Paula: Welcome to Let’s Talk Loyalty, an industry podcast for Loyalty Marketing Professionals.
Paula: I’m your host, Paula Thomas, and if you work in Loyalty Marketing, join me every week to learn the latest ideas from Loyalty Specialists around the world.
Paula: Thank you.
Paula: This episode is brought to you by Epsilon, a leading global loyalty partner that boasts over 50 years supercharging brand experiences.
Paula: Epsilon is delighted to announce the arrival of its award-winning loyalty solutions to the Middle East and Asia Pacific region.
Paula: Its People Cloud loyalty technology and services are designed to create hyper-personalized and emotional connections with customers.
Paula: Perfect for consumers in the Middle East and Asia Pacific countries.
Paula: For more information, visit apac.epsilon.com forward slash let’s talk loyalty, or drop me an email and I’ll put you in touch.
Paula: Welcome to episode 74 of Let’s Talk Loyalty.
Paula: Today, we are here to discuss some great direct customer feedback on actually how they feel about loyalty.
Paula: My guest is Mark James, who is the co-founder and CEO of an Australian-based consulting firm called Customology Customers for Life.
Paula: Now Mark’s team actually got in touch with me after I spoke late last year at the Australian Loyalty Association, where I was talking about some great research on customer loyalty from KPMG.
Paula: Now it turned out that Customology was just releasing its own customer research.
Paula: So that’s the topic of our conversation today.
Paula: Customology spoke to over 2,500 Australian customers about how they feel, about how brands communicate with them, and how they are recognized and rewarded.
Paula: And in fact, there are some pretty startling results.
Paula: So today I’m excited to hear all about the findings of this research, and let me welcome Mark James, CEO of Customology to Let’s Talk Loyalty.
Mark: Hi Paula, thanks for having us on your show.
Paula: Great, nice to meet you Mark.
Paula: How are things down in Brisbane today?
Mark: Brisbane is fantastic.
Mark: The sun is out and it’s really quite warm, and you wouldn’t know some of the challenges the world’s facing at the moment.
Mark: It’s actually a beautiful day.
Paula: Wonderful, and I know you’re actually joining us from your vacation, Mark.
Paula: So you shouldn’t be working today, but you are.
Paula: So thank you so much for joining the call.
Mark: It’s well, my vacation officially finished about three hours ago, according to my wife.
Mark: So I’m officially back on the clock.
Mark: So you got me.
Mark: But I’ve been really looking forward to spending some time with you today.
Paula: Brilliant, Mark.
Paula: Great stuff.
Paula: So listen, I’m excited to hear all about Customology, and particular of the research that you conducted very recently.
Paula: But before we get into the actual report, just please tell me, what is your favorite loyalty statistic?
Mark: My favorite is 10 to one.
Mark: It costs 10 times more to find a new customer than it does to keep an existing one.
Mark: That is my favorite stat.
Paula: Wow, yeah.
Paula: Well, do you know what, Mark?
Paula: It’s not the first time that that stat has been mentioned on this show.
Paula: And it’s exactly for the reason that you said.
Paula: It’s pretty shocking.
Paula: And I think it just takes, you know, a reminder for marketing people and customer loyalty people to kind of go, hang on a second, where are we putting our attention and our focus?
Paula: So it’s a really clear one, super simple.
Paula: And obviously you’re building a business on the back of that.
Paula: But I also did want to pick up on my own favorite loyalty statistic from your work.
Paula: And we were talking about this off air.
Paula: And it really is about this idea that customers actually don’t always trust that they’re being treated as loyal customers.
Paula: And in fact, what you quoted was 77% of them believe that new customers get better incentives than in fact being a loyal customer.
Paula: So tell me, how did that all come about?
Mark: Well, the research was a piece of work the team undertook.
Mark: To just, we wanted to have something that was a voice of the customer, the unspoken customer.
Mark: So it wasn’t with any sort of form of agenda.
Mark: We want to ask some straight questions to the market.
Mark: There’s about two and a half thousand Australians that participated in the survey.
Mark: And these were just a series of questions.
Mark: We were just trying to understand how they felt and what they were thinking.
Mark: Do they feel like a customer or do they feel like a transaction?
Mark: And this particular stat was certainly a lot larger than we anticipated.
Mark: But the reality is that when you really think about it, brands are working really hard out there at the moment to get your attention.
Mark: It’s not as easy to market like you once did.
Mark: While there’s lots of channels, it’s hard to get your attention to just a particular one channel.
Mark: So you become a customer of a brand, or certainly your first transaction, and then nearly before you leave the store, you can buy the product cheaper again, or you’re not even thanked or rewarded for that particular purchase.
Mark: So it’s in a lot of ways, it’s not surprising that customers feel that way.
Mark: But that’s also why they tend to shop around.
Mark: They’re more powerful now than they’ve ever been the customer.
Paula: Absolutely, absolutely.
Paula: And in fact, it’s something that, in fact, I need to do more of.
Paula: And I probably actually have to do an entire show around this, Mark, because yesterday, for example, I just decided to check my own, I suppose, just insights on whether I was being treated as a loyal customer or not.
Paula: And I had a particular opportunity.
Paula: I was insuring my house in Ireland to discover that, in fact, it should be about one third of what I’m paying.
Paula: So I’m being overcharged to a multiple of three times.
Paula: And then I was also talking about this whole concept, and it’s actually called the loyalty penalty.
Paula: So again, I’ll do a whole show, I think, about that, Mark.
Paula: But what I’m hearing is that you guys are hearing directly from Australian consumers, this is just not acceptable way and it’s not being loyal to your customers.
Mark: Yeah, I think over the last, well, certainly in Australia, I can’t speak for the rest of the world, but this idea that there are aggregators out there, that you can shop around for things, you can check your price, you can compare the market, whether it be for energy or insurance or things like that.
