The Nectar loyalty programme is operated by Loyalty Management UK (LMUK) on behalf of 17 sponsor companies, including retailers such as Sainsbury’s, Debenhams and BP.

Cardholders earn points at all participating outlets and can redeem at these and a variety of other partners in the scheme. More than half of UK households have a Nectar card.

From its inception, LMUK has used technology to provide loyalty-generating services to customers.

‘The evidence shows this to be very successful at generating incremental revenue for our partners,’ says Roger Sniezek, LMUK ecommerce director.

‘We get more than one million hits to our web site each month. The digital channels are very important to people. When we went live with our new web site in February last year, we saw a large reduction in calls to our call centre because the web site could deal with those queries effectively.’

A large database of customer information is used to generate highly personalised communications with cardholders.

‘We send out statements four times a year, they are large, personalised mailings,’ says Sniezek. ‘The last mailing had five or six million unique variations. It is an extremely complex, personalised, highly targeted mailing.’ The company recently launched a new eStores facility, allowing customers to buy goods through its web site from popular ecommerce providers, such as Amazon and eBay, and earn Nectar points.

‘We have used some clever embedding technology that allows us to put other people’s web sites into ours and put our look and feel on top of it. And we have interaction between our database and their systems,’ says Sniezek.

And the firm is looking to develop new ways of allowing customers to redeem points at a variety of locations.

‘We have a strategy of moving to electronic redemption, either through the web site or allowing people to turn up with their card and swipe it at a retailer to receive their award,’ says Sniezek.

‘We have built something akin to the Visa/Mastercard network that allows us to do this at Argos, Tussauds Group and Thomson shops. You turn up, get your reward, it hits our database and we authorise the transaction. Our strategy is to move further to all of the points earned being electronic.’

The key to successful use of IT for supporting loyalty is to make dealing with the company simple, says Sniezek.

‘Our strategy is about making it as easy and safe as possible for the collector,’ he says. ‘If you put barriers in the way, technological or otherwise, to people redeeming or transacting with you, then they will give up.’