This episode of “Let’s Talk Loyalty” focuses on insights and emerging trends across APAC and MEA.
With a marketing career that began in direct mail, data and applied statistics, Paul Davies’ has worked in advanced markets like the UK, and today he shares his view on how loyalty marketing is evolving in these, as well as emerging markets that have traditionally focused on customer acquisition.
We discuss global trends in loyalty, as well as the risks and challenges of promotions and first party data, as well as the power of organisational design to help use loyalty mechanics to build brand loyalty, not just transactional loyalty.
We discuss the need for creativity in loyalty marketing, helping marketers connect with both the rational and emotional aspects of the human brain.
This episode is sponsored by Epsilon.
1) Paul Davies – Senior Vice President APAC MEA
3) Hoover Free Flights Promotion
4) Forrester Wave Loyalty Solutions – Q2 2021
Speaker 0 (0s):
Welcome to “Let’s Talk Loyalty”, an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas and if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.
This episode is brought to you by Epsilon and their award-winning PeopleCloud loyalty solution. I am always delighted to have Epsilon on board as a sponsor, and particularly right now, as they were just named a leader in the Forrester Wave Loyalty Solutions, quarter two 2021 report with the top score in the “current offering” category. This report is designed to help you as marketeers find the perfect partner for your loyalty program. So to download your copy of the report, visit epsilon.com/let’s talk loyalty.
Hello, and welcome to episode 116 of “Let’s Talk Loyalty”.
Speaker 1 (1m 6s): Today I’m chatting with Paul Davies, Senior Vice-President for Epsilon APAC and MEA based in Singapore.
Paul’s marketing career began in the UK in the world of analytics and data, but also he spent many years on the more creative and agency side of the marketing world. This gives him a unique perspective on the power of leveraging the entire marketing toolkit to ultimately build brand loyalty. In today’s show, we discuss some innovative ideas around her loyalty, marketers and brand marketers can, and ideally should work even more closely together to build
Speaker 0 (1m 46s): Customer connection and trust, particularly as we evolve our businesses to reflect changing customer needs and global markets. So, Paul, please do tell me, what is your favorite loyalty statistic?
Speaker 2 (2m 4s): Hi Paula. Yes. My favorite loyalty statistic goes back to my education in marketing, which I got taught very early age, a number of statistics, but one of them really stuck for me is that 95% of your customers returning 5%, your customers can help you generate 95% profits. So it’s, you know, to me, and it’s a very simple math so we can undertake on a spreadsheet. Absolutely.
Speaker 1 (2m 27s): Yes. And I’m sure you’re from lots of spreadsheets in your time, because I know you’ve an extraordinary background in data and an analytics, which we’re going to go through. And, and, you know, as we were talking about that, I was thinking that’s something that we as loyalty marketeers. I think we know it so well that we perhaps forget to remind our colleagues in our companies of exactly how powerful loyalty can be. So I think you’re right to bring it back to the, the simplest stuff and yeah, if we’re able to do it on a spreadsheet and prove the point, I think it’s incredible.
Speaker 2 (2m 56s): Yeah. I think it goes back to this belief that I have is that your loyalty is just parked part of brand build part of marketing, right. Marketing communications. And, you know, it’s an evidential point as a why it’s so essential a part of the mix that you’re actually sort of constructing. So yeah, to me it makes sense. Absolutely.
Speaker 1 (3m 17s): And I definitely think it’s getting increasing respect and recognition and it was looking back cause your own career pole. And I think you’re the only person in 1989, I think it was who was actually maybe talking about data and analytics. So tell us about your career, that some incredible experience there.
Speaker 2 (3m 34s): Well, I wasn’t the only one, there’s a lot of us actually back in the UK in those days, but yeah, I started my first ever project in marketing was to build a DG application algorithm for business to business. So that’s how I started. So it was on the, in the sort of technology world, but I, when I came into the agency world in 89, I started, I started actually in, in loyalty sort of developing or running a loyalty program for British telecom, BT and yeah, and that wasn’t a typical loyalty program.
It was, didn’t have points, didn’t have tears, but very much the client viewed it as a loyalty program. Very few as part of the brand building efforts to generate Lords to their customers. And it was every 12 weeks was a communication going out, educating the customer of the products or services, engaging with them, trying to get some reaction. Yeah.
Speaker 1 (4m 24s): Okay. So good old fashioned direct mail.
Speaker 2 (4m 26s): Hey, yes. In those days that’s all he could do. And then from a loyalty perspective, my next little big four, I, I did that for a number of years. Was it for holiday Inn in Hong Kong? I run, I run the, the loyalty program from a technology standpoint. So they appointed us. That’s how I got to Asia. Actually I came out to run that program cause we ran all the loyalty solution for holiday and the priority club as it’s called across APAC in 1994.
Speaker 1 (4m 58s): So you’ve been an expert for, I think about 35 years and begin. Okay. For sure. And a lot of it actually on the marketing agency side, Paul as well, which I think is a lovely context in terms of, I suppose, understanding a client’s requirements because obviously now on the technology side, you know, you obviously have to build and launch and you know, it’s a whole different mindset, but I suppose the whole marketing world is extraordinary and ironic, I suppose that you’re back with the publishing group actually through Epsilon.
