," Human explained.
In the past year eBucks has added Avis and Loads of Living as new partners, bringing the total number of retail partners at which members can earn and spend their eBucks to 8. Members can also spend eBucks online in the eBucks shop, and through the call centre, as well as through eBucks' 15 e-commerce partners.
Loyalty metrics eBucks tracks the programme's impact on an ongoing basis, and the latest research at First National Bank showed that eBucks members conduct 49% more revenue-generating transactions than non-eBucks members - and that eBucks members spend 40% more than non-eBucks members. Furthermore, in a "before and after" survey it was found that the average consumer becomes 16% more profitable immediately after they become an eBucks member.
With the programme's retail partners, it was found that the cash amount spent by eBucks members increased year on year by between 15% and 25% more than non-eBucks members, and that the number of visits to the store by eBucks members was between 6% and 15% higher year on year than non-eBucks members.
Human said she remains optimistic that the eBucks earning and spending growth will continue to increase during 2007.