eBucks has grown from its dot-com beginnings into one of SA's largest multi-vendor customer rewards programmes. It has more than 1m members, and has allocated eBucks worth more than R800m since it was founded. And its growth is accelerating.
About R193m worth of eBucks were allocated for the year ended June 2006. During the financial year, eBucks members' spending climbed 36%, and the member base grew 14%.
eBucks was established in 2000 as a FirstRand Group business-to-consumer e-commerce initiative that offered First National Bank (FNB) and RMB Private Banking customers an Internet banking portal and a customer rewards scheme attached to a virtual currency called eBucks. But a changing market prompted eBucks to rethink its strategy, with the result that the rewards programme and the online banking portal were separated in January 2004.
WHAT IT MEANS
 It has a spend-to-earn ratio of about 80%
Member spending rose 35% last year
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Though eBucks is a profitable business in its own right (and has been since 2003), its vision is to help its partners to be more profitable, says eBucks CEO Lezanne Human. It drives profitability for the FirstRand group and its partners by increasing their customer retention and giving members incentives to behave in ways that are profitable for the businesses.
The business model is simple: eBucks' partners reward customers for their loyalty by allocating them eBucks. The amount of eBucks customers earn reflects the extent to which they are behaving in a way that is profitable for partner companies, while the amount they spend indicates how satisfied they are with the rewards on offer.
"In most developed countries, the healthiest rewards programmes have a spend-to-earn ratio of about 70%. eBucks has an average spend-to-earn ratio of about 80%," says Human.
Over the years, eBucks has added a number of services and partners to its offering. The programme has also added a physical element to its business in the form of an eBucks card.
Customers can spend or earn eBucks at a wide range of brick-and-mortar and online retailers, including kalahari.net, Makro, Look & Listen, Loads of Living, Avis, Spec-Savers, The Golfers Club, GardenShop and Arthur Kaplan Jewellers. They can also spend their eBucks on the eBucks website, and at partner websites such as NetFlorist and Digital Planet.
For customers, there is a benefit to double-dipping as spending money with an eBucks retail partner earns them eBucks from the partner and FNB partners or RMB Private Bank.
eBucks also has a travel desk that customers can use to book and pay for travel services, including kulula.com flights.
eBucks can also be spent on so-called highest unique bid auctions. Members pay a nominal fee (in eBucks) to enter the bid. The ceilings for the highest bids are usually far lower than the retail price of the product on offer. For example, the site had a PlayStation 3 worth R6 300 on offer for a maximum bid of 4 500 eBucks (R450) at the time of writing. If there were several offers of 4 400 eBucks for the item and only one for 4 350, the latter would win the auction.
The programme is successful partly because it addresses criticisms that customers have about most loyalty schemes, says Human. "You can't buy loyalty, but you can at least say thanks to your customers," she says. There are no fees to belong to the programme or expiry dates for the eBucks allocated.
As such, customers can accumulate the virtual currency until they have enough to buy a big-ticket item. Or they can use a combination of eBucks and cash to pay for items from the eBucks shop or retail partner network.
Membership of the eBucks programme is high by industry standards. According to eBucks' market research, more than half of FNB's clients that belong to any form of loyalty programme belong to the bank's rewards programme, compared with the 10%-30% of account holders at the three other big banks. eBucks members have a 42% higher retention rate, and do 49% more revenue generating transactions than non-eBucks members.
Retail partners are also benefiting from the programme. The value of spend at retail partners by eBucks members last year increased 15%-25% more year-on-year than for non-eBucks members (net real increase after inflation).
