Audio Transcript

#203: Groundbreaking Research on What Brits Want From Loyalty (58m)
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. Hello and welcome to episode 203 of Let’s Talk Loyalty an incredible two years on from the last interview we did with Mando-Connect and YouGov in the UK. Today, we’re discussing their latest white paper, which was presented for the first time, just a week ago to the UK loyalty industry.
Paula Thomas

00:00:46
The 2022 joint project is the third edition of this research. Truly the UK is only comprehensive loyalty market study. And this year it’s simply called what Brits want from loyalty programs now. So joining me in this discussion to share her key insights is Charlie Hills. The well-known self-confessed data Nerd who leads Mando-Connect and is the brains behind this project. We’re also joined by Nick Fishbourne, the group account director at YouGov, an independent global research data and analytics company.
Paula Thomas

00:01:27
I hope you enjoy our discussion on all of the fantastic learnings for loyalty professionals. I really believe it’s a comprehensive, independent piece of research analyzing the topics, attitudes, opinions, and behaviors that are driving the loyalty industry today in this sophisticated and diverse market. So first and foremost, bright and early Charlie and Nick joining me from the UK. Welcome back to Let’s Talk Loyalty.
Nick Fishbourne

00:02:01
Thank you.
Charlie Hills

00:02:02
Great to be here.
Paula Thomas

00:02:04
Yes. And actually, Charlie, you’ve been on the show twice. So, anybody who hasn’t heard you before and is going to just get an incredible insight, I suppose, into the type of the work you do with Mondo connect. And of course, this incredible research that we’re talking about today with Nick, from you gov. So before we get into this actually incredibly exciting piece of research, I will say I’ve been geeking out on it all morning. Let’s start by the usual question, I suppose, about our favorite loyalty programs and maybe Nick, if you start, cause you haven’t been on the show before, so let’s give us your favorite loyalty program please.
Nick Fishbourne

00:02:42
Yeah, of course. It’s an interesting question. Actually. I think if you’d have asked me that maybe three or four years ago, I was living in Australia and doing a lot of traveling cause we were living abroad. And so we were, we members of the annex Quantus Pro loyalty program. They have a, I think it’s, I’ll speak to Charlie about this recently very much a world-leading program. It’s, it’s really beneficial if you’re flying a lot and putting a shopping on your Amex card and things like that, but you know, fast forward a few years to today and I’ve got a one-year-old and a two-year-old at home living back in the UK and it’s probably something like prime.
Nick Fishbourne

00:03:27
I can’t, I can’t think of a loyalty program. That’s more apt for a new parent than unlimited TV and next day nappy deliveries.
Paula Thomas

00:03:35
Oh, brilliant. Brilliant. Yes. Yeah. Well, congratulations. I know you’ve got two young ones, I think one and two-year-old Nick, if I’m right. Yeah. Okay. Well go Amazon Prime. So a lifesaver and solving real pain. That’s brilliant. Yeah. Great. So Charlie was, you know, given your incredible work in the industry and again, this huge piece of research you’ve just done. Tell me what’s your favorite loyalty program at the moment?
Charlie Hills

00:04:02
Well, it’s a really brilliant question because this year for the first year we actually asked Brits what their favorite loyalty program was, but I’m sure we’ll come to that in the course of their research without giving away any spoilers. My favorite is actually one of the top 10 British favorites for loyalty and it’s a relatively new program it’s called Little Plus. And what I particularly like about it is it was just so positively disruptive. It kind of launched into the market with an enormous bag. I think the brand took one look at the rules of grocery loyalty and what sort of talk to their customers and understand that that’s not what their customers wanted a tool. So there’s no card, there’s no points. There’s loads of gamification. There’s weekly offers. It’s a really fun program, but it offers a huge amount of value back to its customer base as well.
Charlie Hills

00:04:47
The results have been phenomenal. So I think that will be my favorite. I thoroughly enjoy using it sort of personally as well as professionally, but I think it just gets the edge just cause it really shook things up when it arrived.
Paula Thomas

00:04:57
And it’s absolutely a great point, Charlie, because, you know, certainly for US listeners, you know, Lidl is a discount grocery retailer, absolutely genius, I suppose in its overall business model. So it’s true to say that little is disruptive in grocery anyway. So certainly the same applies in, in loyalty. So they’ve also been shortlisted, I know for you for the upcoming international loyalty award. So congratulations on that.
Charlie Hills

00:05:24
Thank you. They’re a great kind of client team and yeah, they’re up for a few awards this year, so I’m really hopeful that, that we bring home some trophies and it’s a great program.
Paula Thomas

00:05:35
Great, great. So listen, it is the second time we’ve talked about this piece of research on the show, Charlie, and to me it is the definitive piece of thought leadership on loyalty in the UK market and incredibly comprehensive. And obviously Nick will talk us through exactly how it’s compiled, but before we get into that, I’d love to know why you, as I suppose, the loyalty agency, why do you feel this type of research is important to conduct for the industry?
Charlie Hills

00:06:03
Yeah, it’s I think what we founded Mando-Connect, we all was very much that we would always be led by data. I think there can be a lot of subjectivity in loyalty and we wanted to actually really understand what customers wanted from loyalty. And the first thing we did, we have a great partnership with Ogilvy was we sat down with the Ogilvy insights team and we went right, what research is out there about loyalty in the UK. And they were able to reference some fantastic global research, you know, the bond reports in Australia, South Africa, but in the UK, which I think is one of the most advanced sort of loyalty markets in the world, there was sort of a blank page.
Charlie Hills

