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One smoothie, please?

Can the Discovery Vitality Active Rewards programme change behaviour in the long run?

JOHANNESBURG – In his best-selling book, The big short, Michael Lewis recalls a speech by Warren Buffett’s right-hand man, Charlie Munger, at the Harvard Business School in 1995.

Munger said that if you really wanted to get a good sense of how people would behave, you just had to examine their incentives more closely.

While he always had a better grasp of the power of incentives than most people his age, even he had underestimated them, Munger said.

Incentives are powerful tools. Governments know this. Employers know this. Parents know this.

But getting incentives to change behaviour in the long run, may not always be as simple at it appears to be. 

Just think about the tax incentives associated with the monthly contributions to a retirement annuity or pension fund. Theoretically, savers should want to utilise the full benefit of the tax incentives offered to save for retirement, but often this does not happen in practice. Why? Because at the age of 20 or 30 or even 40, retirement may seem like a lifetime away. It is very hard to fathom the use of an incentive when the real benefits will only really be visible in 40 years (assuming investors don’t cash out their benefits when changing jobs).


One company that has basically built an entire business model around an incentive programme (Vitality) is medical insurer Discovery.

At a presentation in early December, one analyst went as far as saying that if investors were only going to own one share it had to be Discovery. Its stake in Chinese health insurer Ping An could grow into a significant business in the long run as structural changes were implemented and people move from state health to private insurance.

But, the bigger thing he said, was Vitality.

“When John Hancock, [one of] the biggest life insurer[s] in America comes to you and says: ‘please can we license your Vitality?’, you know that they have tried to reverse engineer that product. You know they’ve tried to pull it apart. When they come knocking, you know they have failed to pull it apart. You know that you have an awesome, awesome product.”

Active Rewards

Discovery recently expanded its Vitality program with the launch of Vitality Active Rewards. The idea of course, is that an active lifestyle is associated with health benefits and will likely reduce health costs.

For the company, the benefits are obvious. For the member, this is a function of personal circumstances.

In a white paper about the programme, Discovery notes: “Results indicate that incentive-based programmes yield increased engagement in physical activity during the intervention period by employing basic behavioural economics principles such as loss aversion, whereby incentives are framed as rewards to avoid losing, rather than gains to achieve. This has proven to be effective, especially over short and demonstrable periods”.

The paper also argues that incentive programmes can be more effective when goals are personalised and adjusted over time. Where rewards include small, regular incentives in the short-term, more aspirational ones in the longer-term and participants have the support of friends it also has a greater probability of succeeding.

How it works

In short, the programme sets you a personalised, weekly activity points goal through the Discovery app.

Your goal (say 600 points) can be achieved by going to the gym (100 points), participating in a Parkrun (300 points) and loading data from your fitness devices (for example a running watch) to name a few. If you reach your weekly goal, you are entitled to a free smoothie or hot drink at Kauai and Vida e Caffè respectively. If two of your team members also reach their goals during the week you get an additional smoothie or coffee.

In the long run, you can save up to 100% on your monthly gym fees based on the number of goals you reach in a given month and up to a 100% on the base fare of certain local flights based on the number of rewards you achieve between the time of booking and the departure date. If you meet four of your goals in a given month, you can also fund your monthly instalment for an Apple watch in full.

While two free smoothies or coffees a week may not sound like a lot (the novelty will probably wear off after a while), for those members who have a gym membership in any case (the reason many individuals join Vitality in the first place) and who plan to hit their weekly target consistently, the benefits will likely outweigh the costs of the Vitality membership.

If I manage to achieve all my weekly targets each month, my own situation would look something like this. The calculation reflects my projected new savings once all the Active Rewards benefits come into effect. Thus, benefits I was already entitled to prior to 2016 were excluded.



Monthly Vitality membership fee


Monthly gym membership (after 75% discount)


Plane ticket base fare (estimated monthly saving for 6 one-way flights per year – (6 x R1000/12)


Eight smoothies a month (R30 each)


Cash saving (excl. smoothies)


Overall benefit (incl. smoothies)


Of course, it might be unrealistic to assume that I would be able to reach the goal every week over the course of the year. At some point, the weekly points target will have to level off, or it may become too difficult to reach it. For most people it will likely be too time consuming to spend more than six hours training every week. And presumably, six hours of moderate intensity training should be more than enough to unlock the health benefits the incentive was set up for?

While you want to encourage people to be more active, you should also be careful not to set goals that are too hard to reach, as participants can easily become demotivated.

At this point however, I would just be glad if Discovery would stop recording my “moderate” and “vigorous” physical activity running workouts as “steps taken” (the points difference is significant). I’ve alerted Discovery to this and apparently they are working on the problem. Until the issue is resolved, one of their call centre agents advised that I should e-mail them screen shots of my workouts.

After seven weeks of participating, I can honestly say I have been more active. Whether I would be able to keep it up in the long run remains to be seen.



