#94: Global Coalition Loyalty Insights with Payback's CEO Bernhard Brugger

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: This show is sponsored by Comark, a global provider of innovative software products and business services.

PAULA: Comark’s platform is used by leading brands across all industries to drive their customer loyalty.

PAULA: Powered by AI and machine learning, Comark technologies allow you to build, run and manage personalized loyalty programs and product offers with ease.

PAULA: For more information, please visit comark.com.

PAULA: Hello and welcome to episode 94 of Let’s Talk Loyalty.

PAULA: Welcome to April and welcome to quarter two.

PAULA: In today’s show, I’m chatting with the chief executive officer of a world famous loyalty coalition program known as Payback, headquartered in Germany.

PAULA: Bernhard Brugger, otherwise known as Berni, is the chief executive officer.

PAULA: And in today’s discussion, we discuss firstly the incredible redemption rate that Payback points are seeing in its global markets.

PAULA: We also talk through the trends in retail that Payback are seeing throughout Covid 19 from its unique perspective with 80 million members worldwide.

PAULA: We also talk about the idea of employee diversity as a key competitive advantage.

PAULA: So, Berni, first of all, tell me, what is your favorite loyalty statistic?

BERNI: There are a lot of statistics, especially in the loyalty field.

BERNI: And as a data-driven company, we are of course heavily focused on facts and figures.

BERNI: Maybe I would like to start with our 80 million active Payback customers worldwide.

BERNI: Because that’s an impressive number.

BERNI: And we have only in Germany over 31 million Payback customers.

BERNI: Only in the German market, which relates to two-thirds of all households in certain regions.

BERNI: It’s quite a broad coverage.

BERNI: So we are quite proud of that.

BERNI: Another powerful and awesome figure is 5 million.

BERNI: These are the Payback transactions in Germany each day.

BERNI: Only a day 5 million.

BERNI: But I have a favorite, and it’s our redemption quote, because 95% of the collected points are indeed redeemed.

BERNI: And this is a number which is unique across the world in standalone schemes, multi-partner schemes, whatever schemes you are looking at.

BERNI: Nobody has a 95% redemption rate.

BERNI: And this is on one hand side, very important for us because it shows how engaged our customers are and how important the points are for them.

BERNI: Because if you don’t use it, it’s not important.

BERNI: And on the other hand side, it shows clearly our focus because we never earned money by having a breakage.

BERNI: So we earn money by having engaged customers.

BERNI: And so that’s my favorite loyalty statistic.

PAULA: Well, I think it’s my new favorite loyalty statistic as well, Berni.

PAULA: That’s incredible.

PAULA: And I’m glad you mentioned actually the global nature of Payback, Berni, because when I first realized how important it would be to bring Payback on the show, even before we met, I was just coming from the importance in the German market.

PAULA: So I had really only really been thinking about Payback and your 31 million active customers, as you said, but I know you’re actually in India, in Poland and Mexico, Italy and Austria as full coalition programs, if I’m right.

BERNI: Yeah, you’re right.

BERNI: You’re right.

PAULA: Yeah.

PAULA: Amazing.

PAULA: And 95%.

PAULA: I just think that is incredible.

PAULA: And what I often find actually, Berni, is there are so many statistics and things that we talk about, but there’s very rarely a company that is so proud to be able to share a number, actually, because, you know, I think that is the important one.

PAULA: And people talk about the principle, but to really put a powerful number like that there, I’m just super impressed with you.

PAULA: Wonderful.

PAULA: So tell us about the Payback Journey, Berni.

PAULA: It’s been going a long time and I think you’ve been involved with most of it.

PAULA: So maybe you’ll talk us through the history of the company.

BERNI: Yeah, Paula, the question is, it’s only one hour for a podcast, so I could speak for hours about that.

BERNI: As you just said, so I’m the Payback Dinosaur, so I’m within the company over 20 years.

BERNI: I started my career at Payback before we launched.

BERNI: During those days, we have been 20 people.

BERNI: Now we are over 1,300 people.

BERNI: The baby has grown, so I love to speak about the journey and I think the journey is quite special.

BERNI: It’s a journey from a typical startup, as I just said, to an international tech and product company with fantastic expertise for data-driven marketing.

BERNI: That’s in fact what we are doing.

BERNI: It was a very exciting journey, a fast one, and it was continuously marked by innovation.

BERNI: I think that’s one of the important things which we will see across the whole discussion which we will have.

BERNI: In fact, we are quite proud of that as well, so we have just been named of one of the most innovative companies in Germany by one of the country’s most renowned business magazines.

BERNI: People are seeing what we are doing and we are quite happy about that.

BERNI: Even if I sometimes feel like the launch took place yesterday and not 21 years ago, it’s unbelievable how our world has changed in the past two decades and how retail, which is core of our business and shaping our business, has changed and how we have to change over those 20 years.

BERNI: And maybe I start and I try to not to be as long as I would love to.

