The best laid plans

More points than purchases

A major petrol retailer launched a loyalty scheme based around the collection of points with each purchase. These were recorded on a magnetic swipe card and then debited when a reward was taken. Gifts could be claimed at point of purchase, so there was the benefit of instant fulfilment once the reward threshold had been reached.

However, several weeks after launch, the company’s liability in terms of points awarded represented a greater proportion of petrol sales than seemed likely. The reason? The swipe card system was not linked to the till, allowing garage staff to record points on “spare” cards for any purchase made, as long as the total roughly equalled the amount of petrol being sold at that outlet.

A rapid and expensive re-engineering programme was undertaken to connect the card records to the electronic point of sale, allowing for proper reconciliation of sales with rewards.

The retailer who knew too much

A current loyalty scheme operated by a major grocery multiple has proved highly successful. Take-up of the cards has been good and extensive infor-mation is being collected on purchasing behaviour.

The problem is that so many fields of data are being recorded for each customer that the data-processing system has ground to a halt. Instead of being able to analyse customers and segment them for cross-promotions and targeted offers, all the retailer has been able to do is send out money-off vouchers.

In effect, the scheme has become a discount, but with the added overhead of the technology supporting it. The company is now reassessing which data it needs to gather and which can be ignored.

Dead loyal or just dead?

An airline in the United States was operating a frequent-flyer programme. In order to ensure that its liability for outstanding unclaimed flights did not grow too great, it built in regular deadlines for redemption.

For one such sweep, the airline targeted travellers who had not claimed a flight in the past six months. Among those mailed, however, were 22 individuals killed in a crash involving one of that same airline’s jets. The legal settlement for distress caused to relatives ran into tens of millions of dollars, nearly taking the carrier into Chapter 11 bankruptcy.

There are few problems in running loyalty schemes that cannot be resolved and that have not been encountered before