Welcome to “Let’s Talk Loyalty”, an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas. And if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world. This episode is brought to you by Epsilon and their award-winning people. Cloud loyalty solution. Epsilon has actually just released a guide on the topic of contactless loyalty, which explores how marketeers can create human-like connections with their customers in an increasingly contactless world. I would highly recommend you have a look, so to download the guide, visit emea.epsilon.com forward slash let’s talk loyalty, and you’ll find the guide in the resources section.
So welcome to episode 84 of let’s talk loyalty. And today I am chatting to Kelly Best chief marketing officer at Virgin reg. Now, many of you may be familiar with Virgin Atlantic’s flying club, which has been in operation in many countries around the world for many years. However, we’ve also been hearing rumors of a fantastic new group wide loyalty program, which has in fact, just launched under the brand name, Virgin red. It’s predominantly a UK based program at the moment. And today we’re chatting on their global ambition and their focus on engagement and delighting customers.
So Kelly, welcome to let’s talk loyalty. Thanks for having me. Great. Great. And I have to say, first of all, for listeners, I’m very impressed to see in fact that you’re wearing reds by coincidence. So am I,
Are you sure it in coincidence?
Wonderful. We’re totally on brand Kelly and dying to talk all about the Virgin red program today. So what are the newest programs? I’m sure it is the newest program in the UK. So I’m a really, really big news story. So delighted to go through all of the detail. And before we get into the program itself, Kelly, as you know, we always start at, let’s talk loyalty talking about our favorite statistics. So first of all, tell me, what is your favorite loyalty statistic?
Right. So I think when we were building the program, we really went across a large amount of consumers to find out what were their pain points from previous loyalty programs. And one of the, of stats for us was 83% of our customers that we’ve researched didn’t want their points to ever expire. Obviously people worked really hard to accumulate them and then after three years for them to disappear is pretty heart-wrenching we did is make sure that we did just, that points never expire with Virgin reds. So you can, you can save to your heart’s content, fear of them ever disappearing. And we actually implemented that back in September time, the flying club members and anybody that has read, see known as flying club miles, but now we brought it to Virgin points that, that went down, went down really well.
But of course you have a bit of a, an internal debate going on there with the finance, making sure that the economic
Absolutely. Well, that’s the obvious question, Kelly. So as you know, so many of our listeners are very senior loyalty directors and again like you and really trying to put the customer first and center and just to have a statistic like that of 83%. And I mean, that’s that really as a killer statistic in terms of people just getting upset about points expiring, I really didn’t realize it was quite as powerful as that.
Yeah, definitely. And it makes sense, right? Because, you know, if you’re, if you’re an infrequent collector, then it does take a while to get to your dream destination at the end of the day. And so it is pretty soul destroying when you put all that hard work in for it to be taken away and it isn’t at the end of the day, it isn’t fair. So, you know, one of the things that we’re trying to do is be fair and transparent with our members and the upside that we’re going to be getting from an engagement perspective. We really do believe offset the downside from a financial perspective. You know, we all know behind closed doors, a lot of loyalty programs are built on breakage. And actually one of the things that we want to do is disrupt the model and make sure that we’re going through that the right, the right principles and policies in place for, for loyalty for the 20, you know, 20, 21.
Wow. And I’m glad you used the word disrupt, actually Kelly, because as I was thinking about the Virgin group and obviously Virgin Atlantic is probably the first brand. Most of us know, I think it really has a disruption at its core. And I think that’s probably why it’s such a well loved brand. And I think the UK just loves, you know, that kind of as sense of being slightly cheeky and put, always doing something that really is very customer focused and that internal debate, I can imagine it went on quite a long time. Were you involved? I think you’re about a year and a half yourself with Virgin red Kelly, am I right?
Yeah, that’s right. Yeah. About a year and a half. It did. But when you put the fairness angle and the stat, you know, the state is so powerful in its own way. It’s hard to walk away from, you know, 83% of consumers wanting this to be a truth. So, you know, that data point on your side, it’s, it’s quite hard to not win the argument. So, you know, we do need to put members first because if you don’t, it does, it does bite you somewhere along the line. They say, we know we really focused on, on making sure that we’re driving engagement. And so people to spend their points is, is really where we want to be, because that means that they’re engaged in the program and they’re loving it and they’re getting value. And the more you get, the more that they’re gonna want to, you know, the more they’re going to want to get themselves involved with the Virgin brands as a whole.
