South Africa: Vodacom starts prepaid loyalty scheme
The South African mobile phone network operator Vodacom has launched a new loyalty programme called 'Talking Points' for its prepaid mobile phone users, offering users various text messaging and discounted call rewards.
The Talking Points programme is available only to Vodacom's prepaid mobile phone users (not contract users), and rewards members with points for every recharge (airtime top-up). When enough points have been earned, they can then be redeemed for a variety of reward bundles.
No registration is required to earn points, but registration is required before points can be redeemed for rewards. The member's mobile phone number effectively becomes their loyalty points account number. The deployment of this type of programme is an excellent anti-churn measure, as the reward is in the form of additional usage tied to the same account.
When registering to redeem points for rewards (either through Vodacom's call centre or at any Vodacom shop), members are required to provide basic personal information, including:
- Their mobile phone number;
- Their title, first name, initials, and surname;
- Their national ID number (government-issued);
- Their full postal address.
Earning points Points are automatically earned for all recharges and SMS bundle purchases (with a very few exceptions covered in the small print), at the rate of 1 point per ZAR10 spent on a recharge (approx. US$1.60). Points are actually calculated by dividing the recharge amount by 10, and rounding up or down to the nearest whole number. For example: a R12 recharge earns 1 point; a R29 recharge earns 3 points; and a R49 SMS voucher earns 5 points.
The points expire 18 months after they are issued, but do not expire if the user changes from one prepaid pricing plan to another. However, all points earned are forfeited if the user converts from a prepaid plan to a contract tariff package.
Redeeming points Points can be redeemed at several levels:
- 150 points buys a 150 SMS bundle and a 10% discount on in-network calls (both valid for 90 days);
- 250 points buys a 300 SMS bundle and a 15% discount on in-network calls (both valid for 90 days);
- 500 points buys a 500 SMS bundle and a 20% discount on in-network calls (both valid for 90 days);
- At the 1,000, 1,500, and 2,000 point levels, members can have any combination of the above rewards that make up the right points total, plus special offers on selected handset upgrades.
The SMS reward bundles including text messages within South Africa only, and exclude premium rate messages. Although each bundle expires 90 days after it is added to the member's account, an free reminder message is sent 14 days before expiry. However, for multiple SMS bundles, the expiry date for SMS bundles is cumulative: each new bundle added extends the validity period by an extra 90 days. This principle does not apply to call discounts, which cannot be overlaid or accumulated on top of each other.
Members can check their points balance online (through the Vodacom4Me.co.za web site), from their handset, or at Vodacom shops.
From a loyalty viewpoint According to Deon Olivier, director of the loyalty business unit at Achievement Awards Group, churn reduction is most likely to be a key function of the programme, with current churn levels in South Africa's prepaid market standing at an estimated 50% or more.
Olivier points out that the SMS bundle rewards represent excellent value for the consumer, appearing to equate to a 3% perceived return on their spend. According to Olivier, the points have been backdated to November 2005, with redemptions beginning on 5th March 2006.
For additional information: · Visit Vodacom at http://www.vodacom.co.za · Visit Achievement Awards at http://www.awards.co.za