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The Tartan Thistle Privilege programme

Clan loyalty, the spirit of 1745

Scotland. The image conjured up is one of a very distinctive national dress, a hundred different single malt Scotch whiskies, bagpipe music, astonishing landscape and lochs shrouded in mists. Add a generous dose of national folklore, tartan kilts, warlike clans and a fierce pride in national identity and you have a recipe for a culture that, combined with an estimated four Scots living abroad for every one living in the homeland, has extended far beyond the national borders.

Scotland has exported to the world many of its talented sons and daughters to enrich society with great Scottish inventions that cover a range from logarithm tables, via electric light bulbs, pneumatic tyres, telephones, penicillin and TV, to that great national game: golf! Now, the very essence of being 'Scottish' is to be exported in a community-based consumer loyalty programme created by 1745 Limited.

The vision of Lynne Cadenhead, featured in this article, is to stimulate and develop the sense of belonging to and passion for Scotland of the global Scottish diaspora, and in doing so to create both a uniquely loyal community of members who will satisfy this passion and a profitable company, through developing and marketing a range of quality Scottish products and services that the members desire.

Your European correspondent interviewed Lynne Cadenhead, CEO of 1745 Limited, which is the trading company behind the Tartan Thistle Privilege Programme initiative. Lynne is an incredibly energetic, enthusiastic Scottish businesswoman. This programme seemed particularly appropriate for Colloquy readers, since the initial market for the Tartan Thistle Privilege Programme will be the individuals of Scots descent now living in the USA and Canada.

We asked Lynne, how did she think of the idea for Tartan Thistle Privilege Programme?

"The idea initially came from previous involvement with a Tartan credit card project, where the concept was to create a community that would connect with the Scottish passion/psyche for Scotland and develop a global lifestyle built around the brand that is 'Scotland'.

"Having met and spoken to many people of Scottish descent around the world they will say 'Scotland is a dream faraway' and we wanted to 'tap in' to that desire to 'bring Scotland closer' to them. The decision to move from a Tartan credit card to a membership community and loyalty card is to enable Scots in the USA and UK, and eventually around the world, to earn rewards for buying Scottish goods and services and therefore achieve their dreams to 'come home to Scotland', whatever their choice of payment. The original Tartan credit card worked well, but we recognised that it is still limiting to restrict the potential community to only those future members who wanted or qualified for a Tartan credit card."

What is the potential membership base in the USA, UK and general global dispersed Scottish community?

"Research indicates that there are estimated to be over 60m Diaspora (dispersed persons of national origin) Scots around the globe with high populations settled in the USA, Canada, New Zealand, as well as the UK. Our target with the Tartan Thistle Privilege Programme is to recruit around 4 or 5m families but there is no ceiling to the number of members. Our research has indicated that 10% of the total Diaspora are true Scots enthusiasts - passionate about the land of their forefathers and strongly involved in the activities of Scottish organisations, wherever they live." She added, "However, whilst they are keen to visit Scotland, these enthusiasts perceive it as expensive and difficult to get to. By working together with a range of partners, 1745's new initiative will help overcome these misconceptions and work to encourage more tourists and increased spend in Scotland."

Do you think you have any competitors for the idea as a threat or challenge?

"There are several Scottish organisations and Clan Association businesses that promote Scotland and Scottish heritage but none are developing a Scots database nor providing such a wide range of Scottish goods and services."

What is the Tartan Thistle Privilege card brand CVP (customer value proposition)?

"The CVP is under development at the moment and we are negotiating with several Scottish business partners with a plan to offer points for purchasing products and services plus many soft benefits, such as an online Scottish magazine and daily newsreel, certificates of membership, links to clans, clan chat rooms as well as discounts on merchandise including kilts, Scottish memorabilia, travel, etc. Members will pay a joining fee and will receive a welcome pack worth over US$100 of exclusive merchandise, discounts etc."

What are the main challenges you face in developing and launching the scheme?

