#187: Microsoft Rewards - Insights and Ideas

Microsoft is one of the world’s most successful companies in technology, entertainment and in recent years, a leading platform in gaming.

This week’s episode of “Let’s Talk Loyalty” features Adam Grupp, Director of Microsoft Rewards, who leads the company’s loyalty proposition.

Microsoft Rewards engages members for gaming online, through Xbox as well as its Bing search site, where users earn rewards that can be redeemed for in-game activities, passes and charitable contributions.

Hear how Microsoft Rewards thinks about loyalty and Adam’s insights on key future trends for loyalty professionals to consider.

Show Notes:

1) Adam Grupp, Director of Microsoft Rewards, Microsoft

2) Microsoft Rewards

Audio Transcript

#187: Microsoft Rewards - Insights and Ideas (47m)
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 show is sponsored by Comarch, a global provider of innovative software products and business services. Comarch’s platform is used by leading brands across all industries to drive their customer loyalty powered by AI and machine learning. Comarch technologies allow you to build, run and manage personalized loyalty programs and product offers with ease.

Paula Thomas

00:00:48
For more information, please visit Comarch.com. Hello and welcome to today’s episode of Let’s Talk Loyalty featuring one of the world’s most successful companies in both technology and entertainment. Now, Microsoft for me has always been an extraordinary hardware and software company, and now I’m increasingly realizing its dominance as one of the world’s largest gaming companies with globally renowned products and services. I was really excited to discover Microsoft Rewards, the company’s loyalty proposition, which is used to drive deeper engagement with two of their key products.

Paula Thomas

00:01:37
Joining me on today’s show is the director of Microsoft rewards. Adam Grupp who shared his global loyalty insights to build customer connection and what he believes are important trends and ideas for loyalty professionals throughout 2022. So Adam joining me today from I believe Seattle Washington, and from Microsoft headquarters. Welcome to Let’s Talk Loyalty.

Adam Grupp

00:02:10
Hi Paula. Thanks for having me.

Paula Thomas

00:02:13
It’s great to have you, Adam. I think if I recall correctly, our paths crossed because you were listening to my show. So that was a wonderful message that I got from you on LinkedIn. So delighted to have you as a listener. And then of course I saw director of Microsoft rewards that I went, oh my goodness, this is somebody I need to talk to. So super exciting time for me, Adam, and to kick off the show, as you know, we always love to get into understanding, I suppose, what you admire and respect in the world of loyalty. So above and beyond everything you’re doing with Microsoft rewards, I’d love for you to share with our listeners, what is your favorite loyalty program at the moment?

Adam Grupp

00:02:54
Sure. So I knew this one was coming, so I thought a lot about it and where, you know, where I’ve ended up is recognizing that over time we are, our preference has changed. The thing that seems most important in the moment changes. And certainly we look at the last few years, the market has evolved tremendously in a, whether it’s travel or, or retail or you name it. The thing that keeps bubbling up for me is the Amazon Smile program as, as an element of their prime subscription platform and the, just the customer experience that they deliver through that. I know that sometimes we take a kind of a compartmentalized view about loyalty programs, and we think of them as a bolt on to the core business.

Adam Grupp

00:03:39
I prefer to take a different view and, and, and especially when designing them look for ways of making them as inseparable as possible, really integrating them where the values and the goals that we take up in the way we see the world in the loyalty team resembles the way the brand team for the whole company for the whole business looks at things, the customer experience team, but the core product team. And so what I love about Amazon smile is it’s a program that’s, it’s been around for a little while. And, you know, if, if there was ever a category that probably would struggle to carve out a little bit of value for, you know, for a charitable interest in retail, skinny margins, right. But they found a way to do it and they found a way to sustain it. And I’ll tell you what it was that made this my favorite.

Adam Grupp

00:04:23
It was when Amazon re-released their mobile app and made it much easier for an Amazon Smile customer to have the whole Amazon experience. They didn’t have to choose to go to smile dot Amazon. They could, they could get that whole integrated consumer experience being, you know, being an Amazon customer without having to do some strange end run. Right. Yeah. And that, that to me is like, when you’re really nailing it as a loyalty program, when you kind of mainline what you’re doing and you, you make it easy for your everyday customer to both discover it and to stay with it.

