Is Your Rewards Programme Reducing Churn or Just Burning Budget?

Telco Rewards Assessment — Full Reference Content

Dimension Insights

Intent — The Liability Problem (KSh 4.5B)

Safaricom’s unredeemed Bonga Points liability. Points that sit on a balance sheet are not driving behaviour. They are creating accounting risk. A court ruled they cannot be expired. The design problem remains.

When the expiry announcement hit, redemption spiked 34%. Fear of loss did more for engagement in weeks than the programme did in years. That proves the behaviour can be activated. The trigger needs to be redesigned.

Coverage — The Hope Problem (0.002%)

MTN Nigeria’s Mega Billion Promo rewarded 1,500 people out of 87.3 million subscribers. N290 million spent. The other 99.998% got nothing. Recharge spiked during the promo. Then it reverted.

The same budget could fund millions of guaranteed lifestyle rewards. Every subscriber feels value. Every recharge creates a data point. The behaviour compounds instead of evaporating on Day 91.

Relevance — The Prepaid Pressure (-0.7%)

MTN South Africa’s prepaid subscribers fell for the first time in FY2025. Consumer prepaid revenue declined 2.3%, accelerating to -3.9% in Q4. Voice revenue dropped 8% in Q4. Competitive intensity is increasing.

In a multi-SIM market, subscribers shift recharge to whichever network gives them a reason this week. A programme that rewards every recharge, instantly, makes your SIM the default. Consistency beats spectacle.

Delivery — The Network Reward Trap (Own Product)

If your only rewards are airtime and data, you are discounting your own product. The subscriber does not feel a gift. They feel a price reduction. And the competitor can match it tomorrow.

A lifestyle reward, groceries, fuel, transport, dining, creates value the competitor cannot replicate. It makes switching cost personal and real. Safaricom has M-Pesa to deliver this. Most African telcos have mobile money.

Measurement — The Churn Economics (R5 vs R50)

Retention via a monthly guaranteed reward costs as little as R5 per subscriber. Acquiring a replacement costs multiples of that. Every subscriber you lose costs 10x more to replace than to retain.

The telcos that build guaranteed, lifestyle-driven, instant reward programmes first will define the next generation of loyalty in African telecoms.

Recommendations by Dimension and Tier

Intent — Low Tier (0-2)

Your programme rewards usage without targeting a behaviour. Points accumulate whether the subscriber changes behaviour or not. You are spending on loyalty without defining what loyal means in measurable terms. Pick one behaviour: recharge frequency for prepaid, data bundle uptake, bill payment timing, or SIM consolidation. Attach a guaranteed reward to that one action. Measure whether the reward changes the behaviour within 30 days. That gives you a cost per behaviour change number. Without that number, every budget conversation is a guess.

Intent — Mid Tier (3-5)

Your intent exists but is too broad. You are targeting outcomes like reducing churn or increasing ARPU, but the rewards are not tied to precise subscriber actions. Churn is a result, not a behaviour. Recharging R30 every 7 days instead of R50 every 14 days is a behaviour. The sharper you define the action, the easier it is to design the reward, measure the shift, and calculate the cost per change.

Intent — High Tier (6-8)

Your behavioural targeting is strong. You can name the behaviour your programme is designed to change, and you have data showing the shift. The opportunity now is to layer multiple behavioural triggers. First recharge after dormancy. Second bundle purchase in a cycle. Referral. Each tracked and rewarded separately.

Coverage — Low Tier (0-2)

Your programme is invisible to the mass market. If 90%+ of your base does not engage with the programme, you are running a VIP club for power users, not a retention tool. The subscribers who churn fastest are prepaid users who recharge via vouchers at street vendors. They do not open your app. They do not check points balances. They need to feel value through the channels they already use: SMS, USSD, WhatsApp. MTN South Africa lost prepaid subscribers in 2025 while postpaid grew 7.6%. The programme was designed for the wrong audience.

Coverage — Mid Tier (3-5)

You reach some subscribers but miss the majority. 10-30% engagement means the programme works for a segment but is not a mass-market retention tool. The gap is usually channel. Your engaged subscribers are likely app users on contract or hybrid plans. The prepaid majority is unreached. Adding a USSD or WhatsApp entry point for the same programme, with the same rewards, closes the gap without redesigning the mechanic.

Coverage — High Tier (6-8)

Your coverage is strong. Over 30% monthly engagement across prepaid and contract is above the African telco benchmark. The opportunity is to push deeper into specific dormant segments. Subscribers who have not recharged in 30-60 days are the highest-value retention targets. A guaranteed reward on their next recharge, delivered via SMS, can reactivate 15-20% of them.

