One in four Australians is a member of the Fly Buys loyalty card program, and some of Australia's largest retailers and service providers - including Myer, Grace Bros, Shell and Coles - are participants.  That makes it one of the largest customer relationship operations in Australia.

What's more, Fly Buys customers are known to regard their quarterly statements in the same manner as a bank statement or a bill.  Accuracy and timeliness are vital - and the goodwill and reputations of the leading businesses involved in the program are at stake.

Almost incredibly then, this massive program is run out of a single office in Melbourne, where Loyalty Pacific Pty Ltd coordinates elements such as membership applications, the collation of Fly Buys points, award redemptions, direct mail promotions and the mailout of quarterly statements.

"Since its inception, Loyalty Pacific has been a small office with most of the major services outsourced," explains the company's general manager Doug Crocket.  "We don't try to be all things to all people.  There are good people who are specialists in these areas whom we are quite happy to use, in lieu of having to build that capability in-house."

We are one of those key partners.  We have been involved in the program since its genesis in the mid-nineties, printing, collating and distributing the all important Points Summary packages, and assisting Loyalty Pacific with the capture of membership application and award redemption information received by mail.

Loyalty Pacific sends out Points Summary packs four times a year to its Fly Buys members, a process that is complex because of the high degree of individualisation involved, because of its sheer size - more than 9 million packs were delivered in 2001 - and because of the need to nurture the relationships between member companies and their customers.

"It involves very large volume," says Crocket.  "If we got it wrong it would take a lot of time, effort and money to fix it up.  So it's very important that we get it right." 

For instance, the number of records received is reconciled against the number expected; the volume of printed statements is reconciled against the expected volume; and the amount of inserted packs is reconciled against the expected amount.  Barcoding and sequential numbering systems play a vital role in these processes.

"It is a complicated issue to run, in terms of the Points Summary packs," adds Crocket.  Any one pack will include a points statement, an Escape magazine and a range of inserts tailored to that particular member.

These inserts are determined using a complex set of criteria that can involve either geography or customer profile - or both.  For example, some member companies are state-based so offers go only to members in that state.  Alternatively, offers may go to members who have - or haven't - purchased from a particular company before.

"It can create a very complicated set of criteria that you have to be able to print to and change stock for at the right time," says Crocket.  "The process is very complicated - and it is expected to become even more complicated over time.

"I've never worked out the permutations possible," he adds, "but in theory you could end up with every individual customer receiving a different pack.  It really is a mass market of one, where the intention always is to get the best fit in terms of offers, and in terms of appropriateness of the material we send out to the members."

The quarterly mailouts also involve timing issues tied to the needs of both the member companies and Fly Buys card holders.  "The timing of the mailouts is always an area of creative tension, where we try to balance the needs of our members and balance the needs of our participating retailers," says Crocket.

Retailers want inserts in the hands of card holders as soon as possible so they have plenty of time to take up an offer but, at the same time, statement delivery needs to be spread out so that Fly Buys customer care centres can maintain their high standard of service.

"Calls jump dramatically during a Points Summary period, so the longer we can stretch that out the better from the point of view of being able to handle peak demand," Crocket says.

The quarterly Fly Buys mailout is often the biggest direct mail project going on in Australia at any one time, says Tim Holroyd, Business Development Manager.

"Logistically, it's a huge exercise," he says.  "You're looking at about eight semi-trailers full of flyers and brochures and documents that have to be mailed out around Australia.

"We treat it as a major project on its own every time it runs." 

Loyalty Pacific has a database of about 2.5 million active Fly Buys households (approximately 5.4 million active card holders).