The unclaimed value of Safaricom’s #ticker:SCOM customer loyalty awards, popularly known as Bonga points, has hit Sh4 billion after rising by 6.2 per cent in the year to March 2018.
The telco disclosed in its 2018 annual report that the loyalty points carried by ordinary customers were valued at Sh3.5 billion at the end of March, while those held by enterprise business customers were worth Sh533 million.
The points are accounted for as a liability on Safaricom’s books, and only translate into income once they are redeemed by customers in form of gifts, devices, airtime, short messages service (SMS) or data bundles.
“The accrued liability relating to customer loyalty credits of Sh3.51 billion (2017: Sh3.32 billion) is expected to be recognised into revenue as customers redeem their points,” said Safaricom in its annual report for 2018.
“Also included in the customer loyalty credits is an amount of Sh533 million (2017: Sh482 million) earned by Enterprise Business customers, which will be redeemed on maturity of their revenue contracts.”
Safaricom also runs an offer to customers to use their Bonga points to make purchases at selected retail stores, eateries and chemists.
The growth in retail customer Bonga points in 2017 stood at 2.8 per cent—excluding the enterprise business credits— compared to 5.7 per cent this year, indicating that customers are either cutting down on their redemptions, or that they have increased their usage of Safaricom’s services hence accumulating the points at a faster pace.
The points are gained based on amounts used on various services that are marked as rewardable, with a customer earning a point for every Sh10 spent on voice calls, SMS, data and M-Pesa services.
Safaricom has also reported additional deferred revenue of Sh4.81 billion, up by 22.4 per cent from Sh3.93 billion in 2017, which it says is mainly in form of unused airtime and bundled resources.
The telco added that like Bonga points, this will also be recognised as revenue when used by customers.
The deferred revenue also includes Sh243 million for managed services to be rendered in the current financial period under the National Police Service contract, an amount that is unchanged from 2017.
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