10 Standout Episodes: Live Reflections from International Loyalty Leaders Summit (#711)

Amanda: So we thought it would be a good idea to actually bring you the highlights, because it’s impossible for everyone.

Amanda: There’s, I think, now over 600 episodes of Let’s Talk Loyalty, Loyalty TV.

Amanda: So if you’re ever looking for content about any industry, about any individual who’s been on it, it’s there.

Amanda: It’s an amazing series.

Carly: First of all, I want to say thank you.

Carly: It’s awesome to be here.

Carly: And thanks, a big thanks to Amanda.

Amanda: Amazing to have you, Carly.

Carly: It’s a privilege.

Carly: We don’t get to see each other very often in person, so to actually be here and doing an episode as such together is pretty cool.

Carly: We’re kicking off today with, this guy is an icon of loyalty in Australia.

Carly: If you’re in Australia, everybody knows him.

Carly: Phil Hawkins launched from day one, the probably one of the biggest and longest standing retail loyalty programs in Australia, Flybuys.

Carly: Now this is controversial.

Carly: Not everyone’s gonna love this.

Carly: He’s definitely against hearing programs.

Amanda: My first guest I want to share with you is Michael Smith.

Amanda: If you don’t know him, you need to know him because every single one of us faces loyalty fraud.

Amanda: As he says in his quote there, you can’t avoid loyalty fraud.

Amanda: The minute you launch a loyalty program, there will be fraud.

Carly: Air New Zealand actually have loyalty as one of their three strategic pillars across the airline.

Carly: So grow domestic, optimize international and lift loyalty.

Carly: And I take it extremely seriously.

Amanda: That actually leads really nicely into the conversation I had with the team from IAG Loyalty.

Amanda: In this podcast, they talk about the shift from exactly that, just an airline currency into a full, consolidated approach for their members.

Amanda: They’ve now got 40 million members.

Amanda: They’ve got 125 partners.

Amanda: A really interesting podcast that starts out as an almost aviation journey into full partner ecosystem.

Carly: I couldn’t possibly do this without putting Jackie up.

Carly: Now I’ll preface it.

Carly: If you do want to watch it, get ready.

Carly: Everybody cries.

Carly: Her story is beautiful.

Carly: Her passion is amazing.

Carly: And not only does Jackie represent loyalty for the Red Cross Lifeblood Program in Australia, which is literally saving lives, which we’ll get to.

Carly: And we love the statement, loyalty saves lives.

Carly: Who doesn’t love that?

SPEAKER_4: One last fun question.

SPEAKER_4: What’s the worst thing that’s happened during a recording?

Carly: Oh, I’ve got one.

Paula: Hello, and welcome to Let’s Talk Loyalty and Loyalty TV, a show for loyalty marketing professionals.

Paula: I’m Paula Thomas, the founder and CEO of Let’s Talk Loyalty and Loyalty TV, where we feature insightful conversations with loyalty professionals from the world’s leading brands.

Paula: If you work in loyalty marketing, join us every week to hear the latest ideas and insights for loyalty marketing specialists around the world.

Amanda: Let’s hear from the founder of Let’s Talk Loyalty and Loyalty TV.

Paula: Hello everyone, and I’m delighted to be able to join you by video today for this iconic annual event, the International Leaders in Loyalty Summit.

Paula: For anyone who doesn’t know me, my name is Paula Thomas.

Paula: I’m the founder and CEO of Let’s Talk Loyalty, the Industries-Lated Podcast, and also Loyalty TV, our online TV channel.

Paula: I was thrilled to be able to join Amanda and the team for your incredible conference this time last year.

Paula: Amanda was actually our very first guest host that we ever had on Let’s Talk Loyalty, and she’s been creating incredible episodes with amazing guests for our global audience for over three years.

Paula: And we then invited Carly Neubauer as another guest host on our show, given her amazing expertise in the Australian market.

Paula: I was totally thrilled when Amanda invited Carly to this panel session, where they’re together sharing their 10 best moments on Let’s Talk Loyalty and Loyalty TV.

Paula: I wish I could be with you there again in person this year, but as I can’t, I wanted to let you know I’m there in spirit.

Paula: For anyone who would like to connect with me, please do reach out on LinkedIn.

Paula: I’d love to connect with all of you there.

Paula: I can’t wait to hear Amanda and Carly’s top 10 moments as hosts of Let’s Talk Loyalty and Loyalty TV.

Amanda: So we thought it would be a good idea to actually bring you the highlights, because it’s impossible for everyone.

Amanda: There’s, I think, now over 600 episodes of Let’s Talk Loyalty, Loyalty TV.

Amanda: So if you’re ever looking for content about any industry, about any individual who’s been on it, it’s there.

Amanda: It’s an amazing series.

Amanda: But we can’t expect everyone to watch 600 episodes times 40 minutes.

Amanda: So we’ve chosen our top five each to share with you a couple of minutes on each one.

Carly: First of all, I want to say thank you.

Carly: It’s awesome to be here and thanks, a big thanks to Amanda.

Amanda: Amazing to have you, Carly.

Carly: It’s a privilege.

Carly: We don’t get to see each other very often in person.

Carly: And so to actually be here and doing an episode as such together is pretty cool.

Carly: I also have this huge privilege of, I call it my learning in loyalty, meeting amazing leaders in loyalty and spending an hour or two with them to then understand about their programs and their expertise.

