Are U.K. Loyalty Overlays Eccentric?

Using supermarket points to pay for funerals? Frequent-flier miles for cats, dogs and ferrets? Only in the U.K.

Tesco and Virgin Atlantic, two of the U.K.’s biggest loyalty marketers, have added overlays that signal how much more developed—and eccentric—loyalty marketing is in the U.K. than in the U.S.

Grocer Tesco has cut a deal with Dignity Caring Funeral Services that lets Tesco’s 14 million-plus Clubcard members pay for their funerals with Clubcard points. Members can exchange GBP 2.50 in Clubcard vouchers (about $4.53) for GBP 10.00 towards their pre-paid Dignity Funeral Plan. (Dignity has four pre-paid plans to choose from, and 500 funeral directors across the U.K.)

Tesco reportedly polled 10,000 Clubcard customers about offering funeral planning, and 1,000 approved of the idea.

Meanwhile, Virgin Atlantic has launched Passport for Pets, offering a range of premiums that escalates as pets rack up more miles. (Pets also can score miles for their owners’ Flying Club frequent-flier accounts.) Registered dogs, cats and ferrets—yes, ferrets—get a “welcome onboard” pack on their first flight, with a T-shirt and sparkly collar tag for dogs; a toy mouse named Red and a Virgin Atlantic collar tag for cats; or a flying jacket and collar tag for ferrets.

After five flights, pets qualify for premiums such as a Virgin bowl and non-slip placemat, or a donation of GBP 50 to a registered animal charity. Or the pet’s points can be transferred to 1,000 Flying Club miles for the owner.

Premiums escalate at 10, 15 and 20 flights, ranging from Burberry pedicures to Prada or Gucci clothes or a portrait by celebrity-pet painter Cindy Lass. Members keep track of flights by collecting pawprints in a passport issued by Virgin.

Here in the U.S., United Airlines ran a spring promo, United Pet Class, that gave United Plus members bonus miles when their pets flew with them (Feb. 2 PROMO P&I). Humans could redeem the miles for flight upgrades, music downloads or newspaper subscriptions. Midwest Airlines’ Premier Pet program lets pets earn miles; pet owners also can redeem their own miles for free flights for their pets.

“Loyalty programs in the U.K. really are different from the U.S., and people swear by the Tesco, Boots, Sainsbury and other programs. The reason is: U.K. marketers use the data to help improve their relationships with their customers,” said marketing consultant and Northwestern University professor Don Schultz. “Tesco knows enough about its customers that it is likely that funerals are something which are important to the people and something in which Tesco can provide some value. Same is true for Virgin. Knowing what customers want and then making those values available to customers is what loyalty is really all about.”

“Would any of this work in the U.S.? Probably not. We don’t really have any true loyalty programs since everything is tied to a price discount. Everyone gets the same price discount, and if you don’t have a card, the cashier will run hers through for you. You can’t discount your way into a relationship with a customer. That has been proven time and again in the U.S.,” Schultz added.

“So, are the programs wacky? Only if you think giving customers what they want for continuing to be your customer is wacky,” he said. “Maybe the real wackos are the U.S. marketers who think every relationship has a price tag.”