#153: New Zealand Loyalty Expert Shares Exciting Airline & Grocery Loyalty Insights

PAULA: Welcome to Let’s Talk Loyalty, an industry podcast for Loyalty Marketing Professionals.

PAULA: 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.

PHIL: Thank you.

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PAULA: Hello and welcome to episode 153 of Let’s Talk Loyalty.

PAULA: Today’s guest is a leading loyalty personality in New Zealand, having built some fabulous loyalty propositions in his career to date, which includes Air New Zealand, Qantas, and now in the grocery retail sector for Countdown, which is a market leader in New Zealand and part of the Woolworths Group.

PAULA: Phil Devlin is head of strategic partnerships for Countdown, and he shared with me the simple value proposition that the Countdown program offers to its customers in New Zealand, as well as the power of some of the partnerships with the likes of AA Smart Fuel, who were also recently guests on the show.

PAULA: So I hope you enjoy this conversation with Phil Devlin from Countdown New Zealand.

PAULA: So, Phil, I am so happy that you’re joining me today from New Zealand.

PAULA: How are you doing today?

PHIL: I’m really well, thanks, Paula.

PAULA: Yeah, yeah.

PAULA: I know you’re still in a lockdown.

PAULA: So I just wanted to, first of all, acknowledge that it’s still a pretty tough time with the COVID situation.

PHIL: Yeah, it is.

PHIL: And particularly my sympathy goes out to other working parents as well.

PHIL: Trying to do your day job and educating three children under 10 is a whole lot of laughs.

PAULA: My goodness.

PAULA: Okay, well, they will love you all the more for it.

PAULA: I have no doubt, Phil.

PAULA: So listen, let’s get straight into it.

PAULA: I’ve been really, really excited to hear the Countdown story and your entire loyalty career, I know has some really interesting case studies that we’re gonna talk through.

PAULA: So as usual, let’s just kick off with your favorite loyalty statistic and then take it from there.

PHIL: Cool, thanks.

PHIL: Well, the thing that always intrigues me about loyalty in New Zealand is just the sheer penetration that loyalty has into our society.

PHIL: So, and that’s best borne out by the fact that 95% of New Zealanders over the age of 16 are members of at least one loyalty program.

PHIL: And when you think of the total number of New Zealanders coming in at just a fraction over 5 million, we’ve got a minimum 3 1⁄4 million engaged in loyalty programs.

PHIL: And that’s just a tremendous example of how loyalty impacts all aspects of our society.

PAULA: And I think I’m going to credit you guys with doing an excellent job, Phil.

PAULA: And I also, you know, you’ve prompted me to think about, I wonder what the penetration is for me in Ireland, because actually Ireland and New Zealand are very similar, I think, in terms of maybe size and mentality.

PAULA: So I’m hoping to get comparable stats from my country, but that’s amazing.

PHIL: Yeah, thanks.

PHIL: And we do look to Ireland a little bit in terms of that demographic population as well, another small country punching above their weight and really leading the way in so many areas.

PAULA: Wonderful.

PAULA: Thank you for that.

PAULA: Great stuff.

PAULA: So tell me the first big role that you got involved with Phil from a loyalty perspective, I know was with Air New Zealand.

PAULA: And you shared with me some of the extraordinary work that you were doing there.

PAULA: So maybe just give us an introduction to that program and some of the concepts that you developed, because I actually don’t think I’ve heard or seen anything like this in any other markets.

PAULA: So maybe tell us that story.

PHIL: Yeah, sure.

PHIL: I really enjoyed my time at Air New Zealand and it’s a tremendous business that really appeals to the hearts and minds and puts a lot of pride into New Zealanders as well as the national carrier.

PHIL: I joined in 2013 after a five year stint at the warehouse group, which is another one of our listed retailers.

PHIL: And it was at a really interesting time for Air New Zealand.

PHIL: They were transiting from being a classic frequent flyer program into a loyalty and data driven program.

PHIL: And what came with that was a really significant piece of market analysis to articulate where household spend was occurring in New Zealand and how that would translate into potential loyalty opportunities.

PHIL: And we looked at households across the country and analyzed the percentage of spend that was going into categories that weren’t penetrated by loyalty and then looked to bring a loyalty proposition into those areas.

PHIL: And we went into luxury cars with Audi.

PHIL: We went into real estate with Bailey’s, which is one of our national real estate providers as well.

PHIL: So list your houses with Bailey’s and earn Air New Zealand Airpoints.

PHIL: Purchase a new Audi, earn Air New Zealand Airpoints.

PHIL: And really grew the program quite significantly through that business development activity over a period of years.

PHIL: So just a really exciting time to be with the business, met some tremendous people, great leaders, visionaries, and worked for some courageous executives that backed the team and believed in the loyalty proposition.

PHIL: And specifically for Air New Zealand, the program is a little bit different to other aviation programs and that you earn dollars as opposed to miles.

PHIL: You earn them by flying with Air New Zealand, but they represent as dollars and that gives you a really transparent mechanism for redemption as well.

PHIL: So yeah, fabulous program.

PHIL: A lot of really, really fantastic people.

PAULA: And the particular piece I suppose that I was excited to hear was the real estate piece.

