The Loyalty Report is an annual survey, and this year, Bond has tracked a quarter of a million consumers globally, from more than 750 brands, in dozens of industries, across every type of loyalty strategy.
With so much scale and visibility from global markets, the 2023 Loyalty Report truly highlights the key insights loyalty program managers need to know right now, such as the number of programs that consumers say they are members of and active in. It’s not surprising to hear that this year, consumers are finding more loyalty programs to join, and they are enrolling and engaging in them more than ever.
So, the stakes are getting higher, as is the level of competition, so it’s even more critical to hear what consumers are telling us that they value in 2023, and the opportunities that still exist for true differentiation.
Listen to hear the insights from this year’s Loyalty Report as I discuss them with Maegan O’Neill and Sean Claessen from Bond Brand Loyalty, who share their key take-outs and watch-outs for leading brands and loyalty programs in 2023!
Paula: 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 brought to you by The Loyalty and Awards Conference, the leading annual event for loyalty professionals in the travel industry. Make sure to join us this year from the 9th to the 11th of October in Rio de Janeiro for the perfect mix of inspiring content and exciting awards. Check out loyalty-and-awards.com for more information and to register.
Hello and welcome to today’s episode of Let’s Talk Loyalty, featuring our latest insights from our friends in Bond Brand Loyalty and their Annual Loyalty Report. As most of you know, The Loyalty Report is an annual survey tracking a quarter a million consumers globally from more than 750 brands in dozens of industry and across every type of loyalty strategy.
This year, Bond’s Loyalty Report once again highlights key insights such as the number of programs that consumers say they’re members of and active in. And it’s no surprise to hear that this year they are reporting more loyalty programs to join, more they’re enrolling in and they’re engaging in them more than ever.
So I think the stakes are getting higher, as is the level of competition. So it’s even more critical to hear what consumers are telling us that they value in 2023 and the opportunities that still exist for true differentiation. Joining me to share their insights on this year’s loyalty report are Maegan O’Neill and Sean Claessen from Bond Brand Loyalty.So I hope you enjoy hearing their key takeouts and watch outs for leading brands and leading loyalty programs in 2023.
So Sean and Maegan, welcome to Let’s Talk Loyalty.
Sean: Thanks for having us.
Maegan: Happy to be here.
Paula: Great. Sean, it’s a welcome back for you from last year. And Maegan, it’s a first time. Welcome on the show for you. I think. Yeah.
Maegan: Yes. Thank you so much for having me. I’m delighted to be here.
Paula: It’s super exciting. We’ve, of course had Bond on for the last two years, talking about The Loyalty Report and the incredible work that you guys do, producing this enormous piece of work that inspires all of us around the world.
So hot off the presses, 2023. We’re here to talk about all of your latest insights, but before we…
Sean: So flattering.
Paula: I mean, we know this, don’t we? I mean, this is a, you know, industry leading piece of research, so yeah.
Sean: Delight to do that.
Paula: Yes. And I know it’s the 13th year actually, I was just noticing to myself that you guys started this in the year I started in loyalty, so that’s maybe why I have a particular piece of affection. I think I must have seen it and went, thank God there’s all of this support. So here we go. Great stuff. Super. So listen, guys, as you know, we always start these conversations talking about our personal favorite loyalty programs so that we can look for further inspiration.
And I know it’s always particularly challenging for guys like you because you work on so many, but just to get us kickstarted in terms of what we should be looking to in terms of global best practice. Sean, I might come to you first because you’re an old hand at all of this from last year.
Tell us what do you think is your favorite loyalty program?
Sean: Yeah. I mean, Maegan and I get asked this question a lot. I think because we circulate in this space and, to your point, you know, each one of the ones that we work on has its own virtues. It’s got its own particular contacts. There are strengths and areas of improvement for each of them.
I think the ones that are, you know, maybe most compelling to me will probably talk a little bit more about as we go here, are kind of the new entrance, the next generation of loyalty programs that have entered the market sort of since the pandemic over the pandemic, into this new version of the world.
They’re growing at an unbelievable pace. They are leapfrogging a lot of other legacy loyalty. They’ve got you know, no, heritage technology to get over no technical debt. They don’t have the sort of vestiges of classical older ideas, and they’ve had room, I think to exercise something a little bit more unique.
And so, we’ll probably drop some references to like a MyMcDonald’s Rewards, which is, you know, growing all over the world at an unbelievable pace, to the kinds of lesser traditional structures. Maegan and I are sort of personally fans of there’s a way loyalty done that doesn’t look like it used to look. But yeah, we’ll probably name drop as we go.
