Cape Town – It’s not so much about being loyal than being recognised for your contribution that makes loyalty programmes so important in our current financial landscape.
That was the view of Absa Rewards head James Rheeder, at a media gathering hosted by Absa [JSE:ABSP] and Pick n Pay (PNP) [JSE:PWK] in Cape Town on Wednesday.
He said loyalty programmes should offer members significant financial benefits as they tap into the cash earned through their daily card swipes.
Rheeder was highlighting their partnership with PNP, in which people earning Absa rewards can transfer those over to PNP Smart Shopper points, earning 15% in points automatically. So if you had R100 worth of points from Absa, it would become R115 worth of points at PNP. “That’s even more money in their pocket just for using their credit or debit card to accumulate cash back rewards,” said Rheeder.
Foot traffic
PNP’s Rob Pedegana said the aim was to drive foot traffic into shops and to understand their customer’s behaviour. “We give 15% back, not up to 15% back, on every transfer of Absa Rewards,” he said. “There is no tier system with this programme. We also have boost campaigns, where you get 15% extra points added on. The last time we did that, we got a month’s worth of conversion in two days.”
“Through its two-year redemption partnership with Pick n Pay smart shopper, Absa Rewards has been proven to offer a significant benefit to consumers who are feeling the pinch and battling to save, as the cost of living continues to skyrocket,” Rheeder explained. “Consumers have daily living expenses regardless of loyalty and rewards programmes, yet by being smart and paying for these expenses by swiping their cheque or debit cards, they can earn real cash back just through their everyday spending.”
While spending through the retailer had more benefits, Absa also offered customers the opportunity to transfer their points into a savings account, with 5% interest. “Consumers might not be able to save every month, so the cash rewards that they are earning through Absa Rewards gives them actual cash back each month that could be put into savings or even used to help make ends meet,” said Rheeder.
Increase in value
As part of the initial partnership, consumers received an added value benefit of 5%, but this was increased to a 15% added value benefit in November 2013. “This improved offering from 5% to 15% saw an 87% increase in the monthly volume of redemptions and the average rand value that members were redeeming increased by 14%, which clearly indicates that consumers are looking for real value for their loyalty.”
Absa customers have to pay R21 per month to subscribe to Absa Rewards, but Rheeder said the opt-in system meant that those who were part of the programme believed in it and did not have to worry about any tier system. “People are becoming more multi-bank and multi-card consumers, so we want our card to be front of wallet,” he said. “We just want to make it as simple as possible for our clients.”
Of Absa’s 7 million transactional customers, 1.7 million have signed up to the loyalty programme. According to Value+Nettwork executive director Deon Olivier, only 50% of consumers will ever join a loyalty programme. “Either you’re a loyalty junkie or you’re not,” he said. “Customers are not always thinking about loyalty. It’s all about complexity verse simplicity and I think this partnership strikes a chord with the latter.”
Absa, which started its loyalty programme in 2009, but which only gained traction in 2011, has 60 partners where customers can gain added value. “We don’t work in a closed loop system,” said Rheeder. “Only giving back to customers who shop at one place is over. Customers swipe where they want to shop and redeem those points in many different ways, without being tied in to any one place.”
That was the view of Absa Rewards head James Rheeder, at a media gathering hosted by Absa [JSE:ABSP] and Pick n Pay (PNP) [JSE:PWK] in Cape Town on Wednesday.
He said loyalty programmes should offer members significant financial benefits as they tap into the cash earned through their daily card swipes.
Rheeder was highlighting their partnership with PNP, in which people earning Absa rewards can transfer those over to PNP Smart Shopper points, earning 15% in points automatically. So if you had R100 worth of points from Absa, it would become R115 worth of points at PNP. “That’s even more money in their pocket just for using their credit or debit card to accumulate cash back rewards,” said Rheeder.
Foot traffic
PNP’s Rob Pedegana said the aim was to drive foot traffic into shops and to understand their customer’s behaviour. “We give 15% back, not up to 15% back, on every transfer of Absa Rewards,” he said. “There is no tier system with this programme. We also have boost campaigns, where you get 15% extra points added on. The last time we did that, we got a month’s worth of conversion in two days.”
“Through its two-year redemption partnership with Pick n Pay smart shopper, Absa Rewards has been proven to offer a significant benefit to consumers who are feeling the pinch and battling to save, as the cost of living continues to skyrocket,” Rheeder explained. “Consumers have daily living expenses regardless of loyalty and rewards programmes, yet by being smart and paying for these expenses by swiping their cheque or debit cards, they can earn real cash back just through their everyday spending.”
While spending through the retailer had more benefits, Absa also offered customers the opportunity to transfer their points into a savings account, with 5% interest. “Consumers might not be able to save every month, so the cash rewards that they are earning through Absa Rewards gives them actual cash back each month that could be put into savings or even used to help make ends meet,” said Rheeder.
Increase in value
As part of the initial partnership, consumers received an added value benefit of 5%, but this was increased to a 15% added value benefit in November 2013. “This improved offering from 5% to 15% saw an 87% increase in the monthly volume of redemptions and the average rand value that members were redeeming increased by 14%, which clearly indicates that consumers are looking for real value for their loyalty.”
Absa customers have to pay R21 per month to subscribe to Absa Rewards, but Rheeder said the opt-in system meant that those who were part of the programme believed in it and did not have to worry about any tier system. “People are becoming more multi-bank and multi-card consumers, so we want our card to be front of wallet,” he said. “We just want to make it as simple as possible for our clients.”
Of Absa’s 7 million transactional customers, 1.7 million have signed up to the loyalty programme. According to Value+Nettwork executive director Deon Olivier, only 50% of consumers will ever join a loyalty programme. “Either you’re a loyalty junkie or you’re not,” he said. “Customers are not always thinking about loyalty. It’s all about complexity verse simplicity and I think this partnership strikes a chord with the latter.”
Absa, which started its loyalty programme in 2009, but which only gained traction in 2011, has 60 partners where customers can gain added value. “We don’t work in a closed loop system,” said Rheeder. “Only giving back to customers who shop at one place is over. Customers swipe where they want to shop and redeem those points in many different ways, without being tied in to any one place.”