Creating a new brand in the cluttered world of loyalty schemes is no easy job but Keith Mills and Philip Beard, the founders of the Air Miles scheme, must surely stand more chance than most. They are hoping that the 7.35m acquisition of European ticketing agency First Call will raise the stakes higher – but is there any room for yet another scheme?
The purchase of First Call will give the yet-to-be-named scheme a base of valuable contacts in the leisure industry and instant access to booking systems. Beard hopes to differentiate the new launch from other loyalty schemes by providing attractive sporting offers, in addition to travel and leisure incentives.
Buying a ticketing agency gives a loyalty scheme a number of advantages, not least of which is cutting out the middleman – the agency usually adopts that role. It provides inside information on the price, availability and take-up of bookings and also puts the loyalty scheme owners in a good bargaining position with key event promoters and theatre producers.
“Loyalty currency can be used by suppliers to discount excess capacity. People don’t know how much you paid for the tickets, but they have a perceived value,” says Beard.
Beard aims to steal a march on rival schemes, including Air Miles UK (which spawned Air Miles International – now fully owned by British Airways) by offering incentives for sporting events and using technology to make redemption easier for collectors. Beard and Mills had to agree not to set up a scheme in the UK for 18 months when they sold their share of Air Miles UK back to British Airways in 1994.
The new loyalty currency is expected to launch in April and partners will be announced in the near future. Logo and brand name are in the final stages of development; PCI Design has been working on various elements of design for the new business. Though Loyalty Management Holdings is the parent company for both Air Miles International and Loyalty Rewards – the company set up to run the new scheme – Mills and Beard will not be able to use the famous Air Miles flying boat logo in the UK.
Giving tickets as incentives sounds like a winning idea, especially as First Call already runs the box office system for Premiership team Tottenham Hotspurs. But the scheme may fall flat if it can only offer tickets for teams facing relegation when fans are baying for World Cup tickets.
Time spent arranging top rewards goes to waste if people either do not know how to access them or have to go through a cumbersome process to redeem them. For example, to get Air Miles in the UK through the Sainsbury’s Reward Card, customers have to collect vouchers from the till, fill them in, take them to the customer services counter to get Air Miles vouchers, then send them to Air Miles Travel Promotions by registered post.
Air Miles UK director of sales and relationship management Wanda Goldwag admits the process is complicated. “We are working on ways to improve it – the Shell scheme is a much better system,” she adds.
Points are added at the till with each purchase in the Shell scheme, once customers have made a decision to opt for Air Miles. Beard hopes to get more people on “the first rung of the loyalty ladder” by improving the redemption technology.
The short-term aim is to set up kiosks in retail outlets which will print tickets instantly, using the First Call booking system. Beard envisages booking through cash dispensers in the future but the Internet and digital TV are on the more immediate agenda.
Building First Call into a recognised consumer brand is another, longer-term aim for the Loyalty Rewards team. Currently, First Call’s phone number is printed anonymously at the bottom of event ads, but Beard wants to turn it into the first point of call for people wanting to book tickets for leisure activities.
Loyalty Rewards will use joint data provided by partners for direct marketing programmes to inform customers about the range of services provided by First Call. Above-the-line advertising could be used further down the line.
Beard talks a good story and has got the success of Air Miles UK and Air Miles International under his belt. But loyalty had moved on since Air Miles was launched and many companies, particularly in the retail sector, have developed their own, more sophisticated loyalty schemes.
There is always a danger that standalone loyalty schemes will build loyalty for the owner brand rather than the partners – BA in the case of Air Miles. Potential partners have had time to wise up to this and developed their own schemes.