Paula: Okay. Well, you’ve name dropped already one Sean. And I have to say that offline you did explain to me that there’s a wonderful quotation, that’s coming through just in the work that you’re releasing this week, which is that brand programs that didn’t exist three years ago are now leading the world in volume and importance.
So definitely, McDonald’s is one of those. So I think we’ve got a lot of lessons to learn.
Sean: Yeah, I think that’s true. I think, you know, like I put an Adidas like AdiClub in that mix, there’s probably a handful from a global perspective that, and that too maybe is a little bit different, you know, as these programs have become more prevalent. They reach further and further around the world and, you know, are able to account for participation all over the planet.
Paula: Totally. Totally. And we just interviewed McDonald’s actually recently, so that’ll be coming out soon on the Let’s Talk loyalty channel for anyone who is interested, but also, I love new words or new phrases, Sean.
So, I just want to comment on your terminology, which I really like, which is just this idea of technical debt. Not a term I’ve heard before, but I think it’s a pain point we’re very familiar with. And I’m guessing it’s something that you have a lot of clients that do struggle with because in some ways you can be a victim of early success if you are, you know, in the market, like maybe an airline, for example.
So that’s something we probably should get into as well as we go through, particularly as you’ve commented on new models. So I’ll be dying totally to get into all of that. Great.
So Maegan, what’s your thoughts? Do you have a personal favorite loyalty program? What would you say we should be admiring? And you can be as diplomatic as you want, so whatever.
Maegan: Yes. It can be challenging working in this space to pick a favorite. But I think alongside Sean, we’re paying a lot of attention to programs that are using what we termed alternate currencies several years ago. You know, they’re extending beyond turn value propositions, you know, point schemes into relationship building.
And in doing so, they’re creating really compelling, unique relationships with their consumers that are driving their success. We’re seeing more traditional programs, I think, adopt some of those. I think Marriott Bonvoy has done a good job of thinking about ease, and convenience and time as they’ve built that into their structure.
But we’re seeing programs like the Nike membership, you know, really drive successful results and profitability for Nike, and it’s not a traditional loyalty design at all.
Paula: Absolutely. And when I started in loyalty, Maegan actually, just to go back to the year we just talked about, in terms of 2010, I was working in telecommunications loyalty.
And when I was going to all of these conferences, I did feel very alone because our proposition was based on partnerships. And that was totally unique and most people were asking me about our currency and our points program and I was kind of confused as to why I didn’t have one, but I’ve never had one.
So here we are. I think the world is coming full circle and lots of interesting models to get into. So great examples there, Maegan as well, in terms of Nike, Marriott Bonvoy. And I’m sure they’re all coming through in this year’s loyalty report. So, do you want to give us a sense, Maegan, of the scale of this year’s report, because I know it grows year on year, and there’s some amazing insights that you shared with me offline.
So give us a sense of what we can expect in this year’s report.
Maegan: Yeah, we’re particularly excited for this year’s report because it is a global study. The last time we wrote globally was actually pre pandemic, so we have this really interesting snapshot of free to post pandemic behaviors and what’s changed in the consumer’s mindset.
But we’re actually out in 26 countries this year. We have over 60,000 respondents evaluating over a thousand programs against a hundred plus attributes. So we’re able to go really deep, but we’re also able to compare regionally, and around the globe to determine what is leading in one particular region that another region could draw insight from and understand what’s potentially coming down for them as well.
Paula: Incredible. My goodness. All of those statistics, I mean the sheer reach of 60,000 consumers and that number of countries, I think you said 26 countries. Am I right, Maegan?
Maegan: 26 countries. Yeah.
Unbelievable because in my head it was always the North American research report. So obviously very intentional in terms of expanding that out. So hugely exciting.
Tell us where should we start? Maegan, what are you noticing in terms of the key things that this loyalty report has impressed you in terms of learning?
Maegan: Yeah, I think one of the things is it’s a more competitive environment than we’ve ever seen in loyalty. So the past few years through the pandemic with known customers emerging through online shopping behavior, we’ve seen so many brands switch into more formal loyalty programs.
But it means that space is more competitive than it is ever been. We have absolutely seen growth in participation rates and engagement rates. In the North American study, we’re seeing a whole additional active program added into wallet, which we have never seen in the 13 years that we’ve delivered this report.
But at the same time, it is amongst a larger competitive sets. So I think brands are gonna have to be more and more aware of the value and the relationship they’re really building. Because in order to stay active in that wallet, it’s gotten more competitive and more dynamic, and customers expectations have shifted. They’re really quite high and very different than they were a few years ago.
Paula: Yeah. And, and give us a sense, maybe Sean, from your perspective, you know, what are typical consumers like how many programs are they members of? What kind of membership levels or engagement levels are we seeing? And would you say like, is that increasing or decreasing?