"We recognise that in today's loyalty market, many programmes are stale and uninteresting and fail to recognise member likes/dislikes. 1745 Limited intend to develop a programme that involves Tartan Thistle Privilege members and offers benefits and rewards that they want and to help them achieve their dream. We need a sophisticated loyalty solutions platform that enables us to collect lifestyle data as well as transactional data to understand what can influence the behaviour of our members. We have been working to create the infrastructure, both commercial and technical, to deliver this proposition. Best in class solutions have been reviewed by my management team and external consultants and we are confident that we have now created a world class platform to support the vision of 1745 Limited."

We asked Lynne for more details on this aspect of the plan.

"One of the main challenges is to create a programme whereby members can earn and burn points from products/services around the globe. The programme will launch as an online scheme initially and members will earn points by purchasing products/services via the internet and will then develop to include issuing partners in the retail sectors. Market research has shown that over 70% of potential members have access to the internet."

1745 Limited received a grant from TIDA (Tourism Innovation Development Award), part of Scottish Enterprise, to help develop the new initiative.

Will you be seeking to create a 'niche' coalition and what are the target sectors in which you hope to sign up partners?

"We certainly believe that a 'niche' coalition is the way to go. It is important that members can earn points/rewards from many sources to encourage regular activity and high redemption rates. 1745 are in negotiations with main sponsors in banking, credit cards, insurance, retail, travel, genealogy, telecoms and media. Reward partners will include kilt makers, Scottish CDs/DVDs, travel and leisure, airline tickets, Scottish whisky and food, crafts and memorabilia and charities."

Do you see the potential to extend the brand into other consumer product areas?

"It is a business model that could easily work with other nationalities that have a strong and identifiable culture e.g. the extended Irish community globally, but our focus right now is on extended Scottish community."

What are your plans to involve to other high value/ high prestige brand partners?

"It is our intention to seek only high quality brands with strong associations to Scotland and Scottish heritage. We will continue to add partners and sponsors as the programme develops."

How will the Tartan Thistle Privilege scheme co-exist with a heavily promoted Air Miles currency or other large scale membership programmes?

"Whilst most of our members want to travel to Scotland and find out more about their heritage, they are not necessarily Frequent Flyers and therefore need to collect points via other day to day purchases. We do not intend to compete with Air Miles but are talking to a major Airline and may offer a currency exchange option to our members. As flight prices are so low and highly competitive, then we believe that Frequent Flyer programmes have only limited appeal."

What, in your opinion, is the future of the Tartan Thistle Privilege programme?

"Our 3-5 year business plan is to develop a robust, future-proofed programme that will be recognised as 'best in class' and delivers the required rewards and benefits to Tartan Thistle Privilege members and provides a profit to our sponsors/partners. We are forecasting profits in excess of £4m by 2006."

The innovative thinking behind this project is typified in two ideas that Lynne has created with her passionate focus on adding real value for the membership:

• 1745 are creating 'The 1745 Foundation' to endorse Scottish heritage and provide charitable funding to Scottish events and activities around the World.
• 1745 have also created a board game that is available in both physical and electronic versions called 'Scottish Quest' to support the launch of the Tartan Thistle Privilege community. It is an exciting new game designed to "educate, entertain and enlighten" players about many different aspects of Scotland. Designed specifically in mind for those of Scottish descent who are keen to discover more about the land of their forefathers, it's hugely entertaining, and not surprisingly, very competitive! Players complete a scenic journey around Scotland, answering a range of questions on culture, heritage, history, geography, nature and modern Scotland.

Whilst these are early days for this project, your correspondent was left in no doubt that Lynne and her team will deliver on their vision. They are combining both hard and soft benefits in a 'niche' coalition approach that should play to the global market of dispersed Scots. We live in an age of dysfunctional and extended families, global travel combined with global terror. Consumers are increasingly seeking to engage with products and services that offer them more than functional satisfaction. Spiritual and emotional links are playing an increasing role in the design of consumer loyalty in a crowded global market. 1745 recognise this trend and have designed their programme to incorporate these social and psychological trends. A Clan Chief inherits power but remains accountable to the Clan. In England, the monarch is Queen of England; in Scotland, she is Queen of Scots: a subtle, but important, distinction.

The Tartan Thistle Privilege programme recognises that it is serving the community of member interests and not just its shareholders. This is 21^st century thinking, delivered with nostalgia for the past and the dream of travel to a distant land: a powerfully effective combination.