Carly: And you learn so much by meeting with these amazing people.

Carly: We’re kicking off today with this guy is an icon of loyalty in Australia.

Carly: If you’re in Australia, everybody knows him.

Carly: Phil Hawkins launched from day one, probably one of the biggest and longest standing retail loyalty programs in Australia, Flybys.

Carly: And the minute you say Phil Hawkins, everyone knows Flybys.

Carly: It’s his program.

Carly: He was there for 30 years, so from day one, from scratch, and all the different evolutions of the program.

Carly: But they’re really cool things.

Carly: We try and pull out a few key things that each of these fabulous guests told us about.

Carly: He has written an article literally called Tears End in Tears.

Carly: Now, this is controversial.

Carly: Not everyone’s going to love this.

Carly: And also, we did debate this and disagree.

Carly: Because he’s definitely against tearing programs.

Carly: Now, obviously, we’re in a room full of loyalty people.

Carly: We may not all agree.

Carly: However, one thing I did love is that he said that middle tier, the silver tier, can be really tricky to show return on investment.

Carly: And I saw anyone that’s worked in loyalty may have faced that.

Carly: The other thing he talked about was surprise and delight.

Carly: He’s a strong advocate for it.

Carly: No matter how big or small the program, surprise and delight still goes a really long way in loyalty.

Carly: And simplicity, Dino, I think, called it out earlier, but this one stands true for a very long time and for many, many years.

Carly: Simplicity and loyalty is just key.

Carly: So coming from an extremely wise professional, I love that one.

Amanda: Yeah, and I’m not even in Australia and Phil Hawkins is so well known.

Amanda: So wonderful.

Amanda: My first guest I want to share with you is Michael Smith.

Amanda: Now, he is famous in the world of loyalty.

Amanda: And if you don’t know him, you need to know him because every single one of us faces loyalty fraud.

Amanda: I had the privilege of working with one of our clients last week in a workshop where we had all of the operators together and we bashed out fraud as best as we could.

Amanda: And we knew we’d only scratched the surface, but we were trying to make progress.

Amanda: And Michael, as he says in his quote there, you can’t avoid loyalty fraud.

Amanda: The minute you launch a loyalty program, there will be fraud.

Amanda: And some new operators find that terribly disconcerting.

Amanda: They’re like, come on, Amanda, out of all your years of experience, surely we can eliminate it completely.

Amanda: The answer is you can’t, but you can put a lot in place to try and minimize it and manage it.

Amanda: And he’s the chief fraud officer at the Loyalty Security Alliance.

Amanda: He actually works for AI Events, which was around way before AI, per se, was around.

Amanda: So he tends not to use that anymore.

Amanda: But he talks about the different types of fraud and how he described it was, there’s friendly fraud.

Amanda: So, how many of you have been in Let’s Just Use, Checkers Extra Savings with a discount at Poz?

Amanda: And the lady behind you hasn’t got a card, and you say, it’s okay, use mine.

Amanda: Or you go to Clicks and you’ve got your daughter with you, and you say, okay, just use mine.

Amanda: So that might not feel like fraud, but you are giving benefit to another loyalty account.

Amanda: But it’s friendly fraud.

Amanda: You’re not making a victim out of any individual.

Amanda: You’re screwing up the data profile, but you’re not creating a victim type response.

Amanda: Then there’s traditional fraud, which is most typically by staff members.

Amanda: So I remember having a great discussion with Volcek from Comock a couple of years ago, where we talked about fraud.

Amanda: And then my favorite LinkedIn post I think I’ve ever read was yours when you went on holiday, and you went to the fuel station and you didn’t have your loyalty card, she asked you for the loyalty card, the lady filling up your tank.

Amanda: And she said, okay, no problem.

Amanda: And she pulled out her card and you knew that she was committing fraud, she knew that you knew, and so on.

Amanda: And that’s the biggest, that’s probably the biggest fraud that most of you face in every type of industry.

Amanda: You can’t stop it.

Amanda: Like the second your program’s launched, your staff members will work out how to get a benefit from it.

Amanda: And then finally he described, and obviously there’s a lot more complexity in this, so we’re oversimplifying it, but he described organized fraud.

Amanda: And that’s the one with the most criminality attached to it.

Amanda: Whether it’s, and what he described, he said, imagine a hotel loyalty program, and the organization is pulling out the ability to redeem like three nights at a time from members’ accounts.

Amanda: So they’re actually processing these redemptions without the members even knowing.

Amanda: And they worked out that the crime squad behind it was actually running a prostitution business and using the hotel rooms.

Amanda: Just a little bit of like, part of the loyalty speak.

Amanda: So, so then we talk about the mindset of fraudsters, and what he really said is, when it gets to the organized fraud, they will push and they will push and they will push until something falls.

Amanda: So it’s a push, like they won’t stop, whether it’s created by a bot or a human.

Amanda: It’s going to get pushed, so if you’ve got cracks in your system, they’ll find it.

Amanda: And last but not least, he shared the Qantas story, and Sarah shared with us earlier around the Qantas data breach.

Amanda: It was this year, hey Sarah, I think, and how many millions of members’ accounts had been breached.

Amanda: And I remember reading about it thinking like, whew, that’s a biggie.

Amanda: And he talked about something very positive, however, on the Qantas side in fraud, that they picked up their anti-fraud systems, picked up through data tracking, that there was this huge redemption coming out of a member’s account.

