World Wide Worx | Business Technology Research South Africa

South Africa’s most rewarded consumers

The South African consumer who gets the most benefit from membership of rewards programmes is the one who banks with First National Bank, flies British Airways, shops with an Infinity card and is a member of the Discovery Vitality wellness scheme.These rewards programmes came out top of their respective categories (financial services, frequent flyer, multi-vendor retail and wellness) in the Value in Loyalty Programmes 2003 survey, the 2nd annual study of this rapidly growing South African industry. Among single-vendor retail programmes, My Lancôme received the highest rating.

The hypothetical consumers who choose the best of each category would belong to any number of retail loyalty programmes, since they would know all about “double-dipping”, the simultaneous earning of loyalty points on two programmes with a single transaction. Thus when they pay for their BA flight using an FNB credit card, they earn both BA miles and eBucks.

“Such a tactic is known as ‘playing the game’ in the industry,” says Bruce Conradie, director of Razor’s Edge Business Intelligence, who conducted the research with Arthur Goldstuck, managing director of World Wide Worx. “It is very much in evidence in the USA, but South African consumers are still catching on to the payback joys of loyalty programmes.”

The Value in Loyalty Programmes 2003 report includes an in-depth analysis of 18 rewards programmes, detailing the value offered by the programmes to their members.

“As we saw in the previous survey, most programme members do not know how much value loyalty programmes provide,” says Goldstuck. “They usually perceive the cash value of rewards as the main benefit, but this is often so difficult to calculate that few members make the effort.”

Even when the cash value of loyalty points is known, the total value offered by a programme remains obscure. It depends on, among others, the range and value of rewards offered, the possibility of collecting enough points to earn a reward, the rewards’ inherent appeal, and any value-added benefits offered. The report examines these factors, as well as 68 core characteristics of each of the surveyed programmes.

Each programme has been rated against 18 criteria that define the “value mix” offered to members by loyalty programmes. The criteria range from reward choice and reward appeal to attainability of rewards and psychological benefits to members.

Click here to find out more about the latest Value in Loyalty Report.