KEY POINTS:
Several retail and consumer companies are reviewing customer loyalty programmes like Fly Buys, as economic conditions threaten profit margins.
Some are hiring analysts to find out whether they are getting value for money out of the schemes.
And some, including some members of the Fly Buys programme, are
deciding whether they want to make another three-year commitment.
Fly Buys - New Zealand's biggest programme with 85 brands - is understood to be negotiating terms for several members.
Fly Buys owner Loyalty New Zealand declined to say how many are up for renegotiation and said that some had already signed. He said it was a normal part of the renewal process.
But marketers said Fly Buys brands considering renewal were being told to "re-sign or resign".
Sally Carey is a partner in marketing research company Datamine, which examines how loyalty programmes are working and whether they are properly targeted.
She said the company was working with two Fly Buys brands examining whether they would continue.
Carey said that beyond Fly Buys, the economic climate had led to people examining how loyalty programmes - rewarding people for staying with brands or companies for shopping with them - were performing.
Sometimes the schemes do not always stack up the way they did when they started.
"We've found that some people who are not profitable are being rewarded under some schemes.
"They have low-value customers costing too much money or sometimes loyalty programmes just run and people do not leverage them to get an advantage."
Jonathan Dodd of marketing research firm Synovate said he had completed a review on loyalty schemes.
He said that some programmes - such as the petrol discount vouchers issued by supermarket rivals Foodstuffs and Progressive Enterprises - matched those from the competition.
In that sense they were not a loyalty programme but a short-term bribe to customers, he said.
He said that loyalty programmes could become resented as overheads but companies faced the risk of losing business if they dropped them.
Loyalty New Zealand head of marketing Chris Lamers said that brands considering leaving had looked at the cost if it meant they could be replaced by a competitor.
Jon Ramage of Y&R Advertising said that loyalty programmes tracked spending and this offered valuable information for marketers.
"Direct marketing can be expensive, but using data from loyalty programmes allows you to identify clients a lot faster and a lot cheaper."