Because again, to Maegan’s point, you know, the economic climate is dramatically different. In fact, year on year, you know, it’s not even just you know, pre pandemic, post pandemic, you know, I think most countries are struggling in different ways. It feels every year, so what are you seeing coming through Sean, in terms of what consumers are doing?
Sean: Yeah, I mean, your question is sort of one of the next things that I find most exciting about this year’s version of The Loyalty Report. The data that we’ve pulled out of this collection all over the world lets us put those things in comparison, right? You know, you’ve got countries that are feeling the pain of a recession differently in one part of the world than another. And they might have customers who are leaning on loyalty programs in different ways or having new expectations about their interactions as a result.
But I think the thing I’m most excited about is, actually the utility of the data, you know? So for the last few years we’ve been making sure that our clients can get their actual hands on the data. The report is good. The executive summary we publish gives people, I think, really good directional insight.
We’re able to go deeper with them in, you know, custom analyses and things like that. But what is new this year is actually putting that data into the Snowflake marketplace, letting those benchmarks, like your question about, you know, where do we stand and are things growing?
I think marketers of individual brands have those same questions. Are we growing at the same rate as our competitors? As our category? As the other part of the globe that I’m comparing myself to. And so what we’ve done is take that data and make it available in the Snowflake marketplace for people to be able to benchmark themselves against whatever, set of competitors, set of best in class, loyalty programs that they want to, in order to get that constant barometer for themselves on how they’re doing.
Paula: Amazing. And I have never heard of the Snowflake marketplace. Sean, you’ll have to explain that to me. It sounds very exciting.
Sean: So Snowflake is a data platform a lot of retailers are using. And what they’ve done is they’ve introduced a marketplace where you are able to subscribe essentially to different data sources and feeds in order to, you know, enrich maybe models that you’re using with your customers to power or superpower some of the personalization efforts that brands are making.
And so, you know, us having now collected 13 some years of data. Now in 26 countries across the world and whatnot. We’re able to make that data very actionable for people. And so the insights we’ve pulled out for years now in sort of their hands on a regular basis informing some of their modeling in a more automated capacity.
Paula: Wow. Okay. I get it. Yeah, no, super exciting because, as I understand in the past it was, you know, come directly to Bond and obviously you guys would provide whatever was needed. But this sounds like a dramatically improved distribution channel where more and more people can access your data. And again, of course the reputation precedes it.
And people who I suppose are in the market for this kind of analytics, just want more because I feel like it’s almost addictive once we get started with analytics, like.
Sean: Maegan, Maegan and her team have done a really nice job of distilling down some benchmarks that make it very digestible while we’ve got a gargantuan amount of data can make available the use stuff is what they’ve teased out in the marketplace.
Paula: Amazing. Okay, so that’s perfectly teed up then, Maegan. If you were to distill it down into the top learnings, I think you’ve got three particular ones that this audience should be thinking about. So will you take us through those insights for this year?
Maegan: Yeah, some key insights we saw this year and around the globe. So we measure 36 different drivers of what delivers on the experience that a customer is looking for when it comes to loyalty to program scores. And the top 10 we record in every region around the globe. And what we’re seeing are a couple of key themes.
One is around what we call Access. But it’s really about the human delivery and experience of that program. So I think digital experience has come a long way. It’s still important. But what we’re finding are those human moments of interaction are really coming to the top. So how does the program make me feel special differentiated from others? How are the reps delivering on that promise? Are the reps making me feel recognized and valued? Are they helping to deliver the experience that I’m looking for? Are they successfully resolving challenges or answering questions or even just being available to me as a member?
So that human experience, I think is a really important one that we need to pay attention to. And it’s in part because of some of the other drivers. So one of them being around know me and personalization. Nike Plus program is a great example of that. It’s very much built, the value prop and institution is very much built on personalization.
But that expectation of digital personalization coming into the physical space, I’ve come back into your space online. You know me, you customize my journey. You’re able to adapt quickly to my needs. I walk into your location. You don’t know who I am. And so how quickly can we create that connection between the people delivering service in the physical space and the experience that’s being delivered on the digital experience?
Because they’re walking in with their phone. They feel known in that space. How do we make them feel known in the in-person space?
Sean: I was just gonna say an anecdote that you and I are sharing a lot these days. And, maybe because I’ve already name-dropped them and full disclosure, we’ve done a little bit of work with this brand, but I think my McDonald’s Rewards has gotten this part really, really down.
So, you know, my experience in a drive through for the entirety of my life is a fairly mechanical kind of rote transactional interaction. I pull up, I make my order, I pull up to the window, then I pay, then I go to the second window. I get my food and I leave. That is the story of the drive-through.