Paula Thomas

00:05:00
Absolutely wonderful example, Adam. And if I’m right, first of all, in case there are people around the world who are not familiar with Amazon smile, as you said, as part of the prime program. But my understanding is that they actually on their side make a donation to a charitable cause, but not at the expense of the user. So

Adam Grupp

00:05:20
That’s correct. That is correct. So, and this was, you know, there, I’m sure there are lots of other programs that do this. We do this at Microsoft, also the kind of the OJI or the original way that companies would do this is you go through say the checkout stand at the grocery store, and they’d say, would you like to top off your purchase with a donation to this cause of that? Cause, and of course you can probably generate a lot of impact that way for this to be something that is essentially sponsored by the brand, as opposed to coming out of the pocketbook of the customer. I think it makes it a really powerful statement, not just of what it means to be a customer, but what the company stands for, what the product and the brand stand for. Yeah,

Paula Thomas

00:06:00
I totally agree. And also I think out on what they nailed is rather than just, you know, having it sitting, let’s say within a CSR department, you know, the corporate social responsibility area, which for years in my experience, you know, has been very well-intentioned and sat down every year and maybe chosen a charity and done that by the company. But it didn’t feel in any way connected with how the consumer was behaving. So I think what smile has done, you know, again for me is it connects my shopping behavior, which is obviously what they want to stimulate with their generosity. Like they’re directly connected. And I just feel, you know, it’s simple, it’s generous.

Paula Thomas

00:06:40
And I feel like I’ve done something good just by buying the stuff I was going to buy anyway.

Adam Grupp

00:06:45
Yeah, absolutely. I mean, if we, if we step out of kind of the, our, our space as humans and, and thinking of ourselves as customers, and instead look at this more clinically as loyalty program managers, loyalty marketers, there’s something really important there that you said this idea of, of you’re not creating any kind of separation even inside your organization of, of what the smile program is as different or separate or distinct, or kind of buried away from the core customer experience. One of the things that I think we’ve stumbled upon in our organization is recognizing that the more you can, you can drive a clear and almost just implicit understood understanding of the connection between a customer’s values and what they believe in and what they, what they aspire to with what they’re doing, what they’re choosing to do with you, where you can, you can closely link the purchase decision or the engagement decision to a vision of, of impact in the future.

Adam Grupp

00:07:53
And it’s that, it’s that linkage between what they’re doing now and where this is all going when you can craft that, so that it, it becomes just in the air, in the water. That’s when I think cause marketing and social impact in the context of loyalty becomes really, really powerful.

Paula Thomas

00:08:09
It absolutely does Adam and you’ve reminded me of an article I wrote a couple of years ago and I kind of, I was trying to form myself, I suppose, clarify what does make a good loyalty program, you know, from a consumer’s perspective. And I think, again, you know, Amazon smile has exactly done it. And the three words I came up with where it has to be clear, it has to be consistent and it has to be compelling. So I think if you can take those three boxes, then absolutely everybody wins, you know, there’s that feel-good factor and the emotional loyalty dare I said grows. So it’s beyond almost the transaction. It almost just comes through then that I just actually like doing business with Amazon a bit more, you know?

Adam Grupp

00:08:52
Yeah. I couldn’t agree more, Paula, the, I mean, this is not a new thing and loyalty that we think of this as an emotional product. It’s not just a transactional product and it’s, that is, it’s easy to put that on a bumper sticker or a slide deck and have everyone applaud it. But it is sometimes really hard to do. It’s really hard to do, because if you think about why we exist, we exist to drive business value to deepen the relationship that the company has or the business has with the customer. And we measure that through transaction data, we measure that through retention, right? Lifetime value, those kinds of things that are inherently transactional, but that’s not the experience that our customers

Paula Thomas

00:09:31
Totally, totally. Yeah. Well, wonderful. Already conversation, Adam. And I know there’s a lot of these insights that you’ve already brought into the work you do with Microsoft rewards. And I suppose my, my next and I suppose confession is that I wasn’t aware of Microsoft rewards before we met and before we spoke, but I know I’m outside the target market in lots of different ways, first of all, geographically. And

Adam Grupp

00:09:57
Because I know,

Paula Thomas

00:10:00
Well, this is definitely going to be an important discussion point, but also I know you have a very clear and focus on two core areas from Microsoft rewards. So I’d love for you to explain for listeners that, you know, what is the Microsoft rewards program? What are you kind of doing with it?

Adam Grupp

00:10:17
Yeah, you bet. So Microsoft awards began a number of years ago, more than a decade ago as two different programs. And as often can happen in really big companies like Microsoft, we tend to be kind of vertically focused. We have a business over here. We have a business over there. It’s like the old joke from that show 30 rock about the division of television and microwave ovens. The reality is we have these sort of independent things spring up over time. And, and some time ago, we realized as, as a team, as a leadership team, Hey, wait a minute. It really makes sense to, to leverage our, our brands, bring these things together.