Relevance — Low Tier (0-2)

You are discounting your own product and calling it loyalty. Bonus airtime and data feel like price corrections, not gifts. The subscriber does not think ‘my network rewarded me.’ They think ‘airtime is cheaper this week.’ The competitor matches it next week. A grocery voucher, fuel reward, or dining pass creates value your competitor cannot replicate. It makes the switching cost personal. A subscriber who gets groceries for recharging on your network experiences a fundamentally different relationship than one who gets discounted airtime.

Relevance — Mid Tier (3-5)

Your reward mix is partially diversified. You have some lifestyle rewards alongside airtime and data. The question is ratio. If 80% of your reward value is still network credits, the programme still feels like a pricing tool. Flip the ratio. Make lifestyle the default and network credits the exception. Test it in one segment for 60 days and measure the difference in churn and recharge frequency.

Relevance — High Tier (6-8)

Your reward relevance is strong. Guaranteed lifestyle rewards create switching cost the competitor cannot match. The next step is personalisation. A subscriber in Lagos values different rewards than one in Abuja. A postpaid professional values different rewards than a prepaid student. Segmented reward menus increase redemption and perceived value without increasing cost.

Delivery — Low Tier (0-2)

Your delivery gap is killing the behaviour loop. Points that accumulate and wait for redemption create a dead zone where behaviour stops being influenced. Safaricom had KSh 4.5 billion sitting in that dead zone. The subscriber recharges, earns points, forgets, and churns. The points meant nothing. Instant, automatic delivery via SMS or WhatsApp eliminates the gap. The reward arrives before the subscriber puts their phone down. The association between ‘I recharged’ and ‘I got something’ is direct and immediate.

Delivery — Mid Tier (3-5)

Your delivery is reasonable but friction remains. Same-day delivery with a single claim step is better than points accumulation, but it is still not instant. Every step between earning and using is a drop-off. The subscriber who recharges at 8pm and receives a reward at 8:01pm with no action required is the subscriber who recharges again in 7 days. The one who has to click a link the next morning is less likely to associate the reward with the recharge.

Delivery — High Tier (6-8)

Your delivery speed is a competitive advantage. Instant, zero-step delivery puts you ahead of 90% of telco programmes in Africa. Protect this advantage. Ensure the delivery channel matches each segment. WhatsApp for smartphone users. SMS for feature phones. USSD confirmation for the broadest reach. And make sure the reward message clearly ties back to the action: ‘You recharged R30. Here is your R5 grocery voucher.’

Measurement — Low Tier (0-2)

You cannot prove your programme reduces churn. Without a controlled comparison of rewarded versus unrewarded subscribers, every budget conversation is a negotiation, not a fact. The CTO asks ‘what does this programme actually do?’ and you answer with anecdotes, not data. Start with one segment. Split it. Reward one half. Measure churn, ARPU, and recharge frequency for both groups over 60 days. That gives you the per-subscriber retention cost that justifies the programme, or tells you to redesign it.

Measurement — Mid Tier (3-5)

You have directional data but cannot isolate the programme’s impact. You track engagement and churn by segment, but you cannot say with confidence that the programme caused the retention. Correlation is not enough when the budget is under review. A simple A/B test in one segment, rewarded versus control, run for 60 days, gives you the causal link. That single test transforms the conversation from ‘we think it helps’ to ‘it reduces churn by X% at a cost of RY per subscriber.’

Measurement — High Tier (6-8)

Your measurement is strong. You know cost per retained subscriber by segment and by reward type. The next level is predictive: which subscribers are most likely to churn next month, which reward type will retain them, and what is the optimal timing. This is where the data becomes a strategic asset that informs not just the loyalty programme but network investment, pricing, and commercial strategy.

Cost of Doing Nothing — By Dimension

Intent (KSh 4.5B)

Safaricom’s unredeemed Bonga Points liability. Points on a balance sheet that are not driving behaviour. A court ruled they cannot expire. Every quarter the liability grows. The design problem is not the points. It is that the programme was never built around a behaviour worth changing.

Coverage (64%)

VodaBucks has 14 million monthly active users out of 39 million prepaid customers. 64% of the base is untouched. Meanwhile, 5.7 million prepaid customers left in FY2025. A programme that only activates a third of customers while the base declines by millions is a retention tool with a retention gap.

Relevance (0.002%)

MTN Nigeria spent N290 million and rewarded 0.002% of subscribers. The other 99.998% got nothing. Recharge spiked for 90 days and then reverted. The same budget could fund millions of guaranteed lifestyle rewards where every subscriber feels value on every recharge.

Delivery (6 steps)

VodaBucks requires earning, banking weekly, then spending or converting. Six steps between action and value. In a mass-market prepaid segment where the average customer spends R55 a month, every step you add is a customer you lose.

Measurement (R5 vs R50)

Retention via rewards costs R5 per subscriber per month. Acquiring a replacement costs multiples of that. If you cannot prove the R5 is working, you cannot justify the spend. If you can prove it, you can justify scaling it. The measurement gap is what separates a cost centre from a growth engine.