Mark: Up until that, I think there was, brands were really focused on different things and probably relied a little bit on the complacency of the customer.
Mark: It’s just a bit too hard to change.
Mark: I don’t think it’s, but now it’s actually really easy in a few clicks, you can actually change your energy provider.
Mark: You’re not have a five-year contract with a telco anymore.
Mark: You can move very, very quickly.
Mark: So I guess the watchdog, which is the ACCC, he’s worked hard to make sure that the playing field, that a customer doesn’t feel trapped or tied anymore, but the power in their hands to price check something and go, hang on, wait a minute, you know what, I can go over here.
Mark: And this is a bit of a wake up call for brands that customers will just leave.
Mark: In fact, one of the stats there, that at any one time through the people that we spoke to, there’s about 80 odd percent of the customers that we surveyed could be tempted by a competitor, which means you’ve only really got a little base of about 20 odd percent of your customers.
Mark: And that is alarming.
Mark: But it’s not dire.
Mark: The question is, now that you know that as a brand, what are you doing about that?
Paula: Yeah, yeah.
Paula: You’re absolutely right, Mark, and I think it leads actually very nicely on to one of your other statistics, which is really around customer trust.
Paula: And I think what you said is 53 percent of customers just don’t trust brands even with their contact information.
Paula: And I know there’s like, again, loads of things developing in many markets, including Australia, in order to protect these customers with their data.
Paula: But I think this underlying fundamental issue just means that loyalty program managers really need to take a step back and look at it again.
Mark: I think there’s probably two areas of trust.
Mark: You could probably separate them.
Mark: So there’s obviously the abuse selling the data, this fear or misnomer that who actually I’m giving my data to you, where’s it going to go?
Mark: And you can leave that trust in one bucket.
Mark: And I think with the GPDR work and the data compliance and the privacy work, I think that over time is going to take care of itself really nicely.
Mark: But I actually think there’s a separate conversation completely.
Mark: And that is around I’ve signed up, I’ve given you my information and I buy in a particular product or service, let’s say the buying cycles once every year.
Mark: You’re emailing me five times a week.
Mark: So, oh my God, what would you do that?
Mark: And then when you give, I’ve just bought something and because some of these brands are relying very heavily on marketing, they’ve got their newsletter series and what I’ve just bought, I’ve just sent me an email for that I can buy cheaper again.
Mark: hey, you’ve bought something from me and here’s an offer for your friend that’s better than the deal that I’ve just currently got.
Paula: It’s outrageous, huh?
Paula: You’re right.
Mark: So trust, we sort of refer to as a customologist, like our purpose is to enable brands to create customers for life.
Mark: And as part of that, it’s really about a relationship.
Mark: Now, I don’t want to have this sort of motherhood feeling that it’s warm and fuzzy, but a relationship you need to be talking to your customers, not talking at your customers.
Mark: So just because it’s good for you to send emails out at 4.45 on a Monday morning, it might not be ideal for your customer to receive them.
Mark: Just if they’re buying in their cycle every 120 days, you probably shouldn’t be emailing them three times a day.
Mark: And then what are you talking to them about?
Mark: Are you talking to them about the next latest deal or are you talking to them about their engagement with you and providing more information about your product and service that might have a deeper relationship with them?
Mark: So it’s no different to a relationship you might have with a partner.
Mark: You don’t want to end up in counseling with your customer.
Mark: Right?
Mark: You want to make sure that you treat them with the same level of respect you would treat your partner or your friend.
Mark: And recognize the fact that they chose you over another brand to spend their money.
Paula: Yeah, absolutely.
Paula: Very well said, Mark.
Paula: And I know we both share a belief around particularly communicating really just to say thank you.
Paula: There’s a really big, I think, missed opportunity not to be continually selling.
Paula: So the communications absolutely have to have a commercial intention along the way.
Paula: But actually, what about this very simple way of communicating the first instance just to say, you know what, thanks a million.
Paula: We really appreciate that you’ve become a customer.
Mark: Yeah, I mean, we’re probably surprised just how powerful thank you is and just how much it’s been overlooked.
Mark: A number of years ago, we were working with a coffee retailer and we were offering their customers the opportunity to come back again if we hadn’t seen them for a while.
Mark: And this was, you know, we were saying, oh, we haven’t seen you for a while.
Mark: And here’s some offers and then sent us some vouchers.
Mark: Anyway, one of our analysts was looking at these particular group of customers and said, you know, we’ve given these people vouchers.
Mark: They’ve come back, but they actually haven’t spent the voucher.
Mark: What if we didn’t give them a voucher at all, but we just thanked them for purchasing with us and we put them in a treatment and control group and just see what happens.
Mark: So we did.
Mark: Not only did these customers come back, but they came back and spent more than they’d done previously.
Mark: And the thank you, the first round of thank you was a little bit too much.
Mark: We were saying, oh, it was great to see you buying this latte on last Tuesday.
Mark: I bought this, I bought that.
Mark: It was just way too big brotherly, right?
Mark: But then we said it was great to see you in the store last week.
Mark: I’m the operator of the store, and we really appreciate your service.
Mark: If you think there’s anything more we can do, here’s my details.
Mark: Don’t hesitate to come back and let us know.
Mark: And I got to tell you, versus the group that we spent the voucher on, versus the group that we did the thank you with, the results were day and night.
Mark: They were just unbelievable.
Mark: They took, their buying cycle was once every 43 days.
Mark: And the group that we said thank you to reduced to once in every 13 days.
Paula: Oh my goodness.
Mark: So it had an effect of nearly four times.
Mark: And that was, I wish I could say it was something magical.
Mark: I wish I could say it was like we gave them some super duper offer.
Mark: But it was genuine.