So some incredible work. So, so do you think it’s a useful context and, and background to have that kind of, I suppose client side perspective and given, you know, I suppose, hello, it is evolving.
Speaker 2 (5m 45s): Oh definitely. I think, you know, I was fortunate enough to actually work on the client side before I joined an agency, joined the agencies and then yeah. And then I went to agency side and then I got into the technology area more in the consulting sort of tech. And so I’ve sort of seen a mixture of all, all three. And I think, you know, particularly on the agency side, you have to be very close to your clients, understand your client’s needs. And I think that is invaluable to understanding how to leverage loyalty and loyalty solutions to maximize their effect.
And it’s also what I am a big believer that is part of the actual mix of marketing communications that a client should use.
Speaker 1 (6m 23s): For sure. So given that kind of perspective poll and I suppose loyalty programs have been around 12 30, 40 years now, how do you think they’ve evolved over that entire time? And I suppose then we’ll look at where we are now in 2021 and what’s going on at the moment.
Speaker 2 (6m 40s): Yeah. I mean, well, they’ve moved on tremendously, right? They’ve gone from points and transactional sort of solution program, sorry, not solutions to much more engagement and, and surprise and delight and you know, a much more sort of becoming which I highly personalized as well in terms of its interaction with a member. So I think, yeah, they’ve changed beyond recognition to some extent, some of the core fundamentals are still there because you know, you can’t, you can’t walk away from that and neither should you, but I think, yeah, the ability now to engage with a, a customer or a member have you want to craze, it is so much more powerful nowadays to be able to do.
And so easier, more responsive. It gives you a much more sort of closer brand building with the client with the actual membrane itself. Yep. Yeah.
Speaker 1 (7m 27s): And you’re based in Singapore now. So looking after actually a fairly massive region, so APAC and Mia, how would you describe because again, a lot of our listeners are on the U S in the UK and obviously in Australia. So I suppose very mature markets in many ways. So, so how is it in Singapore and particularly in Asia from your perspective?
Speaker 2 (7m 50s): Well, Singapore, sorry, Asia, generally again, there’s are some exceptions. So Australia has quite a mature market versus an Indonesia or Philippines, which may be less mature. They are predominantly acquisition focused markets. So because of geodemographics or demographics in particular, you’ve got a young population growing, coming off the land, going into cities, growing in wealth, then ultimately brand marketers. Their job has really been to how do I acquire these customers?
How do I bring them into my brand and sort of, and then drive that forward. So it’s know. So a lot of marketing and Asia has been acquisition focus. Yeah. Clearly, you know, the pandemic clearly sort of issues around data and the importance now is starting to change that there has been a mix of clients. Obviously some clients have obviously realized the importance of data and customer loyalty and retention as well, but generally that’s, that’s, that’s how they view it. I think, you know, and again, in different industries, different perspectives, FMCG, particularly that way, obviously we got transaction data, then it’s different.
Speaker 1 (8m 55s): Well, at some point I definitely want to do a whole show on FMCG loyalty, Paul. So I’ll be picking your brains on that because certainly in my mind, that’s probably one of the next big trends in terms of people recognizing, I suppose that relationship building capability, but interesting to hear you talking about acquisition. And I guess if I was in a country with a billion people, you’d probably, you know, understand, okay. If I can keep filling the pipeline of guests, it’s a really good strategy to build the business. But I think as you’re saying very clearly, you know, it becomes retention to your points, the favorite statistic at the beginning, if you can retain those people, you can build your profits.
So, so much more easily. So, so great to hear you’re having those conversations with clients, but given, I suppose, eh, COVID on the current situation, I suppose, how do you think clients are feeling about their loyalty programs? Like do they see them as a core part of addressing? And I suppose that the different behavior changes going on right now,
Speaker 2 (9m 52s): We see more interest in loyalty in the last two years and I think anything else, so we’re getting definitely more inquiries, more, more RFPs certainly are being run, you know, and a number of things are driving that, right? So it’s, it’s not just a pandemic and obviously then, you know, consumers go into e-commerce, but it’s a, it’s a data challenges sort of now recognize with the cookies and they realize that first party data is more important. So it’s a number of factors that are driving it, but yeah, you increasingly see that sort of, that trend that I think in the last few years, it’s just accelerated, that’s going across all industries.
It’s not, you know, it’s not the, just the big transactional industries it’s going across, even some smaller ones, retail, you know, sort of many others. Yeah. Yeah. Wow.
Speaker 1 (10m 36s): And in terms of how it’s positioned in most of those countries, Paul, would you say, you know, in my experience have often said on the show that, you know, we always felt like a lower priority. For example, then let’s say the brands team. So, so a lot of the big budgets would go to the TV campaign and everyone was super excited and they were all off kind of shooting as super sexy stuff. But you know, for us in loyalty, it really felt like, I suppose much more of a long-term customer relationship building piece. And again, didn’t seem to always get the respect that it deserves.
