Facts

Customer retention
•    Acquiring new customers can cost 7 x more than satisfying and retaining clients  
•    5% reduction in customer defection can increase company profits by 25% (depending on the industry)

Loyalty programmes
•    Loyalty programmes were born in 1981 when the airline industry was deregulated

Gift cards
•    57% of South African respondents would not have chosen half the gifts they received
•    Only 9% of South African respondents felt that all gifts received were perfect for them
•    39% of South African respondents would prefer a gift card or voucher instead of the present chosen for them

Customer retention vital strategy for business

As exposure to financial slowdown broadens and intensifies, marketing budgets are increasingly coming under pressure.  Experts suggest that it’s now more important than ever to use those budgets wisely and point to concentrated spending on customer retention.

In the service sector it is often argued that customer attraction costs are significantly higher than retention costs. Recent surveys show that acquiring new customers can cost up to 7 times more than satisfying and retaining loyal clients.  A 2% increase in customer retention has the same effect on profits as cutting costs by 10%.  

“If you don’t give your customers a good enough reason to stay, the competition will give them a good reason to leave,” says Gert Tuppinger of Accor Services, the global leader in prepaid incentive and reward services.

Prepaid cards from Accor Services

Identifying the need for a tool to retain customers, Accor Services recently launched a prepaid card that allows the cardholder to shop at any of the 120 000 South African MasterCard outlets, or alternatively, to use the prepaid card within the Accor Services network of over 3 000 merchants countrywide. So far the gift card’s versatility has appealed to a cross section of industry and business segments including cellular companies, financial institutions, advertising agencies, publishing houses and FMCG companies.

Case study 1: Burning miles locally
The range of rewards to burn miles locally for Lufthansa German Airline frequent flyer members registered in South Africa was limited until the carrier introduced the Compliments gift card as a means to redeem miles.   

Case study 2: Electronic purse for Engen dealership staff
Part of Engen’s national Dynamic Service incentive programme is rewarding individual forecourt staff and cashiers for top performance with a safe “cash” prize. Here a branded Compliments gift card is used as an electronic purse.

Case study 3: Customer retention
By adding a branded Compliments gift card to the renewed Altech Autopage contract package the company is rewarding loyal customers and decreasing client deflection.

Compliments Card versus cash rewards

•    Functions as an electronic purse branded with a corporate image
•    Safe money with anti-fraud administrative support
•    Stolen card replaced within 48 hours
•    Tracking of consumer spend

Suited for:
Business to Business
Business to end consumer