00:06:43
We had lots of sort of clients specific small pieces of research or small looks at kind of one sector, but nothing that actually went what’s happening in this market. And that was when we really formed our partnership with UGA because we thought actually what we want it to do is, is create the first study into so actually what’s going on. So we did our first one in 2018. We did our second one in 2020, and then this is number three in 2022. And I think it’s our most comprehensive yet every year we go out and we talk to loyalty thought leaders to understand what the big questions are that they’re facing. So we’ve build on the recent that from the previous year. And then we add the new data points and some of the new points that we’ve looked at this year included. What’s the most appealing program in the UK. That’s the first time that’s ever been tracked.
Charlie Hills

00:07:25
We’ll also look at sustainability, being a really key new trend that we saw pre-pandemic massively accelerated in the new normal and the new world that we’re in. So I think there’s been that kind of that constant evolution, but that’s why we do it. Plus in all honesty, we’re sort of loyalty nerds. We’re a bit like you, Paul, we love, we love understanding what’s going on. And I think my favorite model, the process is almost the little bit that comes after you do the research, you understand what’s going on. And then we think about how can we apply it and what can we see that’s coming? And we did great, one of the big questions this year that we worked really hard on with Nick was about rewards of the future. And I think that’s really interesting as well. So the research kind of looks at what’s what’s happened, but also what can we see coming
Paula Thomas

00:08:06
For sure. Yeah. And when I think back to my days as a loyalty director as well, Charlie, I can only imagine being on a waiting list actually for you to come in and present the results. So I’m sure what that’s extraordinary for everybody in the industry.
Charlie Hills

00:08:19
Well, that’s, what’s so exciting about it. Actually. I think we were, we were quite surprised almost of how popular it’s become and I still get, I still send it to my mum. I still liked it when it comes out and you see it in print and you see it in the press, you know, and niece from loyalty magazine wrote a really big article about it. The worst marketer always features it. So it’s really excited to see it and that sort of thought leadership press and the really fun stuff that we do then with all our clients afterwards is we run all the data for every single one of our clients. So for example, we want Vodafone and we run all the data for Vodafone. We run it from an FM business. We run it for very many members, which is big UK loyalty program. And then we can look at how it varies by those different audiences and see what impact in the loyalty program is having.
Charlie Hills

00:09:03
And then we use it obviously to improve what we should be working on for the next 12 months. So that’s my favorite bit about it. The fact that we can then apply it of so easily and so quickly. And, and that’s, what’s so great about the way that we work with Hugo. We can see it so many layers.
Paula Thomas

00:09:17
Sure, sure. Absolutely. And I mean, it doesn’t even need to be said, but I think it’s important to just in, in passing to say, you know, the consumer behavior insights have changed so dramatically in the last two years. So, you know, at the risk of overstating it, I think this is perhaps the most important piece of research you’ve done so far. So, so let’s come over to you, Nick. And, and first of all, maybe when you introduce, you go for us because I’m very familiar now I would say having worked with Charlie before, but incredibly impressive research service globally. So yeah. Tell us a bit about you go first of all and then exactly how you do this research for us.
Nick Fishbourne

00:09:55
Yeah, of course. Thanks. So you have as a global research and data company, so we offer market research to governments, companies, organizations, charities, worldwide. So we operate in, I think we’re about 55 markets now and globally, we have a panel size of around 17 million consumers and B2B professionals. So it’s real kind of cross-section of the global population. And in the UK, we have a panel size of about 1.2 million. And the way that this partnership with mandate has evolved over the years is predating me.
Nick Fishbourne

00:10:37
I understand Charlie was really kind of underpinned the work that we did a number of years ago to build out the loyalty programming and partnerships section with one of our syndicated data products called profiles. Now, if you think of profiles as an enormous data bank and it’s made up of, I think there’s something like 240,000 different data points in there, and it’s made up of about 300,000 of our most active panellists in the UK. And then we have a corresponding product in each market. And the way that, that this partnership works with Mondo is not only is jolly able to use the data within profiles, but we can also run bespoke ad hoc research with our panel and then upload that data into the profiles data set.
Nick Fishbourne

00:11:30
So, you know, as you were saying earlier, it’s been an incredibly turbulent few years and the ability to not only have this data set, which is constantly evolving and updating, but also to be able to run ad hoc research just on the fly, if there’s a, you know, an area of insight that isn’t covered in profiles that you really need, we can run that applied Diane’s profiles. And then you can see that data in the context of all those other data points. So that’s really how the insight for this, this white paper-driven.
Paula Thomas

00:12:03
Okay. So it’s predominantly quantitative research conducted online. Am I right?
Nick Fishbourne

00:12:08
That’s right. Yeah, we do have a qualitative arm, but yeah, predominantly it’s going to take two.
Paula Thomas

00:12:13
Okay. And what kind of sample size then are we talking about in terms of this loyalty research? Because I know what is nationally representative? So, so what does it take to get them, you know, research at this scale?
Nick Fishbourne

00:12:27
So the ad hoc research questions, we ran with a sample size of two thousand to make sure it was really statistically robust so that you could cut and slice and dice the data and analyze it in a really granular level and still draw concrete conclusions of that data. And the data points that are in profiles are well that, you know, typically numerous as this 300,000 individuals making up that data set. And when you’re in the platform, creating audiences, creating profiles, There’s functionality in it that will let you know what sample size is driving the data that you’re drawing.
Nick Fishbourne