PAULA: And it’s almost like, I’m not sure why other markets, or maybe I’m just not aware of it, Phil, but if I understand you correctly, so it’s the seller, as you said, the listing with the real estate agency.

PAULA: So that’s the funding model there.

PAULA: But is it your experience that this is something that’s been executed in other markets, or is this something that you think actually was quite new to do in the New Zealand market?

PHIL: It was certainly the first offering of its kind in the New Zealand market.

PHIL: I’m not aware that there’s too many other markets that are doing it, but we have a unique kind of set up in New Zealand where the Kiwi dream has always been to own your own property.

PHIL: So there’s a lot of effort goes in at a societal level to house ownership.

PHIL: And we have some of the most expensive real estate prices in the world relative to income.

PHIL: And so therefore the market’s very concentrated and real estate companies are looking constantly for points of differentiation.

PHIL: And that’s the idea of linking up with two national brands, Air New Zealand Air Points and Bayley’s to offer up points on sales really helped to differentiate them in terms of their own competitors.

PAULA: Yeah, of course, absolutely.

PAULA: And did they get it straight away, Phil?

PAULA: I’m guessing they did because of the strength of the Air New Zealand brand.

PAULA: But as you said, it was a pretty innovative concept at the time.

PHIL: Yeah, it was picked up pretty well straight away.

PHIL: And that is down in part to the reach of the Air New Zealand brand and also the reach of the Bayley’s brand as well.

PHIL: They’re an acknowledged market leader here in New Zealand.

PHIL: And the concept is really simple.

PHIL: And the idea of getting air points dollars for doing that was an easy thing to articulate in campaigns as well.

PAULA: Yeah, yeah, absolutely.

PAULA: Well, there’s the immediate customer understanding, which I always think as loyalty professionals, we can easily overcomplicate things because we’re trying to cover off all our business rules and all of our legal stuff and whatever else.

PAULA: So, but even actually, I know you mentioned, you even went as far, you mentioned Audi, which again is another brand I’m a huge fan of and I’m sure they loved the proposition.

PAULA: And even as far as insurance and white goods, so a very comprehensive, home-based, I guess, lifestyle approach to the program.

PHIL: Yeah, we used to talk continually about the Airpoints house and having a lot of your, I guess, typical interactions earning Airpoints and treating that as a very smart decision.

PHIL: And that’s taking the view that if you’re buying a car and you’re choosing between an Audi, a BMW or a Mercedes, they’re all good options.

PHIL: What’s the differentiator apart from the brand?

PHIL: And yeah, the addition of Airpoints to that and the demographic of the base as well was an attractive fit.

PHIL: And I think to attaching Airpoints to regular household spend categories, particularly with engaged customers, drives a lot of retention and stickiness.

PHIL: So there’s a great two-way story.

PHIL: It drives loyalty to the Airpoints product, which ultimately translates to revenue bookings on Air New Zealand flights.

PHIL: But it also helps businesses solve particular problems of their own.

PHIL: So if it’s retention, being able to talk to Airpoints as a loyalty currency certainly helps with that.

PHIL: It’s an attractive acquisition currency.

PHIL: It’s also demonstrated great stickiness as well.

PHIL: So once you’re in, once you’re paying with a credit card, once you’re double dipping on each end of the transaction, it becomes a really compelling proposition.

PHIL: And this was the dominant carrier and still is the dominant carrier in New Zealand, and firmly in the hearts and minds of New Zealanders.

PAULA: Yeah, yeah.

PAULA: And I always loved double dipping.

PAULA: So again, with my points junkie hat on, my goodness, and particularly with big product spends and big lifetime investments, like you’re talking about there, to be able to get the credit card side of it, as well as, as you said, the car brand.

PAULA: And my God, I’d say that was incredibly powerful on a commercial level, was it?

PHIL: Yeah, it was.

PHIL: And it really helped the program, I guess, turbocharge their growth aspirations.

PHIL: And then it went from being a program where you earn through flying to a program where you could really earn on the ground.

PHIL: And in between flying.

PHIL: And that became really powerful because it just provided a source of free cashflow to the airline.

PHIL: It drove loyalty even when you weren’t at the point of purchase.

PHIL: Because if you’re filling up your car, paying on an Airpoints credit card, earning on both sides of the transaction, you are displaying loyalty to the program and the scheme.

PHIL: And that loyalty is effectively a guarantee of future revenue.

PHIL: Because once your points start to accumulate, you get into that wonderful position of being able to dream about how you’re going to use them.

PHIL: And if that’s as simple as a flight down country to see family or an upgrade on an international flight, it gives that kind of uniqueness of your own experience as well.

PHIL: Plus, the ability to pool at a family level as well.

PHIL: Really exciting as well when you’ve got a big family like me.

PAULA: Yeah, of course, Phil.

PAULA: Yeah, and I do think there’s so many, particularly airline loyalty programs that are doing a great job of building their lifestyle propositions, but seem to be focused more on the, let’s say, day-to-day spend.

PAULA: So whether it’s the grocery retailer or the fashion retailer.

PAULA: So I think you just took it to an extra level there.

PAULA: So definitely a fascinating case study and hopefully one that I’m sure you’re super proud of.

PAULA: And I guess what’s in my mind now, Phil, is how on earth were you tempted away from that role?

