Helping Homebase build stronger customer relationsHips - How Aimia ensured a seamless transition from a legacy loyalty programme to Nectar
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Helping
Homebase build
stronger customer
relationships
How Aimia ensured a seamless
transition from a legacy loyalty
programme to Nectar
By Jan-Pieter Lips,
Managing Director, Nectar UK
1 / Building Stronger Relationships With Homebase
Introduction Homebase, the UK’s leading home improvement retailer, is recognised for its choice,
style and customer service across the wider home improvement market. Before joining Nectar in 2009,
Homebase operated the UK’s fourth largest loyalty programme, Spend & Save, for 18 years. Nectar
offered a coalition loyalty value proposition with broader appeal, which Homebase believed would
help the retailer deliver higher sales by leveraging Nectar’s ability to deliver cost effective, one-to-one
targeted marketing. Homebase saw this option as an attractive alternative to Spend & Save, which had
seen declining KPIs and had a more niche appeal.
> The Challenge
Spend & Save was an established loyalty
programme, with a high penetration of sales.
Homebase considered it critical that the
programme’s 4.2 million active members
were migrated seamlessly to Nectar.
The transition team immediately identified one
potential roadblock to a smooth transition to
Nectar: Spend & Save offered a 10% programme
funding rate to its top tier customers—a very
rich value proposition indeed. It was therefore
crucial that the team managed the transition to
the coalition in a way that maintained the strong
loyalty of these top tier customers. Fortunately,
Nectar’s strong UK brand, as well as its ability
to deliver Nectar points on a large proportion
of household spend across the Nectar partner
network, offered a potent alternative to
Homebase’s legacy loyalty programme.
2 / Building Stronger Relationships With Homebase
The Opportunity Nectar offered Homebase a loyalty proposition with broad consumer appeal, which
would allow the retailer to build stronger relationships with a larger portion of their customer base.
Armed with the richer data set and deep analytical insight that Nectar provides, Homebase would gain
a more complete view of customer behaviour—a view difficult to achieve in a proprietary loyalty scheme
operating in a low-frequency retail environment.
For Homebase, Nectar offered the following
core opportunities:
> Customer appeal
Nectar’s strong brand and broad earning
potential increased the overall appeal of the
loyalty proposition. At the same time, the
coalition offered Homebase higher sales
penetration and increased data capture.
> Data-based insight
With the rich data and deep customer insight
that Nectar provides, Homebase would gain a
more complete customer view that included
personal, attitudinal, behavioural and lifestyle
data. Leveraged appropriately, this data set
would give Homebase the ability to deliver
more targeted and relevant offers to
Homebase customers.
> Category performance
Spend & Save’s simple cash-back programme
design limited Homebase to promoting single
products in their offers. Nectar’s currency-based
structure would enable the retailer to reward
cross-sell category activity with bonus point
offers targeted to shift customer behaviour.
> Multi-Channel communications
Spend & Save relied on a traditional paper-
based direct mail model. Nectar, in contrast,
allows Homebase to communicate with
customers via highly targeted multi-channel
communications that include web, email, social
media and mobile platforms. The coalition
partner model, meanwhile, ensures that
programme communications are more cost
efficient, with costs shared across the network.
3 / Building Stronger Relationships With Homebase
The Solution To leverage the opportunities identified by the transition team, Nectar and Homebase
built a transition solution around three key activities.
The three key activities were:
> Home Movers Kit
Nectar redesigned their monthly coalition
mailing which is triggered by a Collector
changing addresses. The mailing includes a
map of the Collector’s new neighbourhood and
shows the nearest places to earn and redeem
Nectar points. This mailing allowed Homebase
to communicate with Collectors at a time in
which they are most likely to be considering
DIY and home purchases.
> Cross Sponsor Initiatives
Coalition loyalty programmes provide partners
with the unique opportunity to leverage their
mutual strengths and complementary customer
bases. Homebase took advantage of this
opportunity to create strong awareness of
its Nectar launch: Nectar’s fuel retail partner
BP supported the launch with POS and
forecourt promotions, while card-issuing
partner American Express supported it by
including a message in one of its direct mail
promotions during the launch period.
> Customer behaviour analytics
Post-launch, Nectar and Homebase performed
detailed data analysis on 12 months of robust
transactional data. This analysis revealed
eight distinct customer segments within
the Homebase customer universe. The
segmentation in turn provided the basis for
effective in-house KPI reporting and a robust
lifestyle marketing communication strategy.
4 / Building Stronger Relationships With Homebase
The Results The move to Nectar drove improved programme value perception that leveraged the
coalition’s broad consumer appeal.
Key positive results included:
> Spend & Save’s 4 million member customers
“The first year working have grown to over 7 million Nectar collectors
with Nectar exceeded our who now shop at Homebase.
expectations. Nectar is a clear > The Home Movers Kit direct mail campaign
advantage versus our competition: continues to achieve overall response rates of
more than 20%.
We have seven million active customers,
it has broader customer appeal, and delivers > The customer segmentation and lifestyle
higher sales. Using Nectar to connect with communication strategy continues to deliver
incremental sales.
our customers is a real opportunity for the
future. It’s an opportunity to drive sales by Promotional deals and events offer the customer
further savings on top of Homebase’s already
a focused programme of direct marketing, great prices, and the use of storewide or category-
to drive loyalty by rewarding our frequent, focused promotions helps to drive footfall and
incremental sales. Working together, Nectar and
loyal shoppers, and also to use the insight Homebase continue to build strong relationships
to improve the shopping experience with Homebase’s best customers.
for the customer.”
— Paul Loft, Managing Director,
Homebase
5 / Building Stronger Relationships With Homebase
Our Company We are a global leader in loyalty management. Our unique capabilities include
proven expertise in building proprietary loyalty strategies, launching and managing coalition loyalty
programmes, creating value through loyalty analytics and driving innovation in the emerging digital
and mobile spaces. We build and run loyalty programmes for ourselves and for some of the world’s best
brands. Customer data is at the heart of everything we do. We are Aimia. We inspire customer loyalty.
Visit us at aimia.com.
About the author
Jan-Pieter Lips, Managing Director, Nectar;
Managing Director, Middle East, Aimia
In the UK, Jan-Pieter is responsible for the
management and continued expansion of Nectar,
the UK’s largest loyalty programme, which has
been embraced by more than 18.5 million UK
consumers. Jan-Pieter is a leading loyalty industry
figure and is often sought out by media to discuss
current events that affect the industry.
Since joining Nectar, Jan-Pieter has held a series of
important roles with the company. Prior to being
appointed Managing Director, he was Director of
Client Development, where he was responsible for
the company’s efforts in developing relationships
with leading UK companies to participate as
Nectar partners. He was also responsible for
developing and launching Nectar Business, the
extension of the Nectar programme into the
business-to-business market.
From 2000 to 2002 Jan-Pieter was International
Business Development Director at Loyalty
Management International B.V. (LMI). Jan-Pieter’s
responsibilities included the development of
opportunities to launch multi-company loyalty
programme in markets worldwide. Prior to joining
LMI, Jan-Pieter worked at Loyalty Management
Netherlands BV, the company that operates
the Dutch Air Miles programme. Jan-Pieter
started his career at the leading Dutch retail
conglomerate Vendex.
Jan-Pieter was born and educated in The
Netherlands. He holds a degree in Business
Economics from the University of Amsterdam.You can also read