00:13:07
So you can always keep an eye on that and make sure that you’re staying statistically robust.
Paula Thomas

00:13:12
Okay. So your clients login and self-serve and find exactly the answers they need, I guess.
Nick Fishbourne

00:13:18
Absolutely. Yeah. And there’s, there’s a huge amount of data in there. It’s, you know, we cover obviously standard demographics, age, gender region. Life-stage are you married? Do you have kids, but there’s a wealth of information on media consumption, for example, what channels are you consuming? Where do you consume media or advertising in exposed to? There’s a lot of attitudinal data as well. So, you know, what are your beliefs and perceptions that driving your behavior? You know, what’s, what’s your perception of things that are happening current affairs. So it really is, you know, a living evolving data set.
Paula Thomas

00:13:58
Okay. And just the actual am, you know, schedule for when this was actually done. So here we are at the end of March and about to get into all the amazing insights, but when was the survey actually done for this, you know, white paper,
Nick Fishbourne

00:14:12
It was around the end of last year, early this year. So It’s, it’s pretty hot off the press. Yeah.
Charlie Hills

00:14:22
Make sure that we run it. So we ran all the data in January to make sure it was reflective of sort of the 20, 22 mindset. So that’s what we’ve been for each year with the white papers is to run it into allowing for the Christmas time lag. We let go back to normal slightly, and then kind of run it in the sort of second week in January. And I think that’s, what’s so lovely about the UGov data actually. So we can take a historic view so we can go back to all the previous January. So analysts, Leon had a really fun time going back. So we’ve got all the comparative data and making sure that we run it kind of, we call it an on week, every time. So yeah. Great data set for us.
Paula Thomas

00:15:01
So, Charlie, what was the most exciting thing that you would say you alert in this particular round of research? Then?
Charlie Hills

00:15:08
That’s a really hard question. No loyalty nets, everyone who knows me knows I love kind of swimming around in data and finding was a really exciting kind of lights. I think they were, they were probably two, if it’s all right to say to Rob, I think firstly, the new data that we had on how appealing do you find loyalty programs was, was quite exciting because nobody’s ever asked that question to national level to understand actually which programs were resonating. And I think what we found made a lot of sense, which I always find quite reassuring. And when you kind of actually, that does make sense. And I think what we found is that the biggest programs in the UK are also the most appealing.
Charlie Hills

00:15:52
And I think that makes sense because the more people know them, the more people are familiar with them, the more they get to see the benefits and the more that kind of, that really brings home to them. But I think what was really exciting was that we learned that 65% of Brits find Tesco Club card appealing, which I’m sure testers will be absolutely thrilled about. They’re also up some awards at BM at the loyalty awards, quite a big drop down to 44%. So I’m assuming that when the next team see this, they’ll be like, oh my goodness, what can we do? How can we start to, you know, really impact that appeal versus Club card. And one of the things that I find personally quite interesting is obviously when you go into Tesco’s, you cannot help, but see Tesco club card.
Charlie Hills

00:16:32
It’s almost that the main thing you’ve got a business and what they’ve done with pricing this year, I think has been so extraordinary and they really kind of leading the market so much that, you know, other programs like boots are following. So I think we should all be keeping a really close eye on Tesco Club card. They never sit still then comes boots, a fantastic program that obviously we all know and love and in the UK, so four points for every pound new pricing, they’re doing a lot of exciting work in promotions and they’re doing a lot of exciting work in sort of triggered rewards as well. So again, a really exciting programs. Those are the big three in the UK. Next comes next favorite program, Which is a program that I think during the pandemic, nearly every households in the UK, you know, became almost reliant on Amazon prime for deliveries, certainly in my house as a cold stream, we try and limit it to our Amazon day to be able to take a more sustainable approach to it.
Charlie Hills

00:17:28
But, you know, it’s a huge program and, and beloved. And I think one of the things I love about it is that it’s a subscription program and it really changed the rules in the UK. You know, we’ll have this endless debate about what’s the loyalty program, what’s a subscription program. And actually I think prime is a brilliant example of both number five. We’ve then got the co-op and lovely program at 23% with that lovely locally ethos and support your local charities, which is a great program. Then we get out to marks Spencer sparks and 21% at 80% at cost to club at 18%, 15% Superdrug health and beauty card and 11% Tesco club called plus.
Charlie Hills

00:18:09
Well, I think what really exciting in that top 10 is you’ve got a real mix of, you know, the biggest and most established programs in the UK, but then the kind of the new contenders coming through as well, you know, class only launched, you know, just over a year ago, a new program cost a club that you check that out. That’s really exciting relaunch. And one of the UKs biggest programs, they’ve done some exciting things, moving away from points to back to a sort of bean collection mechanic. And I think my favorite bit about the relaunch is that they’re a really good example of a program who’ve really baked sustainability into their thinking. If you bring, if you use their own cups eight times to get a free coffee, but if you bring your own reusable cup, you only have to come four times to get twice as good.
Charlie Hills

00:18:54
If you demonstrate sort of strong, sustainable behaviors and then sort of, you know, number 10 Tesco Clubcard plus that new, disruptive, that new subscription model that we’re seeing coming through in grocery and other sectors as well. So yeah, a really strong top 10 for us, we did 50 programs as well, so we can go to the hallways for the tail and we can look at it by sector. So with all of our clients, we’re having a really fun time looking at, you know, how are they performing in their sector? And that’s great, but really great, really strong top 10. That was one of my first favorite stat. And then I think my second is then about the impact that loyalty programs are. Yeah, it’s it’s top of every loyalty marketers agenda.
Charlie Hills

