Best of the Back Catalogue | 5 Loyalty Lessons from Flybuys Australia (#768)

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: So welcome to episode 26 of Let’s Talk Loyalty.

PAULA: I am absolutely thrilled to be marking the actual end of my first six months as a broadcaster, if I was to use the term.

PAULA: And I do remember back to originally planning this many months ago.

PAULA: I really didn’t know if I would ever get here.

PAULA: So first of all, I wanted to say thanks to all of the listeners for the incredible support I’ve had over the last six months.

PAULA: And in today’s episode, we are talking with a loyalty veteran from down in Australia, a gentleman by the name of Phil Hawkins.

PAULA: And Phil has an extraordinary career in coalition loyalty.

PAULA: Now, many of you will be familiar with coalition programs in your own markets.

PAULA: I personally have not done a huge amount of work on the coalition side, but there’s incredible learnings, I believe, to be got from fly buys in Australia.

PAULA: And Phil has admitted that he has left fly buys actually twice already, but clearly has a real love of the brand because he’s gone back and he’s working there again as head of loyalty operations.

PAULA: So for today, let me welcome Phil Hawkins to Let’s Talk Loyalty.

PHIL HAWKINS: Thanks, Paula.

PHIL HAWKINS: Lovely to be with you and great to have the opportunity to talk loyalty with you.

PHIL HAWKINS: That’s my favorite topic.

PAULA: Fantastic.

PAULA: Great.

PAULA: Well, mine too as well.

PAULA: So we have that in common.

PAULA: So first of all, for listeners who are not familiar with fly buys, I know it dates back to 1994.

PAULA: And the other thing I loved is, I believe it is Australia’s most popular loyalty program.

PAULA: So tell us a bit about where it came from and when you got involved.

PHIL HAWKINS: Thanks, Paula.

PHIL HAWKINS: Yeah, I was involved with the program right back at its very inception.

PHIL HAWKINS: And it’s interesting to note that 25 years ago, loyalty programs really weren’t a thing in Australia.

PHIL HAWKINS: It was a foreign concept.

PHIL HAWKINS: Even back then, the nascent frequent flyer programs were really just the place where actually frequent flyers went to, as opposed to tying up credit cards and things like that.

PHIL HAWKINS: And so we capitalized on what we saw as frequent flyer envy.

PAULA: Oh, nice.

PHIL HAWKINS: Because, yeah, when we did some focus groups, we were speaking to the people who maybe were living next door to folk who were able to take advantage of the benefits of frequent flyer programs.

PHIL HAWKINS: And so the concept of a frequent buyer program or a program that would reward you for the drudgery of your everyday shopping, this really struck a chord with Australian households.

PHIL HAWKINS: And we were called fly buyers because when we launched, the only reward was flights.

PHIL HAWKINS: Now over the last 25 years, we stand here now in 2020 and there were a thousand reward choices.

PHIL HAWKINS: But back then, you could see the real emotional attraction to flights, and therefore the program named Fly Buys was coined.

PHIL HAWKINS: It was launched in 1994.

PHIL HAWKINS: We weren’t really sure how it would go.

PHIL HAWKINS: And I think we’d had hopes of several hundred thousand Australian households.

PHIL HAWKINS: We recruited a million households in the first week.

PAULA: Wow.

PHIL HAWKINS: And if we move to today, there are 6.6 million households.

PHIL HAWKINS: That’s about two-thirds of Australian households that are active with the Fly Buys program.

PAULA: Wow.

PAULA: That’s an incredible statistic, Phil.

PAULA: And actually, I’d love to get into the definition after this, maybe of how you define active, maybe over what time frame.

PAULA: But also, I know just in terms of your own favorite loyalty statistic, which I always do like to ask early in the show, you had a general statistic, I think, which was very good for us as listeners who maybe don’t know the Australian market.

PAULA: Tell us about your favorite loyalty statistic there down in Australia.

PHIL HAWKINS: Yeah, so my favorite statistic is that just under 90 percent, so 89 percent of Australians over 18 are in a loyalty program.

PHIL HAWKINS: And on average, each of those folk holds 4.3 memberships of programs.

PHIL HAWKINS: When you look at the fact that we started from pretty well ground zero 25 years ago, I suppose it shows that Australians have adopted loyalty programs that would be comparable with more mature markets that probably had a head start on Australia many years ago.

