February 24, 2024


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Do customer rewards/loyalty programmes actually work?

4 min read
Do customer rewards/loyalty programmes actually work?

by Terena Chetty. Do “rewards” programmes in fact operate? From a buyer point of view, their popularity is plain. According to The Truth & BrandMapp 2021 Whitepaper, 74% of economically lively South Africans are employing loyalty programmes. This is an raise of 7% from the 2015 figure of 67% loyalty use, implying that shoppers do, in fact, find worth in these programmes.

Brand name rewards or loyalty programmes are aimed at attracting and retaining buyers by presenting some kind of gain to shoppers in exchange for making use of their products and companies, specially on a regular foundation. Loyalty programmes are widespread across most industries, together with banking, insurance policy, retail and amusement, giving a extensive selection of advantage buildings from direct hard cash-back again and savings, to factors that can be employed for numerous solutions and providers.

Most well-known in the pack

Major the demand are the Pick n Spend Wise Shopper and Clicks ClubCard programmes, with Pick n Pay’s presenting taking the best spot by just 1% above Clicks. The Dis-chem Reward offering usually takes the 3rd place, with newcomer Checkers Xtra Price savings swooping in to safe 4th place. Extraordinary. The top 10 areas are dominated by retail, with the only exception being FNB eBucks in the number 8 place over-all, and the leading place in the economic services classification. When asked which solitary loyalty programme they would maintain if they had to decide on just a person over-all, surveyed respondents picked FNB eBucks as their leading alternative.

As can be envisioned, the onset of the COVID-19 pandemic resulted in increased usage of loyalty programmes as the population in general expert amplified economic pressure. People welcomed the reductions, rebates and other economical benefits supplied by many benefits programmes. What is attention-grabbing even though, is that 2021 stats confirmed extra gender stability than past use knowledge. Historically, there was a significantly broader hole involving male and female use, especially when it will come to retail loyalty programmes. Even so, 2021 exhibits more gender fairness in this regard, perhaps staying driven by pandemic-centered monetary constrains as very well.

Actively playing your cards proper

Do loyalty programmes get the job done for shops and makes? The response is a resounding yes. Research shows that loyalty programmes have a definite affect on client behaviour. In truth, 64% of consumers say that it influences where they shop and 40% say it influences the products they invest in.

For suppliers to get it correct, it is essential to fully grasp what buyers want the most out of a loyalty programme. Understandably, “cash-back” is a primary incentive for rewards programme utilization, with the subsequent best matter getting special discounts. Girls tend to emphasis far more on retail or buying-based positive aspects, with males putting a lot more significance on standing-based positive aspects, this sort of as airport lounge accessibility  or “higher-tier-level” status, than their woman counterparts. Adult males are also drawn to gasoline and banking rewards to a bigger extent than gals.

In phrases of methodology, specially inside of the retail sphere, swiping a card is the overpowering desired approach to assert positive aspects at a pay-level, with 76% of men and women preferring this alternative. It is followed at a distant next by scanning an app, which comes in at 27% of client votes.

Melissa Hanley, head of loyalty & strategic partnerships at Pick n Shell out, succinctly expresses the price of comprehension customers and the worth it has resulted in for their model: “Historically, Good Shopper has found a product sales participation of around 63% ,and we amplified this to 75% throughout our final fiscal. Wise Shopper experienced its most effective 12 months ever very last yr and we imagine we reached this by providing our associates what they seriously required, when they required it. The intentional system of Good Prices drove massive need amongst our associates and we consider this a substantial acquire on our value proposition. In addition, we keep on to commit in crucial partnerships which give more prospects for Wise Consumers to generate factors and boost their cashback even additional – all over again encouraging them save even additional funds and realise the value of the Sensible Shopper give.”

As inflation and other economic burdens proceed to increase, it will be appealing to see irrespective of whether brands evolve their loyalty programmes in strategies that benefit customers to a larger sized extent. Based on the stats, it is harmless to say that this will increase brand loyalty and obtaining conduct in a measurable and tangible way.



 Most important image credit rating: Pixabay.com.




Terena Chetty is head of approach at 1Africa Consulting, and has intensive working experience in community relations (PR), built-in brand name tactic and client communications. She operates carefully with both equally pan-African and world wide makes, and retains a BA Degree in Interaction Science (cum laude).



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