BERNI: So in March 2000, we had the first step as Payback, the bonus program with a plastic card.

BERNI: So during those days, digitization was not the topic.

BERNI: The big topic during those days was how I can identify my customers and how I can learn more about my customers.

BERNI: And this was quite new because there were some multi-partner things like the airline industries with Miles and More or some other programs, but no program which was a multi-part or designed as a multi-partner program, one card, many partners out of the retail space.

BERNI: And the program was always based on the idea that customers should get much more advantages and save much more money from a loyalty program with lots of partners and from a so-called stand-alone program with only one partner.

BERNI: And so we started in March 2009 partners, and it became clear that customers love collecting payback points while shopping.

BERNI: And we were a very young company and nobody had a clue what will happen at the launch date.

BERNI: So we were very curious and maybe a funny story.

BERNI: So we launched on the Friday.

BERNI: And during those days, the whole company, because upfront, we worked quite hard, the whole company went for a skiing event and we only had two tech guys in the office.

BERNI: And we thought, okay, let’s see what will happen.

BERNI: And we saw tremendous inflow from customers.

BERNI: And we said, what the hell is happening?

BERNI: And we had a very happy party during that day.

PAULA: And you can see that one month after the launch, we already had one million customers, subscribed customers.

BERNI: This was very, very exciting for us.

BERNI: As we already discussed, more than 31 million are collecting today Payback points with 35 retail companies and more than 650 online partners and still expanding.

BERNI: So this was the phase one, if you like to.

BERNI: The phase two in our journey is that we saw that it was clear we had to provide customers with the offers they wanted through all channels.

BERNI: And so we said we’d have to develop a multi-channel marketing platform.

BERNI: If we say that today, it’s clear everyone has omnichannel, everyone has multi-channel.

BERNI: But during those days, it was 2003-04, it was not common.

BERNI: And so we started to provide an offer platform at the very beginning, just offline.

BERNI: But we entered the digital space quite fast after that.

BERNI: And so for us, the key positioning was no matter where our customers are shopping, no matter which channel they’re using, no matter at which time and which place they are, they need exactly the partner coupons and promotions that are relevant to them.

BERNI: That’s the idea common today.

BERNI: But during those days, it was a true new experience for us and for our customers.

BERNI: So this was one of our biggest milestones to develop this product.

BERNI: And we have to perfect the combine of the platform’s reach and personalization.

BERNI: So we are seeing or during those days, we said we are a TV channel because we have so many customers, but it’s a one to one relationship.

BERNI: And this is the power of our marketing platform.

BERNI: And then everything based on big data or smart data, however you like to call that.

BERNI: During this phase, we started the internationalization of the program.

BERNI: So hold, as you said before, was our first market followed by India.

BERNI: And then 10 years ago, we became part of the American Express Company.

BERNI: So this was a strong boost to our internationalization topic because they were interested that we enter some different markets.

BERNI: So together with Amex, we entered the Mexican, the Italian and the Austrian market.

BERNI: And people can collect their points as well with Payback.

BERNI: So we have the six multi-partner systems around the world.

BERNI: Step three after that is Payback has to be or to become the expert in building bridges and connecting all shopping worlds and partners ecosystems.

BERNI: Because in the last ten decades, it became clear that every, especially retail partner, but from all other industries, same thing, that everyone is looking at connecting with their customers and everyone saw the power of digitization.

BERNI: Because together with the digitization, you can easily connect with customers and you build up your own ecosystem, save your own app.

BERNI: And for us, it was very important that we always provide value, not only for our customers, provide value as well in the BGP area for our retail or other partnerships.

PAULA: Sure.

BERNI: So for us, one of the most important things during those days and today is by digitization and bringing together customers and retailers, bringing together the ecosystems of payback.

BERNI: So having a lot of data, having a huge reach, having the possibility to personalize and bringing, on the other hand, together this with the ecosystem of all the retail partners.

BERNI: So that everyone says, and that’s one of the biggest things which we always said, it’s not that you are part of payback.

BERNI: So payback is your own loyalty scheme.

BERNI: And this is a completely different angle and very important for our customers.

BERNI: So we have to be modular, we have to be innovative, and we have to offer for every partner, not the same, one size fits all.

BERNI: So really tailor made what is needed for their special business.

BERNI: And I think that’s one of the success factors which we have in the market.

PAULA: But what I would guess as well, Berni, I’m sorry, I’m interrupting you, but to launch into countries as varied as Mexico, I mean, Poland may be culturally quite similar to Germany, I don’t know.

PAULA: But to go to such dramatically different markets, I guess you had to be very flexible again and do a lot of localization for all of those countries.

BERNI: You have to take in consideration the specialties of every country or every region.

BERNI: And all customers across the globe, they love to have value, they love to have relevant offers, and they love to have it simple and a good user experience.

BERNI: This is common across all markets.

BERNI: Sure, you have to deal with the specialties and what is important in those markets.

