[ TERMINOLOGY ]
REWARDS OR
LOYALTY
PROGRAMMES
WHAT’S THE
DIFFERENCE?
IS THERE A CLEAR DISTINCTION IN
THE MARKET BETWEEN LOYALTY
AND REWARD PROGRAMMES,
ASKS GEORGINA GUEDES.
O
ne of the primary concerns of
any organisation establishing a
loyalty or rewards programme is:
Which should it be?
While the distinctions can be
clearly delineated by those in the
field, many experts insist that this is not actually
the right question to ask.
“It’s a hard question to answer, because it’s as
much about a philosophical approach by marketers
as anything else,” says Dr Sarah Britten, strategy
director at Labstore. “A lot of the time, we’re talking
semantics. In practical terms, the terms ‘loyalty
programme’ and ‘rewards programme’ are used
interchangeably. A rewards programme is a type of
loyalty programme and falls under the umbrella of
loyalty. Loyalty is the end result, and rewards are
what a brand or organisation will use to incentivise
desired behaviour.”
Gustav Lammerding, marketing director of Uwin
Iwin International, agrees: “In my opinion, there
is very little difference between the two, except
if you break it down into its most basic form: a
rewards programme gives you a reward that is not
necessarily tied back to your brand or product.”
For instance, he says, if you take something like the
eBucks and kulula.com partnership into consideration
(where qualifying eBucks members are offered
discounts on kulula.com flights when they use their
eBucks to pay or part-pay for flights), there’s a less
obvious association between product and loyalty than
there is in an initiative whereby you are rewarded
with, for example, a free coffee at an outlet after
you’ve purchased 10 coffees from the same place.
“In it’s basic form, a loyalty programme forces
you to be loyal to the owner of programme’s
brand or product,” he says. ›
WHAT IT BOILS DOWN TO IS THAT BOTH LOYALTY AND
REWARDS PROGRAMMES SEEK TO CHANGE CONSUMER OR
CUSTOMER BEHAVIOUR TO INCREASE PROFITABILITY.
R E WA R D S & L O YA LT Y S A 63