South African loyalty scheme helps members get houses

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By: Wise Marketer Staff |

Posted on June 30, 2005

A South African clothing and footwear retailer is providing a wide range of benefits for members of its account-holders' club, 'Jet Club' - the most dramatic of which so far was a substantial contribution toward a new house.

The Jet chain of over 220 Jet, Cuthberts and Sales House stores in South Africa, Botswana, Namibia, Lesotho and Swaziland, supplies lower and middle income families with value-priced clothing and footwear. Jet has the largest single market share of children's wear in South Africa and, according to the 2004 Markinor/Sunday Times Survey, is the number one retail brand (based on awareness, trust and confidence levels).

The chain operates the Jet Club for all account holders. More than half of its sales are on credit. Account holders join by simply applying at a Jet store.

The Club's uniqueness and strength lie in the fact that it continually strives to make a real difference to the lives of its members.

Benefits open to members, for a monthly fee of R12 (approx. US$1.90), include:

  • Care lines offering free telephone counselling and access to emergency services;
  • Funeral plans: R3,000 (approx. US$450) for the member and R1,500 (approx. US$225) for the spouse of the cardholder;
  • Free emergency medical evacuation to the nearest appropriate medical facility;
  • An HIV Prevention Programme (which provides free antiretrovirals);
  • A "Right to Sight" campaign, which provides free cataract screening and surgery;
  • Annual Community Awards;
  • The Jet Rookie competition (supporting and promoting football in South Africa).

While some of these benefits may seem a little odd to those in affluent societies, they are in fact brilliantly chosen to meet the needs of Jet's target consumers.

Some 1.2 million members of the Club's 1.3 million members receive the Jet Club Magazine (published by The Publishing Partnership), which is read by over 1.8 million readers. More than half of all Club members are females aged from 35 to 49. Most have a monthly income of between R1000 (approx. US$150) and R4000 (approx. US$600). Some 32% of all readers are between 25 and 34 years of age.

The magazine, which includes a supplement (often with a unique community support angle), is claimed to be the most well-read magazine in the region.

Housing backlog
Most recently Jet has turned its attention to the region's housing backlog and the need for public private partnerships to assist government in meeting its delivery targets.

"The solution to the housing crisis cannot depend solely on government funds", says Cameron Burt, manager of Jet Club. "The reality is that if the government is to meet its delivery targets it will need assistance from South African corporates, individuals and non-profit organisations."

The innovative, international non-profit organisation Habitat for Humanity offers just such a convergence of stakeholders to assist in mitigating the housing crisis. Jet partnered with the organisation last year to build six simple, decent and affordable houses in Mamelodi, outside Pretoria. Following the success of that experience Jet Club has announced that it will be building another eight houses (for Jet Club members) in the next three months on sites throughout the country.

Making a difference
Burt explains: "Every year the Club sets aside a substantial portion of funds for social responsibility projects, and we endeavour to use this money wherever the need is greatest and most relevant to our members. The housing crisis in South Africa touches every one of us. Through our involvement with Habitat for Humanity we are able not only to contribute funds but to actually make a difference, by helping to dig the trenches and lay the bricks. Our staff volunteer in such numbers that we overrun the building site."

Ultimately, these houses become a symbol of hope for the future, not just for the new homeowners but also for the community as a whole, who witness what is possible when a few dedicated people come together to make a difference. And for Jet they are evidence of a sustainable approach to conducting business in South Africa.

Approval process
Jet first supported the Habitat for Humanity project in 2004 - paying for eight houses - and was impressed with the effectiveness and professionalism of the organisation. This year when it decided to renew its funding for Habitat for Humanity it requested that the houses it paid for were to be for Jet Club members. Habitat has a very rigorous approval process for prospective homeowners, which includes identifying the family as solid members of their community, ownership education workshops and the paying of regularly monthly instalments from at least six months before any building has begun.

It is a tested process and results in houses being built for families who are a credit to their community - and at the same time, not a credit risk. In view of this Jet cannot simply select members names to be added to the Habitat list (also because housing is such a volatile issue in South Africa any perceived queue jumping would be disastrous). However, with its 1.3-million members, which works out to be a considerable percentage of South Africa's economically active population within the appropriate demographic bracket, in partnering with Habitat Jet is able to support its members. Habitat builds hundreds of houses a year - Jet simply requests that those people on the list that are Jet Club members are selected when Jet is involved with the build.

More houses
The members do not actually get their house free, they still repay a R35,000 (approx. US$5,240) loan, out of the total cost of R50,000 (approx. US$7,486). Jet's sponsorship enables Habitat to build more houses. In addition to the money, Jet provides practical building clothes, gloves and hats.

In terms of customer loyalty it is an intense one-on-one type of opportunity that, because of Jet's visible identity on the building site, rapidly snowballs in wider awareness within the community. And as decent housing is really a desperate need within these communities the positive association for Jet is considerable.

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