Business Franchise Australia


How Consumers Are Increasingly Turning to Loyalty Programs to Ease the Cost of Living

Savvy consumers appear to be taking advantage of loyalty reward programs and freebies to help combat the rising cost of living.

Figures from a leading drive-thru coffee business show more than 40% of loyalty program members have signed up in just the last two years (to June 2023), with customers redeeming a total of $142,000 worth of loyalty points in the last six months alone.

The Muzz Buzz loyalty app is an evolution of the traditional punch card in which customers receive their 10th coffee free, with customers earning points for each dollar spent through the app, which can then be redeemed for products.

Muzz Buzz Executive Chairman Warren Reynolds says he’s not surprised to see the spike in customer sign-ups in recent years, given the current economic climate.

“Customers are looking closely at their budgets and areas they can save money or perhaps grab a bargain. If you can maximise the value of your loyalty programs and get a free coffee here and there, then why wouldn’t you?”

The business has been hosting a free coffee day for the past three years, Mr Reynolds says this year’s event was the most successful yet, which he also partly attributes to cost-of-living concerns.

“We know that customers are being significantly impacted by the increase in day-to-day cost of living, and ongoing interest rate rises. It’s taking disposable income away from people, and it means they’re making calculated choices about where and when they spend their money.”

“Almost 14,000 people took the opportunity to have a coffee on us during our free coffee day in June. We know that times are tough, and if customers can still treat themselves to a takeaway coffee without having to spend a cent, then good on them.”

CEO of Loyalty & Reward Co, Australia’s leading loyalty consultancy, Philip Shelper says consumers are clearly seeking any opportunity to reduce cost of living pressures.

“We’re seeing this currently, and especially across supermarket loyalty programs, where there’s been a boost in both new members and a re-engagement of previously lapsed members.”

“A good loyalty program offers an easy opportunity for customers to access better value.” National Australia Bank also recently highlighted a shift in customers using rewards points to cover their groceries or essential purchases.

Mr Shelper says loyalty programs can provide value for both customers and businesses, especially during tough economic times;

  • Redeeming Points: Customers can redeem points to reduce the overall price of goods or services, or in some instances even use points to purchase gift cards or other products.
  • Reward Loyalty: Points and rewards programs allow businesses to reward members for continued custom, and provide more targeted discounts and offers.
  • Determine Trends: Data collected by businesses can help identify emerging consumer trends and provide insight on current economic conditions.