PAULA: Because certainly for me, with my airline background, it’s a really exciting sector and definitely where you get the power clearly to create propositions and to be truly innovative.

PAULA: So what tempted you away from your time with Air New Zealand?

PHIL: It was probably a role in high-performance sport.

PHIL: So I got the opportunity to go and apply a lot of what I’d learned in corporate life to the success of New Zealand on the international stage at an Olympic level.

PHIL: And that was something that was always really attractive to me and I enjoyed that opportunity over the time that I was there in terms of commercializing some of the activities of the New Zealand Olympic Committee as well.

PHIL: But they say that aviation gets into your blood a little bit.

PHIL: And it certainly got into mind to a degree because I think in a lot of the loyalty businesses I’ve worked at, the cutting-edge stuff has typically originated out of aviation programs and that holds true in New Zealand with Air New Zealand Air Points and Qantas Frequent Flyer over in Australia as well.

PHIL: And those guys have typically been the first ones to harness the power of their data to really focus in on the customer experience.

PHIL: And then you see other industries start to narrow in on that and see that opportunity and start to apply it to different categories like retail, for example, seeing it a lot in financial services.

PHIL: I think there’s a big emerging opportunity in MedTech as well.

PHIL: So there’s a bunch of stuff that I think can have loyalty applied to it, but the vanguard has always been the aviation programs out front.

PAULA: Absolutely.

PAULA: So MedTech is definitely one that caught my attention there, but yeah, just the New Zealand Olympic Committee stuff, that sounds absolutely fascinating.

PAULA: I think I mentioned to you Allfair, I have some, again, just personal friends involved with the Irish Olympic Committee.

PAULA: So I’ve already committed myself.

PAULA: I don’t know about you, Phil, but I’m determined to get to Paris when the Olympics come round, because I feel like we totally missed out, obviously this year.

PAULA: Not sure if I could have afforded to go to Tokyo, but hopefully get there at some point.

PHIL: Yeah, it’s certainly nothing fires up your heart, like seeing your country do well on the national stage, and there’s nothing like the Olympics to kind of be the outward demonstration of pride in your country.

PHIL: And yeah, I guess the pinnacle of an athletic achievement.

PHIL: And yeah, selfishly speaking, I’d love to get to Paris as well.

PHIL: That would be tremendous.

PAULA: Excellent, excellent.

PAULA: So tell us then, I know you did a stint also with Qantas, heading up at New Zealand’s frequent flyer business as country manager.

PAULA: So tell us about your time with Qantas.

PHIL: Yeah, another great experience with a really tremendous company and Qantas.

PHIL: So I came on board as part of a Qantas strategy that really focused on New Zealand.

PHIL: So three things happened.

PHIL: They set up a loyalty business in New Zealand, which I was privileged to lead.

PHIL: They introduced competition on the Trans-Pacific route out of Auckland to Los Angeles in a JV with American Airlines.

PHIL: So that brought a lot of focus on to that.

PHIL: And it had a downstream benefit for customers in terms of prices.

PHIL: And then lastly, they started flying their low cost brand Jetstar on domestic routes in New Zealand as well.

PHIL: So it had flown the main trunk for a number of years, but it started to add a number of our regional centers, Napier, New Plymouth, Palmerston North and Nelson.

PHIL: So I guess the triangulation of those three strategy pieces was really exciting to be part of that business in New Zealand as well.

PHIL: And very different, I would say, to Air New Zealand.

PHIL: So the two brands have a kind of a healthy respect, but almost a frenemy kind of relationship.

PHIL: Yeah, Kiwis and Aussies.

PAULA: Totally.

PHIL: I was sitting in the Qantas office in New Zealand and seeing the All Blacks get ready to play the Wallabies who had Qantas emblazoned on their chests.

PHIL: So that was always an interesting dilemma.

PHIL: Yeah, but a real, an absolute hotbed of loyalty, knowledge and experience.

PHIL: And I learned a lot in terms of how they operate, the scale and intellectual property that they’ve bought aviation programs globally.

PHIL: And just a very big, but extremely well run business.

PAULA: Yeah, yeah.

PAULA: And actually when I think back, Phil, you know my loyalty background and certainly all of my listeners do as well at this stage, but I suppose when I went from, running one loyalty program in Ireland in a telco business to really appreciating the profitability or the power of potential profit was actually a story I heard about Qantas in Australia.

PAULA: And it was with Loyalty Magazine in fact, who run or used to run certainly lots of conferences.

PAULA: And I remember there the lady Anish Macintosh who runs that event, talking about Qantas’ frequent flyer revenue, which I remember she said was exceeding the international revenue for the airline.

PAULA: And I nearly fell off my seat, Phil.

PAULA: So I’m sure it’s certainly not news to you with your incredible background, but I still think there’s a lot of loyalty professionals don’t realize particularly maybe the Australian market just has it nailed better than anybody else, but it’s extraordinary how much money flows through the airline loyalty programs.

PHIL: Yeah, it’s incredible.

PHIL: And I think that COVID’s probably brought that into even sharper focus.

PHIL: So with jets being grounded and flying being at a minimum compared to what a typical schedule would be, the ability for the airlines to earn revenue through ancillary activities like the loyalty programs has become more and more critical to their ongoing profitability.

PAULA: Fabulous, fabulous.