PAULA: Fantastic.

PAULA: So, can I get some insight, then, Phil, in terms of that amazing launch?

PAULA: So to recruit a million people in a week is truly extraordinary.

PAULA: Was it done by direct mail?

PAULA: Was it a TV campaign?

PAULA: Was it a through-the-line campaign?

PAULA: I would just love, and again, I know the communications mix in 2020 will be very different.

PAULA: But just to get that caught through, can you tell us a bit about how you managed to achieve that?

PHIL HAWKINS: Yeah.

PHIL HAWKINS: Look, I think that probably the biggest success factor was signing up as partners into the program, a lot of household names such as cold supermarkets, Shell, we had department stores signed up, we had financial services signed up.

PHIL HAWKINS: And I remember very clearly the Sunday night when our media launch began.

PHIL HAWKINS: And we took out a total ad break that basically had, I think, four advertisements in a row, all for fly buys featuring different partners.

PHIL HAWKINS: And I think that the breadth of the coalition from day one, I think Australian households were saying, hey, everybody’s, a lot of the places where I shop every day, they’re in fly buys, I got to be in it.

PHIL HAWKINS: The second part of that was with two of our biggest partners, you could go into store and sign up immediately.

PHIL HAWKINS: So, and I remember back in those days that for one of the brands at the department store, there were queues coming that were leading right out of the building for people wanting to join up.

PHIL HAWKINS: So there was a great deal of excitement.

PHIL HAWKINS: The other thing I remember from back then was we, our car manufacturer actually ran out of plastic briefly.

PHIL HAWKINS: And so for about a week and a half, we had to send out strong cardboard cards.

PAULA: Oh my goodness.

PHIL HAWKINS: Which was a nice problem to have.

PHIL HAWKINS: But they were heady days.

PAULA: Wow, mildly embarrassing, but as you said, a high quality problem.

PHIL HAWKINS: Yeah, exactly.

PAULA: And just again, on an operational note, I’ve worked on a number of loyalty programs, some that have been brought to market very quickly, and some that have actually taken a very considered approach.

PAULA: So you’ve mentioned focus groups, for example, which I really believe in, in order to really nail the value proposition.

PAULA: But do you have a sense of how much planning time went into flybys before it actually launched?

PHIL HAWKINS: Yes, I do.

PHIL HAWKINS: So there was probably about 18 months from the initial conception to the execution.

PHIL HAWKINS: And I think the thing, particularly I remember in the last few months, you were desperate to keep it as confidential as you could, so that you would maximize the effectiveness of your launch.

PHIL HAWKINS: And so that led to a lot of nervous excitement leading up to the launch date.

PAULA: Wow, brilliant.

PAULA: And I know myself from partner negotiations, Phil, it really does take time to get the right brands on board.

PAULA: So yes, I can imagine 18 months and just bringing everyone on that journey.

PAULA: And yes, the combination of citing people and keeping them confidential as well.

PAULA: So a very delicate balance.

PAULA: Brilliant.

PAULA: So tell us about the partnerships then, because you mentioned a load of household brands, such as Shell back in 94.

PAULA: And it is still a phenomenally, I suppose, broad coalition program.

PAULA: So tell us about the coalition partners that are currently involved in flybys.

PHIL HAWKINS: Yeah, sure.

PHIL HAWKINS: So there are 23 partners.

PHIL HAWKINS: And I suppose it’s a key to any successful coalition program that there is a broad range of what you consider everyday shopping.

PHIL HAWKINS: So Coles Group, which is a 50% owner of flybys, brings Coles Supermarkets, a very prominent Australian supermarket chain.

PHIL HAWKINS: Coles Express, which is the fuel outlet, and two different liquor brands.

PHIL HAWKINS: Then Wesfarmers, the other 50% owner, brings Target and Kmart, brands that are known across the world to the program.

PHIL HAWKINS: We also have a strong relationship with the Velocity Frequent Flyer program.

PHIL HAWKINS: That’s the Frequent Flyer program of Virgin Australia.

PHIL HAWKINS: So one of the most popular reward types is transferring your points to Velocity Points, so that appeals.

PHIL HAWKINS: We have strong financial services partners through Coles Credit Cards, through Coles Insurance, and also National Australia Bank.

