Picture: ISTOCK
Picture: ISTOCK

First National Bank’s eBucks is the most popular loyalty programme of those offered by the four retail banks, by a long way.

This year’s Truth & BrandMapp Loyalty Whitepaper, released this week, shows that 36% of respondents use eBucks, while only 15% use Absa’s Rewards, 14% Standard Bank’s UCount, and 8% Nedbank’s Greenbacks. Capitec does not offer a loyalty programme.

Insights contained in the whitepaper are derived from the responses of more than 25,000 economically active South Africans who took part in an online survey comprising 270 questions relating to product usage and loyalty programmes.

According to the report, FNB is the only bank that publishes the rate of redemption of rewards, claiming that approximately 85% of eBucks rewards earned by members this year were redeemed, and that the value of these rewards equated to R1.8bn.

Nedbank and Absa boast ease of redemption as key drivers of engagement with a loyalty programme, the report says. The Nedbank Shop card and Absa Rewards allow for automatic redemption into cash, which is the most popular reward – 73% of respondents rate cash incentives as their favourite reward.

The banks offering loyalty programmes describe their key point of differentiation as:

  • cash and simplicity, in the case of Absa Rewards;
  • rewards at 100,000 retailers or as cash withdrawals, for members of Nedbank’s Shop card; 
  • benefits on all grocery spend at nine grocery retailers, in the case of Standard Bank’s UCount offers; and
  • unique new rewards for all customers across all segments for FNB's eBucks, such as a free Wimpy burger four times a year at Engen One-stop shops and airtime for Easy customers.

All the banks see their loyalty propositions to help South Africans in cash-strapped times, the report says. Those with partnerships with grocery and fuel retailers say these rewards “really help their customers”.

A loyalty programme alone does not inspire customer loyalty, the report says. The real reflection of customer loyalty is how likely customers are to recommend the brand and its loyalty programme.

Of all loyalty programmes available to South African consumers – not just bank customers – eBucks comes out tops when it comes to likelihood of recommending a programme. Forty-two percent of respondents said they would be “extremely likely to recommend” the programme; 41% of respondents said the same of Standard Bank’s UCount; and 39% of Discovery’s Vitality programme. The report says it’s noteworthy that all three of these programmes are in the financial services sector, “to which consumers are often less emotionally attached”.

According to the white paper, all the banks surveyed plan to add more value to their offerings by improving the data-driven personalisation of rewards.

Retail banking programmes are the second-biggest category of loyalty programmes after retail stores.

Beyond banking

A whopping 75% of South Africans use loyalty programmes, with women belonging to about six programmes and men belonging to about four, the report says.

The top five most used loyalty programmes in South Africa this year are the same as last year: Clicks’ ClubCard, followed by Pick n Pay’s Smart Shopper, Dis-Chem’s Benefit, Edcon’s Thank U and Woolworths’ WRewards.

While the top five held their positions, Pick n Pay and Edcon enjoyed less loyalty this year than last year: 60% of respondents this year said they used Smart Shopper compared with 66% last year, and 47% of respondents this year said they used Thank U compared with 51% last year.

Over the past four years, the use of loyalty programmes has grown year on year. But this year has seen a 4% decline in loyalty usage, with 25% of respondents saying they did not use loyalty programmes.

An active member is a member who has used the programme once in a year. Clicks’ ClubCard has 7.8m active members; Smart Shopper has 7m; Dis-Chem’s Benefit has 4.3m; and Woolworths WRewards 3.4m. According to Edcon, Thank U has 11m members but it does not state the number of active members.

What to consider when joining a loyalty programme

The average South African woman belongs to six loyalty programmes and her male counterpart belongs to four, according to the 2018/19 Truth & BrandMapp Loyalty Whitepaper. This is indicative of the value you can derive from loyalty programmes as well as the fierce competition among brands for your business.

The importance of offering both a card and an app features in this year’s loyalty whitepaper, while the power of simplicity in a loyalty programme and the ease of redemption featured in last year’s report. Card plus app, simplicity, transparency, and the right type of rewards are all important considerations for prospective members.

Here are some others:

  • What, if anything, is membership of the programme going to cost you and how easily will you be able to recover that cost in cash back or rewards?
  • Look at the range of partners – grocery, fuel and others – and their proximity to you. For example, if the fuel partner has no garages near to where you live or work, you might not be able to get value from this offering.
  • Do the rewards expire after a certain period?
  • How easy is it to earn and spend rewards? Do you have to be a high-performance athlete to score a smoothie or cup of coffee?
  • Are the rewards appealing to you? For example, does the programme offer benefits such as access to an airport lounge or another preferential service-type reward, if these appeal to you?
  • Does the programme offer tiered rewards, and how easy is it to move up the tiers?