Adam Grupp

00:10:58
And maybe moreover, we have a consumer experience that is a little bit siloed, right? And we wanted to do something about it. So those two programs that we started off with were in the gaming sphere and Xbox Live rewards. And then in the Windows worlds being rewards for our search engine being, which was our competitor to Google that we launched and rebranded a number of years ago, these two programs because they, because their origin story was inherently about a single product or a single target customer had the gift of clarity in regards to what, what was it that they existed for, right.

Adam Grupp

00:11:43
Y one was to deepen the gaming experience, particularly in the ecosystem around the Xbox marketplace, where you would buy and experienced content, as well as the gold subscription platform, which was really at the time, I think, and I’m not speaking from my own, you know, business experience on this more as the consumer side of this, which I was at the time, the kind of the online gameplay, the collaboration, the connection the social aspects, and sort of the beginnings of a subscription-based gaming business. Then over in the, on the, on the other program being rewards, it was pretty simple.

Adam Grupp

00:12:26
We wanted people to try and stick with this new search engine. That was an alternative to the big guy, right? And in doing that, we had very, very simple measures of customer success in terms of what’s the outcome that tells us we’re doing it right? And so those two programs existed in their own stares for quite some time. And we have actually brought them together. There was a moment where we had to make a tough decision. Hey, will these programs individually be stronger if we, if we combine them or not, are we, are we compromising something in the integrity of what we’re, what we’re doing to serve the individual businesses or the customers and H, and that was a decision point for us. We were able to determine that that was not the case, that in fact, or rather we would be strengthening both by bringing them together, that there was this kind of network effect, this ecosystem value.

Adam Grupp

00:13:15
And that was ultimately a core tenet of our decision to bring these things together, to deliver a better overall consumer experience. And I think when we consider our vision and what we hope to become, we really do want to become a strengthener of the relationship between a consumer user of Microsoft services and products and, and Microsoft all up. Right. It’s not just about these individual businesses. And there’s an aspect of this that does start to creep into the core customer experience. When we think about what are we doing with our consumer business all up and how do we best support that?

Paula Thomas

00:13:50
Yeah, absolutely. So, yeah, absolutely wonderful. So I’m definitely not a gamer. So another reason why I’m outside the target market, although I was really impressed, I had already seen the headlines about the recent acquisition, I think, eh, is that Activision is the gaming company Microsoft.

Adam Grupp

00:14:10
So that was super exciting to want to go. Yeah, yeah,

Paula Thomas

00:14:15
Yeah, yeah. About a week or so ago. So incredibly impressive, I suppose to see, you know, the scale, I think Microsoft is now officially the, or will be when this closes, obviously the third biggest gaming company in the world, so extraordinary performance. And, but again, I haven’t even gotten into it and I know it’s become more, let’s say gender diverse, for example, it’s not just war games. There is more dare. I said, candy crush or more female-oriented things. But, but I suppose when I think about Microsoft, Adam, I think about it as first of all the software company, that’s what I engage with most, most commonly. And so all of my outlook and all of my, you know, words, applications, the office products, and then obviously hardware.

Paula Thomas

00:15:02
So actually for me, it’s almost like way down the pecking order to think of Microsoft as a gaming company. And again, I’m speaking of as they very much as an individual, but I guess my question is, you know, is there a role would you think, and you might probably have to just speak personally here in terms of an opinion, but would you think there might be a role for Microsoft rewards to, to go beyond the gaming, the Xbox proposition and search into hardware, software, other parts of Microsoft?

Adam Grupp

00:15:30
Oh, sure. I mean, it’s, I will tell you if, if, if we had enough time, I could, I could give you a list of all my ambitions for growing the loyalty experience or the Microsoft concern. It’s like, we’re not, we’re not going to do all those things. There’s a little bit of the, you know, kind of the mad scientist in the lab kind of mindset for me on those things. But I think that, I think there is a lot of opportunity and it’s, this is, this is something that I think we experience as you know, in larger companies that have lots of option value, lots of different places, or, or we experience as professionals and leaders in our careers and in the businesses that we lead in order to figure out what to say as to, we gotta say no to a whole lot of stuff.

Adam Grupp

00:16:14
And, and this is something that I would say is, you know, when I, when I find loyalty programs that I’m really impressed with, there’s usually a lot of stuff they’ve said no to, in order to get really good at the things they choose to do. So the thing that’s really fascinating about the gaming world is just this multitude of studios who will collaborate, who will throw in together, who will recombine themselves and reorganized. Like we’ve seen a lot of in the industry over, over time. And there are all these pockets of brands love, and they’re at the game title level, they’re at the studio level.