PHIL HAWKINS: We have a proprietary travel business called Flybuyers Travel, through which you can earn points from your travel, but also use your points to travel.

PHIL HAWKINS: We have eBay as a partner in the program, which is also popular with a number of members.

PHIL HAWKINS: So, across that spread, it’s not unusual as part of your retail journey to be asked, have you got flybuyers at point of sale?

PHIL HAWKINS: And so, with any coalition program, it’s a little bit different now in a digital world, but it has been true throughout the 25 years that you’re competing for space in a purse or wallet.

PHIL HAWKINS: And clearly a card that has a lot of use in a lot of places is more likely to find a prominent place in your purse or wallet.

PAULA: Okay.

PAULA: Okay.

PAULA: Very good point.

PAULA: And in terms of going digital for flybuyers, Phil, are you still issuing plastic cards or what’s the transition to digital been like?

PHIL HAWKINS: Yes.

PHIL HAWKINS: Yeah, it’s a really good question, Paula.

PHIL HAWKINS: Yes, there is a transition to digital.

PHIL HAWKINS: And, you know, for example, we’ve downloaded the flybuyers app, then you’ll have the barcode there.

PHIL HAWKINS: We are transitioning at the moment away from a dependency on the plastic card because one of our most popular rewards is what we call flybuyers dollars, which is essentially exchanging your points so that you can get dollars off at a lot of the prominent retail brands.

PHIL HAWKINS: And as things stand today, that does have a dependency on the magnetic strip on the credit card.

PHIL HAWKINS: So for those members that want to use that reward type, at the moment, they need to have the card, but we are working, I think probably like most programs are on transitioning through to a fully digital experience.

PAULA: If you work in loyalty, you already know exchange matters.

PAULA: What many programs are still figuring out is this.

PAULA: The opportunity isn’t just to offer it, it’s to run it well.

PAULA: When exchange is actively managed, it can become a real growth lever.

PAULA: Driving stronger card engagement for financial institutions, meaningful accrual revenue for travel programs, and more flexibility for members.

PAULA: That’s the thinking behind Points, a Plusgrade company’s exchange solution.

PAULA: They help loyalty programs move beyond passive connectivity with a managed fraud-secure approach built to improve performance.

PAULA: If that’s something you’re exploring, you can learn more in the full article linked in the episode notes.

PAULA: Wonderful.

PAULA: And now what I’d love to get into is a talk I know you gave at the Australian Loyalty Association.

PAULA: So our friends there, I think he gave the talk actually a couple of years ago.

PAULA: But you talked about five lessons of loyalty from a loyalty veteran.

PAULA: So given your extensive experience, and I don’t want to age either of us, but what I love is that you’ve seen, I suppose, every aspect of the life cycle of loyalty, because I think we talked before the show about brands do get super excited when you are on TV, and you are at, let’s say, a sexy point in the journey, and it’s something new and exciting to talk about.

PAULA: But also, in my experience, programs do go through dips over the years, and I know Flybuys has had its ups and downs, but you’ve learned a lot along the way.

PAULA: So give us your five key lessons then about particularly coalition loyalty or loyalty in general.

PHIL HAWKINS: Yeah, the first one is about loyalty in general.

PHIL HAWKINS: And I remember at the conference, I made a bit of a stir because my first slide basically said don’t have a loyalty program.

PHIL HAWKINS: So the theme is question whether you need a program and what is your program’s reason for being.

PHIL HAWKINS: And over those 25 years, I have seen the examples that you sit back and think, why did you bother?

PHIL HAWKINS: And I think from my experience with Flybuys, I’ve learned that you don’t enter into these things lightly.

PHIL HAWKINS: They take a lot of planning.

PHIL HAWKINS: They require substantial investment.

PHIL HAWKINS: And when you see a program launched that really doesn’t get the basics right, and is not invested in properly, then it becomes brand damaging.

PHIL HAWKINS: And I thought of one program launched probably about five years ago.

PHIL HAWKINS: I will keep it anonymous.

PAULA: Okay, we won’t.

PHIL HAWKINS: But it was an Australian apparel retailer.

PAULA: Okay.

PHIL HAWKINS: And I joined all of these programs, and I did have some affinity with the band.

PAULA: Okay.

PHIL HAWKINS: I was surprised that they didn’t ask me any profiling questions at the start, and I thought, well, maybe that had come later.