Mark: It was authentic.
Mark: It came from somebody.
Mark: It was addressed to somebody.
Mark: And it was just recognizing that behavior.
Mark: Now, that might not suit all cases, but I think it does go a long way.
Mark: There are brands that by the time you’ve purchased something and by the time you’ve left the store inside your inbox or your, maybe, an SMS on your phone or a text message, you’ll see, can you rate our service?
Mark: Before they’ve actually said, thank you very much for your service.
Paula: Absolutely.
Paula: And I haven’t drunk the coffee yet, so give me a chance.
Mark: I haven’t drunk the coffee!
Paula: Right?
Mark: So, now, I’m not…
Mark: This research that we did wasn’t sort of to take a stick out and hit brands over the head.
Mark: This was just to say, hey, listen, they’re not interested in your NPS score.
Mark: I know you are.
Mark: They’re not.
Paula: Yeah.
Mark: Think about the conversation you want to have.
Mark: If someone was coming over for dinner tonight, you say, listen, it’s great that you popped over.
Mark: Can you just fill out the survey card and tell me what the meal was like?
Mark: You know?
Paula: Yeah.
Mark: Yeah.
Mark: What about a thank you or appreciation?
Mark: So, what I guess I’m saying, and look, this research is available for free.
Mark: If you go to our LinkedIn site or our website at customology.com.au and you can download the executive summary.
Mark: A lot of this information is there.
Mark: And then people can consume it at their own leisure and they can ask questions.
Mark: There’s a lot of stuff on our LinkedIn page there and whatnot.
Mark: But I guess where I was sort of leading is here is just sometimes the brands probably need to consider slowing down and stop and think like a customer.
Paula: Yeah.
Mark: As opposed to rush to automate.
Mark: Totally.
Mark: And I don’t know if that’s too forward, but I think the customers that appreciate it.
Paula: Exactly.
Paula: Yeah.
Mark: In fact, I saw this one piece of technology where they were you got in trouble if you didn’t why aren’t you providing survey to us?
Mark: I didn’t respond to the first survey.
Paula: Yeah.
Paula: Yeah.
Paula: Wow.
Paula: Now you’re being beaten up.
Paula: Oh my God.
Mark: You know what I mean?
Mark: I think there’s just a little bit of slowing down to get a better result with your relationship with your customer.
Mark: Thank you is one of the most powerful messages, but an unencumbered thank you.
Mark: So that’s not thank you and here’s a voucher to come back.
Mark: Thank you and here’s a voucher for your friend.
Mark: That’s not thank you.
Mark: Hey, and listen, here’s 16 different items.
Mark: This is just thank you full stop.
Paula: Absolutely.
Paula: There is no asterisk.
Paula: There is no requirement.
Paula: We’re going to keep it simple.
Mark: Is that okay, Paula?
Mark: I mean, I don’t know how you feel about that.
Paula: Honestly, as I said, it’s a shared belief, Mark.
Paula: It’s something I’ve always said.
Paula: Do you know what?
Paula: Actually, and do you know it was actually a friend of mine?
Paula: And again, I worked in Telco’s loyalty, as many listeners will know, and I was running a loyalty program there and I ran it for about seven years.
Paula: But at the very beginning, when we started on the project, it was a friend of mine who said, Oh, you’re working for those guys.
Paula: I’ve been a customer for 10 years and they’ve never noticed.
Paula: They’ve never thanked me.
Paula: So how are you going to build loyalty with that kind of context?
Paula: And again, it’s direct customer feedback and clearly it came up in conversation because, you know, I was starting to work on it, but could quite easily come up in a social conversation going, Oh, those guys don’t give a damn.
Paula: Do you know?
Paula: So why would you bother staying with them?
Mark: That also adds loyalty is not about a loyalty card.
Mark: Loyalty is I’ve been put in decisions, put in front of me as a consumer.
Mark: I can go left or I can go right.
Mark: Why would I stay?
Mark: Why wouldn’t I stay?
Mark: And sometimes people stay because they feel the brand makes them feel good.
Mark: Not because of the discounts or the offers.
Mark: We’ve seen thank yous also can be quite easily spun into congratulations.
Mark: So there was a an energy provider over here.
Mark: A bill came in and they congratulated you for getting a lesser amount.
Mark: You’ve been really efficient with your energy.
Mark: Good on you.
Mark: Now, you’d probably think it should be the other way that they want you to spend more, but they’re going, okay, they’re okay for me to spend less and they’re on board with me because they understand that it’s really expensive to find a new customer.
Mark: But if they’re working with a customer and their customer is seeing great value in their service, you should be congratulating them by thanking and congratulating them about that as well.
Mark: I mean in the research it showed that the more youthful generation, I know you can’t sort of see me here, but when I had hair.
Mark: But let’s call it, you know, the people that are much more digitally sort of on board and savvy and whatnot.
Mark: They’re yearning for more personalization in the server, in the research that we did.
Mark: They were saying, hey listen, we want to be personalized.
Mark: We want that relationship with our brand to know who we are, what we are and what we’ve done and recognize that.
Mark: And I think that’s where the trust and the authenticity comes in and say, well done, you’re doing really well here.
Mark: We hope you really got a great result here.
Mark: We hope you’re really enjoying that benefit or that service or that experience.
Mark: And I think that’s where the conversation and tone needs to sit.
Paula: Absolutely.
Paula: And you reminded me of a couple of other personal examples as well, Mark, because again, I worked in the energy sector.
Paula: And again, thankfully, they’d had that kind of light bulb of actually, we cannot ask people to spend more on their energy.
Paula: That’s a totally different, you know, I suppose, old way of thinking.
Paula: So they were very comfortable acknowledging the reducing energy bills.
Paula: So thankfully, that was already in place.