So, so I’d love to get your perspective in terms of how is loyalty positioned in the clients you’re working with? Is it seen as central and or is it more the Brahms teams that tend to lead?
Speaker 2 (11m 20s): There’s not. So in terms of loyalty, it is a huge, typically owned by a separate division or department or team. And they been typically separate from the brand teams or separate from the big brand teams. And again, there’s different structures within every organization. And what you’re starting to see, I think though, is because now the importance of first party data, the importance of recognition of fault, how do you bring loyalty to your customers? And brand building is only one, you know, loyalty is one part of that component.
That’s what you’re trying to do really at a brand level. So I think that they are increasingly coming together, but ultimately how you do that, the organizational design, you need to come to work. It’s, it’s still in evolution. So if you look at our, our clients around the region, that’s definitely happening, they’ve recognized the importance of putting more money behind those programs. But you know, obviously it’s still evolving. I would argue at least in Asia, I think you’re maybe behind the curve. Maybe it’s the worst of all. Maybe potentially more, I don’t know, in the U S or something like that.
Speaker 1 (12m 23s): Yeah, no, it’s definitely something I’m hearing more and more about. So, you know, I think as you alluded to earlier and you know, originally I suppose we all started with promotional programs, direct mail and all of that kind of stuff, then we all evolved through and considerably built all of our points and whether it’s gamification or whatever else. But increasingly I think all of the conversations about emotional loyalty mean that, you know, brown really needs to be involved. So, so I think what I’m hoping is to see more loyalty, marketeers, having bigger conversations about, you know, where they sit in the marketing structure.
And it’s definitely not something that’s going to shift overnight, but I think what we’ve seen, certainly, you know, even a couple of shows that I did in the last year or so, you know, loyalty programs, first of all, are being seen as a strategic asset. And I think we’ve seen that most clearly in the airline business where, you know, certainly they’re bring used to, to, to raise debt and, and to finance through the pandemic and put increasingly again with this and feedback from customers. I do think, you know, really what we want is to be more connected with our brands.
And I think loyalty is obviously the only kind of infrastructure that facilitates that. So again, in, in Asia, do you see that opportunity? Do you think you have that potential?
Speaker 2 (13m 39s): No, I absolutely definitely. I mean, because consumers, consumer, right. So how do you build a brand or the consumer? Okay. You know, in part, obviously you’ve got the recollections of what that brand means to you in your history, or you got the images they create or the smells or the colors, but ultimately it’s engagement. You know, if you go into a shop and you haven’t engaged with that particular brand or an experience and technology can help facilitate that much easier. You mentioned gamification earlier, now that could create so much more interactive, immersive experience with a particular member.
So, you know, you’re seeing activities like that and being coming in in a predominance, and I think it will go into for retail clients, particularly how they use the retail shops, be more virtual reality, augmented reality, leveraging their customer data to drive their customers in particular, the high, high value customers to give them that experience, which will then drive the sort of brand preference and brand loyalty going forward. So I think definitely you’re seeing it. Yeah. Yeah.
Speaker 1 (14m 38s): And do you see your clients? And again, I suppose Epsilon around the world has some extraordinary, you know, both capabilities and, and also what I’m seeing I suppose is the example of gamification, obviously as Dell, we did a fantastic show about Dell and I wrote an article recently as well about Walgreens, because I can see, again, particularly again, maybe in mature markets where there is this potential to build almost a separate profit center around the loyalty as an asset. So I think that’s an extraordinary capability and I did a full show about it actually as well, but, you know, Walgreens have developed this entire advertising group, which again, I’m not saying is absolutely right for every single brand, but I think what I’m hearing coming through Paul is that loyalty doesn’t just have the, the reliance on, on points and prizes and the transactional stuff we’ve talked about before you alluded to the experiences.
And there’s so much more, but I think the whole M you know, loyalty is a profit center is a super exciting idea.
Speaker 2 (15m 38s): Yeah. And, and I mean, a number of companies have gone that way and even separated companies out. I mean, you know, and there are, even as we know, like Mars, for example, is it’s always been a separate entity, its own PNL and, and makes his own on margins and profits and a number of particularly companies that have large scale transactional data has that advantage to do that and really leverage the program in a big way. So, you know, but obviously that requires good design of your program. How do you do that? Well, but also, and how then, therefore, because it sort of becomes such high profile.
So take Singapore airlines is it really becomes representative of your brands. We go back to that brand discussion about how does it support, how does it work? How does it sort of align and build value across each one of them? But yeah, but going back to that sort of, you know, the actual sort of financial sort of opportunity at law provides, I think the other thing that as new clients come into this space is the risk reward balance that you have to have because obviously with every program, there’s always some sort of element of risk as well as significant reward.
Otherwise, you know, there’s no risk, everybody just be doing it anyway. Right. So, yeah, so, so I think that’s the other equation that I think newer brands are entering. This is to say, well, not only do, does it work with my brand, but also how do I make sure it’s actually sustainable provides real value, generates customer lifetime value for me.