PHIL HAWKINS: And I started to get a stream of emails, perhaps two or three a week.

PHIL HAWKINS: The first one, I think, was for 20% Off Kids Clothing.

PHIL HAWKINS: My daughters are 27 and 29.

PAULA: Okay.

PHIL HAWKINS: So, you know, this didn’t mean much to me.

PHIL HAWKINS: And what continued from that point was a stream of emails with random offers.

PHIL HAWKINS: About one in five to one in 10 were of any interest, and no attempt to understand me or from my purchase history.

PHIL HAWKINS: And, you know, it just looked like a mailing list.

PHIL HAWKINS: And I thought, you know, to set this up, this wouldn’t have been cheap, but, you know, why bother?

PHIL HAWKINS: So, yes, so my reference point there is, don’t go into these programs, particularly single retailer programs, as a kind of me too, or, you know, my competitors have one.

PHIL HAWKINS: I also recall at one of my workplaces, like I suppose a lot of us have, I probably had about five different places where I could choose to get my coffee.

PHIL HAWKINS: And I remember my coffee shop of choice was the only one that didn’t have a loyalty card.

PHIL HAWKINS: And that was all about the proprietor who had great coffee, but more than that, he knew my order.

PHIL HAWKINS: He always welcomed me warmly.

PHIL HAWKINS: When I walked in, he would say, He comes lucky, Phil.

PHIL HAWKINS: I felt recognized.

PHIL HAWKINS: And that’s where the loyalty device like the get eight coffees, get the night free.

PHIL HAWKINS: That was a lesser consideration.

PHIL HAWKINS: So that was another interesting reflection.

PAULA: Wonderful.

PAULA: So I love that, Phil.

PAULA: It is about feeling recognized and whether that’s because the owner happens to be there or because you’ve gone to the effort to capture the data and do it properly.

PAULA: I think that’s a brilliant lesson.

PAULA: So yes, I can imagine don’t have a loyalty program from a loyalty veteran, maybe slightly controversial.

PAULA: Okay.

PAULA: So what’s your next lesson then?

PHIL HAWKINS: So I think loyalty is a two-way street.

PHIL HAWKINS: I was at a presentation many years ago and I think it was a person from Hilton Honors Program back in the day.

PHIL HAWKINS: Yeah.

PHIL HAWKINS: I remember that I wrote it down because he said, it’s not about them being loyal to us, it’s about us being loyal to them.

PAULA: Genius.

PHIL HAWKINS: That’s reinforced with me that we owe it to our customers and to our loyalty program members to be respectful, appreciative, and honest in our dealings with them.

PHIL HAWKINS: At Flybuys, we try to challenge what we do with the Weasel test.

PHIL HAWKINS: What I mean by that is, don’t be window-like.

PHIL HAWKINS: Our offers and our dealings with customers have to be straightforward, valuable, attractive, and most importantly, without anything hidden in the fine print or catches or gotchas.

PHIL HAWKINS: We need to be someone who says thank you, not a pushy salesperson who can’t be trusted.

PAULA: Love it.

PHIL HAWKINS: And I’ve always detested the word loyalty schemes because I think schemes are for scheming and for schemers.

PAULA: Yeah.

PHIL HAWKINS: And so I think that’s, it’s not rocket science.

PHIL HAWKINS: It’s nothing technical, but just being genuine and respectful of your loyalty program members.

PAULA: Love it.

PAULA: Love it.

PAULA: And to your point, actually, Phil, I mentioned to you, I did go on to the Flybuys website in preparation for this conversation.

PAULA: And that’s exactly the feeling that I got.

PAULA: It’s clear, it’s simple, and I instantly felt this is something that I want to be a part of.

PAULA: It’s very much, this is the value proposition, this is what we want to do for you.

PAULA: And I can see the amount of effort that has gone in to making the customer feel of value.

PAULA: So, very well done.

PAULA: I really appreciate it.

PHIL HAWKINS: That’s fantastic feedback.

PHIL HAWKINS: Thanks Paul.

PAULA: Yeah, brilliant.

PAULA: So that’s brilliant.

PAULA: So that’s the second lesson, the two-way street and us being loyal to our members.

PAULA: What’s your third lesson for us?

PHIL HAWKINS: Well, the third one was, it’s not all about the points, or is it all about the points?

