Why Virgin is launching a loyalty app to unite all its UK businesses for the first time

Virgin is uniting all its UK businesses under one loyalty programme for the first time as it looks to boost engagement with its customers and give them a reason to pick Virgin over its competitors.

virgin red

The loyalty app launches today (20 June) and will reward members with offers and discounts for using Virgin services and engaging with in-app content. It will feature weekly offers, competitions and reverse auctions, as well as content including quizzes and challenges.

Members earn points by connecting their Virgin accounts and engaging with content. Members do not have to be a Virgin customer to join but the more Virgin businesses they are signed up with the better the experience is and the more points they gain, which every month unlock ‘vaults’ that reveal prizes. These prizes could be offers from Virgin businesses such as Virgin Trains or Virgin Atlantic or from one of its partners, including Caffe Nero.

Speaking exclusively to Marketing Week, Virgin founder Sir Richard Branson explains why his company is launching the loyalty programme. “One of the things I’m most proud of within the group is our history of rewarding our customers, especially those most loyal to us.

“Virgin Red is something we’ve wanted to do for some time but it was important we got it right for our customers.

“Virgin Red is designed to bring together the whole Virgin family and rewards people for living a life more Virgin.”

Sir Richard Branson, founder, Virgin

Virgin has been considering launching a loyalty programme for some time to unite its disparate businesses. It runs a number of high-profile companies such as Virgin Holidays, Virgin Media and Virgin Atlantic as well as some less well known brands such as Virgin Water, a countertop machine for the home that purifies, filters and dispenses water. However, Helen Tupper, Virgin Red’s marketing director, admits customers had become “frustrated” by the lack of reward for their loyalty.

“They wanted to know why if they were a Virgin Trains season ticket holder they did not get rewarded when they joined a Virgin gym. This was an unmet need among customers for quite a long time,” she explains.

The move also makes sense from a the business’ point of view. Customers that take out more than one service with a brand tend to be more loyal and spend more money. Virgin saw this as an opportunity to drive up revenue and reduce churn, as well as engage with customers.

“The loyalty programme is designed to encourage multiple relationships. We have known for a long time that this is the right thing to do from a customer and business perspective. But we wanted something efficient, engaging and that felt Virgin-like,” explains Tupper.

Loyalty goes digital

That is why Virgin Red takes the form of a mobile app. It has an API that enables the app to verify with the relevant Virgin business whether someone is really a customer by asking them to enter personal details such as an account number of email address. The aim is not to collect customer data but to understand which services members already use and base their experience around that. So someone who is a Virgin Trains customers will get served different content and rewards to someone who comes via Virgin Atlantic.

Virgin Red will offer users discounts from Virgin businesses and third parties such as Caffe Nero
Virgin Red will offer users discounts from Virgin businesses and third parties such as Caffe Nero

The experience will also be personalised based on what people do in the app – the content they view, their engagement levels and what they click on. For example if someone shows an interest in holidays at home they might be shown content or offered deals based on Virgin Trains while those that view content about travelling would see Virgin Atlantic-related messaging.

However, Tupper admits she is cautious about over-relying on the in-app data for personalisation. “We don’t want to restrict someone’s experience because that could lead to us just showing people what they already like. We want to show them what they might not know as well . We will approach this cautiously rather than rigidly applying personalisation.”

Virgin also wanted something different to anything else on the market that members could engage with on a daily basis – hence the app. Plus, members will not just be rewarded for money spent but for engagement.

“The breadth of offers and opportunities we can offer from dinner with Sir Richard to being a taster for the upper class menu on Virgin Atlantic sets us apart. We will offer discounts but also unique experiences within what Virgin does. That way of rewarding people is very different and very Virgin,” says Tupper.

“Also, strategically, we did not want to just reward people for what they were spending, that is too predictable. We are rewarding for spend and behaviour, for being more Virgin.”

That might seem difficult when Virgin runs such a range of brands. Yet Tupper believes there are values that run across its businesses and that also chime with its customers around being more adventurous, taking a risk, being innovative, cheeky and fun.

The secret to loyalty success

sir richard virgin red

The marketing campaign to promote Virgin Red’s launch aims to show off those brand values. The ‘V Marks the Spot’ campaign runs throughout July and will see Sir Richard leave a trail of 1 million gold coins across the UK leading the ‘most Virgin’ people to Necker Island for a chance to win a ‘life more Virgin’.

Virgin will promote the campaign, created by Mr President and Speed Communications, through outdoor advertising and online and social media activity, as well as in marketing across its businesses. Coins will appear on Virgin’s online and social channels, as well as in physical form in locations such as its trains.

Tupper says Sir Richard has been “very supportive of the launch” and that the idea for the marketing campaign came from Sir Richard’s wanting to run a real treasure hunt. However she admits there have been challenges. For one operating as a startup within a corporate has been difficult at times, as has knowing what metrics are right to measure its success.

“We have had debates over whether we should be measure new business, acquisitions, engagement or revenue because if we follow one too much it could affect Virgin’s businesses. If we just did acquisition I could do a massive above-the-line campaign and get 5 million users but they might not pay into the scheme and the brand and would churn quickly.

“We are trying to figure out what is the most effective metric to measure that doesn’t drive the business in the wrong way too soon. What is the most powerful level for success?” she asks.

In the longer term, the aim is to make Virgin Red a reason why people pick Virgin Media over its competitors. “It needs to be a reason to join and a reason not to leave. IF people are choosing between two brands we want them to pick Virgin because they get extra rewards. Post the treasure hunt it is about being always on and being a channel to retain customers.”

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