BERNI: But all of our partnerships are always the high-frequency partner.

BERNI: They are relevant everywhere.

BERNI: So food, retail, gas stations, drugstores, they are important wherever you are.

BERNI: Either you are in Peru or you are in India.

BERNI: That’s the same story where in Mexico where we are.

BERNI: And so I would say that based on the right DNA, you have to take in consideration the local specialties.

BERNI: But as a matter of fact, customers are not so different across the globe in terms of what they like and what they are seeking.

BERNI: If you look at the digital companies like Amazon, one of their success factors, super experience for the users, for the customers, service and provide the right products.

BERNI: And that’s a product based company.

BERNI: But if you’re a service company, it’s even more important.

BERNI: And that’s common.

PAULA: Yeah, yeah, they’re great insights, Berni, because I totally agree.

PAULA: Value is something that we all have an appetite for, for sure.

PAULA: We’re human beings and it just makes logical sense.

PAULA: I think the speed to earn, to your point about, you know, why it was originally launched in the first place.

PAULA: So even to launch with nine partners in the year 2000, I think is a huge achievement because it’s a complex thing to negotiate from a coalition perspective.

PAULA: So, but customers, I think, really do feel that benefit then that there is a value because they’ll get the point so quickly and the value.

PAULA: And I love your point about simplicity because I think we’re all a bit overwhelmed with how busy the world is, eh?

BERNI: And everyone’s seeking for direction and ease of use.

BERNI: That’s clear.

PAULA: Absolutely.

PAULA: Yeah.

PAULA: Make it useful to me.

PAULA: Make it easy for me to do it and then I’ll show up and I’ll be excited about you.

BERNI: Yeah, and be innovative.

BERNI: So that’s the third point.

BERNI: So make it easy, make it simple, but make it cool as well, if you like to say that way.

BERNI: So always be on top of innovation.

BERNI: And that’s basically coming back to your question, that’s the fourth step of our journey.

BERNI: So today we would see ourselves as a tech and product company and we would like not to deliver much, to deliver loyalty alone, but innovations for retail industries, connecting the point of sale and digitization and also the new markets to be able to scale the program furthermore.

BERNI: And at the same time, of course, to meet the huge demand from the customers, from the brick and mortar and the online partners.

BERNI: So that’s where we are.

BERNI: So today, we try to bundle all steps which we have across our way and to lead our company into a much more product tech and innovative driven company.

BERNI: Because if you don’t do that, you will be stuck in the middle or you will be out of the market.

PAULA: Totally, totally.

PAULA: And clearly Payback is one of the world’s leaders in coalition, Berni.

PAULA: So well done on an incredible 20 years so far.

PAULA: And tell me, were you ever tempted to leave?

PAULA: I mean, that’s an awful long time to spend with one company.

BERNI: Before we had our interview today, our podcast, I thought about that.

BERNI: And you are completely right.

BERNI: I never would have expected to stay over 20 years within Payback.

BERNI: This is still for me incredible and for my friends incredible because, let’s say, normally I like to see new things.

BERNI: And this is on the other hand side, exactly the reason why I’m still there.

BERNI: Because we always were on top of new ideas, of new developments, not only in our loyalty, let’s say in a bubble or loyalty industry.

BERNI: So what’s happening outside, we always try to lead.

BERNI: The three most important reasons for me and why I’m still here is A, the colleagues, the colleagues, the colleagues.

BERNI: So I think we have a fantastic team, and it makes so much fun.

BERNI: And there are still a lot of people which started with me or the year after, and they’re still around.

BERNI: So it’s like a kind of family.

BERNI: And that’s something which I really value.

BERNI: On the other hand, I always found it very exciting to connect with customers, to be on top of what customers are thinking.

BERNI: Customer is not only the BTC customer.

BERNI: On the other hand side, you have the B2B customers.

BERNI: So really to make the development together with the retailers and our big partners, how it’s a customer focused company, not only Payback as a customer focused company, being a customer focused company as partner of Payback, as partner company.

BERNI: And to educate and to have to have the journey together with them was very exciting.

BERNI: And I still remember 10 years ago, we already pushed for digitization.

BERNI: And a lot of our retailers said, oh, you know what, it’s just a joke, but let’s say the internet, it will disappear.

BERNI: Not to that extent.

BERNI: But this was kind of, let’s say, the feeling during those days.

BERNI: And we really pushed hard.

BERNI: And we said always, if we are not doing this right now in five years, guys, you will tell us you are not leading the market anymore.

BERNI: So we have to do it and believe us that the digitization, it will change the whole retail landscape.

BERNI: And today everyone would agree.

BERNI: But five years ago, it was not the fact.

BERNI: So a lot of our big retail partners, they didn’t have a good internet presence.

BERNI: They haven’t had no e-commerce.

BERNI: And the same for the next phase of the development, the mobility, the app.

BERNI: A couple of partners, they just started with their app.