Amanda: It could have been normal.

Amanda: It could have been around the world first class trips, something not too unusual.

Amanda: But they tracked that the customer, the frequent flyer was on an A380 somewhere in the mid-Pacific without Wi-Fi enabled on that aircraft.

Amanda: So that passenger couldn’t have been making that redemption.

Amanda: And that is a level of data intelligence that we all want to have to be able to prevent fraud.

Amanda: So an amazing podcast worth listening to.

Amanda: Any of you in Loyalty, you’re going to be faced with fraud.

Amanda: You need to listen to this one.

Carly: That’s just scary though, right?

Amanda: I know.

Carly: Okay, so I chose Robert Harker.

Carly: He was a really phenomenal guest and so much fun to talk to.

Carly: He was running one of the biggest loyalty programs within one of our larger health insurers in Australia.

Carly: Now this goes down to his experience and background and real personal drive and loyalty.

Carly: He was adamant and he achieved bringing loyalty, ingraining it through the entire business.

Carly: So one thing that was really cool, he described, is he created loyalty squads, loyalty tribes.

Carly: So no matter which department you worked in, whether it was finance, customer care, et cetera, you had your squads and your tribes and it was really, really fun.

Carly: So he really created that full experience that everyone had loyalty top of mind.

Carly: But he didn’t have this silo where loyalty is off to the side.

Carly: We’ve all probably seen that and experienced it where, yes, there’s the marketing budget, but loyalty is over here.

Carly: He absolutely advocated for loyalty being fully ingrained through the business.

Carly: It worked really well to the point that they could quantify the value every member was receiving.

Carly: They had a discount reward style program, but to the point they even reminded all members of how much value they had accrued.

Carly: And if they weren’t redeeming it quick enough, they would call them, their customer care center would actually call them, remind people, don’t forget you’ve got value here.

Carly: So it really generated this really lovely relationship with their members, that yes, members were getting this discount and they were getting the value, but if they forgot, people were looking after them and really having that two-way relationship to remind people to use the value they were accruing.

Carly: And I thought that was just a really great example of really bringing loyalty through every facet of the business and not just that experience of oh yeah, there’s a loyalty program on the side of the core business.

Carly: So he was really great and just came from such a wealth of experience in the industry.

Carly: Lots and lots of fun to talk to, so I really enjoyed this one.

Amanda: Next we move to a global brand, obviously more US-centric, head office in the US, but I remember growing up with TGI Fridays.

Amanda: As a teenager, it was almost the equivalent of a Rock-a-Mummers.

Amanda: And Lindsay actually has since left TGI Fridays, but at the time, they were relaunching Friday Rewards.

Amanda: And they were operating across 55 countries.

Amanda: I mean, that’s enormous.

Amanda: So she had the real challenge of local versus global, so global program but being adapted to be relevant in the local market.

Amanda: But what I loved about the reason I pulled this out as an example was actually the second point on the screen around how they worked with their staff for the reorganization.

Amanda: But first of all, how she described it, she said, as restaurant hospitality folk, we’re real hustlers.

Amanda: She says, like, we have to hustle to get it right.

Amanda: Because imagine when someone comes in and places an order.

Amanda: And it made me laugh so much because this is exactly me.

Amanda: Anyone who’s sat in a restaurant with me will know exactly what I’m saying.

Amanda: And they go, like, so with my salad, I want this, but I don’t want that.

Amanda: And it’s got to be like this.

Amanda: And please don’t forget this.

Amanda: And so on.

Amanda: And I was laughing because I’m like, and then she’s, please swap this with this.

Amanda: And I need that to be hot.

Amanda: And then my daughter wants that.

Amanda: Whereas in retailing, you say, I’d like this blouse.

Amanda: And I’d like it in size 12 and black, please.

Amanda: Okay, I’m not doing any service for the retailers in the room.

Amanda: I know it’s a lot more complicated than that.

Amanda: But I think in the restaurant industry, because it’s the service industry and the complexity of it.

Amanda: So she really just talked about needing to be hustlers.

Amanda: And I think we’ve heard this morning from Voyu and your team, I’m sure, will be nodding your heads.

Amanda: And anyone else in the hospitality industry will agree.

Amanda: But on to the second point around how they took the server’s feedback as the main input to redesign their program.

Amanda: And it really appealed to me because in truth, in the work we do when we redesign programs or audit programs, we always look at how much is your program loved by your own people?

Amanda: Do they love it because it’s great?

Amanda: Or do they love it because it’s easy to execute?

Amanda: Or do they hate it because it’s difficult to execute?

Amanda: And I think particularly in restaurants, it’s very difficult to execute.

Amanda: The poor server is running between Poz and the table and the credit card machine, and it’s a different swipe for loyalty versus credit card possibly until obviously now we’ve got better technology capability with payment link loyalty and so on.

Amanda: But if you aren’t getting that right, your servers are not going to love it.

Amanda: They’re going to find it an absolute pain and just going back and forth of friction.

Amanda: She talks about marrying the art and science of hospitality through the loyalty program.

Amanda: Then she gave a reference, so then we talked about data, and she said, yeah, one of the hardest things is to get the restaurant owners, the franchisee owner, to agree to put Sirloin steak on the list of entrees that can be redeemed for points.