00:19:35
Everybody’s looking at the business case at the moment, you know, what impact am I having? How can I have a stronger impact? And I think what’s great to see is that in the UK, we’re seeing an increased impact in loyalty programs over time as we’ve run the research. So we know that 40% of Brits will find a more, a brand more appealing if offers a loyalty program fit a stronger emotional connection. So programs are really kind of delivering against our customer’s hearts, I think, which is really fantastic. They’re also delivering against their wallets. So 43% will spend more if they’re a member of a loyalty program and in new data this year, we also look to its impact on frequency, which actually came out as our biggest kind of impacts of 59% of Brits will shop more often if they have a loyalty program.
Charlie Hills

00:20:23
And I think that’s something that’s in Britain at the moment as we try and get people back into shops and back into stores and back into shopping behaviors. So 59% of Brits will shop more often if they have a loyalty program. And then we’re also seeing a really strong impact on behavior as well. So 48% will be more loyal and 40% will actually recommend your brand more if you have a loyalty program. So again, really strong set of impact stats.
Paula Thomas

00:20:51
Oh, they’re wonderful. Yeah. And I think what I’ve heard, you know, certainly over the last couple of years is, you know, we in the industry have increasingly relied on our loyalty programs and every company that you speak to will suddenly say, oh my goodness, you know, this is the time to invest in loyalty. So I think that’s dramatically changing the industry. And we’ll definitely talk about that coming through as well. But also I think it’ll probably be time before consumers fully see the results of that. Well, when we have this data, which proves the commercial rationale, I think we’re off to a flying start because that’s, I think where we struggle the most so well done on those fabulous Faber’s ones.
Paula Thomas

00:21:33
And Nick, then what would you say was your favorite learning then, particularly from all of these, I don’t know how many questions you asked to get so many insights. I think there’s top eight, I suppose, in your white paper. Am I right with that, Charlie?
Charlie Hills

00:21:46
Yeah, that’s what we put in the speech actually for the events We really sort of pulled out as a kind of topic kind of key insights, but in all honesty, I think we can, we can keep going for ages so much in that the way that we ask the questions is, you know, we have the kind of the panel data and the loyalty data points that we’ve built with UGov over the years. And then we ask those kinds of five extra kind of killer questions in bespoke research that we don’t top this year. So it’s hard to pick a favorite.
Nick Fishbourne

00:22:15
Yeah, I think what was quite interesting for me was comparing the data with previous runs, particularly the 2018 figures. And we saw that this year, 70% of us still members of a loyalty program, but that figure has actually declined slightly over the last few years, declined by 7%. And initially, you know, we were quite surprised by that. We’re thinking, well, what’s driving that, but, but when you think about it, as we touched on earlier, the last couple of years have been, you know, tumultuous to say the least we’ve had Brexit, there’s been supply chain issues, Suez canal moved into COVID and now we’re dealing with the, with the conflict in Ukraine.
Nick Fishbourne

00:23:00
So, I mean, if you just take COVID on itself, like a spritz had been in lockdown for most of the last couple of years and we just haven’t simply been able to get out and interact with loyalty programs.
Paula Thomas

00:23:13
Yeah.
Nick Fishbourne

00:23:14
And you know, an extension of that is when you look at even a, a specific sector, you think something like travel’s been enormously impacted and, and travel is a real key sector for the loyalty industry. So I think it’s not that loyalty hasn’t been on the agenda for brands. It’s just the fact that they’ve, you know, they’ve had to pivot so much over the last few years and deal with the shifting sand beneath their feet. And I think that’s probably what we’re seeing in the data there.
Paula Thomas

00:23:45
You’re totally right. And yes, I suppose that was my most striking statistic, I guess. I don’t know favors would be the word I’d use, but certainly striking and important for the industry to be aware of. I’ve already referenced the fact that we’re hearing so much more investments going into the industry, but I do think what we’re also seeing from consumers is that they’re really making more considered choices. So if our loyalty programs aren’t compelling and really don’t give us very good reasons to, you know, share data for example. And I know there’s particular demographics of concerns in the UK markets, which we’ll talk about both. I think it is an alarm call in some ways to say that overall membership has dropped from 77% of the UK population to 70%.
Paula Thomas

00:24:30
So an important one to notice and I guess keep us on our toes. So,
Nick Fishbourne

00:24:35
Well, I think also, sorry, just to jump in there. I think that that speaks volumes for the important importance of making sure that the business decisions as we go through these periods of a data lead, as Charlie touched on earlier, that, you know, you’re not kind of making these decisions subjectively you’re actually touring real robust data and using that to, to, to help draw conclusions. And you go as a, we have a big focus internally on neutrality. So there as an organization to draw the data and to provide insight, we’re not there to take sides.
Nick Fishbourne

00:25:18
So they threw out the pandemic again throughout the war in Ukraine, we’re actually publishing a huge amount of data, free of charge on our website. Anyone can go to the site, reads, editorials, read insight, see graphs, statistical analysis. We’ve been doing that really because we feel a responsibility. You know, we, as I said earlier, we have access to 17 million individuals worldwide. And while we’re running a business that we like to take our social responsibility quite seriously. And if we can provide information, you know, for example, what Brit’s feeling about the refugee crisis, or how were they feeling about vaccinations or look down goals.
Nick Fishbourne

