Loyalty schemes war: Contact fires back

Contact Energy is beginning the massive task of shifting more than half its customers off the Fly Buys rewards scheme.

Contact Energy is beginning the massive task of shifting more than half its customers off the Fly Buys rewards scheme with the enticement of up to 50 cents a litre off fuel bought from BP and Caltex petrol stations by linking electricity bills to the AA Smartfuels reward scheme.

Contact and Fly Buys ended their 16-year partnership at the beginning of this month amidst a major shake-up in the loyalty rewards scheme market, which is dominated by Fly Buys, the Air New Zealand Airpoints programme and the more recently arrived and fast-growing AA Smartfuels scheme.

Genesis Energy has replaced Contact at Fly Buys, with the loyalty scheme operator claiming that it made the decision to drop Contact while Contact's chief customer officer, Vena Crawley, today said that Fly Buys had been a market-leader when Contact joined the scheme in 2001 but that customers today wanted easily redeemed cash rewards.

"From a dollar for dollar rewards points comparison, it's a no brainer. We believe AA Smartfuel offers the best bang for buck for our customers, as well as instant rewards - there are no tricks, no confusing points calculations, no ordering from catalogues and no waiting."

At the moment, the average Contact customer would need to collect Fly Buys for a year just to buy a bottle of Lindauer sparkling wine, said Crawley.

Contact is introducing billing plans that will give customers a choice of 10 cents, 30 cents or 50 cents per litre off their fuel purchases, irrespective of how much power they buy each month, and claims the scheme will be cheaper for Contact than Fly Buys.

The different levels of discount depend on contract terms and mesh with variable levels of prompt payment discount.

Like Fly Buys and Air NZ Airpoints, AA Smartfuel points can be accumulated at a range of retail outlets, with AA Smartfuels allied to the Countdown supermarket brand while Fly Buys and Airpoints are tied to New World supermarkets.

One fuel company, Z Energy, is involved in all three major schemes, offering Fly Buys and Airpoints at Z stations and AA Smartfuel at the Caltex stations it bought last year as US oil giant Chevron quit its retail outlets in New Zealand.

Crawley said Contact would spend more this year on the new loyalty scheme than it did last year on Fly Buys because of the initial cost of marketing and migrating its existing customer base, 247,000 of whom from a total of some 421,000 currently receive Fly Buys.