Amanda: She says they didn’t want to put it on because it’s got a lower margin.

Amanda: It’s more cost of sale food costs.

Amanda: She said, but we realize if a customer buys a Sirloin steak, they have a 78% higher likelihood of coming back to the restaurant versus an average of 40% return rate.

Amanda: So we persuaded, we made them put Sirloin steak as a redemption item for the loyalty program.

Amanda: And that key item actually, many of you have heard me talk about hobnobs, and if you don’t know what that means, I’ll talk to you anytime about hobnobs.

Amanda: But that was their hobnobs moment.

Amanda: That was their item that helped them decide that’s what our profitable customers most need from us.

Carly: One thing I don’t know that we’ve ever talked about, hope Paula doesn’t mind.

Carly: Sometimes it takes us a long time to get an episode out and record it and approved.

Carly: So this was one of those, that’s what made me think of it is, sometimes depending on the company, it can take a while before the person themselves might get approval internally.

Carly: And after it’s recorded, it still might take longer to get approval.

Carly: And then we’ve had a few times where it’s ready to go and then something else externally will happen.

Carly: There’ll be a hiccup in the media where it might be an airline issue or there might be something that happens that we hold.

Carly: So once we got this episode live, it was a real relief both for Kate and for me, because this had taken a long time to get recorded and aired.

Carly: But she is such a smart operator.

Carly: This woman has come from like mechanical engineering background, crazy, crazy smart woman, and now in loyalty and leading the loyalty program for Air New Zealand.

Carly: Some of the really key things here that I absolutely love, and it’s a little bit of a segue along from the Robert Harker comments also, is bringing loyalty through the full business and really ingraining it.

Carly: Air New Zealand actually have loyalty as one of their three strategic pillars across the airline.

Carly: So grow domestic, optimize international, and lift loyalty.

Carly: It literally sits as one of the strategic pillars of the airline.

Carly: And this is so strong because it makes sure everybody employed at Air New Zealand, thousands of people understand the importance of this.

Carly: Now there’s a couple of things that Kate stood strong for and still does, she’s still leading the team there, is this customer understanding.

Carly: And I think this was even discussed really strongly on the youth panel earlier, that this understanding of the customer and really striving for more feedback, they’re always asking for feedback and they’re digesting that feedback day in, day out, and they take it extremely seriously, and having that full transparency with their customers.

Carly: They’re one of the only airlines that actually have a like for like points for dollars accrual, and literally there’s no conversion to calculate.

Carly: I don’t need to figure out this many points equals that many dollars and am I getting a good value?

Carly: No, it’s literally one for one.

Carly: And they do that on purpose to be fully transparent with their members, and it’s really popular for it.

Carly: I joined literally after this and it’s super easy, no calcs required.

Carly: Now, the other thing that they do really, really well, and this is the other reason I want to call this one out, is that they make sure there are plenty of options for earning when not travelling.

Carly: And I’m sure a lot of people in the room would understand and maybe be doing this also.

Carly: It’s great to earn points, but I need to be able to burn them when I might not be able to travel.

Carly: And it’s so important to give that value back to members.

Carly: So not only is she a fabulous speaker and was really great to chat with, it’s a really smart thing that she’s brought through with the team from Loyalty at Andy’s Zealand.

Carly: So I love this one.

Amanda: Thanks, Carly.

Amanda: That actually leads really nicely into the conversation I had with the team from IAG Loyalty.

Amanda: So Rob McDonald and Silvia Espinosa.

Amanda: Rob was here last year, if you remember those of you here last year, and gave us an incredible keynote on the journey of the IAG Loyalty, but the Avios brand.

Amanda: And Rob and I used to work together.

Amanda: In fact, his very first job at British Airways was working in my team across Africa.

Amanda: So Rob and I have got a great history together.

Amanda: That’s why I persuaded him to come and talk last year.

Amanda: In this podcast, they talk about the shift from exactly that, just an airline currency into a full, consolidated approach for their members.

Amanda: They’ve now got 40 million members.

Amanda: They’ve got 125 partners.

Amanda: So it’s not an airline program alone.

Amanda: So it used to be, 30 years ago, it used to be the Air Miles program, very heavily dominated by British Airways and the airline currency for the airline.

Amanda: And now it’s much more of its own coalition pro ecosystem of partners.

Amanda: So he talks about, they both talked about the power of consolidation and what we’ve heard a little bit of that now from cash.

Amanda: That was great to hear some of the stats.

Amanda: Cash gave us around that 17% uplift in your primary brand within the ecosystem once it started to engage in the broader coalition.

Amanda: I think obviously that’s what the IAG loyalty proposition is about.

Amanda: 67% of consumers by their surveys say that they want consolidation.

Amanda: And if you look at the desire of customers, they want exactly what you’ve just said, that flexibility on how to earn, how to burn to the extremity of 74% of customers want that flexibility on earn, 76% on burn choice.

Amanda: And I know there’s so many brands in the audience today who are running really successful multi-partner programs that allow that or are bringing in that flexibility.

Amanda: And then the non-flight capability just as Air New Zealand.

Amanda: So 60%, this really fascinated me coming from the airline industry and knowing IAG and air miles to be British Airways is original currency.

Amanda: But 60% of mile or avios collected are collected on non-flight revenue.

Amanda: I mean, that’s a massive shift from almost 100% when it get started.