00:26:06
And, you know, if we can provide information, that’s going to support organizations that may not have budget to run bespoke research. Then, you know, I think we feel a responsibility to do that. And that is something that we do
Paula Thomas

00:26:19
Well, well done. Nick, we’ll make sure to link to that in the show notes, that’s incredibly exciting. So a wonderful service and it is fantastic that you can be of service to all of us. And again, budgets can be super challenging at these kind of crazy times.
Nick Fishbourne

00:26:34
Yeah.
Paula Thomas

00:26:34
So thank you. So Charlie, what do you make of this overall drop in membership, and what do you think is working and maybe what isn’t working?
Charlie Hills

00:26:43
Yeah, I think when we sat there and went through it, would you govern? I think that’s, what’s lovely about their independence. You know, anybody who’s thinking this can be really confident in the reset. I think sometimes when an agency puts together research, that can be an element of skepticism to it, but that’s, what’s great about that. You got partnerships. So anyone listening can be really confident in that, that, you know, it’s really validated. And I think when we first got that, that kind of, that stat through about the drop in membership, we were pretty horrified prior to that we know big, constantly flat grow. It’s great to see that the majority of Brits are engaged in, in loyalty programs. And then we sat back and thought about it. And so actually, what have we seen in all the time programs that we work on? What have we seen in the press? What do we think is driving that decline?
Charlie Hills

00:27:24
And I think as an extent it’s been that change in lifestyle, that’s come through now, even the most average shopper, you know, when you’re literally locked in your house struggles to get out there and use their programs. And I know there’s kind of this high street retail programs I’ve seen drops in their membership. When you look at sectors like airlines and hotels, where it literally illegal to go, I think they’ve naturally seen a drop as well. One of the programs we work with regularly is called shell go, plus, which I know is a program, is our favorite of the podcast, it’s a fantastic program and we love working with it. And we actually activated a big promotion during the initial lockdowns, which was about engaging the existing base and keeping people engaged and bringing some moments of joy in those really dark times.
Charlie Hills

00:28:09
You know, as you went to film, we actually saw sort of consumers going into forecourts to play this promotion, to actually have some fun and some kind of surprises. So there’s been so much change and so much kind of held back that that’s what we think is driving the decline. And actually what we’re seeing is a real sort of pickup and re-engagement as people come back, I think it’s something that we’re going to keep a really close eye on this year and perhaps back monthly to see what’s happening in membership. But our hypothesis is that based on what we can see is that it will pick back up. So that sort of 77% number. And I think what’s so interesting is that so many sectors are really focusing in and innovating within their loyalty programs. Actually, I wouldn’t be surprised if this year we overtake that 77% number because there’s, there’s so much press, there’s so much acquisition.
Charlie Hills

00:28:54
And the new insight that we learned this year, which is a question I always get asked, how many, you know, how many are they members of? Like, we’ve never had the answer to that. Yes. And we’d guessed before it, wasn’t probably a member of Tesco club card and boots, you know, that’s quite a big nose. And I think this year, it was really exciting when we looked at it, we were like, ah, four, four is the number. Yes, yeah. A metaphor for loyalty programs. And then when we sat back and talked about, well, which four, and that’s, what’s quite interesting and the way that we track it, because we can actually see, you know, for example, I’m a Boots Advantage card member is also a member of, and then we can see which other programs which forms, but what’s really exciting, I think because it makes you think slightly differently as a loyalty marketer, because I think naturally our clients and ourselves, we look at what we would perceive to be the competitors in our sector.
Charlie Hills

00:29:47
So as I think I’ve talked, you know, we work quite a lot with Vodafone. We work quite a lot with boxy in the telco sector, which is the sort of thing, new network that Vodafone sort of back. And it’s really exciting because when we talk to those programs, you know, our initial sort of competitive set is the other telco programs that we do priority. We look at three-plus that just launched in the UK. We’d be looking at Virgin red, we’d be looking at sky VIP. But when you then naturally think, well, they’re only a member for programs, actually, maybe your competitor isn’t in your sector. Maybe you’re, there is actually the biggest program in the retail sector or the biggest program in the pharmacy sector or the biggest program in travel. And I think that’s quite an exciting mindset shift for the industry because you should, you should always be looking at the sort of, you know, who else is in your field, who else is in your sector, but the three that you’re up against, it’s pretty unlikely that they’re in your sector.
Charlie Hills

00:30:39
You know, the big three are likely to be the Tesco Clubcard primes the boots and volunteers card, as well as all the really exciting, smaller programs that exist in hobby craft for world’s Waterstones have got a great program. Paperchase treat me as a lovely program, pets at home VIP, one of my personal favorites it’s I joined the legions of Brits who acquired dogs in the last several years. I think, you know, there’s some really exciting stuff going on there. So I think that would be a top tip is to look outside of your sector, you know, who are the three that you’re up against your customers? Who are they knocking you against?
Paula Thomas

00:31:13
You’re absolutely right, Charlie, because, you know, it’s one thing to say, how can we be the telco of choice for example, but your consumer makes that decision once and then actually goes, as you said, they shop in Tesco or they shop elsewhere and they’re actually going, oh, now that’s something I’m going to give my attention to. So we absolutely need to be looking at best in class and actually reading your white paper. Charlie genuinely found it super inspiring just to see the depth and breadth of programs in the UK that you educated me on. You know, because again, I live very far away and no real depth of understanding, I suppose, of how all of these programs work.
Paula Thomas

00:31:54
So just want to make sure everybody’s excited. I suppose, as I am about understanding, you know, exactly how exciting the UK market is so super exciting
Charlie Hills

