Kiwi Retailers and FMCG Firms Review Loyalty Schemes' RoI

11 June 2008

WELLINGTON: The global economic squeeze is making itself felt in the southern hemisphere where New Zealand retailers and consumer companies are scrutinising the value (or otherwise) of their customer loyalty programmes.

A number of firms have reportedly hired analysts to review their commitments, including some who partner with Fly Buys, the country's biggest loyalty programme.

Customers collect points when they buy into any of the 85 brands participating in the scheme, among which are Air New Zealand, Shell and Unichem pharmacies.

A number of brands are understood to be renegotiating their participation.

Sally Carey, partner in market research specialist Datamine, says uncertain economic prospects have prompted marketers to examine loyalty programme RoI performance. 

"We've found that some people who are not profitable are being rewarded under some schemes," she cautions.

"They have low-value customers costing too much money or sometimes loyalty programmes just run and people do not leverage them to get an advantage."

Jonathan Dodd, of research firm Synovate, says some loyalty schemes could become resented as overheads, but companies run the risk of losing business if they ditch them.

And Jon Ramage of Y&R Advertising argues loyalty programmes track spending and offer valuable information to marketers.

He says: "Direct marketing can be expensive, but using data from loyalty programmes allows you to identify clients a lot faster and a lot cheaper."

Data sourced from; additional content by WARC staff