Man holding up loyalty program card

Gaining value from loyalty programs

Loyalty programs, providing customers additional incentives for the purchase of goods and services, are structured to deliver a variety of benefits, from upfront discounts at the point of purchase to points systems redeemable for a range of rewards.

Retailers will, of course, seek any advantage in the highly competitive battle for the consumer dollar, and loyalty programs can help to retain and attract customers, and can provide a strong platform for customer engagement.

There are a wide range of loyalty programs on offer from various providers across different retail segments, and when signing up for a program, there are a number of factors that consumers should keep in mind.

While loyalty programs can deliver added-on value at no extra cost, they also act to encourage customers to shop more and spend more, and it is worthwhile considering the real value being delivered in the context of purchase intentions.

Consumers should weigh up the ultimate value of the rewards being offered as opposed to savings that could potentially be achieved by shopping with other retailers, and it is worthwhile considering all of the options on offer when making a purchase, especially for larger purchases.

Loyalty programs can certainly pay off, but it is important that consumers keep in mind the upfront value being delivered at the point of purchase, and to make sure that they make loyalty programs work for them.

How keen are consumers on loyalty programs?

Research has shown that loyalty programs can be very effective in influencing consumer purchasing patterns, and can, indeed, be the additional motivation that retailers require to secure rewards-conscious shoppers.

Research company Nielsen’s Global Loyalty Sentiment Survey, conducted last year, found that, with consumers presented with a variety of choices, “a retail loyalty program can be a determining factor for where they decide to shop”.

Nielsen found that 57 per cent of New Zealanders who participated in the survey agreed that, all other factors being equal, they will buy from a retailer with a loyalty program over one without a program. Nielsen additionally found that well executed loyalty programs can “help drive more frequent visits and heavier purchasing”, with 61 per cent of New Zealanders agreeing that loyalty programs make them more likely to continue doing business with a company, and 48 per cent agreeing that they shop more and spend more with retailers offering loyalty programs.

“Monetary incentives attached to retail loyalty programs are favoured among Pacific shoppers,” Nielsen states of customers’ preferred rewards. “Product discounts, rebates or cashback and free products top the list of the most valued benefits, while frequent flyer points ranked as the highest non-monetary benefit.”

Consumers are also gravitating towards programs providing for both in-store and digital engagement, with Nielsen finding that 73 per cent of loyalty program participants stated that it is appealing to be able to earn rewards regardless of whether a purchase was made in-store, on a website or via a mobile device.

Loyalty programs: What’s on offer?

The following is a rundown of some of the loyalty programs currently on offer for consumers, how they operate and the rewards that they provide.

Air New Zealand – Airpoints

Air New Zealand’s Airpoints loyalty program provides for members to earn Airpoints Dollars on eligible Air New Zealand flights, as well as on flights with partner airlines and Star Alliance flights.

Members can also earn Airpoints Dollars via Air New Zealand retail partners, from New World to Mitre 10 to Mercury, or by using an Airpoints credit or debit card, with Air New Zealand having partnered with ANZ, American Express, Kiwibank and Westpac.

The rate of Airpoints Dollars earned per dollar purchase will depend upon the retail or banking partner, with further information on rates available via the Air New Zealand website.

Airpoints Dollars can be used to purchase Air New Zealand flights, partner airline and Star Alliance flights, and to purchase an Air New Zealand Koru program membership, providing passengers a range of benefits, from lounge access to priority check-in and boarding.

Members can also use Airpoints Dollars to make purchases via Air New Zealand’s online Airpoints Store, which stocks a range of items across different categories, and on rental cars and travel insurance, flight upgrades, a range of wine, spirits and glassware, and Air New Zealand merchandise.

Members can also earn Status Points on eligible Air New Zealand flights, along with partner and Star Alliance flights, and with purchases made with some Airpoints-earning credit cards, which provide a range of benefits across Air New Zealand’s Silver, Gold and Elite tiers.

Members can manage their account online, with their account displaying their existing Air New Zealand bookings and the total Airpoints Dollars that they have available to spend.

Fly Buys

Loyalty New Zealand’s Fly Buys loyalty program has over 40 retailers, businesses and service providers that members can collect points from.

Fly Buys points can be collected from over 1,500 stores and service providers in the Fly Buys network across New Zealand, with the rate of points offered for purchases varying from retailer to retailer, and further information available via the Fly Buys website.

Members with a BNZ Advantage credit card can get two lots of points when they pay with their card and swipe their Fly Buys card at Fly Buys retailers, while BNZ customers can also collect points on the outstanding balance of a Fly Buys-earning home loan and insurance premiums, and when purchasing foreign currency via BNZ.

Members who purchase their fuel at Z petrol stations will receive 6 cents off per litre and points every time they swipe their Fly Buys card.

Points can be spent on a range of rewards via the online Fly Buys Rewards Shop, ranging from consumer technology to magazine subscriptions, while travel bookings, including flights, car hire, accommodation and experiences from helloworld and Air New Zealand, can be made, and gift cards and vouchers can also be purchased via a range of partners.

Consumers can manage their Fly Buys account online and via the Fly Buys app, available for Android and iOS devices.

Countdown – Onecard

Supermarket retailer Countdown’s Onecard can be used “at the checkout to access loads of products every day that have exclusive Onecard Club prices”.

Countdown’s Onecard is also available for online shoppers, with Onecard Club prices available in-store, via Countdown’s website, in Countdown’s mailers and via members’ myCountdown emails.

Members can also use their Onecard at Countdown’s AA Smartfuel partners BP and Caltex to gain discounts on fuel purchases, receiving 6 cents off per litre when spending a minimum of $40 on fuel in a single transaction, with a maximum fill limit of 50 litres.

Members additionally have a choice of rewards, selecting either Onecard rewards vouchers, earning points for shopping at Countdown, or AA Smartfuel discounts, earning fuel discounts added to their AA Smartfuel balance.

With the rewards vouchers, for every $10 a member spends at Countdown they will earn a Onecard point, with every 200 points earning a $15 Onecard rewards voucher, with Countdown sending out vouchers every three months, based on how many points a member has earned.

Members will receive AA Smartfuel discounts by spending $100 in a week at Countdown, earning 3 cents off per litre, with $200 spent in a week earning 6 cents off per litre, with a maximum fill limit of 50 litres.

Countdown customers can get a Onecard card in-store, register online, choose their preferred rewards, and manage their account online.


Share this article