BERNI: So it’s quite late.

BERNI: Looking at the competition, on the other hand side, if you look at the big tech companies from Silicon Valley, they will laugh about that.

BERNI: And bringing everything together and always thinking about what’s next and what’s important for customers, for companies and for our company.

BERNI: Because let’s say we like to be successful today and tomorrow.

BERNI: And apart from the colleagues, this is the reason why I’m still here, because I had the chance to really make the next steps and nobody was hindering me.

PAULA: I love it.

PAULA: Yeah, yeah.

PAULA: And I’ll definitely be asking you about all of the innovations that you’ve been working on, Berni.

PAULA: But I guess just as you were saying that, like I was just thinking, in my experience, the view, I think, with retailers and you have more experience, so you can correct me if I’m wrong.

PAULA: But I think that we all maybe had the impression that we could, you know, digitize when we were ready on the brand side or on the retail side.

PAULA: Whereas I think what Covid has taught us is actually, well, first of all, thank God you’re ahead of the curve.

PAULA: But secondly, if customers demand it, you just have to be ready for them.

PAULA: Like I think that this forced digital transformation in Covid has really just accelerated what clearly you knew, I hope I knew, for the last 10 years needed to be done.

BERNI: And if we put the lens on the Covid thing, digitization is one of the things after Covid, the same for working at home or working from anywhere.

BERNI: So this is the other big piece that was brought up by Covid and it won’t disappear.

BERNI: And everyone saw, if you are not ready to interact and connect with your customer over all channels and the digital channels, they were the only ones in a lockdown phase which were possible, you are out of the market.

BERNI: And we saw that a couple of companies, they are struggling, they struggle and unfortunately they will struggle in the next one, two, three years because it’s not over yet.

BERNI: And if you miss the train, it’s quite hard to be as fast as you had to be in a crisis or in a pandemic, which we just saw, because to implement all the systems in a new way, if everyone is not in the office, it’s a total different situation.

BERNI: Very hard or nearly impossible, because the other guys in the market, they are much faster and they are much more connected to the customers.

BERNI: And if you lose the customer, then it’s quite hard to regain.

BERNI: I think what we definitely learned that reach and communication has never been more important than in a pandemic.

BERNI: So connecting with customers, interacting, sending them personalized offers, tailored to their needs, that’s even more important in times like these.

BERNI: And I think for the teams and for having still a motivated and going forward team in place, you need to increase your communication frequency dramatically.

BERNI: And that’s what we did.

BERNI: So I’m much more in touch than I used to be before the pandemic, as everyone was flying around and having some calls.

BERNI: But today we are connecting every day with our teams.

BERNI: We have a lot of councils, much more information, much more transparency, because that’s what people need if they’re alone in their home office.

BERNI: I think that’s international because that’s the same for the guys in India and the same for the guys in Mexico.

BERNI: And everyone is seeking for direction.

BERNI: Everyone is seeking for future visions, ideas, and everyone is seeking for stability.

BERNI: We are a team, even if we don’t see each other.

BERNI: And I think that was one of the major success factors, at least in our company.

PAULA: Amazing.

PAULA: And can I ask you just about communications, Berni, because I often think actually for loyalty programs, it’s probably the next big opportunity.

PAULA: And as you know, clearly I’m very passionate about voice and audio, because I feel this is a really nice way to connect with people that you would never communicate with before.

PAULA: So it’s different obviously in my industry.

PAULA: But you’re still doing, as I understand, printed mailers as well as your digital communication, am I right?

BERNI: It’s a very good question, Paula, because if you would have asked me whatever, six years ago, I would have said, yeah, maybe in two years, maybe one year, maybe three years, we won’t have any paper mailing.

BERNI: On the other hand side, what we saw, so we are not here to educate customers.

BERNI: We are the democratic system.

BERNI: And we said, whatever our customers ask for, they should have the possibility.

BERNI: And today we see, not everyone is a digital native.

BERNI: So our customer base is very, very broad.

BERNI: And it would be wrong to say, okay, people who are whatever, 50 plus, 60 plus, they only like paper because they know that.

BERNI: And the younger guys, they only like the digital communication stuff.

BERNI: That’s wrong.

BERNI: So I’m not into those, let’s say, buckets.

BERNI: But there are still a lot of people which really value the haptic.

BERNI: They really value to have a paper mailing there, to open it, and they use it.

BERNI: And we see people who are using digital coupons and paper coupons, they have much more interaction with us than any other guys.

BERNI: And so that’s the reason.

BERNI: And we asked our customers.

BERNI: And they said, at least the groups, which are saying, I go away with this paper stuff, it’s not environmental friendly, I don’t need it, it’s not easy, so I’m completely digital.

BERNI: Clear, they should have only the digital communications, but there are others.

BERNI: They say, I like it and I value it.

BERNI: And as long as we have those customers, we said we provide paper communication or paper goomboning.