So it can only be a good thing in the long run
For sure. And we have a lot of listeners Kelly around the world and in places like U S and Australia. So, and obviously we’re, we’re truly global, as I know the Virgin group is as well. And, but give us a sense. I know Virgin reds am is really UK focused at the moment, but there is quite a lot of different brands involved. So give us a sense of the various different places now that you can earn Virgin points with the new program.
Yeah, definitely. So we, so we are very UK centric at this very moment in time, but absolutely that’s not where we want to end just to give a bit of context before I get into that. You know, the Virgin group is very diverse, as we all know, and, and it’s very, very global 45 different types of company that are holding the Virgin brands stay across the globe and 30 million global consumers that are participating with a Virgin company. You know, big hotspots for us are obviously the UK, but the us, the brand very well loved out in the U S and Australia. So we are going to be rolling out, you know, inevitably in Australia, but actually very soon in the U S you know, within the next year or two, we will be in, we will be in the States.
And that is, that is really, really exciting. But for now, yeah, our focus is very much on the UK and enabling members to earn and spend with more Virgin companies, but also selected the parties as well. And just to give them context, you know, we’ve got, we’ve got rewards in the program that start from as little as 200 points going to do is break down that, that sometimes that big barriers there, that’s there for engagement. You know, you have to collect, you know, thousands and thousands of points before you can redeem on a flight for instance, that doesn’t float everybody’s boat. So creating a program with a lot of breadth is really important to us because we have lots of needs wants, and nubs across the Virgin group.
You know that about banking. You’re talking about spaceships, you’re talking about, you’re talking about media and wines. You know, it’s so varied and we need to pull that as a program we’re catering for all of those different types of customers that exists across the brands. So that’s really exciting and means that we get to have a lot of fun with the types of rewards that we get to play with. So really now, as of today, we just focused on the Virgin Atlantic customers who we’ve just launched with as of last week, they’ve got 21 new new ways to earn a spend the, the currency. So making, making the proposition more relevant for today.
So as we all know, we cannot enjoy the skies as we did once before. We’ve got a lot of relevant rewards in there that COVID friendly, in-home experiences, lots of, lots of wine, and lots of we’ve got a great partnership with octopus energy around switching. We’ll do to, you know, they’re the greenest energy provider out there and giving, you know, just giving lots of practical ways to get value out of your points, taking away those look forward to moments as well. Cause people want to plan for better times. I’m sure, like we’re all looking at the next holiday we can book. So it’s a mix in the proposition as it stands today to cater for now, but to cater for the future as well.
Absolutely. Yeah. And I think the, the flying club has been around for, or had been around for quite a long time. So I’m sure transitioning that over to the Virgin red brand brings a certain amount of complexity, but I can hear obviously that you’re just adding things in rather than taking things away, which obviously is always a good thing. And my favorite one is what you kind of alluded to there, Kelly, which is making the reward so much more accessible. And I have certainly learned this in my career in loyalty, and I’ve seen it with the other big global brands like Starbucks, for example, where you don’t have to keep saving and saving and you don’t need 20 visits or whatever to, to kind of get something.
And my favorite one is not a brand I was familiar with, but certainly a product. I love a food product. We all have our sausage rolls. So I think, I think that’s your entry level rewards are 200 Virgin points. Am I right?
You’re absolutely right. So you’ve got a partner with them with grapes and it’s, yeah, you can get a sausage roll or a vegan sausage roll of you. So rich from 200 points. Greg is actually a national treasure. People often think Virgin Virgin and Greg’s partnering together. But actually they, when, when we research people’s customers across all of the Virgin group, Greg stands out as it stands out to them and get value from the currency in whatever way, suits them best. Now that is very much in the eye of the beholder, as far as I’m concerned, because we all know that flights are going to be the best value, sausage roll. If you would work out the, you know, the price point and all of that stuff, wouldn’t, wouldn’t represent, you know, from a monetary value the best, but for a bunch of consumers who don’t have large amount of points and they want to get instant gratification, it’s a great reward.