Paula: But what I did find with other clients, again, just in general utilities, was if people are on like a contract and then you go and say thank you for being with us, for example, for your whole contract, it’s year two, there was a massive concern that that would drive the churn.
Paula: Now, to me, that kind of would signal that actually underlying then, you’re probably not giving your customers maybe that overall best deal.
Paula: So there are perhaps bigger problems in the business.
Paula: But I think that’s exactly where research like yours is really useful because what you’re able to do is kind of go, okay, let’s just not talk about one particular sector.
Paula: Let’s just overall see how our customers feel and then feed that back to the loyalty program managers so they can actually take action with it.
Mark: Yeah, I mean, by and large, consumers, and this is an opinion, probably it might not be a fact, but I think people don’t want to really change.
Mark: If they didn’t have to do anything in their day, I think they would just meander.
Mark: I know for me, I don’t want to change my bank account or my energy provider because I physically have to do something or speak to someone.
Mark: So if they make it easy for me to join or engage, but they also equally make it easy for me to stay, right?
Mark: Because then when something else comes along and I say, well, you know what, these guys are just really good.
Mark: I don’t have to think about this.
Mark: There is, you know, we have a culture down here in the health sector where you get this health insurance and everybody knows it goes up every year.
Mark: They publicize it.
Mark: They talk about it.
Mark: And now that you can go and you can go check it with an aggregator, like to sort of say, OK, who gives me the best deal, the best offer?
Mark: I didn’t need these things.
Mark: So, for example, I didn’t need a knee replacement.
Mark: Well, I’ve never needed a knee replacement.
Mark: And I didn’t need pregnancy cover for me personally on my health insurance.
Mark: But interesting enough, I had it.
Mark: So when I changed providers, there’s a 30-day cooling off period.
Mark: And the health provider that I was previously rang me up and says, well, why are you leaving?
Mark: I said, well, it’s quite a significant difference.
Mark: And I didn’t need these other benefits.
Mark: And they said, well, why didn’t you ring us and let us know?
Mark: And I said, I’m a man.
Mark: The chance of me needing pregnancy cover, I’m not sure in any way, shape or form how that would be part of my cover.
Mark: And they said, well, okay, what we’re going to do is we’re going to give you a really red hot deal if you stay.
Mark: And I then asked this curious question.
Mark: I said, why wouldn’t I have had that deal before?
Mark: Where did this deal come from?
Mark: I said, well, we don’t want to lose you as a customer.
Mark: I said, yeah, but isn’t it a little bit too late now because I’ve left?
Mark: And then the incentive they offered was actually significant.
Mark: Like it was not $1 or $2 off.
Mark: It was cheaper than the new deal that I was going on.
Mark: That’s where now I’ve got this underlying feeling, and I’m sure many consumers feel that too.
Mark: This is where the trust factor comes in.
Mark: 74% of people believe the brands aren’t straight with them.
Mark: That could be, that’s their truth.
Mark: Now the brands might have a different view of that, and they’re entitled to it.
Mark: But the customers are saying, hey, I don’t believe what they’re saying to me.
Mark: I mean, you can’t even buy tiles full price in Australia anymore.
Mark: You can’t buy a rug full price.
Mark: You can’t go into one of these TV, sort of video, TV shops and buy anything full price.
Mark: Everything’s on sale all the time.
Mark: So is this the right place or not?
Mark: I don’t know.
Mark: We’re guaranteed to be at by 10 percent.
Mark: So why wouldn’t you put your best push forward?
Mark: So the education of the consumer is very different.
Mark: And that as a result builds doubt.
Mark: And when there’s doubt, there’s no trust.
Paula: Absolutely.
Paula: And there’s two points come to mind for me, Mark, just from that elaboration.
Paula: You’re absolutely right.
Paula: First of all, you know, why does the brand think it’s your responsibility to call and ask for the best deal?
Paula: So why is that burden being passed to the consumer?
Paula: So again, it comes back to the legislation we talked about in the UK.
Paula: And in fact, the figure they put on it, Mark, was over four billion pounds for this loyalty penalty that loyal customers.
Paula: Yeah, it’s extraordinary.
Paula: So it hasn’t quite come into legislation.
Paula: As I said, I’ll come back to it another time.
Paula: But actually, when I’m thinking about my own personal example of being loyal to this insurance company from my house back in Ireland, even if they match the price now, I kind of decided I don’t want to do business with people like this anymore.
Mark: Yeah, good.
Paula: Yeah, it’s more fundamental for me now.
Mark: Yeah, and I think a lot of the work that we do down here, we’ve got this sort of path to repurchase, how to help a customer to come back again and re-engage with your brand to create a longer term relationship.
Mark: And I think the story that you told about that insurance there, you’re now equipped that you know it’s okay to change.
Paula: Yeah.
Mark: More and more people that happen like that, that’s all of a sudden that this is why the research is saying that 80% of people say, I could be tempted by a competitor.
Mark: It’s not 10% of people, it’s 80% of people.
Mark: Which means that we’re really only saying that 20% of your base is really loyal.
Mark: Now, that is a significant thinking.
Mark: That means that how really loyal is your business?
Mark: How really loyal are your customers?
Mark: Now, let’s assume that that number is right.
Mark: Because our survey, you know, there’s lots of other research that’s out there, and I don’t think we’ve got the mortgage on more research, but it is a compelling number.
Mark: If you knew that as a brand, what would you do differently tomorrow?
Mark: How would you engage with a customer sooner, not later?
Mark: Or do you wait for them to leave?
Mark: And interesting, some of the work that we, when we engage with brands, the most common thing is most brands feel like they don’t have enough customers.
Paula: Okay.
Mark: That seems to be the thing.
Mark: Oh, we need more customers.
Mark: Well, just hang on.