Adam Grupp

00:16:57
They’re not usually at the corporate level to be honest, right. It’s there are debates to be had there, but the reality is that you have these kinds of pockets of, of heats where, where the customer, where the consumer is, where the audience is just like, wow, this is great. It’s like, it’s like people who love Marvel, you know, and that’s their reason for subscribing to Disney plus, right? Yeah. So I will say, our Xbox friends are going to have some big decisions to make about how they choose to set this up. Right. Do they, do they look to be very deeply integrated in grading, kind of a single, a single loyalty experience for all, you know, in their portfolio, do they retain some, some distinctiveness, you know, Microsoft made an acquisition of Minecraft similar years ago and that’s, you know, I, while I can’t comment on, you know, making that we’re doing now, I can’t say, you know, as if I take an outsider view or like the way I teach my students at the University of Washington, take a look at what a competitor or what an organization has done before, how they make decisions.

Adam Grupp

00:18:06
And sometimes it can be instructive as to where the, what the wisdom might be about a future decision. Now that’s not to say, you can predict what they’re going to do because the world changes. Right. But I think there’s a lot to be learned from how companies who have made acquisitions over time have made the decision to either fully integrate or to retain some kind of separateness, some distinctiveness of the units that they bring together. It takes a bit more precision and you know, why are we doing this? What is our goal? But ultimately it can allow you to retain a lot of the value that you’re seeking to bring in by not blowing it up. Yeah.

Paula Thomas

00:18:44
Yeah. Well, I’m happy to hear that, you see the opportunity and potential. I also really liked the clarity of doing less. I think that’s a very, very good insight actually, because, you know, we’re just also overwhelmed. And so well-intentioned, I think, you know, that it is tempting to try and be all things to all people, but I sometimes feel that just leads to that, you know, sense of not really being on top of things. So yeah. I mean, it’s probably the reason that I’ve given up consulting for example, is I can just do podcasting. So actually it gets my full attention now, which is super exciting for me.

Adam Grupp

00:19:18
Yeah. Yeah. And it’s, you know, the reality is there, there’s sort of like two attention spans. You have to contend with, right. When you’re leading teams and organizations like this first and foremost, you have to contend with your customer’s attention span. What are, what do they have the cognitive load capacity to retain, to engage with? And frankly, what do they care about? Right. We exist because they exist and they have a need and we’re serving it. Right? Yeah. So that’s the first bit, like the clarity thing that you mentioned at the beginning, the second one is internally, right? Just like you choosing to go deep on, on podcasting as a, as a core focus for you right now, you know, that unlocks the, so much of your resources to go and be great at that same thing goes when we do loyalty, right.

Adam Grupp

00:20:07
What is the thing that we are really all about? What is the thing that we are going to be so focused on that we will be better at that than we ever thought we could be sure. Because we set aside all of these other distractions, we just focus on getting that one thing really, really right.

Paula Thomas

00:20:23
Yeah. Yeah. And I can only imagine the temptation when you do have the opportunities, as you said earlier, in terms of a company like Microsoft, you know, there’s an opportunity around every single corner, so yes. I guess yeah. You have to exercise that.

Adam Grupp

00:20:36
Yeah, no doubt. And it’s, I mean, we talk about this notion of the growth mindset in the technology sector a lot. Microsoft’s no exception. It is. It is really easy to say yes. When you’re, when you’re trying to be growth-minded, when you’re trying to explore what’s possible, stretch yourself and challenge your teams. Yeah. Sounds really good. Yes. Feels very resonant. Yeah. No, it was hard. It was really hard.

Paula Thomas

00:21:02
Totally. Totally. Okay. Well, well done on saying no. And so tell us about what are the propositions then, because I know it’s very different, for example. So as you said, Microsoft rewards has a Bing search proposition. So I’d love you to explain that and probably will sound very compelling given what we’ve already talked about and then the Xbox proposition. So I do think they’re very different. So tell us exactly what you’re offering to your members.

Adam Grupp

00:21:31
Sure, absolutely. I’ll start with being cause that’s where I, I got my start. I kind of came up through the, through the, being a universe at Microsoft. The, value proposition for the search component of our program is that when you, when you search on the bang search engine, Microsoft bang, you have the opportunity to earn rewards for yourself, for causes that you care about. And really all you have to do once you’re signed in with your account is just keep searching. When you search you accrue points that can be used to redeem for gift cards, subscription, value, store credit with Microsoft or Xbox, or even for a cause that you care about through what we have launched over the past several years, give with Bing, which is a, a set of features around helping you to both connect your reward, earning to social impact.

Adam Grupp

00:22:21
But, you know, we hope can eventually be something that helps to shift how we see search as a way of engaging with the world, how we see giving back as something that can be an extension of how you earn value for yourself through the businesses that you choose to work with, the brands that you select for yourself.

Paula Thomas

00:22:38
Okay. Very nice. Okay. Yeah. Super simple. Again, very clear, very compelling. And that’s when it sounds like it has been around for a long time. Did you say Adam, like yeah. About 10 years or so my goodness.

