Branson in mobiles loyalty ploy

VIRGIN Mobile has launched a loyalty scheme in the first example of a concerted effort at cross-selling between different parts of Sir Richard Branson's empire.

The scheme, dubbed 'Flash-It', gives the mobile operator's customers £1 of airtime for every £10 they spend in either Virgin Megastores or Virgin Megastores Xpress.

Virgin said its loyalty return of 10% was more than twice that of the next best scheme Boots' Advantage card at 4%, and much better than Nectar's 2% or Tesco Clubcard's 1%.

Customers, who must show their Virgin phone at the till, receive their reward immediately in the shape of scratch off, top-up phone cards.

Virgin Mobile, which claims 2.8m customers, is stepping up the roll-out of its shops-within-shops inside Megastores and Xpresses.

It has tested 10 Virgin Mobile Specialist stores across London and the South-East for the past couple of months and said there had been an immediate 50% rise in phone sales in those stores. By the end of next year it plans to have put the concept into all 160 Virgin stores across the country.

The moves come not only as Virgin Mobile tries to spur customer growth but also as recorded music sales across the entire sector have plummeted.

Global sales of recorded music have fallen 20% over the past three years as internet piracy and a lack of megahits have hurt the industry. In the first three months of 2003 alone UK sales fell by more than 13%. Industry leader HMV said earlier this month that DVD sales had driven growth in its stores over the past year and added that DVD and video sales could outstrip those of music CDs within a couple of years.

Virgin's Flash-It has run successfully in Australia since the start of this year, where it has been extended to the airline Virgin Blue and third-party shops, clubs, bars and restaurants. Branson said: 'The logic behind Flash-It is simple: Virgin Mobile values its customers. We wanted to find a simple way of giving customers something that is instant and meaningful.'

Virgin is discussing extending Flash-It to other companies across the empire, which include airlines, railways, cosmetics, holidays and health clubs.

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