00:32:04
And it’s moving so fast. I think, you know, one of the things I was like, oh no, it’s so annoying. Every time you write it and then you go to lock it down and then there’s another big piece of news. So Waitrose, you know, one of the big grocery programs in the UK, my Waitrose quite iconic, you know, they were the first to do the free coffee while shopping. They were the first to do the free newspaper shopping has literally just reorged. So it’s not in the white paper, which is a noisy nerd. I’m gutted about you had done it just as we’ve gone to print, but there’s, you know, there’s a constant stream of new news and new things happening in loyalty. So we actually, we do a monthly engine room that we, that we run all the time. And actually we look in that what’s changing consumer what research is going on elsewhere, what’s happening in the market.
Charlie Hills

00:32:49
And we share that sort of fraud our clients every month with the kind of latest news, because it’s a tough market to keep up with.
Paula Thomas

00:32:57
Yeah, totally. Yes. And I hope it won’t be two years before we do the next round of this, for example. So
Nick Fishbourne

00:33:03
Think we’re on the topic of how the direction that things are moving. One of the things I found really interesting in the white paper was there as a bespoke question that we, we run for the, for the project. And it was a question around the types of rewards that people would be willing to receive. And I think Charlie touched on this earlier and it was really people’s desire to receive, receive new technologies is their awards. And actually 64% said that they weren’t really interested in those types of rewards. So we’re talking about smart devices, wearable tech, cryptocurrency, and FTS.
Nick Fishbourne

00:33:45
And I think that’s something that’s really going to change as we continue to run these, these data depths and these white papers. I think certainly in my professional life, the, the metaverse blockchain, crypto, all of these things that are increasingly becoming more and more prevalent. I think we’re probably in a stage of early adoption at the moment, which is why we’re seeing that the majority of people aren’t interested, I can see that the adoption of the internet was sent me the whole curve. I think that’s probably what we’re going to see in new technology. And I think that’s, that’s definitely one to watch as well.
Paula Thomas

00:34:25
Yeah, for sure. I totally agree, Nick. You know, I find it super fascinating to read all about, you know, the super cool and, you know, innovative ideas, but in terms of practicality and what’s actually going to change my everyday life. It’s, it’s unlikely that I’m going to engage with those just yet. Whereas if I can get a really nice, you know, whether it’s a sausage roll or a newspaper or a chocolate or coffee to have to do something that’s pretty universal. So I think what was wonderful to see coming through and, you know, again, not surprising is that rewards are the reason people join. The reason people engage. So given that it’s not surprising, and Charlie, I’d love you to just comment on the role of rewards, you know, and how it compares to other reasons that people join or engage with our programs, just to get a sense of what are the priorities for consumers.
Charlie Hills

00:35:18
Yeah. And I think this is something, a drum that I’ve been beating for a long time, but the industry
Paula Thomas

00:35:26
Totally
Charlie Hills

00:35:26
Wards for best rewards and benefits. And I have as yet to see, you know, any kind of body that recognizes that the most important thing you have to get right in your program is, is the reason for people to join. And then the reason to stay engaged and that’s rewards. It always feels a little self-serving given that I run a partnerships and rewards agency, but I can promise you that we did this with you govern. It was validated. It isn’t all kind of, you know, our thing, but it’s so important. I have sat in so much research over my entire career. Every single time you sit down with consumers and you talk to them about their programs, they will often describe the program by what they get. They’ll say, oh, you know, that’s the program that gives me earlier.
Charlie Hills

00:36:12
It wasn’t described as Amazon Prime, Amazon prime it’s described as the program that gives him nappies and unlimited TV. I think it’s so rock and roll rock star. Don’t worry. You’ll get through it. You’ll get a festival in no time, but it’s one of those things. Yeah. The rewards is number one. We can’t say it often enough. You know, when you talk to Brits about, well, what makes you join a program? 60% of them will say, well, it’s the discounts and offers that I that’s the most important thing. 28% of them, then won’t partner rewards. 83% of them want kind of free services, products and benefits that they get.
Charlie Hills

00:36:52
We’ve got a really savvy audience in the UK. They really understand what loyalty programs can give them and they really know what they want. So I think it’s really exciting to see that the top three reasons that people join programs are rewards. And then in a number four with 12%, we have sort of being the first to know and being on the inside edge. And I think that’s great, but kind of top three reasons to join an OT program was all about the rewards this year. We wanted to ask about engagement as well, because I think what we’ve seen the last two years is an increasing focus on retention and our recognition from brands and programs that their existing customers are really important than their existing members really matter. And actually keeping their hearts and their minds and keeping their wallets is, is really, really important.
Charlie Hills

00:37:36
So we’ve seen a great increase in focus on active rates, member, retention, churn reduction, and that kind of area. And I think so that was one of this year. We wanted to ask us and as you know, actually what makes you stay? What makes you love and keep using was how we phrase the question, a loyalty program, a member. And we were delighted to see rewards come in at number one again, which was food. Yeah. So people told us that having good offers, rewards and benefits are always changing and updating is the most important thing that a program can do to keep engagement and keep retention. So we had 52% of Brits. So that’s that, that was the most important thing. And I think that’s quite exciting for those programs that, you know, all constantly refreshing their reward portfolio.
Charlie Hills