BERNI: Because that’s very important.

BERNI: Same for our redemption channels.

BERNI: We said we have to have a broad set of redemption channels.

BERNI: To redeem your points, you should do it.

BERNI: You can donate, you can collect miles with it, you can pay in the point of sales, you can use the rewards store, whatever you like to.

BERNI: But I don’t tell you what to do.

BERNI: Customers should tell us what they like to do.

BERNI: And that’s the difference.

BERNI: By saying that, yes, we are still having paper coupons.

BERNI: We try to reduce the environment footprint as good as it can be.

BERNI: From that standpoint, I would say we don’t need it.

BERNI: From the customer standpoint, as long as they are asking for it, they should have it.

PAULA: Yeah, but I do agree with you, Berni.

PAULA: Sometimes it’s just really nice to get some personal mail, actually.

PAULA: It’s not something in this part of the world that we really have too much.

PAULA: But certainly when I’m back in Ireland, it’s lovely.

PAULA: It’s where things that are special come in.

PAULA: Whereas I think before, I think there was a phase where everything that came by post was maybe just the bills.

PAULA: Whereas now for me, all my bills are digital, so that’s probably less appealing.

PAULA: But if it is something aspirational, and I know you cross all of the different verticals in all of the countries that you’re operating.

PAULA: So I think that’s incredible because like you, if you had asked me 10 years ago, will we still be doing post on mailings, I would probably have guessed no.

PAULA: So I’m really impressed you still have them.

BERNI: Yeah.

BERNI: And as I said, I think we will have them next year as well.

BERNI: And it’s interesting if you look at other developments.

BERNI: So you have 50% of your friends or people you know, they would say, I love my Kindle.

BERNI: I only like to read books with my Kindle.

BERNI: And the other 50%, they say, I need to have the book in my hand.

BERNI: And why you should tell somebody on the left or the right hand side, you have to do it the other way around if you like it.

BERNI: Why?

BERNI: That’s not my way how I see customers.

PAULA: Love it.

PAULA: Love it.

PAULA: So during Covid then, Berni, what would you say, like what have you seen in terms of changing customer behaviors?

PAULA: Because you have so much access to all of your partners and obviously the merchants and then directly with customers.

PAULA: So what kind of changes have you seen emerging in the last year or so?

BERNI: Yeah, the time will tell us if the changes are sustainable or not.

BERNI: But let’s say people had to do or had to act as they did because they haven’t had much possibilities.

BERNI: What we saw and this was very helpful for us because this is the base of our program.

BERNI: On one hand side, our high frequency partner, because even in a lockdown, food retail was open.

BERNI: Sure, people were not driving too much around.

BERNI: So this was quite harmful for or painful for our gas station partners.

BERNI: So BP and X on Italy.

BERNI: The drugstores were open and very important as a supplier.

BERNI: There were curves at the very beginning of the lockdown.

BERNI: They had sometimes 30 to 40% plus compared to the last year.

BERNI: Then it went down because if you bought 20 packages of toilet paper, then you are done for the moment.

BERNI: So they were quite happy.

BERNI: The winner in the point of sale industry is clearly the pet suppliers.

BERNI: It’s a very important and big partner across all countries of us.

BERNI: And I have the feeling that everyone bought a dog or a cat during those days.

PAULA: Totally.

BERNI: Because they had a phenomenal year.

BERNI: And I always said the lockdown is like an advertisement campaign for Amazon.

BERNI: So the digital partnerships in areas where point of sales were closed, they were clearly the winner.

BERNI: On the other hand, if you look at the travel industry where we have with booking and Expedia, for example, fantastic partners.

BERNI: Sure, with 80 or 90 percent less than 2019, this was not a winner industry, even having a digital partnership there.

BERNI: And the fashion industry was affected quite hard as well, because let’s say sitting at home, nobody had to have the newest fancy dress.

BERNI: Not nobody, but not too many people, let’s put it that way.

BERNI: This is the second group where I would say those were the winners.

BERNI: We are having a Zoom call today and Zoom was a winner, a key winner as well.

BERNI: And thirdly, then you have the point of sales and the industries which are high street and they are suffering badly.

PAULA: Totally.

BERNI: Especially, and that’s what we discussed before, if they haven’t had a strong digital presence, they weren’t ready.

BERNI: 50% were doing quite okay.

BERNI: For example, Thalia, a partner in Germany, they had better gross rates than Amazon, especially in the books, in the book area.

BERNI: So they did a fantastic job.

BERNI: And others, they stepped out of the coalition because they are not too powerful in the market anymore, let’s put it nicely.

PAULA: But I know your own e-commerce marketplace also boomed as well in general, am I right?

BERNI: Our e-commerce marketplace, if we wouldn’t have done so, we wouldn’t have been in trouble last year.

BERNI: And so I’m very happy that we prepared ourselves for that.

BERNI: And this was clearly part even 2019 of our strategy to have much more digital partnerships, because that’s part of the future.

