ARTHUR GOLDSTUCK: Technology is making loyalty more rewarding
The greatest frustration consumers have with rewards programmes is that they have to work so hard for their loyalty to be recognised.
Part of the problem is that the rules of so many rewards programmes appear utterly arbitrary: you can get miles on this flight but not that one; you can get your 11th coffee free only if the previous 10 were above a certain size; your hotel stay doesn't qualify because it was booked through a third party.
In many cases, rewards expire before they can be used, or can be used only within very strict parameters.
It is as if accountants have devised the schemes. Indeed, often they have.
Of course, it shouldn't be this way. If customers are being prevented from using rewards, the rewards programme is broken. Worse, it's a sham.
An example of how it should be done is FNB's eBucks. FNB doesn't make the points expire, and goes out of its way to encourage members to use their value. Of R8.4-billion worth of eBucks issued, R7.3-billion worth had been used, said eBucks CEO Johan Moolman.
"The bank has to win, the member has to win, and the spend partner has to win," he said. "If any of those lose, you don't have a sustainable programme."
Shortly, eBucks will start using the FNB banking app to offer instant rewards, with coupons and discount vouchers offered at the point of sale.
That is almost exactly the strategy that has seen local payments platform Zapper expand into the UK market. It is one of the success stories of the Amazon Web Services cloud offering, to the extent that CEO David de Villiers was invited to share the stage with Amazon.com's global chief technology officer, Werner Vogels, during the AWS summit in Cape Town earlier this month.
"We allow merchants to enable real loyalty, and reward immediately ... not just the threat of reward further down the line," De Villiers told Business Times. "In the UK, we're focusing on retail convenience, because people there buy daily for daily consumption. If you pay with Zapper, every transaction adds to the loyalty card, and redemption is automatic.
"Our platform is excellent for enticing people to come to particular stores and buy particular brands. Our promotions are brand-based, and not just retail-store based. So if you have two bottles of Coca-Cola or Corona in your cart, and you've bought that brand before, you may immediately be offered a third bottle free.
"Neither you nor the cashier has to do anything.
"You can't lose your card, and every transaction gets recorded, so it drives loyalty and not just the idea of loyalty."
Another of South Africa's most successful rewards programmes, Pick n Pay's six-million-member Smart Shopper, is going one step further.
Pick n Pay general manager for information technology Chris Shortt told the AWS summit how Smart Shopper was leveraging the cloud service to offer customer-specific pricing.
"Already, on our B2B platform, it allows us to offer specific pricing to businesses like B&Bs and office parks - Amazon's developer centre in Cape Town is one of our biggest customers," he said.
"Soon, based on your loyalty and behaviour, we will do that at consumer level."
• Goldstuck is the founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter @art2gee