Speaker 1 (17m 6s): Okay. And would you be included in that, I suppose, strategic planning piece piece in general, in terms of understanding exactly, you know, at the very early stages, watch your potential clients, I suppose, are looking to create, like, would they, would they bring you in to, to help design and structure
Speaker 2 (17m 25s): It? Yes. I mean, I’ve got example as a telco in the region that we’re doing the program design, so it’s called product design. So what’s, what’s a point worth if you using points, how do partners play a role and how do you use them to maximize and generate value and leverage them? And how do you use tiers if you’re going to use tears, how do you know what is experience you want to create at the front end? So the whole program design actually very broad and very sort of immersive in terms of what you have to include. So yeah, very much.
Okay. Yeah. I’m
Speaker 1 (17m 59s): Happy to hear that because sometimes they hear that, you know, that a lot of companies, I suppose, maybe underestimate the element of complexity. So they might come in with them an idea about what the value proposition might be, but might not include, you know, their, their, their technology partners like you guys in, you know, is it going to work, leveraging your learning as well? I think that’s a really big opportunity and I love that you referenced Singapore airline as well, because I actually think that’s a, that’s a brilliant example of where the brand is extraordinary.
And again, their loyalty program supports it absolutely beautifully. And I know we talked before Paul about, you know, there are risks, as we know, and I think there’s one that we add that we share in terms of a memory of a loyalty program that went very badly wrong, very early in both of our careers. And I don’t ever like talking about, you know, making anybody look bad, but I think we have to just, you know, as a caution, perhaps for maybe younger listeners who wouldn’t have been around, like you and I back in the UK and Ireland, when a Hoover launched their famous and let’s call it promotional program, it wasn’t exactly a loyalty program, but I know you witnessed it as well as me.
Speaker 2 (19m 10s): No we don’t. Yes. We did talk about this earlier, but yeah, no, it’s, it’s, it’s a great example because it’s so long ago it was in the early nineties, right? Because the brand no longer exists, I guess we’re not damaging anybody’s reputations or smearing them, not something it can happen to anybody. There’s, there’s good examples of Myles doing, having issues, you know, many of the major brands. So it’s not actually just one or two brands. So you can, again, because it is it’s, it’s real blog. Typically these problems are very large scale and therefore you, if you do a promotion or any activity, you can have big upsides, but you, if you get the calculations wrong of downsides, then it’s important that, you know, go back to that data and analytics piece is essential.
Part of the consideration, whether you’re doing a campaign or you’re doing a program design, it’s got to be all the way through the process. Sure.
Speaker 1 (20m 0s): Yeah. And I’m not the analytic side as well. So Paul, I always kind of really do kind of need somebody who’s totally geeking out on that stuff. So I can go and get creative because I do believe loyalty can be super creative. And, but yeah, the, the who, for example, do you want to just tell listeners exactly. I suppose, how it was intended to work and, and how it unfolded?
Speaker 2 (20m 22s): Yeah. So Hoover for people who don’t know is a vacuum cleaner manufacturer back in, in the UK. I think they’re a US-based as well. I think I’m not sure exactly what your country is doing. And so they manufactured who was our vacuum cleaners, and they basically were struggling at the time of the eighties. I had a poor sort of period of sales and performance, and they came up with a promotional idea with a travel agent to offer to, if you bought a free vacuum, you could get two free flights to the U S and I know this is where you want to dive in, cause you’ve actually went to Bolton Hoover.
I think so to do that. And the problem is they’ve got such a big response, which they couldn’t cope with and overestimated that they couldn’t fulfill it. They also tried little tricks and treats to sort of not tricks treats, but little tricks to get away with it, which also backfired on them from a customer service perspective. So yeah, it was a bit disaster. Yeah.
Speaker 1 (21m 18s): And in this day and age, obviously, you know, everything can be magnified if you do get this wrong because obviously social media does, does amplify everything, but, but you’re absolutely right. The end, the proposition was extraordinary. And again, as loyalty professionals, I think what we typically focus on is, you know, first of all, you know, can we drive engagement, you know, and the concern about, you know, under redemption, but equally, I suppose there needs to be absolute peace of mind in terms of the risk of over redemption. So clearly that’s what Hoover got wrong.
And yes, I will say I actually went out and I bought two Hoovers. I didn’t just buy and I clearly didn’t need two Hoovers and one house pole. So, and so it is an amusing example. Huh?
Speaker 2 (22m 0s): It’s very amazing. Yeah. There’s actually, I was reading up a little bit before this call and there’s a good example of a guy in Northern England that he’d bought a Hoover and w get a free flight. So fortunately the Hoover broke down. So he got a service engineer to come out and repair it. And the guy was saying, well, why have you bought this Hoover? He said, I hope it’s not for free flights. Cause you’ll never get them. So he decided then to say, okay, well, I’ll make sure you do get home very well. So he stole his van from him to work. So anyway, my little anecdote there
Speaker 1 (22m 32s): Aside yet. Yeah. I thought you were going to say he returned to the Hoover in golf day. I got a refund as well as the free flights.
Speaker 2 (22m 40s): Yeah. Mr. Customer service guy put, pay back for him. So, but no. Yeah.
