I suspect few of us will ever see most of the CCs mentioned, but I found it very entertaining.
Must be all the ja's. Reminded me of a Benny Hill bit.
Bruce Conradie: MD, Razor’s Edge Business Intelligence
18 July 2007 23:03
MONEYWEB: Bruce Conradie has popped into our studio. He's the managing director of Razor's Edge Business Intelligence, the guys who do the analysis of loyalty cards. What loyalty cards have you got, Dave? What loyalty cards have you got in your wallet? Have you got a Voyager?
DAVID SHAPIRO: Oh, I've got lots of Voyagers, ja. [Laughs]
BRUCE CONRADIE: Lots of Voyagers? Oy, you need some education, consumer education there!
DAVID SHAPIRO: Ja. No, I mean every card of mine - I collect points all over the place.
MONEYWEB: So what's your favourite card?
DAVID SHAPIRO: Investec.
MONEYWEB: Ja, mine too. But Bruce, it didn't even feature on the top.
BRUCE CONRADIE: Ja, Alec, what happened was we did rate Investec in this survey, but we didn't give an accolade to the best credit card programme, and it fell obviously into that category and ...
MONEYWEB: Is it a good programme though, Investec?
BRUCE CONRADIE: Investec is, yes, ja. Well look, I can't say ...
MONEYWEB: That's a bit non-committal.
BRUCE CONRADIE: To be honest, I can't say that I can remember what ratings we gave them. To give you an idea how the survey worked, we came up with 17 ratings per programme. And underlying that was another 112, something like that, over a hundred other ratings [indistinct]. But I mean, it's the 17 ratings that I would like to recall to mind now.
MONEYWEB: When you did speak to us last year, on the credit card rating, you said Discovery was the best card. And I'm thinking of cashing in my Investec card for a Discovery card - do you think that would be a smart thing to do? Is it that good?
BRUCE CONRADIE: Well, it is, Alec. I mean, we did give it the rating of the best credit card overall - that was in December of 2006, and which is why we haven't rated credit card programmes now again. And then if you will recall, the best stand-alone card was the SAA Voyager card, and the distinction there was that in the Discovery case you had to belong to Vitality and be a part of the whole product suite at Discovery in order to get value out of the card.
MONEYWEB: All right, so if you are a Discovery medical aid holder, it's a no-brainer. But if you aren't, hmm, not so sure.
BRUCE CONRADIE: Very much so, exactly ja.
MONEYWEB: Now it's interesting that SAA Voyager came out so strongly, and that David Shapiro is talking about it, because we had the guys from Virgin in the studio here and at CNBC, and they have lambasted SAA Voyager. They don't believe it's a good programme at all, yet it's still come out number one in your survey.
BRUCE CONRADIE: Look, in all fairness to the Virgin Money guys, there were five Frequent Flyer programmes that we rated, and we dropped out Emirates very quickly because that was clearly not offering a great return. And that left us with four. There was Virgin, SAA, BA and the Lufthansa programme called Miles & More - and it was very, very, very close. It was so close we actually had to develop a new analysis to add to the existing 17. You know, I told you 17 plus over 100 - we had to do more because we were busting our nuts over that.
MONEYWEB: So what does it tell you, Bruce - that they are watching each other carefully?
BRUCE CONRADIE: Well, very much so. I mean, programmes like BA and Virgin have cloned themselves - one is a clone of the other. I don't know who came first, but they are almost identical in a lot of ways. But what we found was where the one had lower value in some way or maybe it was inconvenient or something, it would make up in another way. So that was very difficult. Anyway, getting back to the Virgin case, in fairness to Virgin Money, they are very close.
DAVID SHAPIRO: I've got a question for Bruce. Really, in terms of Voyager and all these things, it's all very well to accumulate the points, but have you judged how you can spend them? Because my wife has a SAA Voyager card, and all she does is accumulate points. But when it comes to using them, we can never use them!
MONEYWEB: Good point.
BRUCE CONRADIE: It's a very good point, and the bottom line is I have to say that we didn't measure that. And the reason is that the only way I can think to do it will be to do a quantitative survey, and the cost of doing this survey then would have escalated hugely, and we would have to go to 500 consumers or a thousand consumers and say, "Look, what's your experience?" - because it's not the kind of thing we want to take the airline at its word for, with all due respect to the airlines. It's a tough one [for them] to tell us, you know, "Air your dirty linen, how many people can't redeem?" So we haven't done that.
MONEYWEB: Bruce, should you, though - we're talking about airline cards just to start off with - should you have a BA and a SAA loyalty card, or should you try and fly on one airline only?
BRUCE CONRADIE: Well I think, Alec, that's a function of how often you fly. The real frequent flyers, the people who are doing a lot of flying, they belong to two or three even, and it makes sense because you can't always fly on your preferred airline. But if you're flying once a year, twice a year, three times a year, and maybe you go overseas every second year, you're far better off with one airline.
