UAE customer loyalty programmes: from aisles to air miles

From supermarkets to nail bars and hotels, almost every outlet you stumble upon now has its own loyalty programme in place. But how do consumers benefit from signing up?

Omani businessman Saleh Al Shaqsi took more than a decade to save seven million Air Miles. Darren DeSilva for The National

It took Saleh Al Shaqsi more than a decade to save seven million Air Miles, but just a couple of days to spend most of them.

He did, however, do it in style, with a two-night stay at the Burj Al Arab, worth Dh50,000, and a Dh70,000 shopping voucher spree.

“On the way back our Land Cruiser was full,” says Mr Al Shaqsi, a businessman from Oman, who gave one of the free stays at the luxury hotel to a friend.

”I still [had] some vouchers left because I couldn’t spend everything.”

Like all Air Miles cardholders, Mr Shaqsi accrued miles every time he shopped at outlets tied to the programme.

He used them last year as part of the loyalty scheme’s first expiry date, when five billion miles were redeemed as the deadline approached.

While Air Miles is certainly popular, it is by no means the only loyalty programme in the UAE.

Everywhere from supermarkets to nail bars, clothes stores and hotels have their own programmes to encourage repeat business and reward returning customers.

But which one is best and how much do you have to spend to benefit?

“There is no such thing as the best loyalty card as it is all based on your lifestyle and the interest you have as an individual,” says Ambareen Musa, the founder and chief executive of Souqalmal.com, which drew up a list of the top 12 loyalty programmes available in the UAE.

“If you are a fan of Carrefour and do most of your shopping there, it is worth considering their loyalty card. The whole point of having a loyalty card is to be rewarded for being a returning customer.”

As for which cards to get, the answer is simple, says Ms Musa – the ones that will benefit you the most

“It’s all about getting the cards most valuable to you from the places you frequent the most,” she adds.

How much you have to spend depends on the card in question.

Most programmes have different tiers to reward levels of loyalty among customers. Customers start at the lowest and graduate once they reach a particular threshold. The higher the tier, the more loyal the customer and generally, the more points awarded every time they spend.

Loyalty programmes appear to be becoming more popular but they have been around for a long time in the UAE.

Rotana became the first regional hotel company to launch a loyalty programme in 1999. It now has more than 65,000 active members, and the number of new joiners has risen by 8 per cent in the past year, so it clearly also offers members benefits.

However, Rotana also does rather well out of it.

“Rewards Exclusive is a key revenue driver across our portfolio of hotels and food and beverage outlets, with 21.3 per cent of total revenue generated from member spend, incorporating both individual and group bookings,” says Elie Saliba, the director of loyalty and partnerships at the hotel chain.

Rotana’s programme is one of the larger loyalty schemes in the UAE, and other popular programmes include Al Tayer Group’s Amber initiative and Carrefour’s My Club UAE.

But loyalty schemes are not only the reserve of larger companies. Many smaller chains are now being offered the chance to launch their own programmes through UrbanBuz.

“Basically, we are a loyalty company and we enable businesses to set up and manage their own personalised programme as opposed to a lot of other loyalty companies; it’s not our loyalty programme,” says Mustafa Sadek, the company’s founder and chief executive.

Businesses sign up to UrbanBuz and define the different loyalty levels and rewards. Its fee changes per industry but the minimum charge is Dh500 per location.

The company, which started in 2012, now has around 25 businesses – including N.Bar, Zen Yoga and Bert’s Café – and 60 locations in the UAE, as many have more than one branch. About 17 of those businesses have signed up this year alone and it has a “promising pipeline” that it is about to sign up or launch in the next few months.

“When we sit down with the business, we look at their business model, we look at their pricing, their customers and their objectives. And then we come up with a recommendation of how to structure their loyalty programmes,” he says.

“We don’t recommend that a business treats all their customers the same way because you have the very loyal customers, you have the customers who have just started and you have those in between.”

Loyalty programmes give businesses two advantages, says Mr Sadek.

The first is that it gives them a good view of who their customers are, so they can target them in a way that helps them grow their business. It also helps them stand out from the competition and offer incentives.

“When we talk to the businesses we highlight that they shouldn’t always focus on material rewards like giving them 5 per cent or 10 per cent. For example if you are a top tier customer I am going to invite you to special events. I am going to give you special offers, only for you. And that actually strengthens the relationship between the business and the customer.”

This relationship was singled out as being the most important factor in a June survey about loyalty programmes by PR agency YoungNetwork Middle East involving 77 businesses, with 70 per cent of those polled saying they had such a scheme in place.

But brand engagement was not how the majority of the companies gauge the success of the loyalty programmes.

“Most of the brand loyalty programmes are still measured by revenue,” says the PR firm’s managing director, Rita Rodriguez.

And as she points out, that contradicts the purpose of a brand loyalty programme.

“[It is] not only about measuring results. It’s about giving back to your consumers the connection, the relationship, creating a relationship.”

However, Souqalmal.com’s Ms Musa warns consumers not to overspend simply to rack up loyalty points and to consider the earning to burning ratio, ie how much you need to spend to earn points and how much those points are actually worth.

“The whole idea of a loyalty card is to encourage consumers to spend more,” adds Ms Musa. “So if you have to spend an extra Dh1,000 or Dh2,000 to secure a Dh100 voucher, you should ask yourself if it’s really worth it.”

As long as members like Mr Al Shaqsi are rewarded for their custom, everybody wins.

* Additional reporting by Sananda Sahoo

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