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Connexions Card

A rewarding way to learn the loyalty game?

Since its launch in 2002, the aim of the UK Governments Department of Education and Skills has been to convince 16-19 year olds to commit to further learning beyond the compulsory period of education.

The Connexions Card is one of a range of Government sponsored measures to encourage numbers of young people to stay on in education and training. What is almost unique about the Connexions Card is that this is a government sponsored loyalty programme, operated by The Capita Group which is the UK's leading provider of integrated professional support service solutions. With over 17000 employees at more than 200 offices across the UK and revenues in excess of $1.7bn USD (refer www.capita.co.uk) the group interact with 33 million people on behalf of their clients from both public and private sectors.

Colloquy's European correspondent had invited the programme manager from Capita who runs this scheme, Chris Simpson, to the July Templeton Loyalty Marketing workshop in July to talk about the initiative. The interest from the delegates was such that we asked Chris for a full interview on the programme and he was delighted to agree.

We started by asking Chris about his background and how he arrived in the 'hot seat' at Connexionscard?

"I've spent 9 years in CRM and loyalty management in sales, consultancy, design and operation of a wide variety of programmes including Air Miles, ipoints, the Co-op and IBM. I was the CEO of the iPoints online loyalty programme when Capita approached me to develop and run the Connextions Card programme. The innovative nature of the idea and the chance to experience a public/ private sector initiative made it irresistible."

We agreed that the programme breaks new ground in the area of Government Private sector use of rewards to influence citizens behaviour. How did it start?

"The Connexions Card is one of a range of measures introduced by the Government aimed at enabling more young people to continue in education or training beyond 16. The Connexions Card aims to encourage young people to continue in learning at 16 in three ways:

• motivating young people to fulfil their potential by rewarding attendance and application through exciting and innovative rewards;
• enabling more young people to remain in learning by providing a range of discounts to help reduce the cost of learning, covering local transport, learning materials, leisure and the high street;
• improving the career and life choices that young people make by providing them with relevant information through a website (www.connexionscard.com).

"The roll out of the Connexions Card began in January 2002 and the card is now available to all 16-19 year olds across England. Eventually around 1 million young people should carry a Card. the card is voluntary and we rely on the goodwill of learning centres to adopt it in order to increase numbers and usage by young people.

"At present there are over 1060 learning centres actively using the card. This equates to a quarter of all post 16 establishments in England sending attendance data to the Connexions Card Information server to allow their students to earn points. Over 569,583 Cards have been issued to young people, and over 335,480 of these cardholders are receiving formal learning points."

The UK market in terms of consumer loyalty schemes is very crowded, how do you create interest and space in the member wallet?

"Connexions Card is a unique initiative with a narrow cohort of 16-19 year olds and so occupies a niche position in the market."

Do you view Nectar as a threat, challenge, irritation or irrelevant?

"If anything Nectar has helped Connexions Card by developing awareness and acceptability of loyalty programmes. Research conducted in October 2003 by Connexions Card found that 73 % 16-19 year olds in Greater London think that a loyalty card which offers a number of privileges would help to encourage people to stay in education after GCSEs. Previously in 2001, only 47% thought that the scheme would act as an incentive."

How important is it to facilitate further earning opportunities in the program?

"All 16-19 year olds in England are entitled to have a Connexions Card. On completion of their compulsory education, Connexions Card holders will be able to earn points for learning in three different ways:

• up to 100 points per week for attending learning provided by a school, college, work based trainer or other learning provider;
• up to 5 points per hour (up to a maximum of 1,000 per academic year) for undertaking voluntary activities, such as volunteering and sporting or cultural activities;
• discretionary points for achieving specific learning goals as agreed with a Connexions Service Personal Adviser or other learning adviser (up to a maximum of 2,000 per year)

In return the card provides young people with:

• rewards obtainable by redeeming points; the range of rewards will include products and services, the chance to try new experiences, money-can't-buy opportunities not otherwise available, 'masterclasses' - spending time with leaders in their field - and points pooling arrangements where individuals "club together" for a reward for their learning centres or local community;
• discounts on a wide range of goods and services including learning materials and public transport, obtainable by showing the card;
• a secure personal area on the website for accessing the points account and a telephone helpline;
• information on courses and career opportunities and other lifestyle matters on the website, including a CV builder;
• proof of age features.

"The Connexions Card Team are always looking at ways in which to improve delivery of the service and helping the card achieve its policy objectives and become a useful tool for learning centres."

We asked if Chris saw potential to extend the brand into other consumer product areas?

"Not consumer product areas but we are developing new ways for our commercial partners to gain permission based access to the young people in the programme."

Do you operate a revenue or profit contribution segmentation model?

"Oddly we don't do either as the scheme is a PPP contract between the Department for Education and Skills and Capita."

We asked if Chris saw technology such as the growth of MMS and SMS marketing impacting on your member dialogue?

"It already does. We deliver campaigns by SMS and offer mobile rewards and a short code service by which cardholders can request their points balance and PIN."

Do you plan to modify your rewards structure to make it more customized to member interests?

"Our rewards programme is structured by zone; through personalisation cardholders can customise their view of the site and the communications they receive from us; our campaign software enables us to segment our database by age; gender; location; rewards viewed; recency; rewards claimed. These can be used to deliver campaigns in a very targeted way, e.g. we recently had tickets for a professional football match for which we sent a reward alert to cardholders who had indicated an interest in sport within a 30 mile radius. We are also planning to work with BSM ( British School of Motoring driving tuition organisation) on an ongoing campaign with cardholders who are getting close to the legal age for driving in the UK."

What, if you faced launching Connexionscard in the UK again in the current environment, would you do differently in the overall scope of the scheme?

"We would have established relationships with national discounters early on and opted for a slower build up."

Do you see this sort of scheme extending into other Government initiatives e.g. the challenge of obesity and the non-smoking campaigns by the Department of Health?

"I am seeing more examples of this sort of thing, e.g. the Karrot scheme for 11-16s in Southwark.

"Local authorities and Central governments are likely to consider loyalty programmes as they have a proven record of influencing behaviour."

You are unusual as a programme in that your membership is in effect 'ejected' after age 20, do you see any potential for a 20-25 age group scheme based around assisting these new citizens to get started on the road to employment?

"Not at present although we may offer another existing scheme access to our cardholders if there was a benefit to the programme."

Clearly this is a very interesting example of the transfer of loyalty marketing and motivation techniques from the private to the public sector. As more and more democratically elected Governments around the world seek to engage with their voters, and especially the hard to access younger voters, I believe we can expect to see more of this type of initiative percolating into loyalty marketing thinking. After all, people with access to relevant information are beginning to challenge any type of authority. As Kjell Nordström (author with Jonas Ridderstråle of 'Funky Business') observed, "the stupid, loyal and humble customer, employee and citizen is dead".