Review

MTN and Vodacom's loyalty schemes, compared
  • Mobile operators Vodacom and MTN have either revamped or launched loyalty currencies this year.
  • These complicated points-based rewards programmes offer some value to customers who top up regularly, or fully embrace the programme.
  • Neither is particularly revolutionary or hugely rewarding, as far as points-based loyalty programmes go.
  • But they likely serve their corporate purpose: keeping customers from switching away because they don't want to lose a lot of valuable-sounding points by leaving for a competitor.
  • Here's how MTN and Vodacom's loyalty schemes compare on key aspects.
  • For mores stories go to www.BusinessInsider.co.za.

Mobile operators Vodacom and MTN now both have loyalty programmes with similar names: VodaBucks and YelloBucks.

Customer retention is tough in a market where the vast majority of cellphone users are on prepaid packages, and can switch away on a whim. Reducing such churn is a key business driver for operators – and seems to be the driving force behind both schemes.

But the nature of the deals on offer – sometimes quite underwhelming – also suggest both of the networks are trying to up-sell their customers through their respective programmes.

Here's how Vodacom's Vodabucks and MTN's YelloBucks loyalty schemes stack up.

YelloBucks: they're valid for a long time, but good luck figuring out what they're worth

MTN clothing

MTN’s YelloBucks programme is currently focused on discount vouchers for stores, and discounts on MTN airtime and data with short validity periods. The points-based programme launched at the beginning of October, and operates only through the MTN app.

The system of tiers and booster rewards is hard to understand, and many of the rewards and lucky draws are focused on getting you to purchase additional airtime or data bundles. Still, MTN promises savings on more than “300 catalogued products” and offers from “as many as 31 partners”.

In a press release, MTN said the new programme will “heap more benefits and value on MTN customers” and that “YelloBucks will unlock incredible value, discounts and rewards for customers, just for being on the MTN network.”

As a nod to the value of a contracted subscriber, contract subscribers get 2,000 bonus points for signing up. Prepaid users get just 100 points. 

After that, MTN users earn one point for every R1 spent on their MTN account. They can then spend these points on a range of vouchers. 

What you can get

At present, rewards in the entry level “bronze” bracket, where most will start, are primarily in the form of R50-off or R100-off vouchers for Foschini group stores, Sportsman’s Warehouse, McDonald’s, Steers, Debonairs, and Checkers, among others.

Confusingly, there’s no universal way to compare points to voucher amount. For example, a R50 Debonairs voucher costs 2,500 YelloBucks (the equivalent of R2,500 in cash spend), while a Steers voucher to the same value costs 3,400 (the equivalent of R3,400 in spend).

Some vouchers, such as those for Sterns and American Swiss (R100 off, which will cost you 5,800 points) also have minimum spend amounts; in this case, you’ll only get your R100 discount if you purchase a R500 Sterns or American Swiss voucher with your points.

There are also a host of MTN data and airtime bundles available to purchase with YelloBucks. None of the bundles purchased through the programme are valid for more than 30 days - and conversions to rand values don’t make much sense, either. 

A 2GB data bundle that lasts for one week, for example, costs 7,000 points - which you’ll earn by spending the equivalent of R7,000 on qualifying MTN products.

Much like Discovery’s Vitality programme there is also some games for participants that can unlock further discounts, rewards, and daily prizes for things like data, airtime, digital content, and store vouchers.

Some of these instant daily rewards are attempts to lure users to spend more money on MTN products, however - such as the fairly complex 86% discount on a 720 MTN minutes valued for 30 days, or 67% off 30 MTN minutes for one day.

YelloBucks
YelloBucks

MTN says it is rolling out the new rewards programme in a staggered manner, and as it adds users, it may also add more value. 

One thing in its favour: the long validity period for points. According to the terms and conditions, "YelloBucks will expire 36 months (3 years) from the date they are earned", which compares favourably with many schemes.

Vodacom VodaBucks: higher value, more expensive to get – and also pretty confusing

Vodacom revamped its VodaBucks programme in August, and both prepaid and contract customers can use points earned through the programme to buy a range of vouchers and bundles, and achieve discounts on specific products.

According to Vodacom, it is rewarding customers for using Vodacom services. The more bundles you buy, and bills you pay on time, and the more you access its app, the more points and discounts you get.

There are also some “non-spend” options available. Achieve goals like leaving your SIM card in your phone (presumably to dissuade you from hopping to a cheaper competitor), or watching commercials via the app, and you’ll also be rewarded without having to spend actual money.

Like MTN, point redemptions must take place through a purpose-built app (although Vodacom incorrectly links to its Video Play app, rather than its My Vodacom App, more than once on its VodaBucks website).

Vodacom app

Vodacom’s points are more expensive that MTN's – you have to spend R10 to earn a single VodaBuck – but also more valuable.

What you can get

VodaBucks can be spent on rewards across various categories: electronics and appliances, entertainment, fashion, food and household, travel, and airtime and data bundles. Current rewards partners include BP, Cellucity, Dis-Chem, Kauai, Nando’s, Pick n Pay, and Uber.

Customers can use VodaBucks points to purchase vouchers that can be redeemed at several stores. For example, a R30 Nando’s coupon costs 30 VodaBucks, so the equivalent of R300 spend.

VodaBucks also allows users to directly purchase individual items, in a nod to popular programmes like FNB’s eBucks.

Users can do this either by redeeming points (such as a Kauai smoothie for 89 points, or R890 Vodacom spend); redeeming a combination of points and making a cash payment (like an Adidas cooler bag for 410 points, plus R339 in cash); or to spend cash only on apparently discounted items (like a pair of Levi’s sunglasses apparently discounted from R2,100 to R999 for VodaBucks members, or a six-month Sweat 1000 subscription discounted from R2,999.94 to R1,899).

Vodacom, like MTN, also hasn’t missed the opportunity to up-sell its existing clients with “deals” on airtime and data bundles. These too are available for a limited period, and are somewhat confusing - such as 38% off 1GB of data valid for seven days, or 47% off 2GB of data for 30 days. They are available to purchase at these prices directly, however, without having to redeem points.

There’s also a gaming element to the VodaBucks app: users can exchange five points for a roll of the dice with their Mega Shape feature, which promises “a surprise reward”.

Vodacom has also added another layer of complexity to their rewards programme in the form of having to “bank” points every week, “so they're kept safe for spending later”. In practice, this means users have to either log in to the app, or follow specific USSD instructions, once a week before midnight on a Friday. Forget to do this, and you’ll lose all of your points earned - and “wake up with a clean slate”.

Even if you do bank all your points on a weekly basis, they are only valid for 12 months, unlike MTN's 36 month validity period.

So which is better? That depends – but neither is great

Directly comparing the deals offered by the two rewards programmes is hard – starting with figuring out whether you're actually getting a good deal on airtime and data from either.

On the surface both programmes offer some enticing rewards for doing what you already do, such as recharging. But the complications, such as expiration dates, needing to bank points, membership tiers, and minimum spends, make for a lot of frustration in trying to redeem your points.

For many potential users it may come down not to the way the schemes themselves work, but who the reward partners are on each. A discount or voucher for a store or fast food outlet you frequent already is worth more than something that is theoretically worth money, but which you'll never redeem.

Right now, both VodaBucks and YelloBucks are a little underwhelming, and we wouldn't switch networks for either.

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