BERNI: And I say definitely part, because the other ones are as important as I just said.

BERNI: And part of our DNA is that we said, for us, the most important innovation, it’s not an innovation anymore, but let’s say strategic instrument is our app.

BERNI: And by saying that our app is digitizing the point of sale, so connecting the digital world and the point of sale, so the offline world, because there you have everything together.

BERNI: And on the other hand side, it helps us dramatically to connect with our customers, or better to connect our customers with our digital partnerships and our marketplace.

BERNI: That’s our ecosystem, which is, let’s say, at the core of what we are doing today.

PAULA: Yeah, and I love that whole concept around, I think it’s called O2O in the retail sector.

PAULA: So online to offline or offline to online.

PAULA: I’m not sure which one comes first, but, you know, in fact, I remember, I think it was a US loyalty program saying exactly this.

PAULA: It’s customers are not online or offline, and they created a world called non-line, N-O-N line.

PAULA: And I think that’s what you’re doing.

PAULA: You have the touch points at the point of sale.

PAULA: You have your app now.

PAULA: So wherever the customer happens to be, you’ve got the relationship.

BERNI: It’s funny, Paula, because so you’re mentioning this O2O, or so it’s on the other way around.

BERNI: And there were a lot of books and stuff around that.

BERNI: I don’t believe it is.

BERNI: Customers are doing what they like.

BERNI: It’s not one customer is informing himself online.

PAULA: Distinction.

BERNI: They are doing whatever it is.

BERNI: So where we said, so OK, those are discount customers.

BERNI: Those guys are the premium customers.

BERNI: That’s not true.

BERNI: That’s not our world.

BERNI: The world is you shop in a discounted, then you go to the or.

BERNI: So you can’t put customers in brackets.

BERNI: You just have to be there where the customers are today.

BERNI: And you have to provide value for them wherever they are.

PAULA: Yeah, for sure.

PAULA: Yeah, you just have to be everywhere.

PAULA: You’re totally right.

PAULA: And just for listeners, Berni, I did see one of your fabulous statistics.

PAULA: Another one.

PAULA: I believe you’re the third top shopping app in Germany with about 10 million users at this stage.

BERNI: Yeah.

BERNI: As you just said, the app is the core of what we are doing.

BERNI: Going back to what we just said, it’s connecting everything.

BERNI: And everyone has this mobile or whatever it will be in five years.

BERNI: But for the moment being, it’s the mobile.

BERNI: You have it with you.

BERNI: And that’s the place where you can demonstrate magic, if you have magic.

BERNI: It’s not about, if you look at the first stages of Facebook, for example, where a lot of companies went to India and bought a lot of customers.

BERNI: So it’s not about downloads.

BERNI: I couldn’t care less about the download of my app.

BERNI: The usage of the app is interesting.

BERNI: So you have to bring customers into your app on a regular base because you are providing value with the app.

BERNI: If they open it, if not, you will be gone with which device they ever download.

BERNI: The number of 10 million active customers is for us very important.

BERNI: And if you make the drop down, we are having over 6.5 million a month active.

BERNI: And I think that’s an impressive number.

BERNI: And that’s something where we focus on.

BERNI: Because for us, the app, my favorite picture for it is it should be a Swiss Nile.

BERNI: So you have to have always new innovations.

BERNI: We started informing our customers.

BERNI: Then we had our morning on a one-to-one base.

BERNI: And then we had a couple of new innovations in the app.

BERNI: For example, Payback Pay.

BERNI: We were the first ones that had mobile payment in Germany.

BERNI: So we are proud of that.

BERNI: And today, I’m sure in three years, I can’t state that anymore.

BERNI: So I have to state it today.

BERNI: Today, we are in Germany, still bigger than Apple Pay.

BERNI: And we saw it through the pandemic, how important is the contactless idea.

BERNI: So going further, that’s the newest innovation, which we just brought into our app thing, which is called Payback Go.

BERNI: And Payback Go means to take in consideration the localization piece.

BERNI: Payback Go is changing content, it’s changing couponing, it’s changing color even wherever you go and enter which store.

BERNI: So if you go to Tesco, you have the colors and the content of Tesco.

BERNI: You step out of Tesco, you go to Boots, and then you have the colors and the contents of Boots in the Payback app.

BERNI: That’s amazing.

BERNI: And I think that’s excellent to really be part of the whole customer journey and to demonstrate value wherever they are.

BERNI: If you’re at home, probably you like to see where can I redeem, how can I shop online, what’s the newest stuff, or to be prepared for the next trip.

BERNI: If you are in the city, you like to have the content and the value of the shops where you are right now.

BERNI: And that’s the base idea.

BERNI: I think it’s quite unique and fantastic innovation.

BERNI: We started in Germany, we just started in Poland, and we are in the middle of rolling it out to all other countries.

PAULA: Nice.

