Trends in South Africa's loyalty industry

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By: Wise Marketer Staff |

Posted on March 28, 2013

Reward programmes are all too common these days, and there is no shortage of new programmes entering the South African market, according to Jolande Duvenage, CEO for South Africa's eBucks coalition loyalty programme, who here offers some insights into trends that she believes are influencing the rewards industry.

The question Duvenage poses first is whether or not all the rewards available to consumers are meaningful, and are they keeping up with the expectations of consumers, who are increasingly under pressure to make their money go further in a hard economic environment?

There has been an explosion of rewards programmes in South Africa over the past few years. There are currently more than 70 major loyalty programmes, with an estimated 10 million South Africans carrying at least one loyalty card with them. Duvenage believes this growth will continue in 2013, with even more rewards programmes launching throughout the year.

In 2013, Duvenage expects some existing rewards programmes to continue offering simple cashback or discount based rewards (which are earned and redeemed in a single environment) while others will focus on offering more innovative, tiered and multi-partner models (usually offering more significant rewards to their most valuable customers).

Coalition or multi-partner programmes (such as eBucks) offer members the benefit of accelerated earnings because they earn from more than one partner, boosting their earning potential significantly. They also give consumers the freedom to spend their rewards across multiple partners and channels, increasing the versatility and purchasing power of their rewards currency. For example, FNB and RMB Private Bank reward their customers for positive banking behaviour by offering discounts of up to 40% on gift vouchers from prominent brands, as well as flights and gadgets when paying for these with their eBucks.

At the same time, economic pressure has made it necessary for consumers to become more price-sensitive and budget conscious, resulting in a more informed generation of shoppers. As a result, consumers want to feel like they are in control of their finances. They shop around for good deals, and hunt for bargains, ever wary of being exploited. This new generation of 'sharp shoppers', make purchasing decisions based on value - resulting in increased pressure on rewards programmes to ensure that they meet this expectation.

While some programmes only allow customers to spend in the same environment in which the rewards were earned, others allow members to spend their rewards across a range of goods and services, such as holidays, gadgets, gift vouchers, books and more. Members are also able to use a growing range of channels through which to spend their rewards - be it in-store with traditional retailers, online, or through mobile channels.

And with so many rewards programmes on offer, consumers have more opportunities to receive something in return for their money spent. This increased competition means that rewards programmes need to ensure they differentiate themselves, yet remain relevant to their members.

For a consumer to truly benefit from a rewards programme, it is crucial that they are rewarded for doing the things they do every day - such as shopping, banking and using their mobile phone - and it must be clear which behaviours they need to show in order to earn rewards.

The most successful rewards programmes this year will therefore be the ones that customise their offerings to their members' profiles and reward them for positive behaviours.

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