What if I told you that you could get 50% back on your fuel purchase every month? Go to the movies for nearly nothing? Get 75% off tickets every time you fly?
Not convinced? What about if I throw in the ability to go to the gym for free every month? Enjoy two meals for the price of one when you go out to eat? Get R1 000 cash back monthly when you buy groceries? Free car rentals, Slow Lounge access and flight upgrades?
But wait! How much would you pay for all of this? R399 per month? R299?
All of these rewards can be yours for no money at all! That's right, you can get all these perks simply by signing up to a loyalty programme! All you have to do is give up your name... and access to some of your health data. Oh, and maybe your financial and lifestyle habits, as well as who your friends are.
Still willing to swipe that loyalty card?
The numbers behind the rewards
South Africans love loyalty and rewards programmes: 75% of us belong to at least one, with the majority belonging to between four and six. While we're not quite at the level of some Americans with their extreme couponing, the loyalty industry is thriving.
It's not exactly hard to see why we can't get enough of loyalty programmes; it's a win-win situation for businesses and consumers alike. In the wake of petrol price increases and inflation, the ability to easily earn cashback rewards or discounts can be a welcome relief. According to First National Bank, a total value of R1.8 billion in eBucks was redeemed in 2018.
As consumers become more aware of the value of their personal data, their expectations are going to increase.
For businesses, reward programmes offer the opportunity to drive loyalty, maintain customers and differentiate themselves from their competitors. You only need to look at Discovery Vitality, which made a R603 million profit last year, to understand how much of a revenue-generator this can be.
In a market where understanding your customer can be the difference between success and failure, loyalty programmes can provide a wealth of data on consumer preferences and behaviours. The flipside is that they can also be a minefield of data privacy issues if not approached responsibly.
Where you shop, travel, dine, fill up with petrol: this is just some of the information you potentially share when using a loyalty card or rewards programme. And the richer the partner ecosystem, the more personal the data tends to be, everything from how you drive to what your health is like.
There's no such thing as a free drink, no matter how high you are on the reward tier. These kinds of programmes are built on people's willingness to share parts of their lives with businesses. And as consumers become more aware of the value of their personal data, their expectations are going to increase.
So how do we make sure that the drink - or fuel rewards or Slow Lounge access - is worth it? As more businesses realise the value of loyalty programmes, how can they meet changing customer expectations and offer something of greater value than their competitors?
Redefining rewards
The good news is that the majority (more than 60%) of consumers are willing to share some personal data in exchange for value. However, it needs to be under the right circumstances: the data needs to be relevant to the value being offered and businesses need to make it clear what it is.
How many of us would be willing to share information about our physical health and lifestyles if it could help prevent heart attacks? Or real-time data about our driving habits if it lowers our premiums? I would, and I'm willing to bet I'm not the only one.
The most successful players in the rewards industry understand this. They make sure that whatever you get out of it, it's worth what you put in, whether it's time or effort or data. A few token freebies or discounts is not going to cut it, especially not when you expect customers to give you the world to be able to access them.
Here's where data becomes so important. It's critical for businesses to treat the relationship between customer data and reward with transparency and fairness.
If you're building your own loyalty programme, make it simple for customers to understand how they can unlock different kinds of value, and ensure this value is relevant to their lives. Use the data they are willing to share to continuously streamline and personalise your offerings, so that the relationship is reciprocal rather than one-sided.
Consumers who take the same approach of treating their personal data as a valuable commodity can also reap huge rewards. Don't just look at the advertised savings or rewards, but the overall value in terms of reward, ease and personal data.
How compatible is it with your current lifestyle? Would you need to travel out of your way or radically change your behaviour to reap the benefits? What kind of information will you need to share and are the benefits worth it?
As a member of several loyalty programmes myself, I can't wait to see where the industry is going and how the top players are going to evolve their value propositions to meet their customer needs. Today cashbacks... tomorrow, the world.
Share