By Justin Asher
The loyalty and rewards space is massive. According to recent research, South African loyalty programmes are expected to reach US$512.9 million in value this year before growing to US$ 857.3 million by 2026.
To date, most loyalty and rewards programmes have taken the form of redeemable points or cashback. But in a further demonstration of its growing utility, a growing number of companies are also offering cryptocurrency rewards.
With the cost of living rising rapidly in countries around the globe, it’s likely that crypto rewards will become more commonplace too. Retailers and financial service providers will, after all, have to display greater levels of innovation when it comes to attracting and retaining customers. And what could be more enticing than a rewards programme that gives customers the opportunity to earn over and above a simple accumulation of points or cashback incentives?
Meeting customer expectations
Before looking at how organisations can best make use of crypto rewards, it’s worth digging into why loyalty and reward programmes are so important. Globally, 56% of consumers say that they’re more likely to buy from a brand with a loyalty programme. The same research also showed that more than half of consumers would be tempted if they could use rewards across multiple brands, personalise their rewards, or track their points easily.
South Africans also increasingly expect loyalty programmes as par for the course. According to research released in the Truth Loyalty Landscape 2021, 74% of South African consumers use loyalty programmes of some sort. That’s up from 67% in 2015. Local consumers also belong to a growing number of loyalty programmes, averaging out at 8.7 programmes each.
It should be clear then that loyalty and rewards are critical to providing the kind of great experiences that today’s customers expect from all their providers.
Crypto for consumers
With that in mind, how can providing consumers with crypto-based rewards help ensure that they’re getting those experiences?
For starters, it’s worth pointing out that cashback is the most favoured form of reward for South African consumers. That’s understandable too. Cashback rewards give consumers a tangible sense that they’re getting better deals for being part of the reward programme. For most people, that’s better than having to remember to use their points or wait for a teller to ask them if they’d like to.
But cashback rewards can only take you so far. Sure you might have a little more money to spend every month but how do you use that money? Unless you’re incredibly disciplined when it comes to savings and investments, chances are you’ll just end up spending it on something else. Or like some, hoard your cashbacks leaving them to never be used.
Programmes that reward you with cryptocurrencies, by contrast, give customers a chance to invest and earn as they spend. These programmes are becoming increasingly common too. A number of cryptocurrency platforms, for example, offer credit cards that allow people to earn crypto by spending.
Such reward programmes also represent an easier entry into cryptocurrency for anyone wary of putting their own money into it.
Reward yourself
Of course, those kinds of credit cards aren’t available in every country. And even when they are, people may be reluctant to take out another credit card or would prefer to use their existing cards for purchases. In those cases, consumers need another option.
That, at least, was our thinking when we launched upnup. The app connects to people’s bank accounts and allows them to earn Bitcoin as they shop by rounding up purchases or adding small amounts onto every purchase. The upnup app also allows users to select a third, new, saving mode which provides the ability to select a set amount to be saved every month which is then used to buy Bitcoin automatically or left in a Rand-based savings wallet.
In effect, it’s a way of doing things that allows ordinary consumers to reward themselves without having to belong to a specific programme or shop at a dedicated group of retailers.
The changing face of loyalty and rewards
At a time of rampant inflation, loyalty and rewards programmes are going to become more important than ever. But retailers and financial services companies are also going to have to work harder than ever to differentiate themselves from the competition.
Allowing customers to earn crypto rewards is an effective way of doing so. Until it becomes commonplace in South Africa, however, customers can take charge of their own crypto rewards.
Justin Asher is a Head of Strategy & Marketing at upnup
BUSINESS REPORT