Kiwis' passion for freebies

By Tom Clarke

Kiwis have taken to the consumer loyalty Fly Buys scheme with a greater vengeance than consumers in any other part of the world, says new general manager Alastair Hutchens.

The scheme got away to a strong start when it was introduced three years ago, he says, but then hit a slow patch before really taking off.

"I don't think anyone would have dreamed it would have become so large," Mr Hutchens says.

"The programme took off with a vengeance initially then it eased back after 12 months, but then people began to fly free.

"All of a sudden the public realised it was quite achievable and now the result is that more than 1000 people are flying free every week.

"It has become a bit like Lotto - it's a part of the lives of most New Zealanders."

Mr Hutchens says one in every two New Zealand homes is now in the programme, and there is no precedent for this success in overseas markets. He is not sure why the programme is so popular here and he says there is no sign of interest slackening. Some 2200 new members join every week and more than 165,000 New Zealanders have enjoyed rewards through the scheme.

Mr Hutchens says once people have taken a flight or enjoyed a free hotel, they are usually back collecting points with an even greater passion than before. The company now has thousands of people who have had more than one free flight.

He doesn't believe the decision last week to increase the points required for some flights will have a detrimental effect on the popularity of the free-to-belong-to programme.

Fly Buys enjoys huge market penetration, he says, both in consumer membership and in the retail and service companies which belong to the scheme. These account, he says, for a huge slice of household expenditure which makes it difficult for competitors to gain ground in the market.

"I don't think anyone thought Fly Buys would get a clear two-year run in the market before any competitor appeared," he says.

"I'm sure our competitors are kicking themselves for letting it run so long.

"I think it took a while for competitors to realise what was happening. The longer you leave any market initiative, the harder it is to counter it. If you give a competitor an opportunity to get a good foothold, it become increasingly difficult to knock it."

Fly Buys is operated by Loyalty New Zealand Ltd which has four shareholders, Shell New Zealand, Foodstuffs, State Insurance and the Bank of New Zealand.

Mr Hutchens joins Loyalty New Zealand Ltd on secondment from Shell New Zealand. He has had 22 years in retail marketing roles with the company here and in London, and was involved in setting up and running Shell's convenience stores. He replaces Steve Lobb, the person most closely associated with the development of the Fly Buys concept.