On 21 May 2021, the Constitutional Court handed down a judgment on the tax treatment of retail loyalty programmes.
This week on Kaya Drive, Sizwe held a conversation about loyalty programmes and wanted to know how many loyalty cards listeners had and whether these programmes benefitted their lives.
Here’s what Kaya Drive listeners had to say about loyalty programmes:
The responses were overwhelming with many sharing all the loyalty programmes they are signed up to and how this impacts their savings and lifestyle.
Kaya Biz with Gugulethu Mfuphi took the conversation a step further with Amanda Cromhout, Founder and CEO of Truth and Jerome Brink, Director In Our Tax & Exchange Control Practice, who broke down these loyalty programmes a little further.
Listen to the Kaya Biz conversation here:
With over 72% of South Africans tied to some sort of loyalty programme, what are the key benefits of such programmes for the average consumer? Most companies tend to focus their marketing campaigns on attracting new customers, whereas loyalty programmes are designed to look after existing ones.
Offering various rewards for being a dedicated consumer of their brand, each loyalty programme has different incentives but the key messaging is the same.
The aim is to keep customers coming back for more.
Here are 3 benefits of loyalty programmes:
Accumulate points that can be exchanged for cash
This is one of the most common loyalty programmes, with many companies allowing customers with loyalty cards the option of swiping their cards to build points. These points eventually add up to a Rand value which can then be used at one of the brands affiliated partners.
2. Creates brand affiliates
Valuable customers aren’t just the ones who spend their money on your brand, it’s also the people who generate leads for your business. Those who spread awareness about the loyalty programme you offer and the rewards they can reap.
3. Build personal relationships with the customer
According to South African stats on loyalty programmes, 66% of people will sign up for a loyalty programme if it builds an ongoing relationship. Making customers feel valued instead of invisible.