Adam Grupp

00:22:52
That’s right. It’s been around a while and it’s, it’s one of those things. The Bing product as a challenger brands has had a more, I would say, localized approach to getting the word out. Right. And so you see that in our loyalty efforts as well, where there are some markets we have chosen to really focus our attention. We’re not in every country in the world today, but we are, what we’re choosing to do is to pick the places where we can be really effective and do a great job for our customers and to, you know, stay there and kind of get great at that. And as we have the opportunity to, to extend that to other markets and other, other customers, we will. But yeah, it’s, it’s back to what we were talking about earlier in terms of saying no, to say yes.

Paula Thomas

00:23:37
Yeah, yeah. And what I did pick up just again, researching the being proposition, there is, it does seem to be particularly resident with a console users, which actually sounds like exactly what you were just explaining. Find people who have, you know, built up a trust with the brand and the product in another area. You know, so if I am an Xbox user, then I guess it’s more likely that I would be, you know, happy to default over to being as by search engine. So that seems to make perfect.

Adam Grupp

00:24:07
Yeah. You know, there’s, there’s ecosystem value there for sure. The thing we figured out after a while is that there’s a gamified aspect to what, what our customers get to do with, with being rewards. Right. And it kind of makes it fun to search sometimes kind of look forward to completing the quizzes and the different games that we make available. And for the, for the gamer audience who sort of looking for homeless, look at gaming as like their job there. When I think about being all they can be, when they think about achievement, they are thinking about gaming, they’re thinking about fun. And so that notion of fun has, has always been really important across both, both wings of the program, because we recognize that when you design an incentive or when you build a campaign to get your customers excited, you don’t want to talk to them about vegetables and antioxidants.

Adam Grupp

00:25:02
You want to talk to them about dessert ice cream. And it’s, I’m probably tipping my hand a little bit there about my dietary preferences, but the reality is that element of fun or defining work and play as being kind of one in the same at times, it’s like the business of fun can be serious business that I think is sort of the emotional link there for, for our gamers. Who’ve discovered how easy it is to earn value using Bing. And in many cases, they pile that back into their engagement with Xbox, because it gives them a little extra balance that they can put toward that next game, that next piece of content.

Paula Thomas

00:25:43
So tell us then about the Xbox proposition.

Adam Grupp

00:25:46
Yeah, sure. So w with Xbox this program grew up in parallel, it’s a bank before we brought them together. And, and with Xbox, the, you have this sort of, it’s almost like a conglomerate within a conglomerate. And what I mean by that is compared to being for a moment, search is a very simple product, pretty simple concept in terms of what it represents. So it’s a text box that you type into, and it delivers you magically powerful results that help you to make decisions, find things around it. Right. And it’s not just being there, there, you know, there are others too, that will go nameless. The, the Xbox world is big. It’s big.

Adam Grupp

00:26:25
There is, first of all, there’s both the big gaming aspect of it. You know, the growing social landscape around gaming and the interactivity of it, which I’m telling you when I felt like a dinosaur is when I realized that I was, I was like aged out of this prospect of at least for me as a person getting online and playing with my friends who all have kids, or, or like, what’s this, you know, this online game, like a lot of our, a lot of our gamers are our guys who look and sound just like me, who hop on after their kids go to bed, but you have this, this kind of social landscape around it. You also have the traditional commerce platform where, where you can buy games, you can buy, you can buy media from Microsoft or from X-Box.

Adam Grupp

00:27:13
And then you have that kindthe other layers of, of marketing and experiences that have been built around that. So the thing that is of late becoming a really big thing is game pass. So Xbox game pass is sort of a, it’s a business model. Innovation geared toward making like remaking what it means to, to have access to all the games that you want to play. Right? Lots of people call it Netflix for gaming. My Xbox friends would open arms if I said that, or if they knew that I was saying that on a podcast, but yeah, it’s this, this idea of bringing a subscription model perpetuity to, to gaming content where just like we have this kind of software as a service model, pretty highly penetrated in, in software.

Adam Grupp

00:28:01
Generally, the reason that that works so well for customers is because they don’t have to go out and buy a whole bunch of new stuff. Every time there’s a new piece of content, or there’s a new software update and you know, much like, you know, the way consumers engage with Netflix. There’s a lot of us who probably watch a lot more movies and TV than we did before we had access to it on a subscription basis. I think the same thing can probably be said, when you look at the gaming ecosystem, that Xbox is built, it started out as a marketplace where you’d go and you kind of buy all the cart when you, when you would want something. But yeah, so you have this kind of traditional marketplace and a lot of us who game still buy a lot of games, right?

