Nectar loyalty card
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The Nectar loyalty card is a loyalty card scheme in the United Kingdom issued by a partnership of suppliers including the supermarket chain Sainsburys, the credit card Barclaycard, the department store chain Debenhams and the petrol distributors BP. It was launched in the autumn of 2002, but immediately encountered problems when demand by customers for online registration exceeded the capacity of the servers to service the demand.
The scheme has expanded to include Ford Motor Company, Vodafone, various energy companies, Magnet, Thresher Group, Adams Childrenswear and Winemark.
The Nectar scheme was launched by the founder of Air Miles, Keith Mills and is operated by Loyalty Management UK (LMUK). Mills has described (http://www.the-rtma.com/print.php/type/article/id/40) the benefits of the scheme as follows:
- Shared cost — Tesco spends £150 million per annum on its Clubcard
- Estimated initial 50%-250% return on investment
- Increased retention — Due to the nature of the Nectar scheme, a customer who shops regularly with more than one partner company can gain points faster. This reduces the chances of dissolusionment or fatigue.
- More sophisticated offers — he points out that in many cases Tesco is spending several hundred pounds giving discounts to customers who would be loyal in any case.
- "Overlap" — The collaboration increases the chance of attracting new customers, for example a frequent customer of a BP filling station who joins Nectar may be tempted into a nearby Sainsbury's where they otherwise wouldn't shop (and vice versa) to gain rewards faster.
- To turn "tertiary" or secondary buyers into "primary buyers" &mash; i.e. (to use the Sainsbury's example again) to turn a customer who just buys the essentials at their local store into a customer who does their main shop at that store.