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I don’t like the idea of a private company with questionable ethics harvesting and storing all manner of data about my movements and fitness levels while essentially telling me what to do all the time.

Pay a company to scold me when I haven’t taken enough steps? No thanks. Happy to hold Discovery shares for sure, not so happy to stream them some of my most personal data.

Incidentally I am on Discovery Vitality purely for the Virgin Active subsidy but I will not be jumping into this new Active Rewards program any time soon.

if you already going to gym and hitting the weekly target, why would you not activate the Active Rewards. They already tracking your gym workouts, so you may as well receive the free benefits.

They track me going into the gym, not exactly what I do there. I can live with that without being particularly thrilled about it.

To me, the single biggest problem with Vitality and all its add ons is the rewards. If you’re not a traveller or partner shopper, climbing the ranks will bring you nothing in the pocket. I once was gold, found no point in it, and now I don’t belong to Vitality at all.

By and large, people don’t take too kindly to being told to work harder or do more of something than they’d naturally like to.
Incentive schemes are fantastic where re-directing natural behavior is concerned i.e shop at Pick ‘n Pay rather than Spar to get points, but once it becomes a ‘do shopping ‘x’ times a month worth ‘x’ amount to get ‘this’, people inevitably lose interest, and as the author put it, in the long-term “the novelty wears off” somewhat.

For me, Discovery’s share price looks rather more enticing than any of their gimmicky products, so I’d rather have that instead, though admittedly, those prepared to put in the effort, are making the incentive schemes work for them.

I’ve been using active rewards from last year. My goal had been set at an achievable 500 (ie 3 gym visits x 150, and atleast 1 day of getting >5000 steps). This pretty much mirrored my activity levels. Some weeks I did more, some less. So it averaged out.

Since 2016, they dropped the way points can be achieved but kept the goal constant. Therefore my 500 points can be achieved by 5 gym visits x 100 (new allocation given).

I have been back and forth, and they have blankly refused, and now ignore all emails to them, to adjust the goal based on my “Current Activity Levels,” which is what the white papers says about Active Rewards.

I have been directed to do more outdoor activities, parkrun etc. What they dont seem to understand is that if I could in the 2-3 months I have been on Active Rewards, I would have been doing this already. But it just does not fit into my lifestyle.

Active Rewards is a brilliant way to get people more active, but I don’t believe the BU handled to manage this, has thought of the different scenarios in someone’s day to day life. When I first started the system had “teething problems” which increased my points goal drastically, and now this.

Very dissappointed.

I concur. I am regulalry proselytised by acolytes of the Discovery/Vitality movement – to my mounting annoyance. The fact is that, even though you feel the ‘program’ may be working for you, it will not work for everyone. If a business has succeeded in manipulating your spending and lifestyle habits to the degree that you perceive some derived benefit from the program, then that is your choice and your habits. I do not spend my disposable income on the services and commodities rewarded by the Vitality program – those are my choices and my habits. The thing I value most about the cash in my hand is that it empowers me to be autonomous. Rewards programmes on the other hand (to a greater or lesser extent) are aimed directly at eroding the consumer’s propensity to make autonomous and unpredictable decisions. I most definitely do not want to change my spending habits for the sake of acquiring personal validation from an app or other forms of corporate communication. A business (Discovery included) is not some beneficient NGO that is primarily interested in your physical and personal well-being … it is an enterprise with a profit motive. By extension, rewards programmes support profit, not altruism. I will buy Discovery shares, but I will not subsrcibe to its product or ‘program’.

Please help me understand most of you…

I get the impression that the majority of people that made the effort to comment on this article, think that the products offered by Discovery don’t really benefit the clients invested in them?

But then makes the statement that you are willing to hold Discovery shares in your investment portfolio?

To me that’s the only thing that doesn’t make sense…

Hi FinBro

It’s important to note that, incentive schemes are add-ons and not the core product offerings by the respective companies, therefore they are not fundamental to the company’s operations (Although Discovery is gradually trying to change this) hence our willingness to own the shares.
Discovery is an insurer, and insuring people is not only what they do best but what their investment case is based on.

The point being made by us here is that, for varying reasons, these incentive schemes are just not suited to us personally, but they do work for others, whom Discovery does well from, it’s not a reflection of what we think of the company in its entirety.

“insuring people is not only what they do best but what their investment case is based on”

This is purely my conjecture, so don’t quote me or ask for prove – I beg to differ: “Rewards” is what they do best, and they make heaps of money from people not like you, who join but don’t “game the system” ending up paying more than they otherwise would have.

Well said E!

I do not smoke and drink wine not beer. It does not prevent me holding shares in tobacco and beer companies, because there are plenty other people using their products.

If you take a Peanut Butter bomb, you can save R320 bucks @ R40 a pop.

I reckon that Vitality is a gimmick to beguile members to part with all manner of information. Data is the new gold. Just look at what Google, Facebook, Twitter, Whatsapp et al, are doing. Beware.

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