It is essential to make every Rand go a long way in today’s economy where the cost of doing business is high, especially if you are running a small or medium-sized business (SMME).
According to Sanjeev Orie, CEO of FNB Business Value-Adds, “Loyalty programmes are among the most useful solutions to help SMMEs curb the cost of month-to-month variable expenses such as stationery supplies, travel costs and many other basic necessities.
“Over the last decade, loyalty programmes became a norm in South Africa. Currently, local banks and select retail stores have a variety of loyalty offerings which incentivise clients for adopting a particular behaviour. In addition, banks have been using loyalty programmes to encourage clients to use safer banking channels, thus limiting the risks associated with handling cash,” he said.
While there are a number of loyalty programmes in the market, a lot of them are seemingly being utilised by individual consumers. So how can SMMEs benefit?
Orie offers the following tips to SMMEs that want to maximise loyalty programmes:
Understand the mechanics of each loyalty programme
It is important to understand the mechanics of every loyalty programme you are part of, because some will give you value in the form of cash and others offer discounts or points. Find out what benefits you get on your current loyalty programmes.
Disciplined financial behaviour
In banking, disciplined financial behaviour is crucial because that is what banks incentivise. The same principle applies to most loyalty programmes. Why withdraw cash when you could be using your card at a fraction of the withdrawal cost, and still earn rewards.
Use it or lose it
What is the point of stocking up on loyalty cards or signing up for a loyalty programme if you are not going to use it? Use every Rand or maximise every point you get in order to realise the true value of the offering.
Behave like an ordinary consumer
The rise in cost of living has influenced the way in which people treat loyalty programmes and SMMEs need to follow similar principles to those of consumers, who are starting to ensure that every Rand goes a long way.
Even though he emphasises that loyalty programmes could be effectively used to minimise certain costs associated with running a small business, Orie cautions that they are by no means a blanket solution to every business need.
“Business owners need to understand that maximising rewards will not necessarily settle fixed costs such as: rent and salaries. Hence the need to explore using rewards or loyalty points for variable costs. Loyalty programmes certainly can offer some relief, provided they are utilised properly,” said Orie.