And MyMcDonald’s Reward is doing what Maegan is describing. I am volunteering who I am at the beginning of that interaction. And now over the speaker box, the box says, Hi Sean. I see you’ve got points available to be used today. Is that what you’d like to do? And I’m like, wow. Two things are different here.
I now have a relationship with, you know, the drive-through window individual, the way that I might have a barista at my local kind of coffee place. That’s new. That’s different. And her job is entirely different than it was yesterday before introducing this. Now she has a personal connection with people coming through. You know, this drive through, she’s able to call by name. She’s able to make a recommendation that changes.
I have to imagine how robotic the job may be used to feel before all of this personalization and now feels a little bit more human for her as much as it does for me in that interaction and the drive-through.
And I think, yeah, those are the manifestations that Maegan’s talking about of that you know, human interaction, that sense of being known. Come to life as part of a I would say, one of these new leapfrog loyalty propositions.
Paula: Totally and something, and then I’ll come back to you, Maegan, because I know we have another point to pick up on.
But having spoken with McDonald’s as well, Sean, you’re absolutely right. First and foremost, they describe themselves as an operations business. So we all know that McDonald’s expertise is global consistency and of course a magnificent branch. But one of the key requirements that they said that their loyalty program had to deliver was obviously to enhance the operations and not get in the way.
Because I think what we do find is to Maegan’s point, you know absolutely about that experience with the human being. It can get super clunky if somebody’s rocking up and going. I don’t know how to log in and how does this work? And there’s all that kind of delay and frustration.
But you know, this whole idea that actually you can start to build a different relationship at that moment in time when we’re only used to it, you know, when we log into our Amazon accounts or whatever. So that’s definitely transformational, and absolutely kudos to McDonald’s for getting that right. So you sound like you’re a regular customer, Sean, so.
Sean: I may have just indicted myself.
Paula: I think you have. I think you have.
Sean: I love all, I love all my QSR equally.
Paula: Okay. Yes. Yeah, no, I mean, it’s an emerging sector and again, I think part of the role of this show is to kind of listen to the leapfrogging solutions and you know, almost like what would you do if you didn’t have the technical debt, the legacy systems, the points, whatever. So if there’s definitely learnings to be had there for people to kind of take internally and reflect on.
So, Maegan, back to you. I love the point about the human connection at the point of sale because I’ve often said on this show, particularly I think in this region, for example, there are so many loyalty programs.
And, you know, every time I go into a store, they’ll ask me if I’m a member, and I’ll usually ask them why I should be a member. And that’s just because I’m being, you know, mean, challenging, or testing. But genuinely, mostly, they haven’t invested sufficiently, I would say, in terms of the training. So it sounds like that is a global issue that’s coming through in the research. Would that be fair to say?
Maegan: Yeah. I think it is fair to say, and it’s, it’s a prioritization for the consumer. That I do think brands and loyalty programs at the moment are struggling a bit to deliver on. I mean, we know the pressures that have been on frontline over the past few years. We know the pressures on experience when it comes to whether you have enough frontline staff to actually deliver.
But there’s no question. Its importance has come up in the mind of the consumer. They wanna get back to connecting to humans who can help them solve their problems or give them advice. When we look at journey work that we have in Moments That Matter, in this study, it’s often about decisioning. It’s about finding inspiration and making a choice. That’s where I want, you know, opportunity to engage in a way that loyalty programs maybe today aren’t providing.
Which leans back into, I think, Sean’s story of McDonald’s My Rewards has ease and convenience, which are reflective of time because it’s within the app. You save on profile, you can save preferences. It speeds up your drive through that drive through window. if you’re not using your points, you just skip to the next one. All of that comes together. But that delivery then, on the frontline of that experience of recognition that Sean just talked about, I think really does become the thing that ties it all together.
Personalization is being delivered. Ease and convenience for the most part is being delivered. But where there might be, you know, some of that friction point is really in that human moment.
Now I’ve walked into the hotel. You know, I know I was able to you know, register my room online, etcetera. But when I go talk to that human, am I waiting a long time to talk to that person? Are they able to resolve my issue quickly, etcetera. And that’s where we’re seeing a rise in importance that maybe programs are struggling to meet.
Paula: Absolutely, and it’s well articulated, Maegan, because again, there’s nobody listening to this show that isn’t aware of the importance of that piece of the puzzle.
But I think what they mightn’t be aware of is, as you said, that the consumer is now absolutely expecting that front and center as a top priority. So if we’re thinking ahead in terms of how do I optimize my program, it might be that we actually have to go back into the training cycle, for example, rather than the value proposition.
