It has been difficult over these rocky past few weeks to find genuine success stories from the world of business but here is one which is positively heart-warming. Paul Ryan, a bricklayer from Bedford, spotted a money-making opportunity in the loyalty cards issued by Tesco.
Having acquired 14 cards, he bought bulk quantities of goods which were being sold at high discount but awarded high value bonus points. He sold the goods at car-boot sales and collected bonus payments. The vouchers Tesco sent him enabled Mr Ryan to spend four times their value with major suppliers.
With ingenuity, hard work and dedication, this brilliant entrepreneur quickly made £15,000 out of his loyalty cards. When Tesco discovered that, in a scandalous reversal of what normally happens, a supermarket was being exploited by a customer, there was a fearful fuss. Adopting, hilariously, the high moral tone of a sorrowful headmaster, the supermarket complained that Ryan was guilty of "a clear violation of the spirit and the letter of the agreement". His remaining 2,000 bonus points were confiscated, as were his 14 cards.
What makes the story a perfect parable of modern commercial life is not so much the Del-Boy enterprise of one man as the response, a combination of bullying and fake moral outrage, from the vastly profitable and openly ruthless supermarket chain. For Paul Ryan had exposed the hypocrisy that now sails under that useful flag of convenience, loyalty.
As a marketing tool, loyalty – or perhaps that should be "loyalty" – is very much in vogue. A recent survey by the marketing company GI Insight suggests that, among big businesses, there are today two and a half times more loyalty schemes than there were 10 years ago. More than 85 per cent of all households are said to have more than one bonus card.
But when it comes to buying and selling, loyalty is a one-way street. Indeed, to be a loyal customer today is more often than not an open invitation to be taken for a fool.
Various advisory watchdogs have taken to urging consumers to "shop around" but there are many people for whom the idea of shopping around before every acquisition is depressing and time-consuming. Life is short. Money is dull. It makes most sense, surely, to find a supplier of goods or utilities which delivers what we want at what seems to be a fair price, and stay with them – to be loyal in other words.
But it turns out that it makes no sense at all. Loyal customers are actually penalised for not engaging more busily in the market place. A bank will offer better terms to a new client than it will to some poor fool who has banked with the same company for years. It is incomparably easier to get a good deal on a mobile phone contract by moving from one server to the other.
In order to avoid being exploited, the modern customer must become adept at ducking and diving, checking prices, discounts and special deals. The process eats into the soul, reducing life to a haggle over the market stall in which the only ethics are those of the barrow-boy.
"Are you a regular customer?" The company which sells me house oil asks when I call to put in a ruinously expensive order. Until recently, I had thought the question was asked so that I could be offered the best possible terms out of gratitude for my regular custom. Far from it.
Yesterday, for the first time, I said that I was shopping around. What price had I been quoted? I told them. They matched it, dropping their price significantly, and seemed bewildered when I pointed out that regular customers who assumed that they were offered the best price without negotiation were being made to pay for their good faith.
In fact, whenever the word "loyalty" is used by a company, the customer would be well advised to keep a hand on his wallet. The Egg credit card company recently discovered that thousands of their loyal customers had paid off their debts and were therefore less profitable; they dumped them, claiming – dishonestly in many cases – that they were bad credit risk.
Customers who have put their money into cosy-sounding, local building societies have been treated even worse, with mortgages and savings schemes being sold to enable the companies to dabble in high-risk ventures on the world market. Maybe this is the way it has to be in Gordon Brown's fiscally minded Britain, but it seems a miserable way of behaving, and one which will leach into other areas of private morality.
Thank goodness that now and then someone like Paul Ryan comes along to out-spiv the spivs. He claims that there are 30,000 others working the old loyalty card trick. To those great entrepreneurs, there can only be one message: keep up the good work.Reuse content