Increased redemption drives increased engagement!
It’s an age-old theory that if you create a loyalty programme on high breakage that the numbers in the business case will add up nicely.
Well according to the Truth Loyalty Whitepaper 2017, you can see that this stage in loyalty programme thinking is strictly over. There is a direct correlation between loyalty programme performance and redemption (i.e. the reverse of points breakage). Brands, which operate with high redemption, are facing a potential high attrition rate amongst its database. We have seen this amongst Truth’s clients across the globe. As soon as you manage to drive redemption levels upwards, attrition rates decline and retention levels stabilise and increase. No-one needs me to explain that a retained customer is of more value than throwing marketing money after customer acquisition, time after time.
Let’s think about who is doing this well. It is not a new statistic from the loyalty industry in South Africa, when I quote Johan Moolman, CEO of eBucks (voted year on year as the top retail banking loyalty programme in our annual loyalty whitepaper):- eBucks sees a 86% redemption rate of their loyalty currency, which towers over the global average of 60%. This skew towards higher redemption is a strong indicator of ‘programme health’. The programme members are enjoying the benefits of their hard-earned loyalty currency and redeeming them at a higher level than less engaged consumers in other programmes.
However, it’s not always about points (whether they be eBucks or Smart Shopper points). Sometimes we just want to feel good and enjoy instant benefits. The Discovery Vitality programme has been quoted in their whitepaper to see an increased participation and change of behaviour through small and frequent incentives (in their case, for example: weekly coffee vouchers).
What if you could drive this continuous and frequent engagement for small, daily activities with your clients through a platform which can either reward on a small basis (like a coffee voucher or R5 airtime) or with daily opportunities to win big or save up rewards for big rewards (e.g. 5 star luxury stay at a game lodge)?
Truth has invested in and created www.loyaltyboutique.