MONEYWEB: I know I've just been downgraded by British Airways - no more gold cards. I obviously haven't been flying too much on South African Airways. But the points that you accumulate on the two of them clearly would be higher if you're using one all the time - that really is my question.
BRUCE CONRADIE: Ja, I don't think I explained fully, and for listeners who are not familiar with these programmes, the more you fly on one airline the more likely you are to get to an elite status on the airline. So you go from having your gold card to having your silver card and then from your silver card to gold - sorry, the other way round - the blue card in the case of SAA to silver to gold. And in the case of Miles & More, they've got a super-super elite tier, where you get driven to the aircraft in a Mercedes Benz and you get someone who takes you through the ...
MONEYWEB: Is that Lufthansa's one?
BRUCE CONRADIE: Ja, that's the Lufthansa one, ja.
MONEYWEB: How does Virgin stack up? They talk a good game. So you've now done the analysis ...
BRUCE CONRADIE: No, you're talking Virgin Atlantic ...
MONEYWEB: Well the whole Virgin Money story.
BRUCE CONRADIE: We didn't have Virgin Money in there, because it wasn't points-based.
MONEYWEB: It's a credit card.
BRUCE CONRADIE: No, no, but it wasn't points based, the programme, as far as we understand. I hope we haven't made a mistake there, but as far as I know it's not. It offers some kind of discounts. We had it on that credit card survey which we did last year, but not in this one because it's not points-based.
MONEYWEB: Because they also had a go at eBucks, did Virgin. They reckoned that eBucks was again a bit of a rip-off in their view.
BRUCE CONRADIE: Ja, look, Virgin Money has come out very aggressively, because this is at least the second time. I think it was in March and you've probably had them on the programme as well, where they lambasted credit cards. I think Frequent Flyer miles was the specific target there. Here they've targeted slightly more broadly in saying all miles are no good. But to me the irony, Alec, is that here we have another Virgin company, Virgin Atlantic, that is offering an extremely good credit card partner, and that's in the form of Amex, American Express, and you can swap your American Express points for Virgin miles. And the rate of return is extremely good. So I think that's quite an irony there.
MONEYWEB: That's crazy. So you've got a Virgin Money card, which is doing its own thing and then its partner in the family, Virgin Atlantic, has actually done a deal with American Express? Hmm, John Maxwell needs to get his act together on that, surely. David, what do you think?
DAVID SHAPIRO: It is crazy, because I thought they'd be linked.
MONEYWEB: Got to be the same family, ja.
DAVID SHAPIRO: I didn't know they're linked to American Express.
MONEYWEB: Well you see that's why we asked Bruce to come and tell us these things.
DAVID SHAPIRO: I've just learnt something tonight, because I've got a lot of Amex. American Express, and I like Virgin.
MONEYWEB: Well, there we go. Should you have these loyalty cards, are they worth the effort?
BRUCE CONRADIE: Short answer, yes, definitely.
MONEYWEB: They're quite confusing, though. How many should you have then - try and focus your attention on a few.
BRUCE CONRADIE: I mean I can only give you a very personal opinion, because obviously it depends on the consumer, how much effort they're willing to put in. There's a psychological profile that goes with this type of accumulation. I would say, short answer, three to seven.
MONEYWEB: Three to seven?
BRUCE CONRADIE: Three to seven. You're going to have a credit card programme ...
MONEYWEB: Which ones do you carry?
BRUCE CONRADIE: Let me give you categories rather, Alec, before we go on to which ones I carry. You're going to have a Frequent Flyer programme if you fly. You're going to have a credit card if you have a credit card. You could have a hotel programme if you travel. Then you should have one or two retail programmes, something like a Clicks Club card, for example, or a Woolworths card - and what's the other one? Something like Ster Kinekor, you know. So can you see what I mean? When you start adding up, you get good value out of each of these and each of these serves a different type of product.
MONEYWEB: So which ones do you carry?
BRUCE CONRADIE: I've got a Standard Bank card that's got BA miles, I had an Infinity card, then Mugg & Bean left them, so I've still got ...
MONEYWEB: But that was part of Fidentia.
BRUCE CONRADIE: Ye-e-s.
MONEYWEB: Did you get your money back on that one? Infinity - did you get your loyalty points?
BRUCE CONRADIE: Listen, I lost money long ago, and I don't invest now directly myself so ...
MONEYWEB: And a Discovery card? You did say that was the best credit card - do you own one yourself?
BRUCE CONRADIE: No, but I'm not a part of Discovery. We belong to a very good medical aid and my wife, who is the medical person in the family ...
MONEYWEB: Who phones you when you're on radio.
BRUCE CONRADIE: Ja, who phones me when I'm on radio, she feels that the medical aid we're on is better than the Discovery medical aid. So on that basis, you know, it's not a decision area that I get involved in.
MONEYWEB: Bruce, she sounds like quite a lady! [Laughter] Bruce Conradie is the managing director of Razor's Edge Business Intelligence.
ABOUT THE INTERVIEWER
Alec Hogg - Alec Hogg is a writer and broadcaster. He founded Moneyweb and is its editor-in-chief.