PAULA: So now you’re in a completely different space with Countdown, which I know is a fantastic grocery brand across New Zealand.

PAULA: I think you told me 190 stores nationwide.

PAULA: So super excited to hear all about that program.

PAULA: And I know you heard as well, by the way, we already had our first Kiwi loyalty program story with your friends in AA Smart Fuel recently.

PAULA: So you guys all work super closely together.

PHIL: Yeah, we do.

PHIL: And I particularly enjoyed that episode with Ian and Jordan as well.

PHIL: And we were really closely with them.

PHIL: So Countdown for Context is part of Woolworths Group.

PHIL: The biggest single supermarket brand in New Zealand has had a really strong performing business in the loyalty space called OneCard for many years, over 20 years now.

PHIL: And for the last five and a half years, has been partnered with AA Smart Fuel, the business that Ian co-founded.

PHIL: And the two brands coming together enabled AA Smart Fuel customers to earn at Countdown as well, and also enabled Countdown customers to earn AA Smart Fuel cents per litre discounts as well.

PHIL: And that’s important in New Zealand because our average salaries are low compared to many other countries in the world, and our price of fuel is very high.

PHIL: And we have a population that’s still quite wedded to driving their cars everywhere.

PHIL: So anything you can do at a household level to reduce the cost of a tank of gas is something that KeyWedge really sees on.

PHIL: And the success of the Smart Fuel business is proof positive of that.

PHIL: And that partnership has, I believe, delivered real value for both parties.

PAULA: Wonderful, wonderful.

PAULA: And just very impressive as well to hear that OneCart itself is around for more than 20 years.

PAULA: So maybe tell us a bit about the proposition and exactly how you work.

PAULA: I think particularly, I suppose, Phil, what I’m always interested in, because I’ve never worked in grocery loyalty, is perhaps how it works, of course, for consumers, but also with maybe suppliers.

PAULA: So whether some of the manufacturing brands get involved in the program and how it all then comes together for the consumer.

PHIL: Yeah, sure.

PHIL: So the OneCart program is really simple.

PHIL: And I think as you move further down the development of loyalty programs, simplicity becomes key.

PHIL: And we’ve looked at that at a program level for some time.

PHIL: So how it works is for every dollar you spend in store, you earn one point.

PHIL: So it’s all nice and clear and transparent.

PHIL: When you reach 2000 points, you get an automatic e-voucher.

PHIL: And that’s served up to you through the pointer sale.

PHIL: So you’ll be scanning your groceries and it’ll say, you’ve got a $15 voucher, would you like to use it today or save it for another day?

PHIL: So it’s always a nice surprise, a bit of a surprise and delight.

PHIL: And along with that, we’ve got our one card specials as well.

PHIL: So typically we have a number of items on sale each week that attract double points or two for one.

PHIL: And they’re specials that are unlocked by swiping your one card through the pointer sale.

PHIL: And that drives, I guess, a little bit of the instant gratification as you’re trending your way up to the rewards event as well.

PHIL: And how it works, particularly with regard to AA Smart Fuel, is that at the start of the program, you elect to earn either the one card currency, one card points or cents per litre discounts in the AA Smart Fuel program.

PHIL: And then your comms and your journey are very much customized down that pathway.

PHIL: And more recently, and to address your other question, advances in our technology stack and our desire to bring more value to customers has seen us start to move into boosts.

PHIL: And boosts are kind of what they say, an opportunity for you to boost your points balance or boost your CPL balance.

PHIL: And they can be a mix of either supplier funded, so buy two bottles of Coca Cola hypothetically and get a bonus CPL or bonus one-card points, or they can be derived from our own data set as well.

PHIL: So in the case of me, for example, it might notice that I have a predilection for a certain type of beer, and it can give me an offer to try a new beer within that category or try a different, but similar category as well.

PHIL: So that’s a really powerful tool and it’s bringing our data set to life in a way that’s really focused in on the customer.

PHIL: And it’s also focused in at a really efficient level as well, because you only pay for that discount when you’ve got customer engagement.

PHIL: And that gives you, I guess, the information that the offer is right and it’s attractive.

PHIL: And then if it’s not right and it’s not attractive and it’s not taken up by the consumer, there’s no cost to the business for putting that up.

PAULA: Oh, wonderful.

PAULA: Yeah, performance-based marketing, it’s a fabulous term and a fabulous concept.

PAULA: And can I ask how the suppliers generally react?

PAULA: Because again, I’m trying to get a sense of the level of sophistication, because I do have this feeling that in grocery, there’s a lot more expertise that, again, I haven’t had visibility of or just experience working with.

PAULA: So I’m really keen to hear how aware, like are they coming to you to access the loyal base of customers?

PAULA: Or does it tend to be coming maybe from a Countdown perspective to build the education around it?

PHIL: Yeah, it’s probably a mixture of the two.

PHIL: There’s certain brands and certain manufacturers that definitely come to us because they’ve either participated in the One Card program previously with club prices, and they’ve seen the value and the impact that can have for their business.

PHIL: And then there’s opportunities where Countdown will engage with supply partners to present certain opportunities as well, which they can choose to take up.

PHIL: And it’s a kind of very collaborative approach.

PHIL: It’s not driven massively either way.

PHIL: It’s probably a balancing act of the two.

