Kachingo loyalty scheme coming to a country near you

WM Circle Logo

By: Wise Marketer Staff |

Posted on February 18, 2003

Kachingo loyalty scheme coming to a country near you

New Zealand's lottery-style coalition loyalty programme, Kachingo!, is to be introduced into other countries by The Atlantis Group, as a result of the acquisition of a 25% shareholding in Kachingo's operator, Global Online Systems. The programme is expected to target Australia, the USA, and perhaps the UK at a later date. Other countries may follow in time.

Following the share deal, TAG's managing director, Michael Whittaker, is to become the executive chairman of Global Online Systems, leading the company into those global territories in which TAG already has extensive experience.

Apart from its new involvement in the lottery-style Kachingo! programme, The Atlantis Group (TAG) already provides direct marketing and CRM services, and customer loyalty programmes (such as its patented GraphiCard system) to businesses throughout the world.

Kachingo as we know it Kachingo is a multi-partner (coalition) loyalty programme which rewards members with 'lines' of lottery numbers, printed on separate tickets at the point-of-sale.

Each line of numbers represents a free entry into Kachingo's various prize draws. At present, in New Zealand, the weekly jackpot is NZ$100,000 (around US$54,900, or UK£34,300), and a number of other, smaller prizes are also awarded each week.

Members accumulate game lines by buying goods from participating retail partners, which currently include Woolworths (food retailer), BigFresh, Price Chopper, BP fuels, and Super Liquor stores.

At Woolworths, BigFresh, and Price Chopper, a game line is awarded for each NZ$30 spent (or for each NZ$10 spent at any Woolworths located at a Gull Service Station). At BP and Super Liquor outlets, a game line is awarded for every NZ$25 spent.

The programme allows retail partners to get involved with, and have influence over, the marketing efforts that are made on their behalf.

Why did Atlantis get involved? In a private interview, Michael Whittaker told The Wise Marketer, "Atlantis has the goal of becoming a global CRM player, and our involvement in Kachingo, along with the integration of our back-end loyalty system, adds a great deal of weight to the proposition for international markets."

TAG's CRM offering is based on a back-end product called Connect, which was originally developed to handle the processing and analysis of data collected from the group's GraphiCard loyalty programme. The GraphiCard system (brought to market through TAG's subsidiary, Visible Results) is based on a thermochromic loyalty card, the front of which is re-written at every transaction, providing a visible record of points balances and promotional offers on the spot.

But it soon became apparent that Connect was capable of much more than simply processing data for the firm's GraphiCard clients. The Connect system has grown into a full CRM offering which can be 'plugged in' at the back end of any customer loyalty initiative to drive data storage, processing, analysis, supply chain, marketing, and internal communications.

Whittaker continued, "Because it's a web-based, distributed system that's flexible enough to adapt to any situation, our aim is to put Connect behind a number of different front-end technologies. We see the middle-tier market as a huge opportunity."

What's ahead? But what of Kachingo's potential export to other countries? At last, we have the definitive answers to the rumours flying around the industry for some time.

According to Whittaker, the first export is likely to be to Australia, where Atlantis already has extensive market-place experience. Australia's proximity to New Zealand makes it a logical first target, and discussions and negotiations are already underway with several potential retail partners.

The next country to be targeted is likely to be the USA, once again being the home of many of the firm's existing clients and loyalty programme installations. As in Australia, discussions are already underway with two major players, and an implementation of Kachingo remains at least a few months away.

"Kachingo-style loyalty programmes will be a tremendous opportunity in the USA, where around 90% of the major retail outlets have club card programmes that are getting stale, having had little real innovation in the past few years," added Whittaker. "Using those programmes as a base, overlaying Kachingo on top of them has the potential to reinvigorate the market."

So is Kachingo really coming to the United Kingdom, as rumour suggests? According to Whittaker, "It is no secret that there's a UK venture that has been set up to look at that possibility, and to see how the know-how from the New Zealand programme could benefit a UK implementation." He added, "Globally, people are ready for this concept, and acceptance levels are high."

Whittaker's direct comment on progress toward a UK version of Kachingo was simply: "In the UK, Global Online Systems has a joint venture with a group of well known marketers, and it is proceeding in a positive way. It is making sound progress."

Significant Kachanges! Kachingo's operation in New Zealand has taught its operators a lot about the operational, partnering, and marketing aspects of running such a programme. But although all of the know-how gained so far will be included in the development of the scheme in other countries, there will also be some significant changes and additions.

The first big change for future Kachingo implementations is the integration of TAG's Connect back-end system. New programmes will all be backed by the same systems that currently support Visible Results' GraphiCard programmes in the USA, Australia, Japan and Singapore.

Another background change will be in the way in which suppliers, retail partners, and non-retail partners are handled. Having the hindsight of the New Zealand programme, and bearing in mind the web-based partner-friendly features of Connect, some operational changes will take place to improve the handling of partner and supplier relationships.

Until now, the Kachingo programme has only taken on retail partners, such as food, drink, and fuel retailers. Future Kachingo launches are likely to also target non-retail partners, such as banks, airlines, household utilities, and mobile telephone service providers.

For example, a bank might choose to reward new mortgage customers with 20 game lines per month for the duration of their mortgage, or perhaps offer different numbers of game lines for opening different types of bank account. It has also been suggested that Kachingo game lines could be offered by airlines for online bookings, or by utilities for online bill payments. Mobile telephone services might consider offering game lines for e-top-up payments.

As a behavioural incentive, the programme's appeal is in getting an increasing number of free chances to win that all important, life changing jackpot. And while consumers wait to have their lives changed, an array of other smaller prizes will certainly keep them happy and entertained while they shop.

"What we have learned from Kachingo in New Zealand has given us a great insight into rolling out in any other market. It's an ideal 'village currency', and our research shows that consumers are ready to accept it," Whittaker concluded.

For more information: ·  Visit The Atlantis Group at http://www.tag.co.nz ·  Visit Kachingo! NZ at http://www.kachingo.co.nz