So that’s what I love about this kind of research. It kind of just helps to focus on where will I get the best optimum results? Because at the end of the day, I think we are all very well intentioned people who are just probably up to our eyes trying to deliver absolutely everything. So getting back to that priority is super nice.
So, just to recap then, Maegan, I wanna make sure I’ve got all three. So the human connection at the point of sale, the personalization piece you made the point about, is a digital connection that has been probably optimized, but now the expectation is moving into the physical world. And what was your third kinda, piece and insight from this year?
Maegan: It was time. So it was around that ease and convenience. The expectation there that as a member of the program, there will be record of profile that makes it easier for me to do business with you. I want to jump the queue. I want to, you know, be as efficient as I can in my engagement with you.
We can all blame Amazon Prime for setting that expectation. But the expectation is now across all loyalty programs, that there will be that reflection of ease and convenience. That’s reflective of the importance of my time in engaging with you as a brand.
Paula: Yes. Yeah, and actually I think what Amazon Prime is doing to me actually, is it’s training me to behave badly because now I know I can just order anytime.
There’s no cost implication in terms of like ordering three times a day and making them deliver three times a day. So I do hope they have their operational expertise to keep up with Paula changing minds. Because genuinely what I find I’m doing is. As soon as I think of something that I need, I’ll just go and order it before I forget.
So that I think is, you know, I suppose one of the optimum realities of subscription programs like Amazon. So definitely something that feeds into your big point there about ease and convenience. So, big, big insight.
Sean, what did you think of this year’s results? We talked a lot last year together, and again, I know you had a huge data set last year, and it’s obviously grown this year. But what struck you most in terms of what’s coming through in this year’s loyalty report?
Sean: Yeah, there’s a few things. I mean, we turned just a few years ago, this Moments That Matter data, being able to sort of log moment by moment by moment in a particular customer journey. You know, which one of which ones of those moments are Moments That Matter that are building a loyalty or eroding the loyalty.
I think we’ve brought that back, in a more robust way again, in several markets around the globe. Secondly, you know, we’ve introduced a like an ESG, a values gains index, the degree to which a brand is demonstrating that it aligns to my value set around environment, social governance issues.
I think that is a very telling thing. We’ll be revealing some of that I think later this week at a conference, for a brand like Kiehl’s and the way that it is delivering sort of relentless reciprocity back to customers in a really generous way.
And then I think, you know, even the conversation that we just had, you know, this was sort of the genesis of these behavioral benchmarks and making the data available to marketers.
I think they need to understand sort of how big those gaps are? How far off the leader am I? In the like category, in a best in class. Let’s say you’re a brand. And you’re modeling yourself after, like the level of convenience that Prime creates for people? Or the operational, ease and humanity that’s now being brought to the frontline crew members at a McDonald’s.
I think, you know, chasing some of those leaders, it’s important for brands to know how far off they are. And so those benchmarks are really, kind of the empowerment that we were hoping for in letting brands kind of keep that constant barometer around the behaviors of their customers.
And one of the things Maegan and I have known for a while, and I, I think we published maybe two years ago, started publishing this promiscuity and partnership data, you know which brands are sharing which customers to a greater degree than say their national averages or things like that.
And the reason that’s important is because when a brand like McDonald’s or Amazon or Lululemon or Kiehl’s or someone like that creates a new expectation with a customer that is also a customer of mine in a different brand. I’ve gotta be able to respond to that. That’s been new set of norms that’s gonna be part of their walking around everyday expectations.
And so I think we’re, you know, we’re pretty excited about some of the data being able to direct marketers to make better decisions, whether it be about value prop or the communications or some other aspect.
Paula: And do you see huge differences, Sean? You know, you’re tapping in, of course, to our professional aspirations—of course, to be the best in our industry, the sense of competition.
And we all have that, I think particularly as loyalty professionals, because I just think it’s part of our modus hop operandi. But do you have brands that suddenly go, oh my God, I am never gonna catch the market leader. They’re so far ahead help. Or how does it, how does it play out? I guess I’m curious to know what kind of responses you get.
Sean: This is why that Moments That Matter data are so compelling. I mean, there are moments that I think brands are still investing in maybe over investing in, that the customers telling us that’s a table stake moment. Now you don’t need to overinvest the way that you are. And you are totally phoning it in at this other part of the journey, on this other expectation that I have.
And so some of what we’re doing there is throttling to say, you don’t need to chase the leader. On this thing or that thing, or this thing, but you’ve gotta come up to par and table stakes on some of those things in order to mute that gap. It’s this white space over here, this moment that really matters that you are absent in that the rest of your category is missing out on.
