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Hello and welcome to my summary show of an interview with the leading entertainment company in the UK – Sky TV.
This incredible company operates across five European countries entertaining 22 and a half million customers, and is earning over 12 billion in revenue, so I knew that their loyalty strategy would be as fascinating to all of you guys listening as it would be for me. And Rob Chandler was a super guest who shared some incredible insights.
As usual, I started by asking Rob his favorite loyalty statistic and the one he shared has perhaps become my favorite one because it keeps just coming through more strongly with every piece of loyalty research that I read.
In particular, I’m thinking of this year’s bond brand loyalty report, which also emphasized this key consumer insight, so it is gaining even more momentum in north America in 2021.
So here it is, 73% of customers think that the purpose of a loyalty program is for the brand to show its loyalty to them. But 66% of marketers think exactly the opposite. So it’s no wonder we have so much confusion in the industry around what success looks like, what an incredible perspective, this simple statistic and mindset can bring to any organization. Rob then went on to share the business context for the introduction of the sky VIP loyalty program, which was launched in 2017, following a period of transition for the company, which was of course by then a very mature in an increasingly competitive Marcus sky realized that customers were starting to defect over time and becoming less loyal, even though sky does have some of the world’s most exclusive content, for example, the premier league football rights. So there was clearly no concern about the quality of the product or even its pricing. Instead, there were a number of challenges on one of those top concerns was that customers simply didn’t feel valued by the business. Like many companies, especially utilities, sky had been focused on acquiring new customers all of the time with the results that the best deals and offers were being given to them rather than to customers who had already been loyal for a number of years. Customers then of course learned how to gain the system by threatening to leave. They too could get the same great deals. Customer said they were tired of this approach and sky was being called out on us. So for the first time, the business took the brave decision that all current customers could get the same deals as new ones. It was a huge decision for them and truly marked a step change in their approach to managing and taking care of customers. Sky VIP was then conceived as the icing on the cake away for sky to demonstrate its loyalty to customers with a vision to help them become more emotionally connected to the branch. So then of course they would stay longer. It was a huge challenge. One that’s hard to measure, but clearly one that customers would of course love. So sky VIP was launched in 2017 and the proposition is laser-focused on tenure or quite simply how long a customer has been with sky through this process. It created four tiers, all based entirely on this information, the benefits of the program starch, the moment you sign up with a free gift of a movie, then supplemented by the opportunity for millions of customers to enjoy unique experiences that only sky can offer quite simply. They wanted to bring customers closer to the things they love before the pandemic. The VIP program was rewarding over a million customers a year, including unique service benefits for the top tiers. For example, they enjoyed the fastest service something. I think a lot of loyalty programs completely miss out on as an opportunity. It is an entirely experience-based program with no points or currency in its structure and Rob and his team created what they call a loyalty equation to ensure that they were truly creating something that customers would value. Rob then shared a model he learned from a leading loyalty expert by the name of Gabe Zuckerman. Who’s one of the world’s leading experts in the game of vacation of loyalty games model is built on noticing the various ways to create loyalty using an acronym SAPs S a P S, which stands for status recognition, access to unique benefits, power to influence the brand. And finally stuff Rob had learned from game’s work that the status access and power drivers are harder to do, but they do cause the business a lot less rewarding customers with stuff requires the least effort, but is actually much more expensive. We then talked about KPIs for sky. The VIP program is designed to drive down customer churn as a result of the increased emotional connection they would have with the brand. They call this measure its or intention to stay similar to a net promoter score. Of course it is incredibly difficult to measure and prove, but the entire leadership team were behind the strategy and we’re giving Rob and his team the time to build it and prove it. Finally, we talked about the challenges of running an experience led program through COVID-19 the entire team had to pivot of course, to virtual experiences. And this in fact has now become a really useful format to ensure that sky customers in every corner of the country could be rewarded equally. Not just those in the main urban areas as they had been before with the country and lockdown sky created free and exciting content on health and education for kids, and then built an entirely new portfolio of online experiences with leading entertainers, who of course were locked down this time last year, like everyone else. So in this case, clearly adversity was the mother of invention. And I really loved her Rob and his team found the silver lining in an otherwise very difficult time. So in summary, I learned that sky as a company operates with a real commitment to excellence, having listened to it, customers, it changed the rules from growth at all costs to a model based on integrity and being loyal to its customers. And that for me was a powerful example of just what’s possible when a company’s leadership truly wants to take care of its customers. I really hope you’ll find the time to listen to this entire interview with Rob Chander, all about the sky VIP program it’s episode 39, Andrew was released Speaker 0 (9m 12s): In June, 2020. Thanks again for listening to let’s talk loyalty. I’m your host, Paula Thomas. And I look forward to talking with you again on Thursday. Speaker 1 (9m 22s): <inaudible> this show Speaker 0 (9m 27s): Is sponsored by the wise market here. The world’s most popular source of loyalty marketing news insights and research. The Ys marketeer also offers loyalty marketing training through its loyalty academy, which has already certified over 170 executives in 20 countries as certified loyalty and marketing professionals. For more information, check out the wise market tier.com and loyalty academy.org. Thanks so much for listening to this episode of let’s talk loyalty. 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