Childcare loyalty program

Do loyalty rewards programs belong in childcare?

Publication: Mirage

Loyalty rewards programs aren’t a new concept, they have been around for 40 years; the idea of rewarding customers for their dedication to a brand and in turn creating retention for a business is an everyday concept for Australians. In fact, according to a study by Loyalty Reward & Co, published on ACCC, Research shows that almost 80 per cent of Australians are members of at least one loyalty scheme.

When Brent Thompson, Glenn Noy and Kara Smyth – who have over 30 years combined experience in the childcare sector – became aware of the imbalance of childcare centres versus demand, they were inspired to create a difference to combat the oversupply of centres and give the boutique centres a competitive advantage over the larger players. And so, Australia’s first childcare loyalty rewards program, Nurch, was born. Kara Smyth, Co-founder at Nurch believes that centres are investing copious amounts of time and money to acquire new family enrolments, but by allocating that [time and money] to Nurch, centres can dedicate those additional resources to the children to create a more consistent learning environment for children and carers. “As of June 2020, the average life cycle for children was 15 months for the sample of childcare centres that introduced Nurch in the December 2019 quarter. When we compare the same childcare centres the average lifecycle of those children at the childcare centres increased to 17 months. The increase of two months shows the increased loyalty the parents have shown to the childcare centres”, Kara says.

It does raise the question though – do loyalty rewards programs belong in the childcare industry or is it giving people a reason not to leave a centre if they are unhappy with the quality of education and care or working conditions? An educator in the sector recently said, “I am disgusted by a loyalty program for childcare. I feel like it compares making decisions about children’s education and care experience to where you pick up your next bag of pet food based on who will give you the tenth bag free. This disregards quality education and care practices and preys on people who may be financially vulnerable.”

According to the ABS, the average family income in Australia is $120,000. Childcare search and comparison site Care for Kids has shown the average cost of childcare in Australia soared during 2021 to a high of $177 a day – a large, and for many, unavoidable household expense. If there was a free opportunity to earn digital gift cards to reduce household spending, would they take it?

Nadine Ross, National Operations Manager for Imagine Education Group, comments, “Initially I was a little sceptical but the feedback has been overwhelmingly positive and the main feedback we receive is that families can’t believe a loyalty rewards program exists for paying their childcare bill. Most of our families at Imagine Childcare receive $400 a year in gift cards and the trend is that they like to save them up for Christmas Holidays or use the points to buy groceries or other household items”.

Aimee Gossange, a parent enrolled in the Nurch program says, “I love the idea of loyalty for childcare – goodness knows it costs us parents enough to send our kids to daycare. We retrieved a voucher to the value of $200 over the Christmas/New Year period and still have much more to redeem”. Another parent, Emily Keable, states, ”Childcare for three children isn’t cheap! We have enrolled our kids, three days per week. This leaves us around $600 out of pocket per week, $30,000 per year, after the gap fee. Nurch rewards add up to about $1000 per year in what I believe is childcare savings for us, as we’re able to spend the gift cards on everyday items for our house and even my children’s school supplies”.

Since its launch in 2019, Nurch Childcare Loyalty Rewards members have redeemed $1.446 million in digital gift cards. Nurch currently has 42 partner child care centres across four Australian states (Queensland, South Australia, Victoria, New South Wales) with an additional 15+ centres implementing the program by December 2022. Nurch is aiming to partner with 300 centres Australia wide to reward 30,000 Australian families, by 2025.