Speaker 1 (22m 47s): But on the, I suppose, again, back to the positive side of the, of the brand story pole and one, I suppose, I think is probably my favorite example. And I don’t know if you’re familiar with this program at all, actually, but it’s called vitality by a company called discovery in South Africa and I’m dying to get them on the show. So if anybody’s listening from discovery, please do contact me because I’m dying to do a full show on it. And I have talked about it before, but I think the most extraordinary example, because first of all, I don’t always think South Africa gets the recognition.
It deserves in terms of how mature it is as a loyalty market. But I think what vitality did was really start with this whole, I suppose it was a business model, as well as the loyalty model I would say. So I think it’s this opportunity to say, look, how can we build the business to be loyal to our customers? So as I suppose, the whole mindset of loyalty that then exp you know, just expands into everything and what I particularly love about that one poll. And again, just for listeners, essentially, I suppose it’s a shared value model.
So again, I’m sure you do loads of this kind of stuff, poll and advise all your clients about it. But the whole idea that if I’m healthier, for example, let’s say I go for walks. I go for runs. Then my health insurance premium should be lower. My claims long-term should be lower, but really, I think in addition to the transactional piece of, you know, the typical, you know, earn this kind of loyalty, I think the discovery brand has just exploded in terms of how it’s perceived by customers, because they feel that integrity coming through to the extent.
And I don’t know if you saw it, but I think it was about two years ago, they’ve now launched a bank on the back of the health insurance company and the car insurance company. So, so I just think it’s a great example of, of what you’re saying in terms of building the brand.
Speaker 2 (24m 33s): Yeah. And I’ve actually seen vitality advertise. So obviously they’re carrying through that whole strategy into a advertising approach. So I didn’t know about the bank. I didn’t know some of that aspect of it, but I’d certainly seen it and yeah, I haven’t actually been quiet about it, but sort of seeing this sort of strategy, what they’re trying to do, and it was all about that you be healthier and then you get benefits in terms of the services and the products. So, yeah, it’s interesting to go back to that brand building, they’re leveraging the loyalty aspect as it will help build a brand. Absolutely.
Speaker 1 (25m 3s): Yeah. So what kind of things, I suppose, are you kind of talking to clients about now, Paul? So, you know, we’ve talked about changing customer behavior, I’m sure there’s a massive amount of, so it’s market research going on from every em, every broad left right. And center at the moment to see what customers do value. And, but I suppose from an Epsilon perspective, you know, you’ve done extraordinary work. I know recently, obviously you got the top score in the current offering category and the latest Forrester wave loyalty solutions reports just in quarter two and 2021.
So congratulations actually must have been thrilled with that coming out again.
Speaker 2 (25m 39s): No, it’s fantastic news. I mean, yeah. I mean, we’ve got the highest scores possible in seven 17 of the 28 sectors. So it really is evidence of our real strength in this area at the moment. But in fact, we’ve actually won this award. I’ve been in the, sorry, not the one that’s been in the actual sort of a wave leader area for, I think, I think the last six years. So it’s not sort of just a one-off, it’s a consistent focus and dedication to loyalty in that way. Yeah. In that respect, but no, very, very pleasing.
And I, you know, I also supplement all the other awards that we have in the forest away vary on email and database and other things. So it’s a positive,
Speaker 1 (26m 18s): What is your view on email actually, Paul, because I do really, what I’m hearing is it’s still the most powerful communications tool available. And you know, I just a couple of days ago, obviously I was speaking with persona live. So your colleagues in the U S about lots of different things that I’m hearing coming through from, from having conversations like this. So, so is it the same in Asia that email still, you know, the default on the most powerful tool that clients need to be focused on?
Speaker 2 (26m 49s): No, it’s, well, I’m not, it’s different by markets. So email is not the, maybe the only channel in all markets. Obviously there are some real outliers like China, it’s all we chart. So you look at Marriott, which is a customer of ours and voice. Our loyalty program is a great program. If you go into, into China, you’ll find it all on, reach out, it’s all within the ecosystem, your points, you’re booking your hotels, et cetera. You go to somewhere like Thailand and you’ll find programs online as the line is the app, the social messaging app, and you’ll find the program embedded within them.
So what we’re seeing is a lot of social messaging sort of tools and capability being used by consumers across the region. Email is certainly part of the mix, but it’s not the only part of the mix.
Speaker 1 (27m 40s): Okay. Okay. And clients then like Marriott Bonvoy. I mean, if I, if I literally had a magic wand, Paul I’d love to ask whoever had the marketing budget to launch that program, it was just extraordinary. And I mean, global dominance from what I saw incredible to have a client like that, I happened to be in Hong Kong at the time. I think when the rebrand happened and again, here in Dubai, over in Hong Kong, everywhere I went, I saw Marriott Bonvoy. So that’s absolutely extraordinary. And so, yeah, I’m really kind of excited about the power of them.
And I suppose tailoring by Marcus, which again, as Logix professionals, I suppose we don’t need to be told to do that, but amazing em, amount of variety that you’re having to execute on in order to keep a global program to some level of consistency.