PHIL: And because it’s really important to the business that we make the right offer at the right time for the right person.

PHIL: And what’s right for you might not be right for me.

PHIL: And that the old approach of spray and pray is something that we’re trying to do away with and be a lot more targeted.

PHIL: But really address that balance between knowing you and showing you value and crossing the line into potentially showing you too much or making the wrong offers.

PAULA: Yeah, yeah.

PAULA: No, you’re right.

PAULA: I think as a community of marketeers and certainly loyalty marketeers, I do think we have the very clear understanding that we want to be treated with respect ourselves as individuals.

PAULA: And definitely I think that’s translated into how we run our loyalty programs, thank God.

PAULA: Whereas actually I heard a shocking story the other day, which is again, just more around how cookies do track our behavior sometimes in ways that makes us a little uncomfortable or sometimes very uncomfortable.

PAULA: So I do think as loyalty data owners, I think we have just that mindset of respecting the data and using it in a much more powerful way.

PHIL: Yeah, I couldn’t agree more.

PHIL: I think that firstly compliance is our license to operate and we take that really seriously.

PHIL: And secondly, we’re custodians of some great brands and we want those brands to be representing the right things.

PHIL: And it’s a nightmare to think that lack of attention to detail could see a great company on the front page of the newspaper for the wrong reasons.

PHIL: And we don’t want that.

PHIL: We absolutely want to comply with the rules and do things the right way.

PAULA: Absolutely, yeah.

PAULA: And again, what I always love about the CPG sector or any manufacturing brand is their understanding of what consumers do want.

PAULA: So their own kind of brand integrity does always come through in everything they execute.

PAULA: And I think what I particularly like, what you said there, Phil, is that they’re coming back to you, having seen success with campaigns in the past, because again, like I’ve worked in the media business and not every form of media works.

PAULA: So when you have an advertiser or somebody coming to sponsor or support a campaign with you, it’s just a vote of confidence, I think that you’re doing good work all around.

PHIL: It is, and it’s also something that I think really supports the increased visibility and transparency that business wants today.

PHIL: So if you’re making the investment, you wanna know that that investment’s translated to the outcome you’re trying to solve for.

PHIL: And if that’s selling more bags of potato crisps, great, because we can actually use our data set to track that.

PHIL: We know how many people we’ve got.

PHIL: We know how many people buy potato chips.

PHIL: We know how many people have opted in to receive offers about potato chips.

PHIL: So we can present a really compelling audience to a third party like that.

PHIL: And provided we take the appropriate customer consents, which is back to that license to proceed.

PHIL: And I think that gives you great measurability as well, versus taking out an ad on the middle pages of the newspaper or a 32nd TVC can often be a bit tough.

PAULA: Well, I’ve often said, I don’t know how I would sleep at night if I was trying to make those decisions, because the attribution and the measurability is just too hard for me.

PAULA: Clearly it has an incredible role to play, but yeah, we definitely share that love of seeing what comes through.

PAULA: And again, on the back of a strong, respectful relationship, I just think is probably why we all love working in the loyalty business.

PHIL: Yeah, that and I think the variety.

PHIL: True.

PHIL: Yeah, just I reflect often that there’s very few industries that expose you to multiple other industries.

PHIL: And loyalty is that you can be talking to a telco in the morning, an insurer in the afternoon, and a vehicle manufacturer in the evening.

PHIL: And that variety keeps you interested.

PHIL: It broadens your own business acumen.

PHIL: It builds out your network.

PHIL: And it’s just a really interesting topic.

PHIL: And everybody has a story or a question or anything like that, that they often want to ask about loyalty.

PHIL: So it does engage people a lot.

PAULA: For sure, for sure.

PAULA: And just on a very, I suppose, practical detail, Phil, I was doing a couple of shows recently, just looking at the form of identification.

PAULA: And I’m sure, you know, Countdown has various different options.

PAULA: I’m sure there’s a physical and a digital option for the one card.

PAULA: But the reason I just want to ask about it, because it’s normally not something that would even be a question in my mind.

PAULA: But certainly research coming out of both Australia and South Africa have shown just in the last couple of years that the actual physical card seems to be having a resurgence of popularity, which in a time where I thought we were all going digital, I thought we were all going contactless.

PAULA: And, you know, I’m pretty clear that my phone’s the only thing I’m always going to have with me.

PAULA: What’s your experience with Countdown in terms of how customers want to identify themselves?

PHIL: Yeah, it’s a real mix of the two.

PHIL: So we’ve got, within New Zealand at a demographic level, we’ve got quite an aging population.

PHIL: So we’ve got a cohort of, I guess, baby boomers that are reaching retirement age.

PHIL: And they strongly identify with them scanning their plastic card, keeping it in their wallet or purse and scanning that in the network.

PHIL: And there’s a habitual kind of reassurance in doing that.

PHIL: And against that, we’ve got very high mobile penetration, fantastic fiber broadband nationwide, and a real rise in digital natives that are scanning at every opportunity.

PHIL: And we have ambitions around being a digital first business, but we also recognize that as a retailer, we engage the way our customers would like us to engage.

PHIL: And that’s leading on digital, but having backup options as well that are more traditional.

PAULA: Okay, okay.

PAULA: So it is following the, I suppose cliched demographics, but what we would expect.

