And the loyalty wnner is…

Market research

For the second time, British Airways’ Executive Club has taken the accolades as South Africa’s most highly-rated frequent flyer programme in a study of South African rewards programmes.Value in Loyalty Programmes 2005, the third annual study of South African loyalty programmes, was conducted jointly by Razor’s Edge Business Intelligence and World Wide Worx. It found that SAA’s Voyager programme, despite having become South Africa’s most popular rewards “currency”, offered lower returns than its competitors in two key measures used in the survey: Return on Spend (RoS) for flights and Return on Transaction Value (RoTV) for credit card partners.

“We developed these metrics to assist the public in choosing loyalty programmes based on real value rather than the promise of loyalty points for their own sake,” says Bruce Conradie, managing director of Razor’s Edge. “Loyalty programmes need to deliver on their promises if they want to earn true loyalty.”

Aside from Frequent flyer programmes, four other categories were covered in the survey, namely Financial services programmes, Retail programmes, Multi-sector programmes and Travel and leisure programmes. Each rewards programme was evaluated according to 19 criteria, including cash value, reward choice and appeal, and attainability of rewards.

The most highly rated programmes in each category were:

  • Financial services programmes: eBucks – offers a greatest number of earn opportunities in the financial services sector, including earning on home loan balances and cheque account transactions.
  • Frequent flyer programmes: BA Executive Club – edged out Virgin’s Flying Club because it had more financial services partners, a choice of credit card partners and advantages in rising through tier status.
  • Retail programmes: Exclusive Books Fanatics – mainly because it offers a higher earn rate than its main competitor, Clicks ClubCard, despite the unpopularity of the practise of expiring awards after a short period.
  • Multi-sector programmes: AgriBonus – rewards high volumes of business spend, giving its members a points earning power that is far above that enjoyed by the other category contenders.
  • Travel and leisure programmes: Southern Sun Frequent Guest, exceeds the offering of other programmes in many ways, including a high RoS (10% minimum) and excellent value-added benefits.

“The best rewards programmes are designed for both reward and convenience,” says Winnifred Knight, a leading marketing consultant, who participated in the structure and content of the survey. “When programme owners use reward points merely as bait, and then make it difficult to redeem awards, they end up in damage control mode with customers rather than reaping the benefits of loyalty.”

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