Amanda: I mean, so much so that they actually have got an ecosystem of non-flight activities.

Amanda: They own their own wine club.

Amanda: I think Rob talked about it last year.

Amanda: They actually have created the Avios Wine Club.

Amanda: He talked about the spend on their co-branded card, so that’s a way to augment your earning capability, being the equivalent of 1.5% of UK GDP.

Amanda: I mean, it’s gargantuan, it’s crazy.

Amanda: The collector is five times more valuable than a non-collector, in terms of their value back to the business.

Amanda: And then he explained to…

Amanda: Imagine if you’re bringing on all these extra partners all the time.

Amanda: So he also described last, on the podcast, around Uber, their partnership with Uber, and the seamlessness of being able to use your Avios with Uber.

Amanda: They have 500, so any of you in tech, just take this in and breathe deeply, 500 different product releases per annum.

Amanda: That’s almost two per working day, product release per day.

Amanda: Two per day.

Amanda: Because if the minute, if you introduce Uber as a collector or redeemed partner, and it’s not seamless, you’ve lost the customer there and then.

Amanda: So a really interesting podcast that starts out as an almost aviation journey into full partner ecosystem.

Carly: Wow.

SPEAKER_4: Good stats.

Carly: I think this actually flows quite nicely with the theme we’ve been talking about.

Carly: Chris Mills headed Loyalty with the Corps and the Corps Live Limitless program.

Carly: Now, one of the key things that he discussed when we caught up was the challenge of everyday relevance.

Carly: And it’s similar again from the travel theme where you might earn, but how can you redeem when you’re not staying, in this case, in a hotel?

Carly: Or where’s the relevance of the program if you’re not always staying in hotels?

Carly: So what can they do around that?

Carly: One thing that they looked at in this program and Chris has driven really strongly is the partnerships and bringing partnerships into play, which just obviously extends that earn and redemption when not travelling option.

Carly: And also bringing hotel restaurants a bit more top of mind.

Carly: It may not be the place you’re thinking of going out for dinner with your friends.

Carly: Do you think to go to the local hotel restaurant?

Carly: It’s not always every region or every culture thinks that way, some more prominently than others.

Carly: So really driving that full process around your local hotel restaurant might be the one to go to when you’re just popping out for dinner.

Carly: Now another one we chatted about, which I really love, and it’s made me think every time I go to a hotel now, is how do the team, the staff at the hotel identify a VIP when they’re just walking around?

Carly: Like how do you know the difference?

Carly: Like they don’t have a badge on and you can’t like tag them.

Carly: So he was talking through some of the cool strategies that they use to know who the VIPs are in on-premise, in the hotel while walking around when they don’t have like a hat on or anything.

Carly: Like they have to be able to spot them and they do expect to be known.

Carly: So it was really, really clever how they work that through with the program and a really big consideration that you might put a loyalty program to place but the staff have to really carry it out.

Carly: One that was really cool, and I told Amanda about this and we had a laugh because one of the key stories Chris reflects on is the staff at one of the core hotels had noticed that this particular VIP loved Diet Coke and was always ordering Diet Coke.

Carly: So before check in one time, they filled this gentleman’s fridge with Diet Coke.

Carly: So obviously when the guy checked in, was very excited and very happy.

Carly: I was telling Amanda and she’s like, oh my god, that was me.

Carly: And I know it wasn’t you.

Carly: She’s obviously a fan also.

Carly: But anyway, it goes to just showing that real connection of understanding the person, understanding what they love and will make their trip or they’re staying really valuable and really special.

Carly: And I really love that.

Carly: It’s an emotional connection in loyalty.

Amanda: I’ve said it a million times.

Amanda: If someone did that, if a hotel got that right for me, and I’d be there, I’d never, anywhere else.

Carly: I think they had this guy for life.

Carly: I mean, how could you not?

Carly: It’s just so, it’s it.

Carly: But then I did ask him, where’s the line on creepy?

Carly: Like I get it, but you know, there’s a level of, there’s a level of know me, but don’t know me too well, thank you.

Carly: So it was good.

Carly: Anyway, great chat.

Amanda: Yeah.

Amanda: Great.

Amanda: So the next interview I did with this gentleman, Professor Daniel McCarthy.

Amanda: So like I hope any professional, if you’re going to host the podcast, you do your preparation.

Amanda: You’re, did I have to prepare for this one?

Amanda: This guy is so clever.

Amanda: Like he was so intelligent.

Amanda: And about six times when I was doing the prep call with him, I was like, just run that by me again.

Amanda: I understand loyalty and I understand churn, I understand data, but you’ve lost me five times over.

Amanda: But then when he broke it down and I was like, this is utterly fascinating.

Amanda: So he’s at the University of Maryland.

Amanda: And everything you think you know about retention and churn, he may have turned it on his head and went, maybe it’s not that simple.

Amanda: So he talked about the churn fallacy.

Amanda: So I don’t know about you, but I reckon if we had a Slido app going up and I said, what does your loyalty program do for your program in terms of reducing churn?

Amanda: When we’ve asked this question before, we get stats of, yeah, like 10% is a good response rate.

Amanda: In fact, I’m as equally to blame for stating that in Blind Loyalty under KPIs in the book.

Amanda: And he said, yeah, but Amanda, it’s possible, but think about it.