Mark: What about the ones we got?
Mark: Well, they’re not spending enough, they’re not coming in as often.
Mark: I said, well, hang on, you’ve got a lot of them.
Mark: Yeah.
Mark: Interesting, there is not an infinite amount of them.
Mark: It’s not like we’ve got, we can just make more tomorrow.
Mark: And it’s very expensive to get them, but acquisition is one thing.
Mark: Let’s have a look at the ones that are staying.
Mark: Let’s look at them differently.
Mark: You know, one of the other stats that was really alarming was that over 50% of people that we do in the research said they never, even if they gave their information over, willingly, were never communicated to.
Paula: Oh, my God.
Paula: Yeah.
Paula: And that’s, I mean, I honestly don’t understand that.
Mark: Is that crazy?
Paula: It totally is, because I’ve seen plenty of examples of, you know, capturing too much information and not all of it being used.
Paula: And I’ve often said on this show now, my birthday is coming up in a few weeks, Mark.
Paula: It’s my big, big, I’m going to say judgment time because every loyalty program I’m a member of, I’m kind of looking to see if they are communicating with me on what to me is my special day.
Paula: But to actually not receive any form of communication, particularly after you’ve made a purchase and given your details, I mean, that’s just a waste of everybody’s time and money.
Mark: And it’s interesting, some of these programs you see, they seem to rush them to market and the birthday has conditions on it.
Mark: So, we’re going to give you a birthday offer, but you must spend it on this day between 10 and 3 and on these 6 items only and you got to jump through 3 hoops where I would suggest to brands they shouldn’t have an offer for the customer’s birthday.
Mark: They should just recognize the fact it is their birthday and just celebrate it and send them an emoji with a smiley face.
Mark: Can I tell you, it’s very difficult to stuff that up.
Paula: Exactly.
Mark: And I think that the birthday, there are actually 365 days of the year.
Mark: The birthday is one of them, and it is an important day.
Mark: You want the brand, if they’re in a buying cycle as a customer, you want the customer thinking about, if I’m going to make a decision today to purchase, they want to think about you first.
Paula: Yeah.
Mark: One of the things when I was reading some stuff many years ago and I got the opportunity to mentor under some of the leaders that were shaping McDonald’s.
Mark: You know, in the APAC region, and I got to mentor under a couple of particular people there.
Mark: And just got to getting their thoughts on why they advertise and how big their advertising budget was, you know, and it was seem to be everywhere.
Mark: And one of the guys made this comment to me and he says, we don’t advertise to sell more hamburgers.
Mark: That’s not what we do.
Mark: We advertise so when you’re thinking about buying a hamburger, you think about us first.
Paula: Oh, lovely.
Paula: Lovely.
Paula: That’s a whole different perspective.
Mark: And it just made me think about, you know, brands probably that’s why one of the adages we use is stop and think like a customer.
Mark: You know, if you just took the time to think about your customer for a second, and you talk to them a bit more, or certainly just talk to them after they’ve purchased and said, whether it be recognition or congratulations, leverage what we call that money moon period when they’ve just made that purchase.
Mark: you’ll find that you won’t have to find as many new customers.
Mark: Because your customers will come back more often.
Mark: Maybe not spend as much each transaction, by the way.
Mark: If the transaction value stays the same, but you come more often, you win.
Mark: Does that make sense?
Paula: It does.
Paula: And I’m just smiling with your term Money Moon, because you mentioned it to me once before, but it’s a gorgeous word, and I think you invented it, so you better explain to listeners what it means.
Mark: Well, Money Moon is probably a ton that we’ve taken, like the Honey Moon.
Mark: That is arguably one of the best times, I think, after your wedding, everything is just the Honey Moon period.
Mark: You’re having a great time.
Mark: Most businesses when we’re working with them, like I said, they focus on this idea that they need new customers, or and sometimes at the same time, they say, listen, what we also need to do is we need to stop churn.
Mark: We need to stop the customers leaving with us.
Mark: Now, the interesting thing is most customers, if they’re in the churn bucket, they’ve kind of already left.
Mark: There’s probably no amount of counseling that’s going to help them.
Mark: They’re already shopping somewhere else and they’re doing that.
Mark: And what we found is there’s a period of time between when the customer makes a transaction, certainly their first, but even their second or third transaction, and it’s somewhere between that 7 and 30 days.
Mark: That is what we refer to as the money moon.
Mark: And inside that period, the customer is most likely to refer, most likely to think about coming again, most likely.
Mark: And let me just talk about the referral part.
Mark: So, when customers make a purchase, let’s say it’s not an insignificant purchase.
Mark: They might buy a TV or they might buy a large appliance or they might have gone and bought a new shop out for some sort of purchase for dinner.
Mark: Most people, when they do that, they want to tell their friends, oh, I went and shopped down here the other day and I got this and it was such a good product.
Mark: You should check it out.
Mark: It’s a really good deal.
Mark: And it was a great service because then their friends say, oh, was it really?
Mark: Oh, that sounds great.
Mark: You got a good deal.
Mark: And people want to share that story.
Mark: That’s the Monday Moon.
Mark: That’s the silent salesman coming in.
Paula: Yes.
Mark: Now, what supercharges that?
Mark: Imagine if someone had made that purchase and you followed up by saying, thanks very much for your purchase of this significant item.
Mark: Here’s a link to how it’s put together or how others have put together.
Mark: If you’ve got any troubles, here’s our number.
Mark: Call us back.
Mark: We just really value the fact that we want to make this great for you.
Mark: Not, here’s a voucher to come back in tomorrow and buy something else, or here’s the same item on special next week.
Mark: So this time is where we nurture the customer.
Mark: We start to forge the foundations of our relationship inside this money moon period.
Mark: That’s where great referral comes.
