Many years ago, I turned 30. Too many years ago! This year – Flybuys turns 30. For me, having worked with Flybuys from the very start, and for many of the years since until I retired my Flybuys wings a couple of years back, it’s a time of reflection – and maybe some lessons for loyalty marketers about the journey.
When Flybuys was in the planning stages across 1993 and 1994, loyalty programs were truly virgin territory in Australia. The only loyalty programs as such were the fledgling frequent flyer programs of Qantas and Ansett, but they were smaller, exclusive clubs then – you paid to join and you only collected points for flying (no linked credit cards then), so membership was pretty much the domain of, well, frequent flyers.
So how do you start a retail coalition loyalty program in a market where nothing like it exists? The simple answer is, with great excitement but great nervousness. Who would join? Would Australian households understand how the program worked? At the time, I reckoned we needed a few hundred thousand to join for it to have a chance of success. Thankfully, a couple of months in, we had a million households.
For Flybuys in 1994, there was definitely a “first mover” advantage. It was something that was fresh, new, different. But as first movers, there was also the risk of being the first to fall into traps or make mistakes along the road. When Flybuys was launched the only reward was flights, which was highly aspirational, but not achievable for all members, made even more challenging by a strict 3-year points life. Today, there are over 1,000 rewards, and your points never expire as long as you use your card at least once a year.
What lessons are there for loyalty marketers today? Firstly, think carefully and critically about whether a loyalty program will benefit your business. What are you trying to achieve? What business problem are you trying to solve? These days, with loyalty programs sprinkled liberally across so many industries and retail types, and likely to be used by your competitors, it’s too easy to fall into the trap of “me, too”. A loyalty program should not be a default choice. I’d argue it’s preferable to have no loyalty program at all than to be operating a poor one.
Thankfully, relative to 1994, there is a wealth of program expertise and understanding out there. But that does not mean that investment in loyalty should be considered carefully, soberly and with caution. Be clear about your objectives, and be methodical and strategic with design and execution.
Secondly, for those with existing programs, continue to question the relevance of your loyalty program. I recall the time 15 years in, an international expert who was consulting for a competitor branded Flybuys a “trash and trinkets” program. We had to demonstrate to stakeholders – owners, partners, members, and the media – that this wasn’t the case. Programs need to continually demonstrate relevance and performance to justify their existence.
For Flybuys, it has been an ongoing challenge over 30 years to remain appealing to Australian households – to be genuinely rewarding, to be trustworthy, and to have relevant and engaged partners. For a coalition program, you need work relentlessly with partners to ensure that they continue to provide great value to Flybuys members, and that they find their involvement in the program worthwhile.
30 years on, Flybuys remains at the top of the Australian loyalty tree. What might it take for your program to get there?
About the author
Phil Hawkins is a globally recognised loyalty program professional with over 30 years’ experience, with deep experience in coalition loyalty.
Photo by Tara Clark on Unsplash.