That’s where you could carve a differentiation. I mean, Maegan and I go to painstaking lengths with our teams to ensure that they’re finding. Not the lookalike loyalty structure. The same print and repeat kind of thing. And yeah. And that competitive advantage is, I think, what we find through the throttling of those Moments That Matter data, you know, looking at the promiscuity.
Later this week, we’ll be sharing some data around, you know, kind of the big lie of loyalty is that everybody talks about the numerator. Maegan visited five times this year. That’s two more times than she visited last year. Yay. But what we don’t talk about is that Maegan had 12 occasions and we only got five of them.
And thinking about the denominator is a way that I think brands can do more with what they have or do more with less, which is very important right now as people look at their budgets and they think about headwinds in the marketplace. And so I’m excited about some of that data this year as well.
Paula: Of course. Absolutely. And Maegan, I love this terminology of white space that Sean is just sharing. So have you any insights, just, you know, coming from a consulting role, I always feel like you get, you know, words and all from the clients directly. What are they struggling with personally?
So we have the consumer data of course, now coming through in this report, but what are you hearing from clients and what are you saying to them in terms of this white space and where to be thinking?
Maegan: Yeah. I think what’s been really interesting coming out of this year’s report in North America, we did what’s called Evasion Network Analysis, which I will not unpack, here.
But what we understood were that out of these drivers of loyalty, and loyalty to brand and loyalty program, there are two key paths that are coming to light. One is the financial path. So this really has to do with your earn burn value proposition. It has to do with does the program save me money? Does it gimme choice in how I redeem that value? But it’s very much financially driven.
The second path is much more relationship driven. Does it gimme exclusivity? Does it adapt to me? Is it aligned with my purpose and values? Does it create ease? It’s much more relationship driven and what’s so interesting from the data is that we know that financial path is the expensive path to play in.
It’s also the public path. Your competition can match that value proposition. It’s the most, you know, undifferentiated in many ways. It’s also not as strong. At driving the outcomes of a loyalty program as the relationship path is. So all of that opportunity for uniqueness and white space and competitive advantage sits in that relationship path.
And that’s where, that’s our favorite place to play. That’s where the unique toys sit, the white space sits. And it’s really hard for your competitor to replicate things that are true and authentic to your brand. That your brand is sort of known for and really delivers an experience for your customer.
And that’s the way you create that differentiation and also that experience. That really sets you apart and makes you one of those ones that we say, here’s a top performer in this particular category. So there’s lots of room to play. It’s just, it’s not in that financial path. That financial path is expensive. And it’s easy to replicate. So you’ve gotta move beyond that.
And I think that’s where we’re seeing really innovative programs. As we saying Nike membership doesn’t have an earn burn value proposition. It’s entirely in the relationship path. Lululemon has launched their essential membership exactly the same way. No earn burn value proposition entirely about your experience and your relationship with the brand. And so there is lots of space to play there.
I think what maybe brands need help and support with is identifying what those right leavers are. And that’s where Sean was talking about Moments That Matter.
And other points of data that we have that can really help them focus in on the most impactful ones for them. So they’re not trying to do everything. They’re doing a few things that are really meaningful to the outcome of their business.
Paula: Yeah, and that was exactly gonna be my question, Maegan, because I think everybody is like, okay, we get it. But how?
You know, it’s like, you know, I think we would refer to it in terms of, you know, transactional loyalty versus emotional loyalty. So you are obviously hearing that coming through again directly from consumers. That is almost an expectation. Maybe it’s in the ESG space, and I don’t know if that’s, you know, really what’s driving this.
I know, Sean, you referenced ESG and values is something that I think over the past couple of years, maybe through the pandemic, became something that people started to question about who they wanted to do business with and who they wanted to be loyal to. So do you think it’s driven on the emotional side by these kinds of big topics of ESG or is it beyond that?
Sean: I think they punch above their weight. Right? Like Maegan’s describing these two paths. And I think, you know, the best brands kind of are firing on both of those paths. There was a lot of our sentiment going into this year’s data collection that was, you know, considerate about the fact that, you know, different parts of the world are in different financial situations.
Would that overpower? Would that take away from the focus that there’s been on kind of my environmental agenda or the social aspects and issues that I think are important that I wanna brand or reflect back to me that I wanna feel part Victorian. And what I can tell you about that values gains index is, it walks a very practical line about the dollar value return to the brand when they get these things right.
So when I strike the emotional cord that says we’re on the same page about what we’re trying to do for the planet, we’re on the same page about this social issue. And I feel like you as a brand are giving me a way in to make an impact to be participatory in your larger effort or larger initiative.