00:38:16
It’s like a big tick, but yes, you’ve got it. Right. Second kind of variable that people wanted was the same thing, but always the same. So we’ve got a contingent of Brits for whom actually they don’t like all the change in the chair and they actually just want one thing. So 44% of Brits said that that was really important. And then after that comes this sort of the platform experience and actually having a simple and effort-free kind of account management and user experience, which I think the area as well, we’ve seen a huge amount of investment in, I think when you look back at loyalty programs from 10 years ago, you know, you have to work really hard to get your
Paula Thomas

00:38:53
Data,
Charlie Hills

00:38:53
A lot of mass involved. How many police like, well, what’s my point was, you know, you compare that to now, you know, with little plus where you just literally go in and it’s on your phone and you just like pay as you go through. I think, you know, there’s, there’s been a huge investment in that and it’s really paying back, but rewards are still kind of number one and number two for, for what keeps people loving and using programs. So I think that was one thing to see.
Paula Thomas

00:39:15
Yeah. And it’s music to my ears as well. Charlie, because I think again, we can get, you know, so concerned for example, about the technology and about, you know, other principles of loyalty, like, you know, how can we personalize this? How could we be omnichannel? Like all of those things really do matter. But as you’ve said, if you don’t get the absolute reward, right, like that value proposition is literally what you will live or die by. So I think it’s huge recognition. And again, I know you’re in the industry, but as I’ve said to you, I think exactly on this show two years ago, we had the exact same research conclusions and my interpretation and certainly the business’s interpretation and this perhaps was in, again, the telco sector.
Paula Thomas

00:40:00
It was, I think the perception of our consumers, that if we did go out and partner with other companies that they really realized that that was something over and above what the business could do kind of quite easily internally again with a discount or an offer there. But if you did go out and get them a coffee, which we did, they were like, oh my God, that’s amazing. Oh, you guys are doing that. So yeah, I think there is something inherent there where consumers are picking up on us and totally value it. So again, validating all of the work and conclusions you’re doing.
Charlie Hills

00:40:33
Yeah. We love partner rewards. I mean, obviously we do, but I think it’s so important as a program owner, because I think if you ask yourself the genuine and honest question, you know, what are the rewards and benefits that I can give my members really love really one and really value the program. And you have to ask that question broadly, you can’t ask it. You can’t look almost in your back pocket and go, yeah, I’ve got that. I can sort of repurpose totally free, ideally, and then sort of pass off as a reward. I think you genuinely have to start with your audience. What is it they really want and value. And I think a lot of that will come from your own portfolio and your own capability. The reason your customer is because they love your products and then they need what you’re selling.
Charlie Hills

00:41:18
But I think you do have to look bigger. And as you say, you know, for telco brown to offer coffee, I think is a fantastic partnership. You know, it’s a really rich partnership in the UK. We see a lot of that and we also see a lot done in cinema, which is really exciting. There are some brilliant cinema partnerships out there. And I think what’s really important is that blend of the big everyday mass stuff, you know, the dining partnerships, the coffee partnerships, the cinema fellowships that you know, that the majority of your customers are going to really, really love. And then supplementing that with the things that you know, that extra kind of bit, that bit that’s unique to you. I think sky VIP is a fantastic program at doing that in the UK. They’re absolute masters of looking at what their customers love and their members creating these once in a lifetime incredible experiences.
Charlie Hills

00:42:02
I’d thoroughly recommend checking them out. I think very me rewards from Vodafone is another really good example of a program. That’s really investing to understand what its customers want and then serving breadth and variety so that no matter what you love, there’s a fantastic reward in there. They’ve just done a big partnership with Justy, you know, Brits love a takeaway, get away from it. And there’s a fantastic, a market leading partnership that they’ve negotiated there and built with Justine, just very me members, which is really exciting. They’ve announced that they’re sponsoring Wimbledon again, you know, one of the British great loves, you know, this year more than ever with Emma in the frame. And I think it’s really exciting sort of re-look at what your customers love that you can offer that also outside and, and really excite them.
Charlie Hills

00:42:46
And I think, you know, there’s a reason that 28% of Brits want polar rules and 23% you around their self. They are, you can be a little bit more exciting if you’re running a program in a sort of a slightly more boring sector. And then we all know the sector and, you know, find some really great stuff.
Paula Thomas

00:43:04
Totally, totally. And I guess coming from outside the loyalty industry, Nick, were you surprised with any of those conclusions? And I think particularly, I suppose the fact that simplicity is coming in and third place as a reason to engage, you know, again, way of both things like personalization, again, I think is a bit of a wake-up call for all of us to say, of course personalization is important, but actually just let’s keep it simple. So people actually understand what they’re getting.
Nick Fishbourne

00:43:31
Absolutely. Yeah. I think if people, if people don’t understand something, it probably breeds a bit of a feeling of mistrust. Do you kind of think, you know, the brands trying to hide something or get away with something? And I think certainly, you know, just from the UGov lens, engagement and trust with a brand is so important. One of the things we’re finding with our, our panelists, who we reward for, for completing surveys giving us data is that increasingly they’re actually not so bothered about financial rewards, but they really want to know how their data is being used.
Nick Fishbourne

00:44:16
So for example, if, if a panelist provides a lot of data for research and that data fuels a press release for a PR firm, we’ll actually track that and we’ll send the panelists that answered that questionnaire, a link to press release. And we can say, Hey, thanks for your data. This is, you know, this is what it’s fueling, that’s invaluable. And I think people today, they, you know, they, they want to contribute to something bigger than themselves and they that if they can see how their information, their insight, their opinion is fueling commerce and, and allowing companies to make decisions, then I think that’s invaluable.
Paula Thomas