PHIL HAWKINS: And I know we were talking beforehand around, you know, one of my strange loyalty stats was the number of times I’ve read over the years that points programs are dead, including probably one in the last few months.

PAULA: Okay.

PHIL HAWKINS: And, you know, I think there are both sides to the coin.

PHIL HAWKINS: Clearly, points have been incredibly enduring as a motivational currency that works.

PHIL HAWKINS: And, you know, I really, and I’m probably a bit biased, I really don’t see signs of that changing.

PHIL HAWKINS: We get reminders every day around how much that engages with Australian households.

PHIL HAWKINS: But, you know, if I think about what fly-bys means to Australian households these days, certainly the collecting points and getting a benefit is there.

PHIL HAWKINS: But it’s the convenience that fly-bys can play a part in and making shopping easier.

PAULA: Okay.

PHIL HAWKINS: So one of my favorite campaigns that we run, and look, it’s not extraordinary.

PHIL HAWKINS: I know other programs do this.

PAULA: Okay.

PHIL HAWKINS: But every Tuesday, we send an email to Engage Fly-Bys members, and it is called Your Weekly Specials, and this is for Coles Supermarkets.

PAULA: Yeah.

PHIL HAWKINS: And Coles is like most grocery retailers, they have hundreds of products on special every week.

PHIL HAWKINS: All we do is put in front of their customers.

PHIL HAWKINS: Here’s 12 things that we know you buy, just letting you know they’re on special.

PHIL HAWKINS: Now there are no special bonus points on them.

PHIL HAWKINS: It’s just helpful.

PHIL HAWKINS: And we know that that strikes a chord with a lot of those members, and it’s a go-to point every week.

PHIL HAWKINS: And that’s a great example where the program is just helpful to your life.

PHIL HAWKINS: Yeah.

PHIL HAWKINS: So I think that’s…

PHIL HAWKINS: And there are other examples where it is not just all about the points.

PHIL HAWKINS: And so my summary is, it’s not all about the points, but it is about the points.

PAULA: I love that.

PAULA: But can I ask you one thing?

PAULA: Because I know in the past, for example, a lot of clients would have debates with us, I suppose, as their loyalty team, to say, well, look, if those customers were already going to buy those products, why would you put them on special?

PAULA: Why would you bring their attention to it?

PAULA: Should it not be around driving behavior change?

PAULA: Should you not be trying to cross sell them something?

PAULA: I mean, do Coles have a view around that?

PAULA: And I love the helpful mindset.

PAULA: But how do they reconcile that or justify that internally?

PHIL HAWKINS: I’ll be careful not to speak for Coles, but, yes, it’s super convenient for the customer.

PHIL HAWKINS: Yes, I take your point.

PHIL HAWKINS: It’s something they are buying.

PHIL HAWKINS: They might not necessarily be buying it from Coles every week.

PHIL HAWKINS: And if this is another form of encouragement to get them to turn left to Coles rather than right to the competitors, then this serves its purpose.

PAULA: Okay.

PHIL HAWKINS: And we know that, yes, it’s popular with our Flybuys members, but it works well for Coles.

PAULA: Okay, I love it.

PAULA: And I guess it is a proof point then.

PAULA: So it comes back to your previous point around, it is the mindset.

PAULA: If you’re going to be genuinely helpful, then let’s give the customers exactly what they want to buy.

PAULA: So I think it makes perfect sense.

PAULA: Brilliant.

PAULA: What then is your next lesson in learning for us, Phil?

PHIL HAWKINS: Yeah, this is a little bit more of a scary one.

PHIL HAWKINS: And it comes under the banner of, if you have your customer’s information, don’t lose it.

PHIL HAWKINS: So this is around security.

PHIL HAWKINS: And so I think one of the biggest shifts I’ve noticed over the last four or five years is so much focus on keeping the data and contact information, et cetera, that we hold for Flybuys members on trust, that we keep that secure.

PHIL HAWKINS: I think over 25 years, you build up such an element of trust, but we know that that could disappear in a moment if the wrong thing happened and we lost that trust.

PHIL HAWKINS: I think a program like Flybuys, it would be a mortal blow.

PHIL HAWKINS: And so just the efforts we’ve put into ticking all the boxes that you can tick.