BERNI: And I think that’s the next step, which is even more personalized, even more on a one-to-one base, and taking in consideration.

BERNI: And that’s important for us because we are a B2C and B2B company.

PAULA: Totally.

BERNI: We are taking into consideration that every partner of us would like to see his value and his brand by interacting with the customer.

PAULA: Sure.

BERNI: That’s the new baby, which I’m quite proud of.

PAULA: Oh my goodness, Berni, you should be, because as you were explaining that, I was just thinking all of the historical transactional data that we all have is based on a totally different lifestyle.

PAULA: Perhaps, you know, my coffee when I was on my way to the office.

PAULA: So, you know, all of the favorites or the behaviors are completely irrelevant.

PAULA: So if instead you’re able to locate based on where I currently am, perhaps working at home, it’s relevant today depending on what I’m doing today.

BERNI: So it’s truly, let’s say, real time.

PAULA: Yeah, as it should be.

BERNI: The more digital the world is, the more real time is important for customers because they don’t want to think about tomorrow.

BERNI: They are here and they are now and they would like to have it here and now.

PAULA: Absolutely.

PAULA: So with all of these innovations and an incredible 20 year history already, Berni, what would you say?

PAULA: Like what are you struggling with or what problems do you think that you’re still trying to address?

BERNI: Good question.

BERNI: Two main things.

BERNI: Sure, the pandemic was and is still one of the biggest challenges which we are having in terms of colleagues, in terms of interaction with the customers, in terms of helping our big or smaller partners through such a phase.

BERNI: It’s a huge chance on the other hand side to demonstrate that you are a true partner, a true strategic partner.

BERNI: If you are there for your P2P and P2C customers, I truly believe that there’s a value in a face to face communication, especially if it comes to innovation, to creativity, to processes which are around.

BERNI: And so this is for our company, one of the biggest challenges in the market or strategic wise.

BERNI: I would say what I stated at the very beginning, where I said we have to be a product and tech company to ramp that up and to change, to have the change process from a sales marketing company to a product and tech company and not losing your original DNA and to bring everything together to really provide additional value for companies which are today, which are having the possibility today to do a lot by themselves.

BERNI: So you have to be always a little bit better or try, better is maybe the wrong word.

BERNI: You have to play on your strengths a little bit more.

BERNI: Let’s put it that way, which is the reach, which are tools which we can build for payback and display to all our partnerships.

BERNI: And by saying that to bring together the ecosystems was one of our biggest discussion over the course of the last two years, because people and companies, they tend to fight for what they are having.

BERNI: And if we would do so, we would lose what we are having today in five years.

BERNI: And so we had to change and to cut off things and to cut off security and to cut off revenue streams as well.

BERNI: Knowing that you have to cut them now in order to be successful in five years.

BERNI: That’s something which is, let’s say, if you read a strategy book, is crystal clear.

PAULA: Yeah, sure.

BERNI: You have to do it.

BERNI: But if you do it and if you know by doing this, you lose whatever, a fair portion of your rest today.

BERNI: And you have the hope for the future that it will come back even better.

BERNI: But you have to do it now.

BERNI: If not, you are out of business.

BERNI: But the moment to decide to really change the whole business model and the whole model, which was successful for 18 years or 20 years or whatever.

BERNI: Yeah, that’s not too easy.

BERNI: We had two years of hard discussions before we had the big move where we are today and where we said, it’s cool that everyone is having his own app and is interacting with the customers.

BERNI: And let’s think about how we can bring everything together and be even more powerful in the future for our customers.

BERNI: And if we are powerful for our customers, we will be powerful for ourselves.

BERNI: And this was probably for me and for our company the biggest challenge over the course of the last two years.

PAULA: My goodness, my goodness.

PAULA: And I guess part of that whole, you know, start up to success story is really the importance that you talked about actually at the very beginning, Berni.

PAULA: So you being an incredibly loyal employee to the company and keeping your own team, it sounds like incredibly loyal as well.

PAULA: So I wanted to congratulate you on that.

PAULA: What would you attribute your success to in terms of keeping a team in such a competitive country as Germany?

BERNI: I think this my way or highway thoughts from a CEO is not the road to success anymore, let’s put it that way.

BERNI: So I believe incredibly in teamwork and in teams.

BERNI: And if you really believe and if you live that value, you can’t be successful focusing on one leader.

BERNI: So that’s not the future.

BERNI: The future is being flexible, bringing together teams, having always different teams together, because you are tackling always new challenges.

BERNI: And so you won’t be successful in the future.

BERNI: And today, if you say that’s my structure, and this is the structure for tomorrow, and this is the structure how it works, that’s not the way excellent people would like to work today.

BERNI: And I’m truly convinced that it’s a two-way street.

BERNI: So a company has to think about what’s important for people to stay or to come to a company.

BERNI: On the other hand side, sure, the colleagues or the employees, however you like to call it, they have on the other hand side the duty to bring the same mindset at the table.

