Rewards programmes have become popular in South Africa, with as many as 72% of consumers using them. According to Rioma Cominelli, a Director at First Loyalty Plus, reward programmes are designed to benefit the customer by saving them money. “Loyalty programmes give consumers access to preferential rates or cash-backs, which means they get to enjoy the things they love at a lower cost,” she adds.
A recent study by Truth & BrandMapp revealed that the use of rewards or loyalty programmes is declining, which can be attributed to an unstable economic environment, slow wage growth and high taxes. “The fact that consumers are cash-strapped is more reason for them to look into rewards programmes so that they can make the most of the money they have,” says Rioma.
There are various types of rewards or loyalty programmes, and Rioma shares the most popular below:
Point loyalty programme
This is one of the most popular loyalty programmes offered in South Africa. It’s usually free to join and allows consumers to accumulate points each time they spend money on a product, accommodation, or experience. Over time, the points are converted to discounts, special offers or cash-back, which consumers can use as they please.
Paid loyalty programme
With this loyalty programme, customers pay a monthly or yearly fee to join. This grants them access to guaranteed and exclusive discounts on holidays, meals, spa deals, movies, cruises, shopping and more. The companies that offer these kinds of rewards usually negotiate lower rates with various brands on behalf of consumers, so instead of joining free multiple programmes, consumers can enjoy benefits from a centralised point. Although consumers pay to join this kind of programme, they save more money than they would have if they weren’t a part of it.
Rioma says consumers should ask themselves the following questions to determine whether a rewards programme is suitable for them:
Do you eat out (even if just once a month)?
Do you travel for work or pleasure (locally or abroad)?
Do you visit the cinemas or rent movies online?
Do you shop online?
Do you want to keep doing these things and save money at the same time?
“If you answered yes to any of these questions, then you’ve been losing money. There are pros and cons to joining either of the programmes mentioned above. A free programme only allows you to save after you have accumulated points and a paid loyalty programme gives you instant and guaranteed benefits. Either way, every consumer should join one so that they can reap the rewards and unlock lifestyle discounts,” concludes Rioma.
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