PHIL HAWKINS: And I think related issues are loyalty fraud and programs like Flybuys, this is something we have to watch like all large programs do.

PHIL HAWKINS: And so that’s a topic we’ve watched.

PHIL HAWKINS: And you know, closely related with that is program design.

PHIL HAWKINS: You know, I think when you have such a coverage across Australian households, they are very good at pressure testing your promotions and campaigns.

PHIL HAWKINS: And if they’re not perfectly designed, you know, there are millions of beta testers out there.

PHIL HAWKINS: You’re going to find a way around.

PHIL HAWKINS: Yeah, so, and look, I think an associated topic with that is data privacy.

PHIL HAWKINS: And, you know, we’ve looked on from a distance at GDPR.

PHIL HAWKINS: And, you know, the relevant regulator in Australia last year put out, basically conducted two studies, one into digital platforms and one specifically on loyalty programs.

PAULA: Okay.

PHIL HAWKINS: And, you know, that is helpful for us because it focuses on us, on things like being very open and transparent with our members about, you know, data use, making sure that all the consents that need to be in place are there.

PHIL HAWKINS: And that our FlyBiz members are aware and are very clear about, you know, how our program works.

PAULA: Fantastic.

PAULA: And just on another logistical point, you mentioned you’re obviously on the digital transformation journey.

PAULA: In terms of your customers being able to update their data or withdraw consent, is that at a point of being self-managed?

PAULA: Can they log in to your program and do that at this point?

PAULA: Or is it customer call center managed?

PHIL HAWKINS: No, they can do that online.

PHIL HAWKINS: But I think, like most programs, we need to watch this very carefully, that these things aren’t unintentionally hidden or aren’t obvious or that there are clear paths to members feeling comfortable and choosing their consents carefully.

PHIL HAWKINS: So it’s certainly something that we can improve on.

PHIL HAWKINS: And I think that mirrors the changing expectations of consumers.

PAULA: For sure, for sure.

PAULA: But I love picking up on words, Phil.

PAULA: And I really like that you used the words mortal blow.

PAULA: And I have seen one program, which again, shall remain nameless at this point, but a hotel brand in Ireland, which had a massive database.

PAULA: And it was the end of the company when they did have a major violation of data.

PAULA: So yes, I don’t think it can ever be underestimated.

PAULA: Even if the financial penalties of GDP or don’t exist, for example, in Australia, it is the trust piece that we are lucky enough to have access to.

PAULA: So good to hear you take it so seriously.

PAULA: And I think you have one final lesson for us then in terms of your illustrious career.

PHIL HAWKINS: I do, and that’s about rewards.

PHIL HAWKINS: And I think, gosh, thinking back to the conference, I think my headline was, there’s something to be said for toasters.

PAULA: Interesting.

PHIL HAWKINS: And my main point here is, with a thousand reward choices in flybuys, what I love about our program is that we let our members choose how they wish to be rewarded.

PHIL HAWKINS: And the range of rewards goes right from transactional cash off, right through to emotional aspirational.

PHIL HAWKINS: And I’ve always had that sense that that’s a strength of the program, and that we basically create that marketplace, watch very carefully how members are rewarding themselves, but just work hard to make sure that’s always engaging.

PAULA: And can you share with us which particular categories, I think you mentioned velocity already earlier, as a program you can transfer your flybys points over to.

PAULA: What other would you say are the most redeemed rewards?

PHIL HAWKINS: Yes, so flybys dollars are very popular.

PHIL HAWKINS: And it’s funny Paula, but we get several reminders about the diversity of Australian households that are taking awards.

PHIL HAWKINS: Yes, at one end, you can really pamper yourself and high-end merchandise and things like that.

PHIL HAWKINS: But at Christmas time, it’s not unusual to pick up on social media, you know, struggling households saying thank you flybys.

PHIL HAWKINS: Because of the points I’ve earned, I can afford to have my family around for Christmas dinner, or I can afford to get presents for the kids.

PHIL HAWKINS: And so, you know, when you’ve got that diversity of membership, you know, they are such solid points that this is not just about a perk that’s adding to the rest of the perks in my life.

PHIL HAWKINS: We see people, you know, in Struggle Street.

PHIL HAWKINS: And the most outstanding example was, we saw on social media, someone say, I had run out of cash, but I remembered I had some fly-by’s dollars stored on my card.