00:44:57
And yeah, and I think it picks up on the whole idea as well of being seen, you know, because as human beings, actually, we just want to know that we’re making a difference and that people are listening and taking notice. So I think that’s a very thoughtful gesture and not one I’ve heard before in market research. So again, well done to you go from that one.
Nick Fishbourne

00:45:15
Thank you. I can’t pay the credit for that one. I’m afraid.
Paula Thomas

00:45:18
No worries at all. I think the last big topic then that you guys touched on was the whole piece about sustainability. And again, you know, back to the loyalty awards, for example, I know that’s been on the radar now for a couple of years, the conference we met as ourselves, Charlie, there was definitely a whole discussion about an eco loyalty, but tell us, what is the role of sustainability? Would you say now, again, coming through the pandemic, we’ve got a lot of, you know, getting back to normal to do so where sustainability in terms of people’s priorities, would you say?
Charlie Hills

00:45:51
Yeah, I think it’s, it’s a really exciting and important change that we’ve seen in the industry. So in 2018, we went around all the thought leaders and it didn’t come up as a topic. No one was thinking about it, particularly in 2018, in 2020, we started to ask about it because we saw it coming. We hadn’t seen a whole lot, a huge amount of activity in this space in loyalty, but we could see it happening in other areas. And I think it’s the next point that data privacy is a big trend that we’ve seen in marketing. We see it reflected in royalties. Sustainability is a key one corporate social responsibility in helping charities and good causes kind of equally important and close to our hearts.
Charlie Hills

00:46:32
We do a lot in that space as an agency and our clients all do as well. And I think sustainability with an area we really wanted to dig into and we really wanted to understand, because I think quite frankly, as an industry, we don’t do enough. So in this research, we learned that the majority of Brits now want programs to help people live sustainably, live sustainably and help the environment. So 71% of British people said that that was important. The loyalty program should do. And I think if you looked at that, you wouldn’t find 71% of programs doing something in this space, 71% of Brits wants it and doing things, but they’re not perhaps doing as much. I think when we then dug into, well, actually, what is it that you want programs to do?
Charlie Hills

00:47:16
We didn’t ask the question on prompted because we thought actually there aren’t that many programs doing it. So if we ask the question, unprompted Brits, I think are going to look at us and go, well, what they can do. So what we did is we worked quite closely with you guys to review the history, understand what was happening, what we could see happening in other markets, what should be happening. And we asked Brits, well, actually, which of these things should they be doing? And what was done was that 44% once programs to reward sustainable or environmentally friendly behaviors. Now that’s huge because I think if there was a little too marketer and go, well, what am I doing to reward sustainable or environmentally friendly behaviors in all honesty, most programs in the UK will be well not much.
Charlie Hills

00:47:59
I think that foster example that I talked about earlier is a flagship something to look at as a loyalty program, but actually that’s a really great example of actually rewarding, sustainable behaviors after that came off rewards that help people live more sustainably. So 43% of Brits wanted that. And I think, again, that’s something where as a loyalty program owner, that’s not a difficult thing to help with. So actually you can offer awards that help people live more sustainably. So a really great example of that is TK Maxx, treasure. It’s a really innovative program. It’s really fun. There’s a lot of gamification and keys that you earn sort of playing rewards that you can either win or get for yourself.
Charlie Hills

00:48:39
But what’s always really important. And sort of central to TMX is thinking is that they will always offer within that portfolio rewards that help people live more sustainably. So the great example of that is a reusable wax rack for food, lovely reward, execute and source, but actually kind of customers look at that and they recognize it as something that helps them live more sustainably and reduce their single-use plastic consumption. So I think sometimes when we look at sustainability, we can think, oh my goodness, it has to be massive. It has to be a core Papanek and you can do some quite simple things that then actually start to make a difference. Next team, supporting environmental charities. I think mark suspense, the sparks probably leads the way in this and the UK fantastic program.
Charlie Hills

00:49:23
The group that challenged them charities into really interesting carrot categories. And they’ve got some really lovely environmental charities within that. I think it’s something that we saw pre-pandemic. We saw it massively accelerated during the pandemic when everybody was giving to the NHS and now actually we sort of seen it drop off slightly. So I’ve really want the industry to really pick that up and keep that. I think that’s really central that we do good after that offering rewards from brands that help and support sustainable causes. I think there’s some really exciting brands out there that have this baked into their DNA. We’re a huge fan of Tom’s in my family, but there’s a lot of brands out there who, you know, buy one, get one for is a core proposition.
Charlie Hills

00:50:05
We’ll have really strong kind of charitable components, environmental components. And I think that can also, should also inform the brands that you work with offering a digital loyalty card rather than a plastic or paper one comes next. So providing information about environmental issues and sustainability and lastly sort of offering forums, this one wasn’t terribly popular. And he accented Brits were interested in that, but forums to discuss environmental and sustainability issues and sort of suggest solutions. But I think there’s a lot that has program owners we could be doing around sustainability. And it’s certainly a key priority for us for sort of this year and beyond.
Paula Thomas

00:50:40
Yeah. Yeah. And I love that you’ve given the answers action. You have prompted the consumers for the Asheville. And because again, I think the industry is struggling to know what can we do and what will customers value. So a really nice approach on that one. Would you say NICU were, am surprised by anything on the sustainability side?
Nick Fishbourne

00:50:59
No, I, I think it’s, it’s brilliant that the industry is moving in that direction. I think we as consumers have a responsibility to be a bit more self-aware in terms of