Speaker 2 (28m 27s): Yeah. I mean, that’s, that’s the way the world proliferation of journals now, and it is really a part of the mix and it’s a challenge for marketers because obviously increases costs. How do you serve these customers? So they all want to have their own preferences and choices. So, yeah. So, yeah. And it’s just, I think just one of these things you need, you now need to cope with and manage, obviously, you know, that’s where you can use it analytics, or you can use AI, for example. So embedded in our tool is it’s an AI model, which says, okay, well, you know, particularly for email, when did you send that email?
It’s automatically sort of runs in the background and then helps you determine that sort of sequence of events. I think that’s sort of what, what happens, start to happen across orchestration across all channels, which channel does that particular consumer sort of prefer to use? When should they send it? How do you best do it? I think that’s where technology will start to play it. Yeah.
Speaker 1 (29m 18s): And you’re right. Absolutely. Paul, I think this whole piece around, you know, the global nature and reflecting exactly the way of the world to use your term. And there’s a retailer I spoke to recently, I can’t name them, but they are restructuring. And instead of loyalty being headquartered in Europe, they’re taking an opportunity to am, to locate in China and for global. So that was really interesting. So I geographically you’re in a really good place and, you know, I guess digital transformation is essential, but would you agree with that?
Speaker 2 (29m 54s): Well, well, because your, your ecosystem in China is very different from a technology standpoint. So I guess it depends on how well that team is going in to do and what their role is. But I know a number of major clients, including when I was on the agency side for this client of IBM, they tried to relocate their whole regional TAC team into China after a year and a half, they realized it was too difficult. Now that was quite a few years ago, it’s changed. It may has changed in sane, but I think China is in such a big and unique market in its own. Right. You can start, I think you can start to dominate your sort of your team ultimately, cause there’s so much opportunity or pressures.
I think if you’re in, if you’re in a Singapore or some of the other markets, to some extent, it’s, you know, you wouldn’t focus on the local market as much, you don’t get dragged into to all of that sort of challenges. So I, I think, I think, yeah, that is obviously what I’m hearing and also gets wrong. Right? I mean, what my experience says this is,
Speaker 1 (30m 52s): But I do follow a lot of people in loyalty obviously, but you know, particularly when I see stuff coming through from the Chinese market, a lot of the kind of messaging from, and people who are executing stuff there is around, you know, it’s, it’s totally underestimated in terms of the complexity needed to, to be ready for that market. So, so again, if you’re going to build a brand on Weechat, build a loyalty led brand on recharge, obviously you need local expertise, but again, the rest of the world doesn’t have which ads. So, so we have to go back to our loyalty mechanics and, you know, all of our M you know, various tools in the toolbox, in the, in the Epsilon toolbox to be able to build fash.
So, yeah, so, so I suppose to, you know, what’s coming next in loyalty, Paul, and we hear a lot of the buzzwords around AI machine learning. You’ve talked there about predictive algorithms in terms of, you know, knowing my, you know, preferred channels of communication, for example, which I think everybody’s getting better at, well, what are you thinking are the next big things that we need to be either handholding listeners through or brands through in terms of making sure that we get these kind of returns that we need.
Speaker 2 (31m 58s): So I think, again, it’ll be different, I think by markets and by industries, to some extent and your maturity. So, you know, when we look at certainly new clients coming into us, it is the latest gamification, the latest engagement, how you engage with the consumer, how do you bring that brand component into the engagement process and build a brand loyalty in some other areas it’s more about personalization. So it’s real time personalization creating that sort of agile content, providing a ability to, you know, provide the latest offer, provide the latest sort of a example or products to them.
So again, it’s a little differently each one. So we’ll sort of the requirements and changes. I don’t think there’s no, there’s no, I think big bang or sort of something brand new. I think it’s all sort of, sort of specific to a client’s needs or challenges or where they are in the maturity. Okay.
Speaker 1 (32m 55s): And would you hear a lot about them saying that we expect this loyalty program to build our brand and, or we’re, you know, diverting Brown’s resources or do you still hear the more traditional kind of, you know, this is a, you know, an earn and burn. We need to drive behavior change. Where would you say the balance is in terms of the people you were speaking
Speaker 2 (33m 13s): To? I said, it’s moving out of the transactional and more into this sort of recognizing it’s more of a brand program, but it’s still, it’s a journey in that respect, what we are seeing as well, is that clients where appropriate, I started to realize that it shouldn’t be for one brand, but doing a group brands. So they’re doing it more, a group level as opposed to a sort of single yeah. In that way. And then you’ve got, again, you’ve got more variety for that customer. You got the ability to have more ability to cross sell as well as an up sell. So I think, you know, that also makes sense, but it’s more complex and managing, certainly I’m more potentially politics because you’ve got your brand manager, here’s his brand and you know, somebody over there and they use the data.
So yeah. Yeah.
Speaker 1 (33m 51s): But you’re right. Consumers love it. Like that breadth of, of potential where I can, you know, reward my everyday behavior, for example, across everything I’m doing. I’m definitely seeing huge amount of that. I know I did a show about a group wide program in malicious, for example, recently on also in Hong Kong. So definitely a big kind of global trend. And again, here where I live, you know, there’s plenty of them, you know, I suppose big ham conglomerates that the master brand might can be known, but they certainly are kind of creating programs and, and running them, you know, across multiple categories.
