Corporate News
Safaricom last year introduced ‘Changa Na Bonga’ which allows
subscribers to pool Bonga points and use the credits to purchase
merchandise using part cash and part Bonga points. PHOTO | FILE
By DAVID HERBLING, hdavid@ke.nationmedia.com
In Summary
- Unclaimed Bonga points in the company’s books totalled Sh3.2 billion in the year to March 2013, reflecting a growth of 8.9 per cent in the 12 months to March this year.
- The points are accumulated based on a customer’s airtime usage, with each Sh10 airtime loaded earning subscribers one point.
- Safaricom ordinarily maintains a long catalogue of smartphones, laptops, tablets and other devices that subscribers can choose to redeem their Bonga points.
The value of Safaricom’s
customer loyalty awards known as Bonga Points increased by nearly a
tenth to Sh3.5 billion, the telecommunication company’s latest annual
report has shown.
Safaricom accounts for Bonga Points as a liability in its
books in keeping with accounting guidelines, and only recognises them as
an income whenever customers redeem them either for merchandise,
airtime or SMS credit.
The Bonga Points are accumulated based on a
customer’s airtime usage, with each Sh10 airtime loaded earning
subscribers one point.
“The growth in points is in tandem with increased
usage of Safaricom products and services,” said Nzioka Waita, director
of corporate affairs at Safaricom in response to Business Daily queries.
Unclaimed Bonga points in the company’s books
totalled Sh3.2 billion in the year to March 2013, reflecting a growth of
8.9 per cent in the 12 months to March this year.
Safaricom ordinarily maintains a long catalogue of
smartphones, laptops, tablets and other devices that subscribers can
choose to redeem their Bonga points.
Customers are, however, limited to picking from a
pool of specific offers, which contributes to the accumulation of the
Bonga Points liability for those that do not find devices to match their
tastes.
The company also occasionally runs promotions
dubbed Jisort na Bonga Points, which introduces select devices to the
catalogue of redeemable items.
Safaricom said it has sold over one million devices
in the past two years under the sale campaigns which give customers the
option of using part cash and part loyalty points to purchase
smartphones and tablets.
Part of the challenge for Safaricom has been
putting a fixed value to Bonga Points to allow customers to monetise the
rewards scheme.
“As regards valuation of Bonga points, it’s
discretionary and not something we disclose as it varies depending on
the sales season,” Safaricom said in a statement to Business Daily.
Uncashed Bonga Points eat into the telco’s revenue
given that accounting guidelines require the firm to only recognise the
loyalty points as sales once customers redeem the credits.
This means Safaricom’s total sales for the year to March 2014 would have been 148.17 billion without the deferral of revenue.
Under the loyalty scheme, subscribers earn one
Bonga point for spending on voice calls, short messages service (SMS)
data and M-Pesa services
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