PAULA: Wow.

PHIL HAWKINS: That doesn’t happen often, but that was a true story.

PHIL HAWKINS: So, you know, that’s the other side of the coin too.

PHIL HAWKINS: Thinking about why you have breads in reward offerings.

PAULA: Wow.

PAULA: Well, I mean, you said at the beginning of the show, Phil, that you have a love of loyalty.

PAULA: I hear it coming through right there.

PAULA: That’s a gorgeous story.

PAULA: Yeah.

PAULA: Talk about making a difference for people, hey?

PHIL HAWKINS: Yeah.

PAULA: Yeah.

PHIL HAWKINS: So, yeah, that was quite remarkable.

PAULA: Wonderful.

PAULA: Wonderful.

PAULA: So I love your five lessons.

PAULA: I definitely want everyone to really, you know, get a little bit of a tune into everything you’ve captured there for us.

PAULA: Just on a practical note, you did mention, you know, the active definition.

PAULA: How do you actually just manage activity levels?

PAULA: I know your points don’t expire, am I right?

PHIL HAWKINS: Your points expire if you don’t use your card for 12 months.

PHIL HAWKINS: And so, and basically, we think that that’s a reasonable program rule to have when you’re talking about such everyday items, such as going to the supermarket.

PHIL HAWKINS: And really, from that perspective, points expiry is not an issue for our members.

PHIL HAWKINS: So that’s interesting because in that unlikely event, not only do we expire your points, we close your membership.

PAULA: Okay.

PHIL HAWKINS: So-

PAULA: You’re kicked out.

PHIL HAWKINS: Yeah.

PHIL HAWKINS: Now, I think there’s actually…

PHIL HAWKINS: This might sound weird.

PHIL HAWKINS: There’s a benefit to that member because what essentially that mirrors is their right to be forgotten.

PHIL HAWKINS: So-

PAULA: Nice.

PHIL HAWKINS: Now, compared with other programs in Australia, where, yes, they have expiry rules, but the membership figures they quote are almost on a ever joined basis.

PHIL HAWKINS: And I’m certain that some of those programs, their membership numbers include folk who are dormant, if not actually deceased.

PAULA: Yes.

PHIL HAWKINS: So, by definition, I can talk about active members on a 12 month basis.

PAULA: Gotcha.

PHIL HAWKINS: Because if they’re not active in 12 months, they’re not in our program.

PAULA: Gotcha.

PAULA: Great.

PHIL HAWKINS: So, when I talk about 8.8 million members within 6.6 million households, you know, two thirds of Australian households, they are folk that are using the card at least once a year.

PHIL HAWKINS: Now, I’m sure you’re going to say, yeah, but you’d like them to use it more than once a year.

PHIL HAWKINS: And so, naturally, we look at engagement metrics across, you know, a range of factors.

PHIL HAWKINS: But, yeah, some of my loyalty colleagues in Australia know that when there’s a census of, oh, how big is your program versus your program versus your program, you end up with a lot of oranges and apples as far as comparison process, yeah.

PAULA: Wonderful, wonderful.

PAULA: So I guess the final couple of things, first of all, we talked off air just about coronavirus because it’s so topical at the moment and heartbreaking pretty much, I think, for everyone.

PAULA: But tell me, you did mention there has been some impact from coronavirus in Australia from your perspective, in particular, I think, with colds.

PAULA: So maybe just tell us a bit about what’s going on there.

PHIL HAWKINS: Yeah.

PHIL HAWKINS: So what we’ve seen in the last, it’s really only the last maybe seven to 10 days, is probably a lot of what you could call panic buying or at least people stocking up on what you call, I suppose, dry grocery items.

PHIL HAWKINS: And unfortunately, we’ve seen in the last probably four or five days, particularly a lot of panic buying of toilet paper.

PHIL HAWKINS: Wow.

PHIL HAWKINS: And, you know, it’s almost been a social experiment to observe in terms of, well, I don’t need toilet paper, but because everyone else is going a lot, I better buy a lot too.

PHIL HAWKINS: So just over the last four days, we have sent some broad brush communications to Flybuys members because unfortunately, Coles and its supermarket competitors in Australia have increasingly had to ration purchases.

PAULA: Okay.

