Five loyalty lessons from Coles’ flybuys revamp

More than 16 million Australians will open their mail today and discover a brand new flybuys card from Coles as part of the supermarket’s relaunch of the loyalty scheme.

Launched in 1994, today flybuys has more than five million active cardholders.

Coles acquired full ownership of the loyalty program in February 2011 and relaunched flybuys last week.

Speaking at the relaunch, Ian McLeod, managing director of Coles, said the program would offer customers more points on their everyday household spend, more places to earn points and a faster way to get savings off their groceries.

“Last year we decided to rip up the rule book on reward cards and build a program which offers real value to Australians,” said McLeod.

“Our aim was to find new ways to give our customers something truly worthwhile as a thank you for choosing to shop with Coles.”

There are five key lessons to learn from the revamped flybuys.

1. Include as many people as possible

Coles says it is mailing flybuys packs with flybuys cards to “nearly every household in Australia”.

Instead of having to request to join the loyalty program, Coles is automatically sending customers a card which they then just have to activate.

Including the whole of Australia in a loyalty program may be out of the reach of SMEs but including a businesses’ entire mailing list or customer database is not.

2. Have a key selling point

Coles has come up with a key selling point for the flybuy’s program called my5 which will give flybuy’s customers 10% off five products of their choice – whatever the price.

Coles describes this as a “world first” and it is certainly a point of difference from competitors programs which just offer points for money spent.

3. Loyalty programs need to be easy

Coles is well aware that customers have limited patience for complicated loyalty programs which make them jump through numerous hoops just to redeem points.

The flybuys overhaul includes getting rid of the expiry date on points, increasing their dollar value, and making it easier for shoppers to claim rewards, including at the checkout.

4. The more the merrier

The original flybuys program included Coles, National Australia Bank, Target, Kmart, Kmart Tyre & Auto Service, Coles Express, Liquorland and 1st Choice Liquor.

The revamped program has expanded to include Webjet, AGL, and Telstra alongside the original flybuys partners.

SMEs can consider clubbing together to improve the value of any loyalty program to customers.

5. Use the data

Coles is unlikely to be revamping flybuys out of the goodness of its heart, it’s more likely that the supermarket giant is keenly aware of the value of the information that can be collected from customers using loyalty cards.

Data gathering by Coles is likely to include information on where customers are from, the products they buy and the hours they shop.

Information like this can help Coles (and savvy SMEs) determine a choice of product lines, what products to offer discounts on and marketing and advertising strategies.