Mark: That’s where great opportunity to recognize the fact.
Mark: You’ve had the product for 30 days.
Mark: Sure, get the survey out, but maybe personalize the survey a little bit different.
Mark: Instead of making it about how did we go as a business, how did the product go you bought from us?
Mark: Did it actually work for you?
Mark: Did it make it different?
Mark: Yeah.
Mark: Whether they remember the person at the counter or not is one thing, but did what they get from you make a difference to them?
Mark: Because it should be what’s in it for the customer, not for the brand.
Mark: And I think that’s the responsibility of the brand to the customer, not the customer to develop a relationship with the brand.
Mark: It’s the other way around.
Mark: You’re right.
Mark: And while the job is not to please everybody, some stuff just goes bad.
Mark: Some stuff just doesn’t work.
Mark: And I don’t think any one brand is out there trying to alienate their customers.
Mark: That’s certainly not what I’m saying.
Mark: But what I’m suggesting is that inside this special time, instead of focusing on how to stop customers leaving, why don’t we…
Mark: You get a customer to engage a second and third purchase, the likely of them staying for third, fourth and fifth is quadrupled.
Mark: So it goes up exponentially because your habit forming now, you’re building a relationship that says, this is where I go.
Mark: This is what I get.
Mark: This is what I use.
Mark: This is what I love.
Mark: This is what I tell my friends about, as opposed to, I’ve tried you once and oh, look, there’s another deal over here tomorrow.
Mark: You can be the brand that can change that.
Paula: And you’re absolutely right.
Paula: I think that window is something that is certainly not being talked about by any of the loyalty people that I’ve, we haven’t really explored that topic, Mark.
Paula: So thank you for raising it.
Paula: And I really also like you mentioned to me before, Mark, that there’s an opportunity maybe to change the channel in terms of the communication, because you might have captured the email address, and we all know it’s super efficient and cost-effective, obviously, to send the email out to either say thank you or something else.
Paula: But what if you did pick up the phone?
Paula: Like, that’s an extraordinary customer experience.
Mark: It so certainly is.
Mark: And it doesn’t even need to conform.
Mark: You don’t need a privacy approval to keep and ring down a customer that bought something.
Mark: I just want to share an interesting story.
Mark: And so this data is easily available.
Mark: So, yep, sending out a thank you.
Mark: And I just want to also note that you’ve got to test and learn some of this.
Mark: Each brand, each relationship with their customer is going to be different.
Mark: So there’s not one right way of doing it.
Mark: But I think if the thinking is there that inside this nurture time, I think that’s important.
Mark: But we found that people sending out just an email, sometimes they will send out a survey quicker.
Mark: And they’ll try to understand the customer.
Mark: In fact, in some cases, you might get two or three surveys before you get it, and then you’ll get another offer.
Mark: And you haven’t even received your product yet.
Mark: But there was an interesting couple of scenarios.
Mark: One that really comes to mind is each week, this particular brand, they would send out recognition and thanks to the customers, but their executive team all got five phone numbers each.
Mark: And they had to, one week, ring a customer every day.
Mark: And they had to ring up a customer and say, hey, thanks very much for paying your bill on time.
Mark: Thanks very much for buying that product.
Mark: Hey, thanks very much for being a customer.
Mark: And the CEO himself led that charge.
Mark: And that might sound like, well, that was a big job.
Mark: And in fact, some of the customers said, well, I’m so, really?
Mark: You rang me?
Mark: Now, once a day might be too much, but what about ringing five customers a month?
Paula: Yeah.
Mark: And this one particular CEO that we were working with, he would spend half a day each month in a branch of a bank.
Mark: And he put a name badge on and he would go out and he felt he’d learn more about the customer in that half a day than he did from sitting from any board paper he ever read.
Mark: Most of the good ideas come from the customers.
Mark: And if we take the time to listen and speak with them, that can have a profound change on some of the decisions we make at the business.
Mark: So I think phone is a really interesting channel.
Mark: For that, the other channel that’s really interesting also is the use of messaging, like texting versus reminding them that their appointment is here as opposed to a flash sale on.
Mark: One of the great things we were doing with this tyre organisation is no one wanted to go out and get out of bed in the morning, go get a new tyre, but we’d say, hey, your appointment is due.
Mark: And they responded a lot more to that channel.
Mark: So we tested both.
Mark: That worked really well.
Mark: And the other piece is there seems to be quite a significant resurgence in direct mail.
Paula: Okay.
Paula: Yeah.
Mark: Yeah, which is really interesting, right?
Mark: So, but not for everybody.
Mark: So smaller volumes, right?
Mark: So if the brand took the time to understand and segment their customers, they’re most engaged or they’re ones that look like they’re engaging more, we’d sent them out a brochure or some information or some experience based information.
Mark: So obviously the right, we saw great, in fact, some of the highest yields in the travel industry.
Mark: In 2019, 2020 was not exactly on the keyboard.
Mark: But even that said, the back end of 2020, when travel locally here kicked in, the direct mail had a profound impact.
Mark: Because people could see the experience, and they could talk around the kitchen table on it.
Mark: It’s hard to move the tablet.
Mark: It’s hard to move the phone around the table.
Mark: But people are using both their phone, they’re using their laptop or tablet, and they’re also looking at the tactile and saying, hey, listen, what if we did, and they stick it on the fridge and say, we should go there.
Mark: We should check that out.
Mark: We should do that.
Mark: I don’t think any one channel is wrong, but I certainly think an abuse of a channel is wrong.
Mark: So I think, you know, I’d have a interesting, when we were mapping this one particular client, in a 30-day trading month, there was nearly 40 different emails a customer would get.
Paula: Oh, my Lord.
Mark: Now, at first, they couldn’t believe it.