Adam Grupp

00:28:41
That’s not going anywhere, but increasingly the, the shift has been not from, or has been from thinking of our customers as, as buyers in those kind of moment to moment transactions, that kind of transactional aspect to making the portfolio available. Right? And so this is where a product like game pass creates such a unique opportunity for loyalty, because instead of trying to drive transactions in the marketplace, we are thinking about how do we get people more excited about what they already have access to? How do we get them to play more games and discover their new favorite game that they, they never would have found? I just was playing one last night for the first time that it’s been around for 20 years, right.

Adam Grupp

00:29:22
This is not a new game. And I’m, I’m just like, wow, where have you been all my life? And that that’s, again, it brings back in that emotional components and you focus on the usage and particularly with a product like, or a set of products like Xbox, the delighters are in, are in the experience of the product, right. It’s not in the purchase flow, or it’s not in the balance where you read your statements or even how many points you’re accumulating, it’s in the joy of applying

Paula Thomas

00:29:51
Consuming more. Yeah, that’s quite extraordinary because I was, I was going to ask, you know, what is the strategic intent of Microsoft rewards for Xbox, you know, how much is focused on acquiring new gamers, you know, you know, is polo a potential game or who knows?

Adam Grupp

00:30:10
Yeah, that’s a great question. So I’ll give you a more general answer to that question. And this is, this is my opinion. I think that generally speaking loyalty programs don’t make great customer acquisition programs. Now there are exceptions for sure. If you look across the industry they are great at giving the customer a reason to stay and making sure that when they do, they’re glad they did. So put another way. I think really great loyalty programs do their best work when they focus on when, when they are focusing on the existing customer base and how to make that, that customer experience for them as good as it can be as satisfying as it can be.

Adam Grupp

00:31:02
And that means engagement and retention. If you think about this, like a funnel, you work your mid-funnel, your work, your bottom of funnel, so that you don’t see customers leaking out the bottom of your funnel.

Paula Thomas

00:31:13
Yeah. And another thing that I’m hearing a lot, Adam, and I don’t know if it happens within Microsoft rewards, but it’s the idea of, I suppose, community and being a member of something. And I had a guest on recently, just back to your point, actually about subscription because that’s, you know, such a huge topic. So subscribing to get content is absolutely wonderful. And particularly the unlimited content concept. And I did see in your latest dam results, for example, that there are 25 million, for example, subscribers to M Xbox live gold. I believe it’s the name of one of the products. So I hope I’ve got my terminology right there, but yeah.

Paula Thomas

00:31:55
So I just think it’s absolutely extraordinary, but, but the distinction I wanted to get your opinion on is, you know, do members of, of Microsoft rewards feel like they’re part of something, you know, greater, like, does it have like a tribe-like mentality or, or is it just, no, I just love gaming. I’m happy to share ideas, but, but it’s just about my gaming experience. I just have to understand that a little bit.

Adam Grupp

00:32:18
That’s a great question, Paula. We talk a lot about creating community, creating a sense of belonging. And this is, this gets back to that notion of moving away from just the transactional aspects of loyalty to really focus on the emotional drivers of loyalty. I know I said earlier that we look at great loyalty programs as being deeply integrated in the core business and the core offering. And so now I’m going to say something that probably feels like it’s in conflict with that. I think the, the notion of creating community in loyalty programs can sometimes be a little bit fraught if we believe that people have to create a sense of, or have to have a sense of community as our customer, that is literally about our loyalty program or about the thing that we call our loyalty program.

Adam Grupp

00:33:10
So let me give you an example, what I mean. So if you look at the Xbox ecosystem today, if you look at the landscape of customers and users and gamers online on social media, on streaming platforms, everywhere, you see community everywhere, it’s a vibrant community. People are passionate to the point of, of, of absurdity sometimes about gaming. The community is thriving there. And, and so the, the temptation could be for a loyalty program manager to come in and say, okay, now we’re gonna, we’re gonna try and take all that and kind of build that into making people really excited about our loyalty program.

Adam Grupp

00:33:55
That’s sort of getting it backwards, right? That’s trying to get the customer to serve us. I remember reading in a piece of literature years ago, that when you, when you talk to company leaders and customers, each of them has sort of an opposite view of what w what loyalty is in the context of like customer loyalty customers say, well, loyalty is about the company being loyal to me, the customer, right. And companies say, well, loyalty is about the customer being loyal to us. Totally. It turns out where all the hero in our own story. And, you know, it turns out we, as loyalty managers are no different from our customers in that respect.

Adam Grupp

00:34:38
And we need to remember that we’re not here to serve ourselves. We’re here to serve them.