I do think, you know, we were encouraged by the fact that the financial aspects didn’t overpower. So even as consumers, you know, maybe we’re feeling the pinch in their wallets. It didn’t take them fully off that track, which I think it had the potential to do. We were curious about whether or not it would do.
But Maegan is, is that fair to say? Like the data didn’t say everybody run to the financial side of the ship, like quickly.
Paula: Yeah. More points quick. Give ’em more points. Bonus them up.
Sean: Much, much richen. Let’s richen the value prop and deepen the discount and pull the lever.
Maegan: Yeah, I mean it was very interesting. We absolutely went into it. We consistently measure, you know, these different attributes of the program. And financial has always been equally weighted with the other components of the design and value proposition of the program. And so we wondered this year, would it tick up? Would we see it, you know, really shift?
And what was amazing is around the globe, it stayed stable. It is important component of the value proposition. But it continues to only be a component of you can’t overweight to it because it won’t deliver the outcomes that you’re looking for. And it’ll be a very expensive direction to head in.
So we continue to say loyalty program should be where you are looking to invest for those financial outcomes to make sure that, you know, yeah, you’re avoiding mass discounting that you don’t need to do etcetera, because you’re doing it more targeted within your loyalty design. But you don’t need to overweight that.
Because other components of the program are just as important around providing access, providing convenience, you know, communicating effectively with me around the value proposition that you have, those continue to be equally weighted to the financial components.
Paula: Absolutely. And what I’m also inspired by as well Maegan, is this idea that in certain sectors, and I think that’s the big caveat, but there are opportunities to have, you know, propositions that may not need a currency.
You’ve mentioned Lululemon, we’ve talked about Nike, and of course, if I’m an airline, I, you know, I can’t rely on that same methodology. I’ll still need to have that financial piece in place.
But I think for people listening to this show, and again, as we go through all of our careers and perhaps move from an airline to a hotel, to a retail brand, for example, these kind of models that might not carry a liability, you know is a very interesting space to play in.
You know, like propositions, like gamification of course, as well also have these kind of opportunities. So definitely in you know, interesting to hear that consumers are aware of these, exceptional propositions and accepting of them in certain sectors so that we can start to get more creative. And sometimes the budget investment might still be, you know, quite significant in terms of obviously creating those emotional propositions.
But as you said, you know, not necessarily carrying the weight and the expense of doubling up or doubling down, whatever the term is in terms of the financial side. So super exciting to hear all of those, those coming through.
So I guess the kind of big, final piece then to think about perhaps is other trends in loyalty. So, there are lots of things we’ve briefly touched on such as partnerships, I think was one. That sounds like is something that is becoming much more compelling for consumers in the report. So I don’t know which of you would like to comment. Maybe both of you, cause I think this is a huge one I’d love to understand.
Sean: Maegan could probably put some data to this. I mean, one of the things that we’ve been watching for and calling for, and I think this year’s collection of the data helps to substantiate is just the degree of appetite that customers have to what we’ve been calling like loyalty link to create a kind of networked version of their loyalty experience between the brands that they are circulating with, you know, with the brands that they’re doing business with.
And so we’re seeing a lot more both formality to that long term, embedded, intertwined kind of co-relation between brands and they’re doing it through their loyalty propositions.
We’re also seeing some time-bound versions of that, you know? Here in this place for this period of time, you could feel a version of this value proposition. Whether you were a member before or not. And I think like that kind of creativity is starting to create a bit more of a tapestry, like a bit of a network effect amongst the loyalty programs that live in the marketplace. Where consumers can kind of nest one inside another.
Like if you think about a third party food delivery. You know, several of the restaurants in that marketplace are gonna have their own loyalty programs. Forcing consumers to choose, do I wanna earn this one or do I wanna earn on that one? Do I wanna participate only here instead of both? You know, maybe this is our bias to the world. We were very, and people not, or people, you know.
Paula: I like that.
Sean: Very, the essence of Bond is to like, put things together. Solve two problems with one component. And I think I’m encouraged by in the data, the way the consumers are talking about their appetite, to share credentials between programs to link those two things together in order to unlock more utility or more value, or whatever that proposition is.
Paula: Amazing. Amazing. Thank you for that. I like that. And versus, or I think that’s an important distinction, especially in the business that we’re in. And actually you’ve just reminded me, I was reading your bio on the website, Sean, and I loved it because it said, you wanna move your clients beyond the F words.
And of course that sounds very rude, but beyond frivolous, beyond fun and beyond fleeting. So that was super well written. So, credit to you on that one. So sounds like that’s exactly what’s going on.
And then Maegan, yeah, just in terms of what are you kind of seeing and hearing in terms of these, again, partnerships as a trend or other trends that are coming through from a program perspective that, again, the audience of this show would love to hear about.