PAULA: So it’s not that there is a younger cohort that is saying, actually, we like to have the card.

PAULA: It is following exactly what I guess we’d expect traditionally.

PHIL: Yeah, it is kind of traditional.

PHIL: And I think that there’s been some other causal factors like COVID, for example, the heightened sensitivity around hygiene and hand washing and contactless as well.

PHIL: And that does drive a lot back through the app.

PHIL: So you can control how clean your hands are.

PHIL: You can control how clean your phone is.

PHIL: And if you’re in an environment where you’re the only one touching things, it brings a reassurance all of its own as well.

PHIL: So I think there’s definitely gonna be thought and consideration for that moving forward as we navigate this globally.

PAULA: Yeah, for sure.

PAULA: And I guess, you know, and I do feel like, you know, some countries are starting to emerge from the pandemic.

PAULA: I know obviously there, you know, you guys are still struggling.

PAULA: I know a lot.

PAULA: So again, sending all of the, you know, best possible support and energy to get you guys through it.

PAULA: It’s still, you’re still in lockdown, if I’m right.

PAULA: Aren’t you at the moment?

PHIL: Yes, we are.

PHIL: We’ve had six weeks here in New Zealand.

PHIL: In Auckland, where I am now, we’re just in our second week of what we call Level 3.

PHIL: So that’s a full lockdown, work from home, no school.

PHIL: But with takeaway coffee and Uber Eats, which is great.

PHIL: Level 4, you don’t have the coffee or the Uber Eats.

PHIL: You’re literally at home the whole time.

PHIL: And New Zealand’s had a tremendous run with COVID, in a sense, our isolation and strong action early in 2020 insulated us for a while.

PHIL: But I think the Delta strain has just infiltrated the world and we’re no different.

PHIL: I mean, I think we’re protected by the Pacific Ocean, but it did get back into New Zealand a while back and it’s been a lockdown, but vaccination’s the key.

PHIL: And we, again, look to a country like Ireland, number two on Bloomberg’s rankings now for openness.

PHIL: And incredible.

PHIL: New Zealand’s dropped all the way to 38th, but that’s cyclical.

PHIL: I mean, I think you guys had that with your winter, you vaccinated effectively and now you’re opening up to the world again.

PHIL: And we’re coming out of winter into summer, starting to vaccinate effectively and God willing, we’ll open up as well.

PAULA: Wonderful, wonderful.

PAULA: Well, listen, thanks for the update on that side, Phil.

PAULA: And I guess the reason I was thinking about that is, it has obviously dominated conversation for the last 18 months and to the detriment of another, probably the most important topic in my mind, which I think loyalty is moving into.

PAULA: And I know you’re very passionate about, which is the whole area of sustainability.

PAULA: And I really think loyalty increasingly has a role to play to, I suppose, first of all, incentivize behaviors that are sustainable for the planet and for, I suppose, even at a local level.

PAULA: So I’d love you to talk me through any insights you have in terms of how loyalty and sustainability are starting to come together in some ways.

PHIL: Yeah, it’s something I’m personally passionate about.

PHIL: And something that I think is a big opportunity.

PHIL: So for a long time, I’ve thought that the audiences that we can reach through loyalty are significant.

PHIL: And what we’re hearing bottom up in our research is that consumers are more and more aware of their impact on the planet, their own impact as a personal citizen, and the impact that brands and companies have, and how they feel about those brands and companies due to environmental or sustainability concerns.

PHIL: And I think there’s a real role for loyalty to play there as well.

PHIL: And through our partnership with AI Smart Fuel, we’ve got access to CarbonClick as a redemption option, so a carbon offsetting program.

PHIL: But I think there’s more we can do at our own level within Countdown.

PHIL: And you see that roll out through campaigns like removing plastic from stores.

PHIL: But I think there’s a real role for loyalty to, in a macro level, help drive consumer advocacy towards more sustainable solutions.

PHIL: And that can be as simple as incentivizing low carbon options, incentivizing low plastic options with loyalty points, incentivizing healthy fresh options versus highly packaged options.

PHIL: And that has a societal benefit as well.

PHIL: And one thing Countdown’s very focused on is being good and green for New Zealand.

PHIL: And that sustainability is right in the wheelhouse.

PHIL: And if you extrapolate that further, when we talk as a steering committee of companies that are engaged in loyalty, the one thing that every company does, irrespective of their industry, sustainability is near the top of their agenda.

PHIL: So loyalty has a role to play, I guess, in bringing that together, harnessing all of the coalition effect that loyalty can deliver, but focusing it on something rather than just for personal gain, for planetary gain.

PHIL: And whoever can crack that, I think will take their customer engagement to a whole new level.

PHIL: And that will have obviously economic benefits as well.

PAULA: Yeah, yeah.

PAULA: No, I love that absolutely, Phil.

PAULA: And again, I’m actively inviting anybody listening who does have solutions in this space, obviously to reach out because I see one of the things I can do is maybe share messages about solutions that are out there.

PAULA: So I’ve certainly talked with Earth Rewards in the past, one great solution out of the UK.

PAULA: But again, anyone who’s looking at doing something, you’re absolutely right.

PAULA: I think we need all the help we can get, Phil.

