Loyalty programs are big business in New Zealand and, according to some reports, some 97 per cent of consumers in New Zealand are members of one or more loyalty programs. Demand is high, as is the competition, but people have rightly been raising eyebrows at how the programs actually work. Sometimes locked behind strange points-to-dollars conversion rates, it’s not always clear exactly how much your loyalty is worth. We’ll look into where loyalty programs are being deployed, how they can benefit customers, and some common sticking points for consumers and analysts.
What’s the Point of a Loyalty Program?
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The purpose of a loyalty program is to convince you to spend the section of your income dedicated to the form of product or service at hand with one specific business and to continue to do so. Loyalty programs can help to level the playing field for businesses that don’t feel like they can compete in other regards, such as on price. They’re very common in New Zealand, even to the extent that AA ending its Smartfuel program in January 2024 was big news. As mentioned, most of these loyalty programs offer a points scheme, but increasingly, vendors are seeing the appeal of cashback. Many New Zealanders utilise cashback search engines online, so some online businesses have made cashback the big selling point of their loyalty program. Take the free cashback at Dunder Casino, for example. Here, you get two per cent back on weekly losses as an entry Tier 1 member. Reach Tier 5, and you get ten per cent cashback. It’s a loyalty reward for continuing to play at the site weekly that comes in the form of real cashback. Elsewhere, discounting prices is another way of making a loyalty program appealing. As seen across supermarkets in New Zealand, those who are members of the loyalty programs are privy to lower prices, making that supermarket more appealing and convenient than its competitors to the cardholder.
Things to Consider When Assessing Loyalty Programs
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According to a survey reported by NZ Marketing back in 2021, New Zealanders ranked the now defunct AA Smartfuel loyalty program as the best around. It, along with its top ten peers like Farmers Clubcard and Air New Zealand Airpoints all offered what customers were looking for the most. These aspects include having a diverse range of rewards, convenient paths to points redemption, and a clear-cut way to earn those points or rewards. Another big selling point of the most popular or most highly regarded loyalty cards was that points could be converted or redeemed into tangible returns. While cashback wasn’t overly common among these, being able to get travel miles, food, or fuel by using points was. Whenever you’re weighing up two loyalty programs, seeing exactly what points convert to is key. Many people go for good dollar-to-point conversions but find out down the line that there’s actually not much that they want to redeem those points for – making the effort of being loyal less valuable. When it comes to discounts offered by loyalty cards, you’ve got to dig deeper. As found by the research from Consumer.org, items marked with loyalty card discounts aren’t always at the lowest prices around. Loyalty programs are prevalent across New Zealand, but before you add another card to your wallet or create another account, be sure to do the math and weigh up whether you’re really getting valuable, tangible rewards for your efforts.
