South African reward schemes ranked by value

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By: Wise Marketer Staff |

Posted on July 23, 2007

South Africa's most valuable rewards programmes are eBucks, the Ster-Kinekor Movie Club, Vodacom Talking Points, and the Virgin Atlantic Flying Club, according to the latest 'Value in Rewards Programmes' survey report by Razor's Edge Business Intelligence.

The survey rated the country's points-based rewards programmes according to their value to members.

Best value for rewards
Ster-Kinekor Movie Club was rated the most valuable entertainment rewards programme, while SAA Voyager was found to be the most valuable frequent flyer programme. The popular eBucks programme was declared the "most valuable retail rewards programme" as well as the "most valuable independent coalition".

Vodacom Talking Points was recognised as being the best rewards programme for the mass market, and Radio 94.7 Highveld's recently launched Club VIP was declared the most innovative rewards programme for 2007.

An award was also made for the most valuable top tier within frequent flyer programmes, going to Lufthansa's Miles & More programme with its ultra-exclusive Hon Circle tier. Benefits enjoyed by members include chauffeur drives from the boarding gate to the aircraft and a personal valet to attend to passport control at the First Class terminal in Frankfurt.

No specific awards were given for credit card-based loyalty programmes, as these were rated in the company's earlier Value in Credit Cards survey (December 2006). That survey found that the most valuable credit card at the time was the Discovery Card, a co-branded card issued by FNB and Discovery (both of which are subsidiaries of FirstRand).

What makes a good programme?
For the purpose of the Value in Rewards Programmes survey, the rewards categories were based in part on a suggested ideal mix of programmes. Bruce Conradie of Razor's Edge explained: "I recommend that consumers should belong to anything from 2 to 8 loyalty programmes, but that the mix of programmes depends on the individual. People who fly often should belong to a frequent flyer programme, and most consumers could benefit from a credit card programme."

The best programmes, Conradie says, should do more than just give money back in the form of loyalty points or cash-back. They should provide benefits and privileges that cannot otherwise be bought - for example, preferential queuing, exclusive shopping times, first option on products with limited availability, or even a useful newsletter. The report cites the example of cinema chain Ster-Kinekor inviting its Platinum cardholders to exclusive movie premiers.

"This is an area in which we could still see a good deal of growth. South African marketers still generally have the mindset that a rewards programme is about using points as a type of discount mechanism. But, as consumers become wealthier and more discerning, product value and value-added benefits will become more important than reduced costs," Conradie concluded.

Loyalty programmes growing fast
Despite criticism that has been levelled at rewards programmes in South Africa, they are still growing in popularity, among both companies and consumers. The two-year period since the survey was last done has seen a considerable growth in the sector. In the 2005 survey, 22 programmes were profiled. This number increased to 32 in the 2007 survey.

Rewards programme active memberships in South Africa now exceed 10 million, and this figure excludes the Vodacom Talking Points programme because the potentially large (some 17 million or more) membership figure was not released.

The report does point out, though, that the quoted figure of 10 million refers to overall programme memberships, not individual members, as one individual often accounts for several memberships in different programmes. The active memberships quote in the report also refer to points-based programmes only, and the country's biggest rewards programme is still the Clicks ClubCard with 2.1 million active members.

The report, Value in Rewards Programmes, is available for purchase directly from Razor's Edge - click here.

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