PHIL HAWKINS: And so that’s, I suppose that’s one thing we can do on behalf of a significant partner in Coles’ supermarkets is quickly go out to Coles’ customers and basically give them an update.

PHIL HAWKINS: So that’s been, I suppose, Paula, the most visible sign over the last week or so in Australia.

PAULA: Wow.

PAULA: Yeah.

PAULA: And it is.

PAULA: It’s bizarre.

PAULA: I think, yeah, as human beings, actually, we’re not as sophisticated as we think we are.

PAULA: So I can imagine.

PAULA: Yeah.

PAULA: If I saw the neighbor coming home with a car full of toilet rolls, I might suddenly think I need to go do the same.

PAULA: And where I come from, when the only equivalent example would be, for example, if there’s snow and Ireland doesn’t cope with snow very well, they like to buy when it rains.

PAULA: But we don’t seem to have panic buying here.

PAULA: But in Ireland, if there’s anything like that, it tends to be bread bizarrely.

PAULA: We seem to be most of us are having a load of bread in the house.

PAULA: So anyway, yeah, it just proves that loyalty has a role to play, as you said, in terms of communications at more difficult times, which I don’t think we tend to.

PAULA: But yes, you do have permission and trust to communicate to people about whatever you feel is appropriate.

PAULA: So yeah, I know from my side, Phil, I’ve learned absolutely loads.

PAULA: Is there anything else that you wanted to talk about on the show today before we wrap up?

PHIL HAWKINS: The interesting thing for me is a reflection of loyalty trends.

PHIL HAWKINS: We’ve spoken a lot about what’s happened the last 25 years and how we think things are going to move in the future.

PHIL HAWKINS: We can see a place for flybys to transform from a loyalty program, which will always be part of our business into more of a sense of a data and platform company.

PHIL HAWKINS: What that means and clearly from a channel perspective, the presence we can have from a digital audience perspective.

PHIL HAWKINS: The other thing that I think that will be a trend is what I said earlier about the points versus the convenience.

PHIL HAWKINS: I think some Australian households have a fear around big data, but where they can clearly see that this makes their lives easier and simpler, you know, that can be a focus.

PHIL HAWKINS: Well, keeping points always in the background, of course.

PAULA: Yeah, yeah.

PAULA: No, well, we’ve said points is not dead and it’s not gonna die.

PAULA: But I think, you know, Phil, I do write a lot about loyalty in the convenience retail industry.

PAULA: And I know I have regularly commented on programs that are delivering operational benefits to the members.

PAULA: So I fundamentally believe, as you said, once you have that platform in place, let’s just make people’s lives easier.

PAULA: So that’s been done by a number of brands around the world.

PAULA: And it certainly sounds like Flybuys is doing an amazing job of the same.

PHIL HAWKINS: Great.

PAULA: Yeah, brilliant.

PAULA: So listen, first of all, before we go, just wanted to also compliment you, working at home today with Flybuys behind you, as a big sign, just for listeners, I found that very amusing that Phil is literally, he’s waving it at me now.

PAULA: We’ve got Flybuys front and center on my screen.

PAULA: So this is a man who has definitely drunk the Kool-Aid.

PAULA: And as you can tell, he lives and breeds loyalty.

PAULA: I really enjoyed our conversation, Phil.

PAULA: Is there anything else you want to say before we wrap up?

PHIL HAWKINS: No, look, thank you for the discussion.

PHIL HAWKINS: It’s been stimulating and congratulations on your podcast.

PHIL HAWKINS: I think it’s a great thing that you’re doing.

PHIL HAWKINS: And I look forward to hearing more of your guests in the future.

PAULA: Wonderful.

PAULA: Thanks a million, Phil, from Let’s Talk Loyalty.

PAULA: This show is sponsored by Wise Marketeer Group, operating the Wise Marketeer and Loyalty Academy.

PAULA: For nearly 25 years, the Wise Marketer is the industry’s longest serving publication and source for news, information and insights, which now includes its own branded industry research, insights and advice.

PAULA: For global coverage of customer engagement and loyalty, check out thewisemarketer.com and become a Wise Marketer member or subscriber.

PAULA: The Loyalty Academy sets a global industry standard for loyalty education, with its Certified Loyalty Marketing Professional or CLMP designation, which has created a community of more than 1200 marketing executives and professionals across more than 50 countries.

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