Speaker 2 (34m 23s): Yeah. And, and we’ve seen that as well in the middle east. So definitely a trend in the middle east sort of big conglomerates coming in and looking to bring the individual portfolios together. Yeah. Definitely leverage value from it. Yep. Yep. And
Speaker 1 (34m 35s): The other part-time, I’m also fascinated about Paul is you mentioned social messaging earlier. So you know, whether brands are as interested and comfortable, I suppose, with incentivizing non transactional behavior. So things like, you know, if somebody is posting nice stuff on Twitter or Facebook or whatever else, and, you know, is this worth rewarding? Are they comfortable investing in that again, give them the focus away from, you know, budgets have been spent on acquisition and now hopefully moving back into the loyalty space.
So, so do you see that kind of behavior coming through as well as programs are evolving?
Speaker 2 (35m 12s): Yes. No. I mean, in built in our platform has the ability to, you know, you get points to somebody who’s shared something or tweeted something or whatever. So they, they, they get value from doing that, which is, yeah, it’s a two way sort of a benefit. So yeah. So it’s definitely seeing that sort of coming into it. I wouldn’t say it’s that being the primary focus, but it definitely is sort of a narrative that’s sort of evolving more and more. And I think it’s social chat channels increase, you know, become not just a messaging channel, but just so you take the line for example, it’s, you know, it started off purely as a messaging channel.
Now you can do a lot more in, in line a bit like we chat, we can actually have many programs and other things that also means you need to engage in those channels more interactively rather than just mode. It’s not about pushing your message out. It’s about using the channel effectively in that way. I think that will be a big area to, to marketers to understand how they use that. You know, I’m pretty sure things like Tik TOK for example, will also know to understand how to use that particular channel, which is in its growth. Yeah,
Speaker 1 (36m 13s): You’re absolutely right. I hadn’t thought about tech talk. So now I have another potential podcast to figure out how to do, but again, actually to, to the conversation earlier, I think what that does again, illustrate is the importance of, you know, the loyalty team intersecting with the brands team to decide how are we going to message or communicate or connect and to use the simpler Sturm am in new emerging channels, because clearly take talk is, is one of the big new stories, but certainly going to not going to be the last one.
So hopefully there’ll be more of that going on.
Speaker 2 (36m 46s): Yeah. And it’s all video, right? So obviously for you, you have a more immersive experience, so have much more emotional poll potentially in your communications and that’s where it becomes. Is it a brand message or is that loyal to message, you know, they’re the most fueled sort of, you know, sort of merged together to some extent or, yeah,
Speaker 1 (37m 3s): I hope they’re at least starting to measure that. So again, I must kind of ask more of my guests coming up on the brand side, whether, you know, I know obviously things like NPS and the KPIs and all of that kind of stuff is being measured. But, and certainly when I worked, let’s say with O two priority, as you know, I also started in Intel CO’s and when we did our brand research and the loyalty program was a part of that in terms of its influence on the overall brand. So, so hopefully that’s something that started to come through as well in the contract we’re working with.
Speaker 2 (37m 33s): Yeah. I’ve the brand research I’ve seen this also see loyalty as, are you a member of it and how do you make your experience as opposed to say, how is it contributing to the brand? So I wouldn’t say, I mean, you know, I’m not saying I’m sure the clients are doing it. I’ve not seen that experience of really treating it as part of the brand component yet. Well, for that will definitely come come through because it is an integral part. It
Speaker 1 (37m 57s): Is an integral part and it feels to me, Paul, and I don’t know if I’m overstating it, but it feels like it’s maybe the next big opportunity, because as we’ve said before, you know, you can have all the technology in the world and again, you have an extraordinary platform and you’re very proud of it and winning awards and getting recognition from the foresters of the world. But I think the, the shift in customer expectations is I don’t think they’d ever use the word emotional loyalty, for example, as a consumer, but I think that’s what they’re expecting to feel coming through.
So I think brands have to show up, have to be there. And I think it’s that critical intersection. And I’ve talked about it in, I’d say a broader terms pole where I would have called it maybe customer experience, but certainly what I’m starting to feel like now is no, the TV budgets and those other kinds of brands, teams are probably people that we can get closer to.
Speaker 2 (38m 49s): Yeah. And I mean, if we look at what’s happening, I mean, particularly in the last 12, 18 months with a pandemic, you know, all the research you’re saying, people are looking for a deeper, deeper, more meaningful connections. Yeah. Brands are starting to look more for purpose or authenticity to a hundred. You want to describe it, but purposeful driven brands and, and therefore, ultimately I think you’ve got to bring those things in and loyalty can help sort of demonstrate some of that and become more purposeful, authentic, certainly can drive more meaningful conversations and experiences with those consumers because obviously you have the data on them.