Maegan: Yeah, I mean our clients were certainly asking us about all these partnerships that they’re seeing come out into market and how impactful were they? So it was really important in this year’s study to help unpack that and help them understand. And what was really interesting was that when it happens, when the consumer is aware of the linkage, three and four will link. And of those over 70% will say they have a better experience with the brands, or they shop more frequently with the brands as a result of that.
So that’s some really compelling data to say that yes, these are effective and people are looking for this opportunity. The key insight though is awareness, which is that we found generally only 20 to 30%. Maybe, I think at the top 39% aware that there actually was a link partnership. So if there’s one place to focus, it’s on building that awareness amongst the membership base that that partnership exists and that they can link.
Because once they know three and four will link, and they’ll have a much better experience with your brand and the other brand as a result of it. It’s just building that awareness that is key.
Sean: Maegan, Maegan and her team are always scouring. You know, aside from the work that we do in publishing around The Loyalty Report, she and her team run something called the Trend Report, where they’re just scouring the marketplace for real world examples from all over the planet of people getting this right or missing the trick of it.
And I think that communications part on another day, we could probably have a whole hour about the gripe of terribly branded loyalty programs and miscommunication. And the, and the brand architecture of some of those things, and you know, maybe for the next few years, we’ll help people get more of that right.
Paula: Well, you know, you’re speaking to the converted Sean because I am, you know, somebody who’s here to share. You know, our job as a podcast is education and inspiration. And I always had that problem with our loyalty programs. Anything that I ran exactly the same kind of metrics, which is probably a bit disheartening, but again, 30% in the telecoms brand I worked for, it was only 30% that typically knew we had a loyalty proposition.
So I always found myself fighting for that communications capacity, of course competing against the bills and the, I dunno what every competition that was going on. Every, I dunno what. So yeah, I think, between us all, we need to think about our communications and, you know, when we’re investing all of this value into these propositions.
Especially when they are both financial and emotional. We need to share that love much more widely and whatever way we can do to achieve that. I think as you said, Sean, we might have to come back and do a whole separate session and that trends report sounds super interesting as well, Maegan.
So we’ll make sure to link to that in the show notes. Of course today the key is the launch of The Loyalty Report 2023 Executive Summary now available. I think maybe Sean, would you tell us where’s the best place for people to go and find that. Is it directly on your homepage?
Sean: Yeah, yeah. You should be able to find your way to anything from the fast facts to the executive summary. There will be links there to the Snowflake marketplace and some of where people can get their hands on those behavioral benchmarks. Everything we mentioned around the values gains index, it’ll all be there.
So we’re, you know, that’s kind of something we take a lot of pride in is being able to provide a lot of insight, share this with people. And so we’re just constantly looking for new ways to expand how we do that.
Paula: Amazing. Great stuff. Okay. So thank you for that. And Maegan, just from your side, have you any kind of, you know, key points that we haven’t talked about as yet in terms of this year’s loyalty reports?
Any big, wows, any surprises that came through for you? Just to help people understand like that they should really go and, you know, find this report and read it to understand it more detail.
Maegan: Yeah, I think this year is so interesting because it’s such a dynamic marketplace. There is more competition than there’s ever been. There’s more novelty, new design than there’s ever been.
And so I think there’s so much opportunity to learn from others in the marketplace, but also learn what your consumer is really focused on. What are their expectations? They have shifted. I think for years we talked about the new normal. I’m not sure anybody knows yet what the new normal is, but we certainly know the areas of focus and attention that are being drawn by the consumer.
And, hopefully some of that insight will help you narrow the focus a little bit to deliver a new and maybe more engaging experience than you have today within your loyalty design.
Paula: Amazing. And I’m sure both of you would be only too happy. Of course. If people listening to this show have further questions and clarifications and want to reach out to you directly, I presume we can connect you to them on LinkedIn.
Sean: No problem.
Paula: Wonderful. Great. Listen, as always guys, I’m always super inspired by what you’ve done in terms of all of this incredible amount of work, really serves our industry and gives us a lot to think about. So Sean Claessen, EVP of Innovation and Chief Strategy Officer, and Maegan O’Neill, Managing Director of Consulting for Bond Brand Loyalty.
Thank you so much from Let’s Talk Loyalty.
Sean: Thanks for having us.
Maegan: Thank you.
Paula: This show is sponsored by The Wise Marketer, the world’s most popular source of loyalty, marketing, news, insights, and research. The Wise Marketer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 500 executives in 38 countries as certified loyalty marketing professionals. For more information checkout thewisemarketer.com at loyaltyacademy.org.
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