The rise of customer loyalty schemes in Rwanda

MTN Rwanda chief executive Bart Hofker speaks at an event to reward the company’s prestige customers on July 11. / Photo: Igihe.com

MTN Rwanda on Thursday announced the expansion of its loyalty programme, MTN Prestige, to increase the number of “loyal” customers that benefit from the telecommunication company’s services.

The revamped programme would increase the number of beneficiaries from the current 4,000 to 600,000 and give them unique services, including exclusive voice and data plans as well as value proposition services from its partners.

“When MTN Rwanda launched the “MTN Prestige” loyalty programme a few years ago, customers were spending a few resources on the telecom services than it is today,” Richard Acheampong, the Chief Marketing Officer told Sunday Times.

MTN partners with close to 60 businesses, including beauty and spa shops, clothing stores, airlines, fitness clubs, hotels and restaurants, airport operators, vehicle company services, and travel and tourism firms, among others.

Loyal high value customers are then able to tap into exclusive services provided by those partners, in addition to unique treatment the telecommunication company gives them.

What this means is that more clients join the programme with hope to access these services, bringing more value to the business. And indeed, officials say that these kinds of customers bring in some unique value to the company.

“The top customers bring in the most of the revenues and it is important to take care of them. That is why we have a segmented approach,” Acheampong notes.

But it is not MTN only.

In Rwanda and elsewhere, companies are racing to give the highest recognition to their loyal customers. From airlines to retail stores and hotels to entertainment and game centres and hospitality firms as well as banks and other corporate companies, the race to lure customers into these services is increasing.

Think of Marriott International, a chain of hotels, whose global base of loyal customers is about 120 – 130 million people.

Marriott runs a loyalty programme called ‘Marriott Bonvoy’. This is a global programme for guests who frequently stay at the hotel and clients who book events and it is something that means a lot to such a business.

“For us it means that the business we do is substantially supported by our customers. Our target is to make sure every person who steps into the hotel is encouraged to join the programme,” says Rex Nijhof, Marriott Rwanda’s General Manager.

Other schemes

There is RwandAir on the other hand. The national carrier has been running “Dream Miles” loyalty programme which it unveiled back in 2011 to reward its frequent flyers. Members subscribed to this programme earn miles every time they travel.

They can then get to enjoy a variety of benefits such as access to the business class lounge, excess luggage, redemption of free tickets, upgrades to business class and priority check-in just to mention but a few.

RwandAir also runs a Loyalty programme called Dream Miles. / File

You most likely have heard of the Pareto Principle commonly referred to as the 80-20 rule.

When applied to air travel, it means that 80 per cent of airlines’ revenues come from 20 per cent or less of its customers. Going by this principle, airlines depend on frequent flyers to stay in the air.

Regionally, some of the most talked about frequent flyer programmes are; Sheba Miles (Ethiopian Airlines), Flying Blue (Kenya Airways), Voyager (South African Airways) for the intercontinental carriers, and there is PAA Royal (PrecisionAir) for the regional carriers.

With this rule, companies like MTN Rwanda seek to raise the membership of ‘MTN Prestige’ loyalty programme to 20 per cent in the future, according to Acheampong, highlighting that they are doing this by catering for customers based on what is important to them.

“We realised that customers need holistic experience and if we are going to offer that experience, it wasn’t making sense to offer that service to only 4,000 customers, because that is just 1 per cent of our customer base,” the officer noted.

Business Analysts argue that retailers and other businesses have to step up efforts to attract and retain loyalty programme members as they drive value proposition.

“Successful business leaders are those that look at revenue and profit as effects of customer satisfaction which is basically about investing in great user experience and solving people’s needs,” one local business analyst says.

But customer loyalty programmes in Rwanda, he adds, have one flaw.

“They often focus on the external customer forgetting the internal customer who’s the employee. Studies have severally found that an unhappy employee will never make a customer happy,” he notes.

He strongly thinks these customer loyalty campaigns should be balanced between internal customers and external customers as their relationship in between ultimately determines a brand’s success.

In more mature markets like United States or Asia and in advanced sectors like the banking sector, businesses utilize data to serve customers by sending relevant offers and communications to retain their loyal customers.

But, believably, considering offering rewards that are experiential instead of discount-driven gives an edge to businesses.

“People say they want a discount, but what they really want is an experience. Experiences translate recognition better than discounts,” another expert says.

editor@newtimesrwanda.com

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