Paula Thomas

00:34:42
Yeah. I love that. Yeah. And I think that came out again, even quite recently, Adam, because I had bond brand loyalty on the program as well. And it was one of their big, big insides. So you’re absolutely right. It’s one thing for us as an industry to say, yes, we’re here to drive behaviour and we’re here to take care of our, our customers, you know, but you know, what expecting the customer to do more and be more loyal as a result, but actually the customer is sitting there going, what are you doing for me? You know, why should I be loyal? You know, so, so who goes first? So it sounds like you have a wonderful mentality about getting the community and taking care of that community as best you can.

Adam Grupp

00:35:24
Sure. Well, and I think also just recognizing that it takes a little bit of humility sometimes to find your, find your space in a, in a like Microsoft consumer and recognize, okay. There are ways in which really, really great loyalty programs are practically invisible to the customer. When maybe an example of a, another loyalty program. I really love the Alaska airlines mileage program. Okay. When, when you had talked to Alaska airlines customers, that’s partly the benefit of being a regional airline, as opposed to having to be everywhere.

Adam Grupp

00:36:06
You asked people what they love about Alaska airlines, and they will quote you chapter and verse the things I love about the loyalty program, but they’ll also talk about the flying experience and the travel experience. And they don’t, you know, the customers of Alaska airlines don’t really distinguish the loyalty program from the core offering. It’s one of the same, right? And so with that in mind, I think when we set out to design systems and incentives and programs and experiences for our customers, yeah. Oftentimes, you know, you’ve done it right. When the customer can’t even tell the difference between what you’re doing and what the core product is.

Adam Grupp

00:36:46
Actually, our COO likes to remind us of this. You know, the marketing is the product is the marketing and this mantra of really creating seamlessness. And sometimes it means you’re not taking the hero position in the customer’s mind, but, but what matters most is they come away from the experience with a warmer heartbeat for your program, your product, your, your experience that you offer.

Paula Thomas

00:37:10
Okay. Yeah. And they probably won’t be able to articulate why. And yes. Yeah. So that’s the point I think you’re making, making is that they just know that they want to go back into that warm, fuzzy place.

Adam Grupp

00:37:21
That’s all right. And maybe more importantly, they don’t necessarily know to articulate that as being, because of the loyalty program, they just know they really love X-Box.

Paula Thomas

00:37:29
Yeah. Yeah. And I can imagine the language and I can imagine the tribal behavior and for sure, you know, we all have things we geek out about. So given how extraordinary, like I’m often thinking, you know, like more and more like our business models need to really learn from, you know, bringing fun into business a bit more, you know, like, like just genuinely, you know, when I think about education and courses, I’m studying with the Seth Goden at the moment, for example, repeating my podcast training, just to kind of see what I missed the first time around. But again, there’s loads of gamification. There’s all the badges in there. So, you know, every time I behave in a, in a, in a nice way and there are community guidelines and all those wonderful things.

Paula Thomas

00:38:14
So yeah. I definitely feel like I’m part of that cohort of people who are passionate about something which clearly gaming absolutely. As well. Yeah. Yeah. Yeah. Wonderful. So in terms of, I’ve already asked you about expanding beyond the, the core two areas of focus and geographically Ben, and I know Dubai by topping top of your, you know, your wishlist for, from a commercial perspective. Although I think you said to me, you’re, you’re, you’re keen to travel here at some point, did you?

Adam Grupp

00:38:43
Yeah. Well, I’ve been through the airport a few times. I’ve worked trips, but I haven’t had a chance to get out and explore yet

Paula Thomas

00:38:49
Stop off yet. But, do you think Microsoft rewards will extend beyond the US into, I don’t know, other or the markets of focus, do you think there’s opportunities and intentions to do that?

Adam Grupp

00:38:59
Yeah. You know, it’s the, the will, is there. I will tell you, you know, we love the, the prospect of being a broad geographic program today, we operate in about 20 markets by 20 countries, and we have a, somewhat of a variable offering. There are some markets where we have our full program offering. That includes the buying experience and others where we focus mainly on, on the Xbox and then store aspects of our program. The thing I would say is, and I think this could probably be said of any business making a decision about whether to expand. You have to look at what are the outcomes that you’re trying to land for your customer and for your bottom line.

Adam Grupp

00:39:42
And I will tell you, but, you know, probably the the biggest constraint for us is looking at what it will take to operate in a new market successfully delivering the kind of customer experience we want the customer to have. And if we can’t do it with confidence, we don’t go there yet. Okay. But I say yet, because,

Paula Thomas

00:40:03
Hm, yes, yes. You’re being disciplined and saying no, but open

Adam Grupp

00:40:07
To saying yes,

Paula Thomas

00:40:08
Well done. Well done. And then I suppose my final question, then Adam just would love your perspective on other trends and concepts. And I suppose, where do you think loyalty may end up going? We talked before we came on air about hopefully, you know, thinking about, you know, the pandemic might just soon become something that we don’t have to obsess about or, or worry about that as we have for the past two years. So I know in my experience, the conversations I’m having loyalty is just really, really getting increased respect, increased focus. And of course the increased discipline I think, is, is equally important as well.

