Up your game, reap rewards

Do loyalty programmes create loyalty?

It’s becoming harder than ever for companies to retain their customers

Loyalty and reward programmes aim to change that by improving customer lifetime value, reducing customer churn and maintaining high levels of customer acquisition and retention

The big question, however and one of the most frequently asked in the loyalty industry is whether loyalty programmes really do influence customers to change their behaviour

The Truth & BrandMapp Loyalty Report says the answer is an overwhelming “yes” and that consumer behaviour does change due to loyalty programme membership The report says a well-executed programme can generate between 4-6% incremental revenue for a business

According to the study, 84% of South Africans said loyalty programmes influence where they shop, 56% said they influence the products they buy, 53% said they influence where they buy fuel, 49% said they influence where they bank, 34% said they influence where they choose to eat and how they travel, and 23% said they influence where they buy insurance

It also noted that women were more influenced by loyalty programmes than men in terms of where they shop and the products they buy Men, on the other hand, are more influenced in terms of where they buy fuel, where they bank and how they travel The BrandMapp findings are confirmed by other surveys

A McKinsey report focused on the Australian market released earlier this year also found loyalty programmes change customer behaviour, with 60% of survey respondents saying that by virtue of a company’s loyalty programme, they were doing at least one of the following: increasing their purchasing frequency; choosing that business more often over that of competitors; were more willing to recommend the brand to others, and were more willing to pay a premium for loyalty points or enhanced loyalty status

The report said in an uncertain macro environment, consumer-facing businesses can overcome declining consumer sentiment by investing in their loyalty programmes Companies with high-performing offerings, it added, can expect “higher sales, greater bang for their customer acquisition bucks, with customers enrolled in these programmes spending more, churning less and demonstrating a greater willingness to recommend their favoured brands to others”

The McKinsey survey asked 1,400 consumers about their experiences interacting with loyalty programmes across a variety of industries The firm cautioned, however, that consumer optimism is falling, with the public spending less and showing a greater willingness to switch products, brands and channels in search of better value McKinsey said the decline in loyalty within the Australian market is apparent at every income level, but more so in the higher-income bracket affiliate partner), they will be eligible for all the various qualifying rewards when shopping at any Dis-Chem Pharmacy and Dis-Chem Baby City This layered approach and ability to earn rewards from numerous programmes simultaneously is unique to Dis-Chem’s Benefit Programme, she adds

“Customers don’t want a rewards programme that is hard to understand and difficult to benefit from We’ve made every effort to remove all potential barriers to make it as easy as possible to earn and redeem rewards The programme is structured in a way that ensures customers feel valued and respected ”

Every time a customer shops, a portion of all eligible purchases is donated to the Dis-Chem Foundation The 2022 Truth & BrandMapp Loyalty Whitepaper revealed that the ability to donate to charity was among the benefits of belonging to a loyalty and rewards programme Recognising this affinity for altruism, a percentage of eligible purchases is donated to the Dis-Chem Foundation, in addition to earning Benefit rewards

Established in 2006 in response to concerns around growing levels of poverty in South Africa, the Dis-Chem Foundation works closely with registered NGOs, NPOs and NPCs to support and improve the lives of struggling communities The main focus of the foundation is on health, nutrition and clean water In partnership with Future Life, Octodec and Nivea, the Dis-Chem Foundation will provide more than 2 4-million nutritious meals to children in need this year

The foundation also plants and assists in maintaining food gardens, and provides safe and clean running water in rural communities which, in turn, provides work and nutrition to those in need sustainably In addition to food security, Dis-Chem community clinics offer health services to the needy

The foundation s annual campaigns include Million Comforts, which provides sanitary products to teenage girls to ensure they don t miss school, and the Blanket campaign, which provides blankets to old-age homes, children s homes, animal shelters and other needy organisations

Questioning the cost of education?

School-Days is an innovative programme using loyalty methodology to raise funds for school, college or university education

When members spend at partner brands, they earn education-time points (ETPs), which can be donated or redeemed to pay for such fees

The programme, which boasts more than one-million members, more than 600,000 of whom are active, has partnered with Dis-Chem, Baby City, Standard Bank UCount, Jet, TFG, NetFlorist, The Harvest Table, Booking com, King Price and Car License

The big differentiator with SchoolDays ETPs are that they can only be redeemed to pay for education, not cash

Or Other Benefits

The programme recently announced the launch of “Plan to Pay” , an innovative product which allows families to plan ahead for the cost of a child s education

How it works is that families purchase ETPs onceoff or via monthly instalments, with the investment used to pay for education later The ETPs are held and backed with cash investments in Standard Bank Participants earn bonus ETPs based on their behaviour and through partner campaigns They can also earn them by spending at partner brands When the time comes to redeem the ETPs, they are paid directly to the school, college or university of the member s choosing