PAULA: So amazing to hear that Countdown is really focusing on that.

PHIL: Yeah, and I think it’s only gonna become more apparent in future years as well.

PHIL: I think we’re breeding a generation of people in New Zealand that are gonna take this way more seriously than my generation.

PHIL: And yeah, I like to think that we took it seriously, but what’s coming through is a whole different approach.

PHIL: And that’s super exciting.

PAULA: It is, yeah, yeah.

PAULA: And there is a lot of criticism of younger generations, as we know, because maybe you just get to a point where we have to start comparing ourselves to our kids and our friends’ kids or whatever, but you’re absolutely right.

PAULA: You know, that there really is an incredible level of dedication to fixing it and fixing it properly and to having more integrity around, you know, the planet and what it does for us.

PAULA: And again, one of the bizarre, you know, as we talked about, effects of COVID is, you know, there has been some environmental relief almost, obviously at a huge cost, but probably did show people what’s possible.

PHIL: Yeah, I agree.

PHIL: I think pros and cons, I think amazing impacts on things like water purity.

PHIL: You see it walking around the foreshore of Auckland, the harbour looks great because we’re not using it so much.

PHIL: But what you do also see is disposable masks floating in there.

PHIL: And that’s something that pre-COVID we wouldn’t have seen at any sort of level.

PHIL: So it’s, you know, with the planet, you don’t want to rob Peter to pay Paul.

PHIL: We’ve only got one planet.

PHIL: So making the most of it for future generations and custodians is hugely important.

PAULA: Yeah, for sure.

PAULA: And speaking also future generations, Phil, I think, you know, my other favorite topic then is really innovation and any ideas or suggestions, or I suppose just your general thoughts on what we as loyalty professionals should be looking out for, you know, to cut through.

PAULA: Because again, I think particularly airlines, I suppose, you know, we’ve done so much, but I often hear criticism that people do get a bit jaded if they just hear points coming through.

PAULA: So what else do you think we can do as loyalty professionals to really excite our members?

PHIL: I think there’s probably a couple of things, and one’s not exciting as such, but I think it will be really powerful.

PHIL: And that’s taking steps to reduce complexity in programmes and really drive simplicity.

PHIL: We see so much legalese and jargon attached to our industry that it can be off putting for people that aren’t intimately involved.

PHIL: And I see in New Zealand at the moment, we’re looking at a parliamentary act on a plain language bill.

PHIL: And I think the role for loyalty there is really exciting.

PHIL: If we can destigmatise the language and destigmatise some of the confusion, I think you engage more people more often.

PHIL: And for me, the big battle has always been to win the hearts and minds, you need to reach them first.

PHIL: And that engagement is really critical.

PHIL: And we don’t often as an industry do ourselves any favours with buy this, get that, asterisks, pages and pages of T’s and C’s and all of that kind of stuff.

PHIL: And I think there’s definitely steps we can take there around innovation there, which is entirely unsexy, but we’ll have a great practical application.

PHIL: And that’s something I’d like to see New Zealand really leading the way on as well.

PAULA: And I’ll just pick up on that actually, Phil, before you move on, because my rule, when I was negotiating partnerships, because I love the way you’ve explained it there, I always said, you can have one asterisk, as in you can have one but.

PAULA: So, you know, you could say here, you know, it’s valid, you know, six days a week, but after 6 p.m.

PAULA: for example, like that was totally fine.

PAULA: As long as there was only one condition, once somebody started adding in multiple parameters, you know, we all glaze over as customers.

PAULA: And I think you’re absolutely right.

PAULA: I did a full show on simplicity as a business principal.

PAULA: So I really, really definitely agree with what you’re saying.

PAULA: So we’ve almost given ourselves ridiculous complexity, I think, yeah?

PHIL: Yeah, and I think it probably erodes trust, particularly amongst people that aren’t involved in it as in their day-to-day life, like you and I are.

PHIL: I think that the more we can keep it at a legally compliant yet conversational level, I think that’s gonna be incredible to de-stigmatize it for people as well, because people’s eyes glaze over very quickly these days as well, and no one’s got time to necessarily read four or five pages of Teas and Seas, in some cases even more.

PHIL: So we’ve got a duty here to tell people what we do in plain language and stand by it as well.

PAULA: And I will just quote you as well, actually.

PAULA: I do love when people come out with words of wisdom, Phil.

PAULA: So to win hearts and minds, you have to reach them first.

PAULA: I think that’s a gorgeous concept.

PHIL: Oh, thank you.

PHIL: Yeah, it’s engagement is I think the single most critical thing that I’ve come across in my entire loyalty career.

PHIL: So you can have the greatest program in the world, but if it’s not engaging for customers, you haven’t got a chance.

PHIL: And I observe that our lives are getting busier in a lockdown environment where we’re so attached to our computers, mobile phones, tablets, et cetera.

PHIL: And we’re bombarded with messages.

PHIL: So to really stand out, you’ve got to engage people and that talks to what’s the single commodity you can never get back and that’s time.

PHIL: So if you win the eyeballs of people for longer, you will ultimately win the game.

PHIL: And that’s something that we’re really passionate about in our business now.

PHIL: We’re in an industry that’s not a unique industry.

PHIL: Our competitors offer similar products and do a wonderful job.

PAULA: Yeah, of course.