Mark: Now, some of them are just, it’s at this next stage in the order chain.
Mark: It’s coming up here.
Mark: It’s going this.
Mark: So this was an online and a delivery style sort of business.
Mark: But there were five surveys in there.
Mark: You think we could have just achieved it with one?
Paula: Oh, my goodness.
Paula: Yeah.
Paula: Maybe two.
Paula: Knock yourself out if you want, but seriously.
Mark: There were seven offers in there.
Mark: There were close to 15 different delivery cycle messages.
Mark: And I guess what I’m going for from this is sometimes, as a brand, I think it would be healthy to sit down and map out what that journey looks like, especially around what happens.
Mark: So after they’ve poured it, what happens next?
Mark: What do you think we should do?
Mark: And typically, people, I think, are trying to go find another customer like that.
Mark: Well, hang on.
Mark: We haven’t even broken even on that customer yet.
Mark: They need to visit us sometimes three and four times just to get our return.
Mark: So this is where you nurture them.
Mark: This is not where you say, okay, I’ve got to go find another one.
Mark: So I think the channel is there, and abuse of a channel is not cool.
Mark: But I think the ability to use the right channel and even multi-channel, I think, is there.
Mark: And I’d also caution people that I think automation is really helpful, but automate it with customer thinking.
Mark: Don’t automate it just because, okay, well, I think 445 is the right time to send the emails, because that’s when we should send them.
Paula: Yeah, it totally does, Mark.
Paula: And I think, in addition to the right channel, and really thinking, as you said, like a customer, I think, is a customer loyalty program the right strategy is also a question that should be asked even more than it currently is.
Paula: Because the final point I wanted to pick up on from your research project was 64% of customers that you spoke to are loyal to a brand without a loyalty program.
Paula: And in fact, I’ve often said as well, the reason I call this show Let’s Talk Loyalty and not Let’s Talk Loyalty programs or points or whatever, is exactly because there are so many other ways to create a feeling of loyalty and loyal behavior without necessarily having a loyalty program.
Paula: So I’d love to hear your thoughts on that side.
Mark: Look, that’s an excellent point.
Mark: I often get asked, what do you think is the best loyalty program you’ve seen out there?
Mark: And I pretty much answer the same way all the time.
Mark: I think dentists and hairdressers have the best programs because they book a meeting from the meeting.
Mark: And every time you go there, you don’t see them argue with your dentist.
Mark: He says, well, I’ll see you back for a clean in six months, and I’ll see you again.
Mark: And that, I mean, by and large, that’s what you want to do, the customers, to come back more often.
Mark: Look, I think, once again, every brand is on their own journey, but a bad program or a rushed program that doesn’t deliver value that’s different to what you would get as a transactor, as opposed to a loyal customer, can be highly damaging for a brand, because the people go, well, I don’t even know what I get.
Mark: And we’ve seen reminder programs to encourage people to come back and get checks on things or whatnot, can be highly, much more effective than a loyalty program, I’ll say, because when people think loyalty, immediately they go to some sort of mechanic, like a points and a card and a stamp, and get clipped to clap.
Mark: And for the right brand, those sorts of things are important.
Mark: But taking someone’s information down and even putting them on a warranty journey or a service journey for the product they’ve bought, I’ve got that.
Mark: We’re going to check in with you each year to make sure it’s right.
Mark: If you’ve got any questions about that, we’re going to manage your receipts for you.
Mark: When you buy that, you get this type of service check-in.
Mark: You’ve got this sort of warranty.
Mark: I mean, just the warranty component could be highly changed to be a much more service-based relation with the customer.
Mark: I mean, when you think about it, you buy a product that comes with a one, two or three-year warranty.
Mark: Well, technically, you’ve got a three-year loyalty program with that customer.
Mark: Yes, it’s a warranty program, but you’ve got a three-year engagement to have a relationship with them because they’ve decided out of all the products that they were going to choose, they’ve chosen yours.
Mark: it was interesting.
Mark: You mentioned earlier that I was on holidays.
Mark: And we’ve stayed at this lovely resort up on the North Coast.
Mark: And when I got there, there was no, there’s Wi-Fi, but you had to register to get it.
Mark: And you had to join the club.
Mark: And I go, right, so you join the club and you get the Wi-Fi.
Mark: And I hate to say it, but the Wi-Fi on my phone service was actually more powerful than the Wi-Fi they were offering.
Mark: And then you got 5% off your meals and blah, blah, blah, blah.
Mark: Anyway, then we said, okay, we really liked it here.
Mark: I got a survey from them for registering, which is really interesting.
Mark: They didn’t know where I was staying.
Mark: They didn’t ask me how I was feeling when I was staying.
Mark: And then when I went to check out, they said, oh, listen, I’m part of this program.
Mark: And the lady at reception, and so she said, oh, you really joined that one.
Mark: You should join our other program, because that would have got you 10% off your accommodation.
Mark: I said, there’s another program.
Paula: Oh, my God.
Mark: And this is an ambassador for them.
Mark: Now, she wasn’t saying it as, you know, to be totally.
Mark: But here’s the interesting someone would have gone to some effort to build that program.
Mark: Someone would have gone to some effort to design it.
Mark: There was collateral there.
Mark: There was branding.
Mark: There was time.
Mark: There was all sorts of things like and it all fell over at the reception.
Mark: I enjoyed that.
Mark: I joined this one.
Paula: Oh, God.
Paula: Oh, God.
Paula: Mark.
Paula: Yeah.
Paula: Do you know what I’m hearing is there are plenty of opportunities for people like you and I to help and advise all of the well-intentioned, I would say, programs and businesses out there that, as you said earlier, nobody sets out to do a disservice to their customers.
Paula: And we all want loyal customers.
Paula: But I think we’re all so busy that some of these things just become confusing or poorly executed.