So I think, you know, there’s this sort of consumer need with this ability to sort of bring loyalty into cos the brand will actually sort of help both, both parties. Yeah,
Speaker 1 (39m 34s): You’re right. Yeah. I think as consumers, we feel it, I think as brands we see that consumers need it and on a case of just kind of, yeah. Coming together to, to leverage things in a way that is, you know, a fair value exchange and really kind of driving the overall business, but feels a bit better and feels less transactional. And as you said, Groza overall value M over the longterm.
Speaker 2 (39m 55s): Yep. Correct. That’s what I think it’s going. Yeah.
Speaker 1 (40m 0s): So I think that’s, that’s a really interesting conversation poll. And as I said, I really, I get excited about any loyalty conversation that has, you know, I suppose a commercial focus, but also the integrity of the emotional piece coming into it as well. So, so I love the fact, as I said, that you were working back in analytics in 1989, all the way through to, to building extraordinary programs and running them like Marriott Bonvoy. So are there any other kind of key topics that you’re seeing coming through that we should, you know, just kind of chat about in terms of what the listeners around the world might, might learn from?
Speaker 2 (40m 38s): I think, I think this whole area of loyalty and brand coming together, it goes back to what I, when I started in my industries is recognizing that you have a left and right side of brains and marketing, right. The creative and the rational. And I think how you bring those together, I think is really important. So you’ve got to have the creative side of it. You got to have that emotional side of it, but you’ve got to have this rationality about the value of the program. And sometimes those twos don’t always connect. And I think, I think it also from a marketer standpoint, how do you recruit people that has those skills and, and bring them, get them to work together because it requires, you know, you gotta, you gotta have the analytics person, which is usually a much more rational and by numbers perspective, you’ve got somebody who’s much more about experience or engagement, you know?
Yeah. But ultimately now engagement can be certainly informed by the data. Right. And so you’ve got now start to bring these two together to work together. And I think the agencies have been able to do this for a while because they’ve had analytics built into the business, but mark is not so much possibly. And, and you don’t tend to have usually out and out creatives as well in, in marketers. I mean, obviously it has changed within housing, but I think that there’s an interesting dilemma there for those senior marketers, how they bring that sort of skills and understanding. And as you’re trying to bring your loyalty program into your brand program and have the two district sides work in tandem in harmony,
Speaker 1 (42m 6s): I liked that idea, Paul, because I’ve often said, I feel like I missed a bit in my career in various things. I would have loved to have worked in PR and I would’ve loved to work in a creative marketing agency because I really do think that you get permission almost to, to come at business objectives, like, like loyalty actually, and, and come up with a totally different perspective. And you’ve reminded me of another good example, actually a show I did over a year ago now, Paul, but it was the British gas rewards again in the UK.
I’d like both of us in the utility sector. But what I really loved about that again, particularly was they were struggling on the brand side. So, and the whole energy sector, I think particularly the British media, give it a really tough time, you know, energy prices rise and, and, you know, the, the, the service providers are almost blamed for that, but British gas rewards then gave them almost a new tool and you whole set of messaging to em, to give back and have that overall experience for the customer where they could connect.
I think in them in a different way, they have a lovely character called I think Wilbur where, you know, you can just kind of make it friendly, maybe make it family focused. And actually people then kind of see it, not just as a utility and as an energy company, but they start to like the brand a lot more.
Speaker 2 (43m 23s): Yeah. Or maybe not even see it as a program. They now see it as a yeah. As a figure, a figure, you know, representation of, of the program. And it sort of, it sort of becomes less corporate in a way and much more consumer orientated. I think that’s part of what creative brings to the table. Yeah. Yes,
Speaker 1 (43m 37s): Yes, absolutely. Will. I doubt it was a data analyst who came up with Wilbur. So I think you never know, but I think it proves your point that we probably need to be looking to the marketing agency community to bring those into our loyalty programs, to see what we can do to, to humanize is too emotional lies it. If that’s a words and, and yeah. Really drive the feeling of loyalty, not just the overall loyalty program.
Speaker 2 (44m 4s): Yeah. And I think the other thing is, again, now coming back into a publicist agency that they don’t have a loyalty agency per se. I mean, a lot of big agencies don’t, you know, they’ve been sort of the sort of domains of specialist loyalty companies in the way. So again, it’s, it’s another interesting sort of dynamic or whether that becomes now more mainstream in an agency environment.
Speaker 1 (44m 23s): Absolutely. Yes. And I know I was looking at publicists and I know it is still one of the largest and longest established and marketing and PR agencies in the world and obviously headquartered in Paris. So publicist does extraordinary work. So, so I think the partnership between publicists and Epsilon is Jill stem
Speaker 0 (44m 40s): Is just extraordinary. So Paul Davies, senior
Speaker 1 (44m 44s): Vice president for APAC Mia or Epsilon. Thank you so much from let’s talk loyalty.
Speaker 3 (44m 49s): Thanks. this
Speaker 0 (44m 55s): Show is sponsored by the wise market here. The world’s most popular source of loyalty, marketing news insights and research. The widest marketeer also offers loyalty marketing training through its loyalty academy, which has already certified over 170 executives in 20 countries as certified loyalty and marketing professionals. For more information, check out the wise market tier.com and loyalty academy.org.
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