BERNI: And I think that we found a quite good balance how we try to motivate by projects, by ideas, by transparency, by giving a clear way forward what we think, what’s the strategy, what’s the future, what are our numbers.

BERNI: So we are a company which is very transparent, apart from what I can’t say being in a corporation like Amex, but talking about our numbers, we are very transparent with our colleagues.

BERNI: We are very open for discussions.

BERNI: I just recently had a town hall and after the town hall I had 56 questions.

BERNI: That’s a lot.

BERNI: I’m very happy about that because it shows that people, they don’t have to fear to ask whatever they think and whatever they have in mind.

BERNI: And that means that we are an interactive company.

BERNI: And I think for young, talented people, to have the possibility to bring in their ideas and to fulfill new things, new cool stuff.

BERNI: On the other hand side, sure, you have to get your base right.

BERNI: But I think it’s very important for young, talented colleagues to be part of the decision is very important for people which are more experienced and would like to be to be heard and seen and have the possibility to be part of the change process.

BERNI: And I think that’s something which we are doing quite OK.

PAULA: Well, I mean, 56 questions.

PAULA: I mean, that you must have been exhausted after that whole town hall.

PAULA: But as you said, it shows that they feel comfortable and that they are happy to be able to ask.

PAULA: And I always think for me, I just want to know that I’m making a difference in the job that I do.

PAULA: You know, like we’re all showing up to work every single day and we want to keep good talent.

PAULA: So and so to have that like openness and to keep them loyal to you.

PAULA: And ultimately, the whole company benefits because obviously then the product can develop with the insights of a different demographic.

PAULA: Because as you said, there’s plenty of mature people around the table.

PAULA: There’s usually plenty of gray hair and stuff, but you know, get the energy and dynamism of a young team is extraordinary.

BERNI: Yeah, it’s exactly to the point what you’re saying, Paula.

BERNI: And so maybe one more thing.

BERNI: What we always said, we don’t value.

BERNI: Sure, we value if somebody is 15 years in the company.

BERNI: But if we talk about careers, that’s not the point.

BERNI: It’s about your talent to fulfill a role, to fulfill a task or whatever has to be discussed.

BERNI: So for us, if we talk about salaries or position increase or stuff like that, it’s never for us a KPI.

BERNI: How long are you in the company?

BERNI: After three years, you have to make the next step.

BERNI: Maybe after two months if you are excellent.

BERNI: I think you have to be flexible.

BERNI: And people love flexibility if they have a stable base.

PAULA: Perfect.

PAULA: Well, listen, on that note, Berni, I’ve asked all of the questions I’ve been dying to ask you in terms of the payback business.

PAULA: Is there anything else you wanted to mention before we wrap up?

BERNI: Yeah, I have to.

PAULA: Please.

BERNI: For us as a company.

BERNI: And this is something we talk a lot about change processes and the future for us as a company.

BERNI: And I can’t have an interview of one hour or a discussion of one hour without mentioning it.

BERNI: For us as a company, it’s not only looking at the most or the best people, sure.

BERNI: It’s always very important for us to have diverse and inclusive teams.

BERNI: And that’s something I would really like to mention.

BERNI: So if somebody is listening to our podcast, we are very open to that.

BERNI: For us, it’s very important.

BERNI: It’s not only a social reason that you have to talk about.

BERNI: It’s an economic reason, so we have 60% women in our customer base.

BERNI: And I think there’s a huge value if teams are diverse.

BERNI: But then you have new ideas if they are open to speak out, what we just discussed, and then you can produce the best ideas.

BERNI: And so for us as a company going forward, I think it’s a main competitive factor.

BERNI: If you only look from economic reasons, it’s a main competitive factor, having good products and having excellent people and being part of the talent pipeline to really embrace the inclusion and diversity.

BERNI: And this is something which I’m leading personally because that’s something which is really important.

PAULA: Well, I think that’s a lovely point, Berni, because I think you’re right.

PAULA: A lot of people talk about diversity and inclusion as a strategy or as an intention.

PAULA: But you’re right.

PAULA: The commercial reality is we need to be representative of our customer base.

PAULA: So to have that strategy for your own team, I think you’re right, will absolutely be a competitive advantage.

BERNI: If you just look at Munich, we are in an environment where we have Google, Amazon, Microsoft, that they are all in Munich.

BERNI: So it’s really hard to keep your talent and people if they come with big checks.

PAULA: Oh, my goodness.

PAULA: Listen, I can hear you’re doing a fantastic job, Berni, just from a consumer perspective as a leader.

PAULA: So I’m really thrilled to have had some insight into your program.

PAULA: I really hope we can stay in touch and maybe do another show, maybe further down the track, maybe when the whole pandemic is behind us.

PAULA: But for now, I just want to say, Berni Brugger, CEO of the Global Loyalty Coalition, Payback, thank you so much from Let’s Talk Loyalty.

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

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

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

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

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