Amanda: He said, when you launch a loyalty program, particularly at launch, there’s this big hoo-ha, the big launch, and you have this spike in your acquisition rates.

Amanda: And over time, naturally, that spike will decline faster and then it normalizes.

Amanda: So over time, with your loyalty program, you may put the credit towards, I’ve got a great loyalty program because we’re reducing churn, but actually you’re going to reduce churn anyway because you’ve got this enormous spike in acquisition and the life cycle of the loyalty program will see that churn rate calm down anyway.

Amanda: So that’s a little bit of a thing to take away and try not to persuade the CFO about, but he just talked about the churn fallacy and then he said consumers are like melting ice cubes, they’re going to melt away at some stage anyway.

Amanda: So the way you have to measure it is take cohort by cohort, comparative customer behavior groups and measure their churn stats versus non-loyalty members if you can, which isn’t as simple.

Amanda: So that was the churn fallacy and melting ice cubes.

Amanda: So if you hear myself or him talk about that, that’s what we mean.

Amanda: He then talked about the different types of churn rates.

Amanda: Because tomorrow I’m doing a keynote on B2B loyalties, so really it’s one of our favorite subjects.

Amanda: He talked about in B2B companies, the churn rate is often very rapid, quickly, like you get a lot of reduction of members very quickly.

Amanda: They work out whether they’re in or out and then they’re out if they don’t want to stay.

Amanda: But if they stay, they really engage with you.

Amanda: It’s a lot easier to get that engagement than potentially a consumer program.

Amanda: And then the subscription model, if it’s difficult to get people to subscribe, right?

Amanda: I mean, any of you running subscription models, if it wasn’t difficult, everyone would be doing it because it’s annuity income, you think, every month possibly.

Amanda: But once a customer has signed up, then that churn rate, if you measure it as such, definitely is obviously a lot less because of stickiness and laziness.

Amanda: How many of you have got subscriptions that you don’t cancel and you go, flip, that’s come around again.

Amanda: So there’s laziness, but there’s stickiness.

Amanda: You hear Amazon Prime talk about, Dan didn’t talk about this, but we hear from different sources, Amazon Prime talk about something like a 98% retention from year one to year two members and a 97% of those in year two stay for year three.

Amanda: I mean, those stats are madness.

Amanda: So I did ask him, well, what is that ultimate KPI you should be measuring?

Amanda: And he said, well, I refuse to give you one because there isn’t such a thing as the one magic KPI.

Amanda: He said, I do, obviously, customer lifetime value is preferable if you can measure churn correctly and therefore tenure correctly.

Amanda: But he says, there’s no single measure.

Amanda: So don’t get hooked on your one KPI.

Amanda: I heard Cash talk about multiple KPI’s and constantly be measured and constantly updating them.

Carly: This is what I mean about it being a learning curve for us as well.

Amanda: Yeah.

Carly: Anytime I speak to these great professionals, we get to learn so much.

Carly: And this one was a game changer.

Carly: Amanda told me to watch it.

Carly: Like, what the heck?

Carly: I had to watch it twice to understand it.

Carly: I think.

Carly: Yeah.

Carly: He’s good.

Carly: I couldn’t possibly do this without putting Jackie up.

Carly: Now, I’ll preface it.

Carly: If you do want to watch it, get ready.

Carly: Everybody cries.

Carly: She just makes people cry.

Carly: And it was awesome in such a great way.

Carly: Her story is beautiful.

Carly: Her passion is amazing.

Carly: And not only does Jackie represent loyalty for the Red Cross Lifeblood Program in Australia, which is literally saving lives, which we’ll get to.

Carly: And we love the statement, loyalty saves lives.

Carly: Like, who doesn’t love that?

Carly: However, she also shares one of her personal stories throughout the interview, which I wasn’t expecting in entirety.

Carly: So she caught me off guard too.

Carly: I’ll just give you the tip.

Carly: But it was beautiful.

Carly: So it comes from a place of a personal story, the actual stats of a successful year one program.

Carly: And it is just phenomenal.

Carly: So the stats we’ve got up on the screen is 17% uplift in the first year they’re saving.

Carly: They saved in that first year, they can actually quantify a quarter of a million lives.

Carly: Now, at the moment, they’re going through an evolution of the program, a massive overhaul.

Carly: They’ve managed to prove that at year one it worked and there was this fabulous uplift.

Carly: So now they’re going gangbusters.

Carly: They’ve got additional funding and they’re gonna really take it to the next level next year.

Carly: So very exciting.

Carly: But I couldn’t possibly have done this without mentioning Jackie.

Carly: They’ve got a very unique style of program too, just for a bit more loyalty specifics.

Carly: It’s the gifting style.

Carly: You donate and then there’s gifting throughout it because there’s some rules around.

Carly: You can’t just convince people to give blood.

Carly: There’s some rules around that.

Carly: This is one of the examples.

Carly: So I promised her I’d bring it on stage.

Carly: So she made me travel from Australia with that one.

Carly: But I like it.

Carly: It’s great.

Carly: It’s good size.

Carly: Anyway, so this was my final one for this exact reason that we can actually call out Loyalty Saves Lives.

Carly: And that’s a pretty cool tagline that not many of us can actually say every day.

Carly: So I loved it.

Amanda: Amazing.

Amanda: Beautiful.

Amanda: That obviously totally appeals to me.

Carly: Absolutely.