PHIL: Our battleground and differentiator is on earning that engagement and then translating that engagement into repetition and loyalty.

PHIL: And that’s the role that an effective loyalty program can play in that engagement is just, it’s huge.

PAULA: Wonderful, wonderful.

PAULA: So any other innovations or trends Phil, that you think in addition to simplicity?

PHIL: Yeah, look, I think one of the big trends that I’m personally really excited about is probably the emergence of SaaS platforms and composable architecture.

PHIL: So historically, heavy dependence on legacy systems, lots of manual workarounds, bolt-ons, trying to, I guess, wring more blood out of a stone.

PHIL: Whereas with SaaS platforms, it’s instant, it’s composable, it’s user-friendly, it’s refreshable at a platform level as well.

PHIL: It helps you reduce organizational technology deficit.

PHIL: And I think it really helps organizations kind of rediscover their entrepreneurial mojo.

PHIL: And what I mean by that is with SaaS, it’s a quick configuration that you can set up to test and learn at scale.

PHIL: And that’s something that’s hugely exciting.

PHIL: So it’s not a huge exercise to get underneath the hood of a massive legacy system.

PHIL: It’s something that you can set up at your desk.

PHIL: And then you can test quickly.

PHIL: You can concentrate it by region.

PHIL: You can do all types of things that I think will really enable businesses to go out and get as much data points and learning as possible, rather than just kind of saying, okay, we did some market research and the 20 people that we talked to thought that this was a good idea.

PHIL: You can actually go and prove it with data.

PHIL: And you can test it over a short period, over a long period, run proof of concepts nationwide, et cetera.

PHIL: And I just think that that’s gonna really open up a whole new world of creativity for loyalty professionals.

PHIL: And I think it’ll really help organizations make decisions with confidence as well.

PAULA: Yeah, yeah.

PAULA: I think you’re absolutely right.

PAULA: And I’ll give a shout out to our mutual friend, Simon Rowles in Australia from beyond, who introduced us to each other.

PAULA: And I think we’ve talked certainly on this show and again, just ourselves in conversation about, the importance of people like Simon to translate tech into commercial, affordable, agile solutions that certainly people like me who doesn’t speak tech can understand the power of perhaps a new SaaS platform without being terrified that it’s gonna be one huge decision that I have to live with for 10 years.

PHIL: Yes, spot on.

PHIL: And Simon’s the guru, he’s incredibly well connected.

PHIL: He’s got a great gift at translating concepts into reality.

PHIL: He’d be perfect to oversee the Plain Language Bill for loyalty.

PHIL: He speaks what the people wanna hear.

PAULA: For sure, I’ll have to get him back on the show, Phil.

PAULA: And from what I’m hearing as well, it sounds like you’re probably busy cooking away a couple of fabulous ideas there for Countdown.

PAULA: So from my side, I’m hoping we can stay in touch and certainly as the months and years go by, we can compare notes on other kind of ideas and innovations that we’ve launched, certainly in the New Zealand market.

PHIL: Yeah, absolutely.

PHIL: And I think that would be wonderful.

PHIL: And I think New Zealand’s got some great other potential areas too.

PHIL: Like I think we like to think of ourselves as the Tasman Sea is a ditch.

PHIL: So when we talk about crossing the ditch, that’s going to Australia.

PHIL: And I think that when you look at loyalty in our part of the world, I don’t think anybody’s got a truly Australasian interoperable program yet.

PHIL: And it’s something like a SAS could really stand that up.

PHIL: And that’s tremendously exciting to think that that’s something that could happen in our lifetimes as well.

PHIL: So to give a seamless customer experience, not only in your country, but actually in somebody else’s country, I think would be incredible.

PAULA: Absolutely.

PAULA: Yeah, yeah.

PAULA: No, you make perfect sense, Phil.

PAULA: That there is extraordinary potential.

PAULA: And in a market which, as you already explained at the very beginning of our conversation, if 95% of Kiwis are engaging with loyalty programs, the appetite is fundamentally there.

PAULA: I’m sure it’s a similar level in Australia.

PAULA: I don’t have the figure top of mind, but clearly you’re doing amazing work, Phil.

PAULA: It’s a very exciting market.

PAULA: I’m loving watching and obviously listening to what you’re doing.

PAULA: That’s all the questions I have from my side.

PAULA: Was there anything else that you wanted to touch on before we wrap up?

PHIL: You’re always welcome to come to New Zealand, Paula.

PHIL: Irish people have settled in New Zealand for many generations.

PHIL: And we promise that we make great wine and we’ll make you feel very welcome.

PAULA: Oh, that’s fabulous.

PAULA: My goodness.

PAULA: Well, with an invitation like that, it’s definitely going on to the wish list.

PAULA: So listen, Phil Devlin, thank you so much from Let’s Talk Loyalty.

PAULA: This show is sponsored by The Wise Marketeer, the world’s most popular source of loyalty marketing news, insights and research.

PAULA: The Wise Marketeer also offers loyalty marketing training through its loyalty academy, which has already certified over 170 executives in 20 countries as certified loyalty marketing professionals.

PAULA: For more information, check out thewisemarketeer.com and loyaltyacademy.org.

PAULA: Thanks so much for listening to this episode of Let’s Talk Loyalty.

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