Paula Thomas

00:40:51
So I know you come for, for example, from a finance background, so highly accountable in terms of the profitability, obviously, of anything that you do, what else do you think is, is important for loyalty professionals, listening to this show? You know, thinking about loyalty as we go through 2022,

Adam Grupp

00:41:07
You know, I think that being clear-eyed about trends is important, recognizing the secular trends that are changing lots of industries and lots of, lots of categories. There’s an opportunity there, I think, to, to lean into those, those changes and to be okay with experimenting. Right. But I think, you know, of course the, the business fundamentals are essential, right? You go to loyalty conferences and it feels like you’re in a group therapy session, sometimes talking to different loyalty program managers about how they justify their program. So leadership, right.

Adam Grupp

00:41:47
It’s the business case. The, the thing I would say is you have to, you have to balance that, that financial sensibility with the brand love with the, the emotional aspects, the creative aspects of loyalty program management that are really about creating that, that warm connection with the customer. You can’t have one without the other. And so it’s that, that’s probably one of the things that I have delighted in learning about over the past five years, working on this program is just, wow. You know, you can, you can run a great business, but to really build an even greater business, you have to embrace the customer experience.

Adam Grupp

00:42:34
You have to embrace the, and really like really internalize what it means to love a brand, right. And how, how to develop experiences that cultivate that, right. It’s in some ways, it’s the opposite end of the cognitive spectrum from the spreadsheets and the data models and all those kinds of things that we do to, to crunch the numbers. But it is, it is equally if not more important than, than the financial stuff. So when I went back to your original question, when I look out at trends and what’s going on, and what do I expect to come? I think that we are going to continue to see increased leverage of technology and digital experiences across sectors. And I think that’s just a statement about how people will consume products and services.

Adam Grupp

00:43:18
This idea of the experience economy has been around for awhile. And I think that that’s, that’s something that we have to take as a given and loyalty that we are in the business of creating experiences. It’s like that idea that people don’t remember what you did. They remember how you made them feel sure experiences are all about evoking, that emotion, that feeling in a way that’s durable. And so that’s a big one. The other, the other problem with all these kind of collapsing digital channels and, and like the barriers coming down between some of these things, as we all spend more and more time online is there’s a lot of noise. It takes a lot to break through. And so simplicity and clarity of single-purpose remains and has become even more important.

Adam Grupp

00:44:01
Wow.

Paula Thomas

00:44:02
Yes. Well, you know, we, we will definitely credit you with consistency Adam, in your messaging, so well, don’t you, I can hear laser-focus coming through so I can imagine it must be wonderful for your team just to have that level of direction and guidance and, you know, just, you know, the higher purpose of what you’re trying to do to, to delight your members and your customers. So, yeah, so that’s all my questions from my side, Adam, is there anything else that you, you would like to mention before we wrap up?

Adam Grupp

00:44:34
You know, I guess I would just say, thanks for the opportunity to join in this conversation. It’s a, it’s a delight to listen to your podcast and, and to the different guests that you bring on and also, you know, to get in the ring and, and participate a little bit too. So thank you for that.

Paula Thomas

00:44:51
Wonderful, wonderful, well, I’m hoping it’s not the only time, Adam. I’m pretty sure I’m going to be watching some exciting stuff coming out of your, your team. So yeah, I’ll be watching, watching with interest and delighted to stay in touch. So with that said, I will say, Adam grew up Microsoft director of Microsoft Rewards. Thank you so much from Let’s Talk Loyalty. This show is sponsored by The Wise Marketer, the world’s most popular source of loyalty marketing use insights and research. The Wise Marketer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 245 executives in 27 countries as certified loyalty marketing professionals.

Paula Thomas

00:45:39
For more information, check out TheWiseMarketer.com and LoyaltyAcademy.org. Thank you so much for listening to this episode of Let’s Talk Loyalty. If you’d like us to send you the latest shows each week, simply sign up for the Let’s Talk Loyalty newsletter on LetsTalkLoyalty.com. We’ll send our best episodes straight to your inbox. And don’t forget that you can follow Let’s Talk Loyalty on any of your favorite podcast platforms.

Paula Thomas

00:46:19
And of course we’d love for you to share your feedback and reviews. Thanks again for supporting the show.