Amanda: So last but not least, this was released actually just a couple of weeks ago.

Amanda: And I had the pleasure of interviewing Rob Pope actually at the International Loyalty Awards Conference with Peter.

Amanda: Where’s Peter?

Amanda: From EBAX.

Amanda: And a lady from Accor Hotels.

Amanda: And I got off the stage wanting to say to Rob, can I please interview on Let’s Talk Loyalty?

Amanda: And I said, I’ve got something I need to admit.

Amanda: I’ve got a loyalty crush on your programme.

Amanda: And I’ve had a loyalty crush for a long time.

Amanda: And I won’t tell you what you said back to me.

Amanda: That’s maybe for later after a glass of champagne.

Amanda: But basically, Maya, we heard Sarah earlier talk about her time when she was working at Maya.

Amanda: So I did check in with her to check the timeline.

Amanda: So I don’t say anything that Rob had said that is offensive in any way, which it’s not.

Amanda: So Sarah’s view was, no, no, no, it was great when I was there.

Amanda: Then it dipped, and then it came back with Rob.

Amanda: So the Maya Company’s 56 department stores in Australia, it’s an iconic brand in Australia as the ladies know, but anyone who knows Australia knows.

Amanda: And they’re celebrating their 21st birthday this year as Maya 1, sorry, not Maya, but Maya 1 program.

Amanda: So he described that six years ago, the loyalty program was their worst performing department.

Amanda: It was on a decline, 9% per annum decline in terms of its engagement stats, its member, member stats, everything.

Amanda: And they decided to actually kind of stand up and take a stand to say, loyalty and the customer have to be at the heart of our brand, not out on a whim as Maya 1, but the heart of the Maya experience has to be through the Maya 1 program and customer centricity.

Amanda: And they built it from the inside out using data.

Amanda: So the data strategy, they augmented their already very rich data with second and third party data, attitudinal data and so on.

Amanda: And they started to see the engine turn.

Amanda: They described it as going from the worst department to the engine room of the Maya brand.

Amanda: So if your loyalty program is the engine room of your mother brand, then that’s a great story.

Amanda: He shared a stat with us that if they can get a customer who’s currently maybe just bumbling along at three times a year frequency, if they could find a way of pushing that beyond three times a year to four times a year, then there was a hook.

Amanda: Less, three or less, there was no hook.

Amanda: There was like a big chance they would lose this customer, but as soon as they could get it to four and ideally six, then they had real stickiness.

Amanda: Which leads me into talking about their platinum tier, which is their buy invitation only tier.

Amanda: He talked about the frequency of this platinum tier is 76 times a year.

Amanda: Imagine going into a department store, not a grocery store, or a department store 76 times a year.

Amanda: And they apparently through analytics and through research, they have an 82% discretionary share of wallet.

Amanda: I mean, that’s absolutely enormous.

Amanda: They walked away from the International Loyalty Awards this year as the most awarded brand in terms of how many trophies they walked away with.

Amanda: They won best use of data and analytics.

Amanda: They won best industry transformation, best program in Asia Pacific, and best program globally.

Amanda: So it was a real honor to chat to him.

Amanda: He’s a lot of fun as well.

Amanda: We also had a Diet Coke discussion.

Amanda: And, no, anybody?

Carly: We’ve had arguments with him over Diet Coke, haven’t we?

Amanda: Yeah, so Diet Coke comes up again.

Amanda: So that’s the last of our interviews.

Amanda: We weren’t planning a Q&A session for this, but Jen’s going to see if there are any, there are some, so we’ll happily take questions and do answers.

Amanda: Okay, cool.

SPEAKER_4: So the first question is, what is your perspective on the ethics of loyalty programs?

SPEAKER_4: Is it ethical for program owners to keep unredeemed points or extend their expiry dates?

Carly: No, is the answer.

Carly: No, I generally, my opinion on this is, if you’re serious about engagement, you want your members to be using their points.

Carly: Don’t expire them out.

Carly: So if engagement is the key, which I think we are all here to drive towards, you need your members using their points.

Carly: You need them redeeming.

Carly: And if they’re not, then obviously they’re not engaging the brand.

Carly: There’s so much data and stats around when people redeem, they overspend, whether it’s gift cards and points and that additional over.

Carly: So I personally thought that’s a no-brainer in my opinion.

Amanda: Yeah.

Amanda: I mean, any brands in the room who we’ve worked with, you’ll hear my mantra around forced expiry.

Amanda: It’s painful.

Amanda: It’s painful for the customer.

Amanda: It will be painful for you ultimately.

Amanda: Yes, I know the balance sheets and liability and, and, and, but rather get the high redemption rates.

Amanda: I think tomorrow on the partnership panel, Nick’s going to be interviewing some brands that are…

Amanda: When I say boasting, I don’t mean that in an ugly way, rightly so being able to share their enormously high redemption rates and their programs that are doing well and respected because members are getting value out of it.

SPEAKER_4: And I want you to remember, what’s the South African loyalty programs apart from other loyalty programs internationally?

Amanda: So I’ll narrow it down to South Africa because I think we’re here in South Africa and I actually haven’t seen enough of the African continent programs on the global stage.

Amanda: So I am asked this a lot actually and I think the first thing I want to say is I think a retail banking sector here in South Africa from a loyalty point of view is light years ahead of the rest of the world without question.

