How Esso made your friends nicer
Back in the 80s Esso started giving people Tiger Tokens every time they bought petrol. These tokens could be redeemed against a number of exciting items, and one of the most popular was a very desirable set of china mugs. Far from being viewed as a tacky free gift I remember seeing many sets of these mugs proudly displayed in the houses of my parents' friends. These mugs were a literal embodiment of your smart shopping, advertising that you managed your money wisely through the medium of pottery. This was one of the first successful loyalty schemes, but how did Esso's china mugs make your friends nicer?
Organising anything for your friends that involves your paying for everything up front and reclaiming the money used to be, to put it mildly, a horror of epic proportions. Let's say it's 1999 and you are organising a long weekend away in Alicante for some friends. This is one of the most onerous, time consuming and thankless tasks you can imagine (I once read a book almost completely devoted to organising group trips away, which I highly recommend). 13 years ago undertaking this task on behalf of your friends used to involve:
1. Ringing all your friends one by one to try to arrange a time everyone was free or could get holiday. Not all of them have
a mobile, so even getting hold of them all is a challenge. You have to pay for all the calls.
Irritation factor: You've dribbled a bit of toothpaste onto a clean t-shirt.
2. Trying to find a flight and hotel, lots more phone calls, possibly visiting some web sites which don't work very well and
just list further phone numbers to ring. More calls to pay for, and you possibly have to ring a hotel with a receptionist
who doesn't even speak english (quel horreur!). Alan Whicker would not have stood for it.
Irritation factor: You tried to turn on the bathroom light but the cord came off in your hand. It is still dark and you need to go quite urgently.
3. Providing credit. Should this be for more than a couple of people you would have to stump up all the money, and then laboriously
reclaim it in the form of cash or cheques from your scatter brained chums over the period of 5 or 6 months through repeated
poking, cajoling and threatening. The cheques have to be physically presented at the bank in order to ensure they do not go
astray in the post.
Irritation factor: You have toothache. You have taken your seat for a star-studded production of The Ring Cycle to discover it is between those of John McCririck and Nick Griffin. Your trousers have caught fire.
To undertake this took genuine altruism, the only thing you stood to gain from your endeavour was whuffie, an extra thick phone bill, and the possibility of falling out with at least one of your friends.
In the world of 2012 though, things have been turned on their head. Loyalty schemes have come a long way since Tiger Tokens. Thanks to the proliferation of loyalty points, cashback credit cards and cashback sites, what previously looked like straightforward altruism is now a potentially lucrative endeavour with little effort involved. Let's look at that process again in 2012:
1. Create a group and put some proposed dates up on Facebook or Google+. Read the responses and pick a date, post the chosen
Irritation factor: You are hungry, but someone gives you a bacon sandwich.
2. Find a flight and hotel. Bang the details into Kayak or Expedia, pick a hotel that looks nice.
Irritation factor: You have missed the beginning of Bear Grylls Born Survivor, and have to reach over and get the PVR remote to rewind to the beginning.
3. Provide credit. You pay for everything on your cashback credit card, with Quidco cashback. The whole process nets you
a few hundred quid, and everyone can easily make an internet bank transfer to you. You may still have to chase them a bit.
Irritation factor: You have won a few hundred quid on the lottery, but have to carry those heavy banknotes home.
What can we make of this? Thanks to the advances in online services, the parts of the task that used to be onerous have become practically no work. The loyalty industry has embraced technology to the point that extending credit to your friends is not only convenient, but is actually profitable. Loyalty is not standing still and merchants are looking to loyalty schemes as a way to improve their customer intelligence and to link customer behaviour across channels; a process that is crucial to a joined up multichannel strategy. The recent tie up between American Express and foursquare is presumably harvesting not only shopping habits but also locations & smartphone information in very consumer friendly way.
Loyalty schemes offer an incentive in return for customer information that merchants can use to improve their marketing effectiveness and ultimately entice their loyal customers to spend more money. Customers who pay on behalf of their friends are not only lining their own pockets with cashback, but may be skewing that data to appear to be a higher value customer. The next time someone offers to pay for your dinner or holiday ask yourself, are they doing it because they value your friendship, or because they've got one eye on "those nice china mugs"?
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