Paula: So yeah, that’s part of the intention of the show and certainly part of what I’m hearing that you’re intending to do.
Mark: Yeah, in fact, there was a stat and once again, that research is available online if the guys want to go grab that.
Mark: I wanted to just while we were chatting, I was just Googling here in the research.
Mark: But 25% of customers revealed that they had left the brand once they actually joined the program because they felt the benefits of the luxury program were awful.
Mark: They weren’t getting the value from it.
Mark: So they’ve got the customer, they convinced them to join the program, they’ve partnered with their money or whatnot.
Mark: And then they’re trying to go, oh my god, this is so bad I’m going to leave.
Mark: So it’s this is where I think a review of your program on a quarterly or an annual basis looking at the right benchmarks and that isn’t necessary in NPS.
Mark: I don’t think that is the right benchmark or the only benchmark, I should say.
Mark: And then I think a review with the idea to test and learn and then speaking to the customers, talking to them, asking for information.
Mark: Once again, the purpose of this survey and research that we did was to give this information to brands and say, well, you might be doing it better than others.
Mark: But if this is how the sentiment of the market is, what would you do differently or are you on track?
Mark: And I think that was part of the purpose of it there.
Paula: Absolutely.
Paula: Yeah.
Paula: And I can say you’ve done an extraordinary job, Mark, and as you said, the survey is available both in the executive summary, which a lot of people would just I think prefer to have those key highlights and obviously the full format as well.
Paula: So that’s extremely useful.
Paula: And certainly in my own experience, as you said, an audit is extremely useful, and I really believe in bringing in people like you guys.
Paula: So, you know, Customology customers for like who doesn’t want to have a particular expertise like you guys offer.
Paula: So I would definitely encourage everybody to check you out.
Paula: Is there anything else that you wanted to say or mention on the show, Mark, before we finish up today?
Mark: I think probably just, and thank you for that.
Mark: That’s a lovely recognition, but even leaving a brand like ours to one side.
Mark: Brands often ask, well, what are we in control of?
Mark: And you don’t necessarily, you’re in more control than you think.
Mark: I mean, you can stop and assess your program today.
Mark: You don’t need us to come and assess it.
Mark: You can make a decision that how are we going with our customer?
Mark: Are we really thanking them?
Mark: Are we really recognizing?
Mark: Are we looking at that money moon period well?
Mark: I mean, you don’t need to buy a piece of software to do that.
Mark: You don’t need a piece of hardware to do that.
Mark: This is about a decision that I really want for my brand to make sure that if a customer is a customer, then we’re going to try to make them a great customer.
Mark: And if we’re going to have a program, it’s going to deliver value beyond what a normal customer would get.
Mark: Because they’ve decided that they want more.
Mark: And we’re going to develop a deeper relationship.
Mark: It’s a little bit like having a relationship with the customers you’re dating, right?
Mark: And then when they join the loyalty group, they know you’re married to them, right?
Mark: So up until that there, well, I can’t really think of a good analogy, but maybe that’s somewhere between Tinder and I don’t know what else.
Mark: But I think what I’m saying is the brands, you don’t need a piece of software or a silver bullet to fix this.
Mark: You’re in a lot more control than you think.
Mark: And interesting, a lot of what you’ve got isn’t actually broken.
Mark: It just needs to be looked at a bit differently.
Mark: No shiny or silver bullet is going to fix it.
Mark: More often than not, we work with brands and they’re going, right, we need to invest in this brand new big CRM strategy.
Mark: And I said, because our data is really bad.
Mark: And I said, well, okay, that’s interesting.
Mark: You understand that all you’re doing is you’re lifting the bad data and you’re putting it into that system.
Mark: What if we had to look at the data first and see what value is there?
Mark: And then you can decide what system you need.
Mark: And I’m not here to rag on any sort of system, but I think if they’re only as good as what you put into them, anyone can buy a plane, but you still need someone to fly it, right?
Mark: So I think the point I guess I’m trying to illustrate is the brands are in a lot more stronger position, they think.
Mark: But equally, the customer is now in a time in history more powerful than they’ve ever been.
Mark: And certainly with that more mature generation, because of the recent events that the world has faced in the last 12 months, they’re much more digital savvy.
Mark: They’re OK to shop around and check out things.
Mark: Five-star ratings and reviews are now more powerful and everyone’s a critic.
Mark: And people are OK to change.
Mark: And I think that’s where I think the opportunity.
Paula: Well, I think that is the perfect way to close, Mark.
Paula: You’ve really, I suppose, demonstrated extraordinary insight and I think a real passion for doing this well.
Paula: So from our side, I have to say it’s been a fantastic conversation.
Paula: So Mark James, CEO and customologist, thank you so much from Let’s Talk Loyalty.
Paula: This show is sponsored by The Wise Marketer, the world’s most popular source of loyalty marketing news, insights and research.
Paula: The Wise Marketer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 170 executives in 20 countries as certified loyalty marketing professionals.
Paula: For more information, check out thewisemarketer.com and loyaltyacademy.org.
Paula: Thanks so much for listening to this episode of Let’s Talk Loyalty.
Paula: If you’d like me to send you the latest show each week, simply sign up for the show newsletter on letstalkloyalty.com and I’ll send you the latest episode to your inbox every Thursday.
Paula: Or just head to your favorite podcast platform.
Paula: Find Let’s Talk Loyalty and subscribe.
Paula: Of course, I’d love your feedback and reviews and thanks again for supporting the show.
Publisher’s Note:
This transcript was generated with the help of AI and podcast publishing tools such as Apple Podcast’s transcription service.
In the interests of efficiency and minimising our costs as a small business, it has not been checked by a human.
If you have any comments or concerns about the accuracy of this content, please do contact us for changes or corrections.
