Vitality Active Rewards: Carrot or stick?

Discovery has revised the way points are rewarded for its Active Rewards programme for the second time since introducing the Apple Watch benefit in December, much to the dismay of some of its members.

Initially launched in September last year, the Active Rewards programme sets participants a personalised weekly points goal, which can be achieved through various physical activities, with the aim to promote healthy behaviour and reduce health costs. Members are rewarded with short-term incentives like free smoothies and can get up to a 100% off their gym fees or Apple watch installments if they consistently reach their goals.

Active Rewards has been its most successful benefit to date, with more than 160 000 activations – about two to three times what it anticipated.

.@Discovery_SA sold more than 17 000 Apple Watches in less than 3 months as part of its #ActiveRewards programme.

— Hanna Ziady (@hannaziady) February 25, 2016

In communication sent to members, Discovery says its research shows that one additional workout per week reduces the risk of hospitalisation by 7%.

“The foundation of the Vitality Active Rewards programme is therefore accurate, measurable and clinically valid physical activity data. The problem with unverified physical activity is that it rewards incorrect behaviour and ultimately, people end up cheating themselves.

“Based on this, in order to minimise the potential for gaming and abuse, which is occurring through the use of unverified physical activity, refinements will be made to how you can earn Vitality points,” it said.

The new points system will be introduced on April 2. It was also revised on January 1.

The frequency and manner in which the “goalposts are being moved” have raised questions about whether the changes were really informed by bottom line considerations and if its initial communication about the benefit was transparent enough. (Listen to Dr Shrey Viranna, Vitality’s CEO, response to these concerns here.)

An Active Rewards member who signed up for the Apple Watch benefit, arguing that the goals were achievable based on the current points system, may have to pay up to R308.33 per month for the benefit if the retail price at the time of collection was R7 400, should the goals become too tough. If the member’s general budget was compiled based on the assumption of a 100% gym discount and/or signed up for Vitality to use the Active Rewards programme, the cash-flow implications can be more significant.

While some members did not seem too concerned about the changes, others took to social media to voice their disappointment.

@Discovery_SA #Vitality slashes physical activity points to move #ActiveRewards Goalposts again! #VitalityMembersGettingScrewed!

— Elroy Heynes (@elroyheynes) March 3, 2016

Sources: Facebook, Twitter & Hello Peter 

But how difficult would it really be to achieve the targets in terms of the new system?

The table below compares the requirements for 300 points.

Moreover, members will no longer be able to upload race results to claim points for race events themselves. Fitness points will automatically be allocated based on the data Discovery receives directly from timing companies.

While the impact of the revision will have to be determined on a case-by-case basis, the below table is included for illustrative purposes. It provides the actual data of my own indoor (ID) and outdoor (OD) running workouts during one week earlier this year. Under the current system, my lowest average heart rate that would qualify as “vigorous exercise” is 133 beats per minute. From next month, this will increase to 152.

January 23 to January 29

While the table clearly demonstrates that I am no athlete, it also highlights the fact that I would potentially have to make considerable changes to my exercising routine to keep reaching my goals over time. Since I did not sign up for the Apple Watch, the cash-flow implications of the change would be capped at about R163 a month (if I don’t receive an additional gym benefit any longer).

Viranna says the changes are not an effort to protect the company’s bottom line.

“We’ve always been open about our shared-value model, which says making people healthier improves their health and well-being, which does, in doing that, contribute to our financial bottom line.

“But that happens by getting people out there and getting more of them engaged, not contrarily by discouraging them from being engaged.”

Viranna rejects the argument that the changes are drastic.

“These changes are not in any way drastic. We are moving towards more verifiable [data] and we are refining heart rates towards a more clinical relevant dataset,” he says.

Having now collected six months of data, they are pretty comfortable and confident about the success rate and how the changes will be a “gentle nudge” towards improved activity outcomes, Viranna says.

Discovery has always been upfront that the programme is dynamic and that it would change over time.

“We don’t communicate frequency of changes in any of our benefits.”

Viranna says there seems to be a strong view among a small group of people that the program structure should be static and that the changes are potentially unfair.

However, Vitality is not a loyalty and rewards business that tries to create affinity.

“In those instances I can understand why somebody may be aggrieved that the benefit is changing or the comment about the bottom line, but if our underlying premise and principle is about shifting and encouraging behaviour [changes] then you would understand that inherently in that there has to be change.”

Viranna says they will be adjusting goals downward for certain members to give them time to adapt their training plans to the new points changes should they so choose.

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