Amanda: You manage to achieve bank wide loyalty in a way that the rest of the world just dreams of.

Amanda: So I had a conversation only yesterday actually with a company about the US trying to achieve this and it just doesn’t get that depth of behavioral change.

Amanda: We heard Fay Elizabeth earlier giving us amazing stats.

Amanda: She was really generous with how, even if it’s just their gamification platform, how it’s changed the product uplift, but it’s because the whole program is built on a stack of bank wide loyalty.

Amanda: And then in terms of the rest of the industry verticals, I think, I’ve often said this and I think it’s changing, but I don’t think it’s changing quite enough.

Amanda: I feel that the program structures here are absolutely solid and if we look at our white paper results in partnership with Brandon and the Wi-Fi team at Brandmap, we see an engagement level higher than I’ve seen anywhere else.

Amanda: So I compared the average number of programs that South Africans engage with actively are using is 10.2 and I compared it actually to the Comark white paper where you said the global stat of how many programs are you a member of is approximately 10, 10.6, I think.

Amanda: Being a member of a program versus actively using is very different.

Amanda: So we see a very high activity rate.

Amanda: Where I do feel we could do better as an industry, but I think it’s improving, is actually getting that faster, better, the timiest and more relevant communication.

Amanda: We’re definitely getting better at it.

Amanda: Some of the examples that are coming through without question are better than a year ago.

Amanda: But I do look at some of the international brands, I see what’s cash shared with us over some of that engagement, not just in communications, but the store experience.

Amanda: Sort of taking it beyond just the loyalty program, but making it in that customer experience layer as well.

SPEAKER_4: I see Australia is a very mature loyalty market, and one of the likes of people in the industry watch.

SPEAKER_4: What would you say is the top of mind innovation happening in loyalty in Australia?

Carly: Can I say AI?

Carly: Because that’s like the easiest answer of the room.

Carly: No, that is obviously, but I guess even having a chat with Sarah yesterday, I think there’s so much that we don’t know, even though we know that’s probably the number one answer.

Carly: There’s a few things though that are coming through really, really strongly and B2B programs, it’s extremely prevalent market at the moment, and I would say partnerships and ecosystems, I really enjoyed what Cash outlined also because we’re seeing that immensely.

Carly: It is what drives our B2B programs and even going back to the first question, anything under a 90 percent engagement rate is just not acceptable in B2B in Australia these days, and that absolute driving home for redemption is what gets us those stats.

Carly: So that’s probably the two bigger parts that I’d say in that space, and that’s why I’m looking forward to your presentation tomorrow also.

SPEAKER_4: And then one last fun question.

SPEAKER_4: What’s the worst thing that’s happened during a recording?

Carly: Oh, I’ve got one.

Amanda: So I’ll share mine, especially with Rob.

Carly: We’ve got a few, gosh.

Carly: We need all the outtakes.

Amanda: Yeah, thank goodness it gets professionally edited by Paula’s team.

Amanda: So Rob, we kept counselling because of travel plans or business conflicts, and then I said, Rob, this schedule doesn’t allow you to cancel again.

Amanda: I’m putting my foot down.

Amanda: We have to do this interview on X date.

Amanda: He said, okay, no problem.

Amanda: Then he had COVID and he was really sick.

Amanda: So then we ended up doing it on a Saturday.

Amanda: I said, it’s okay, I’ll do it Saturday or Sunday.

Amanda: I’ve got to get it out for Paula’s schedule because it creates havoc for the Let’s Talk Loyalty team if we miss the schedule.

Amanda: So he was doing his best, but he couldn’t stop coughing.

Amanda: We kept stopping and starting his coughing.

Amanda: And then that’s when we started having this diet coke discussion because he was coughing.

Amanda: And I said, grab some water.

Amanda: And then he gulped this normal coke.

Amanda: I said, that’s not water.

Amanda: That looks like diet coke.

Amanda: He says, no, it’s coke.

Amanda: No sugar, no fun.

Carly: Oh my God.

Carly: I’ve got two really different.

Amanda: It got edited out.

Carly: This is why we love the editors.

Carly: Martina Lipp, she’s in Austria.

Carly: We found out that she lives two minutes away from my cousin in Graz, this tiny little town in Austria.

Carly: And then throughout the recording, we couldn’t stop laughing so much.

Carly: The editing was ridiculous because we can’t, I don’t even know why.

Carly: We just couldn’t stop laughing.

Carly: Anyway, so that was one.

Carly: But probably the worst, most annoying, it had taken months to coordinate a recording.

Carly: Two guests, one was in India, one was in Poland, and then I’m in Australia.

Carly: So coordinating this time zone was just a nightmare.

Carly: We finally start recording.

Carly: We’re 20 minutes in and I had a power outage, like the whole neighbourhood power outage.

Carly: And I’m like, oh my Lord.

Carly: And you can’t hotspot to record.

Carly: It doesn’t work.

Carly: Like there’s too much going on.

Carly: So yes, after so much coordination to get these three time zones aligned, and everyone’s busy work schedule as well, 20 minutes in and the power goes out.

Carly: And all I could do is apologise and go, I’m so sorry.

Carly: So we’re yet to re-record because we haven’t managed to re-…

Carly: This is only about a month or two ago.

Carly: So that was just so annoying.

Carly: Thank you so much.

Paula: Thank you so much for listening to this episode of Let’s Talk Loyalty.

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