Many readers will be struck by how similar the new Woolworths reward program is to our standard loyalty program. It's no accident. What happened was that just before we designed the program, we went to a conference that primarily dealt with loyalty programs. As we listened to what these experts from some of the largest convenience stores in Europe and Australia, such as 7-11, Telstra and Optus, said, we took notes and later used their ideas to make our adaptation. Presumably, Woolworths listened to the same experts.
You can see how it works here, and it's exactly the same as ours.
You must have a card, and to get it, you must supply Woolworths with your personal details. This is because the value of the customer monitoring, email addresses, and information is considered to be worth 1%, and Woolworths is not giving that 1% up.
Then, when you purchase selected products, such as items marked with an orange ticket, your account collects Woolworth's dollars (points) on your card.
When your account reaches $10 in Woolworths dollars (points), you get $10 off your NEXT eligible purchase. Unlike some rewards programs, part payments are not accepted.
If you do the figures, it works out to for every $800 of purchases, their customer will get back about $10, or 1.25%, assuming they redeem it. In practice, many do not redeem it so reducing the cost somewhat.
The payout figure is not surprising, as 1% cost, as I stated, is about what most loyalty programs work on. Note that the Woolworths rewards program is not going; I am sure it will cost Woolworths 1%, as I can guess who will be forced to pay for it!
Here are some links with more information.
http://mumbrella.com.au/woolworths-faces-protracted-battle-to-maintain-…
http://mumbrella.com.au/woolworths-axe-qantas-frequent-flyer-points-rew…
The system is tested and proven and is available to all our clients in our software.
