Nectar: Making Loyalty Pay

Loyalty Management UK (LMUK) manages British supermarket chain Sainsbury's frequent-shopper card program, called Nectar. LMUK uses Sainsbury's sponsorship as the magnet to attract other retailers into a profitable, multisponsor loyalty network. Examines the economics and consumer behavior of retail loyalty programs and allows comparison of the brand-building power of a single-sponsor program to the promotional power of a multisponsor program. Describes the launch of the program and its first 18 months of growth, at the end of which it is the largest loyalty program in Britain. Illustrates the use of the program to deliver customer-specific promotions to the 13.5 million-member database and how the program evaluates the success or failure of specific promotions.