So it’s about having the breadth of value that appeals to different types of people just on the flying club point. I think it’s really important to know that, you know, the way that I, I think about it is that there’s one currency and two shops that you can spend it in. So the fly still has all of the rewards that have have existed for a long time within that. And Virgin red is additive to the flying club members. Like likewise flying club rewards are additive to Virgin red members, and we will continue to simplify the journeys and make it more seamless to be interacting with both. But yeah, they are two to two separate programs with one common currency that can be enjoyed around it in more places these days.
Yeah. And I think it’s a good insight Kelly, because we all know that travel is the ultimate rewards. I mean, nobody’s going to am to dispute that, but as you said, sometimes you’re either not in a position like, unfortunately at the moment with the pandemic or for other kind of family or personal reasons, you might not be able to travel at a particular point in time. Well, I love the Virgin wines. I think that’s always a beautiful concept and I’m sure that’s thriving in the middle of the pandemic at the moment. So I’m hoping as Virgin wines comes to where I live at some point in the future, in fact, I was looking cause I was like, which brands do we have? We do have Virgin mobile here, Kelly. And so that says, it seems to do extremely well.
So hopefully the, the, the points we’ll, we’ll extend quite soon, we also have Virgin Hyperloop, which may be further down the journey, but just for listeners, actually, I just find it fascinating. The Hyperloop as, as a Virgin product is it is a train that’s going to operate there’s over a thousand kilometers an hour at some point. I’m not sure when it’s going to be coming out. But yeah, at some point you may have to build in a reward for a Virgin Hyperloop journey. Kelly, I think,
And that’s very much in my thinking, you know, when you’re getting, when you get to play with things like Hyperloop and all, but in galactic, you know, and so we get access to all of these amazing innovative companies that can bring something completely different that no other loyalty can bring to the party. So we’re going to do with the gifts that we have to play with in the long run. And certainly when orbit had its very successful test play a few weeks ago, we carried a lot of the merchandise within Virgin reds and within about a week, the whole, the whole shop was sold out. If you like. So it doesn’t need to necessarily be that you go and experience that physical experience.
It can be there to enjoy the things that sit around it as well.
Oh my goodness. But that’s also a really good insight, Kelly as well, because I have heritage of some airlines for example, and that may be, do end up and using their merchandise as rewards and for loyalty club members. And that’s, that’s extraordinary. I didn’t know you had done that yourselves. Yeah.
We’ve actually got quite a lot of physical goods in the product product at the moment. So EMI, so used to be Virgin EMI, but EMR, you can go and buy vinyl today. You can buy, we’ve just got some Virgin voyages merchandise coming on the app, but it allows us to be quite topical. So when you got galactic in there with supporting from galactic jackets or bags or caps or whatever, and it just, you know, while we’re working through how we, how we actually get people to space, you know, bringing, bringing some synergies together a bit quicker.
Okay, brilliant. Brilliant. And I wanted to ask you Kelly as well, just around how long it’s really taken. And I suppose the journey from realizing that that Virgin really wanted to recognize all of the group company customers. And you’ve mentioned an extraordinary statistic of 35 million across all of the brands globally. So what would you say in terms of that overall journey? Has it been, you know, a longer dare I say, a journey on a more complex product project, and would you say that’s connected to the pandemic or, or has it just been easier than you expected? I’d just love to get a sense of, of, of what it’s been like, because to me it’s like, I don’t know where I would start.
It was really easy, but I think nothing up a lot of business, no, that’s not true. I think, you know, it’s been an idea in the minds of our chairman and certainly Richard for many, many years. And in 10 50 last year we had a funny 50th birthday. It wasn’t the birthday year that we were imagining, but still some very cool things happened in that year for the brand. And yeah, we’ve wanted to have a loyalty program for, for a very long time. And actually Virgin red probably got up and running around 2018. When we started working through the plans of how we take over the currency and the tight scoping out the type of program that we want to be and all that good stuff.
And, you know, we have the advantage of starting from scratch. So brand new systems, AWS, you know, working with the leading edge tech providers, we’ve had the beauty of building on brand new technology. So that’s been really cool. And we were actually due to launch in March, 2020, anyone else known a smaller, much more lighter MBP than we then we actually went to market with. But so in some ways Covid helped us from a, from a pro active because it gave us more time to pour into the proposition. We not the finished article right now, by any stretch of imagination, we’ve still, we still view ourselves as an MVP of what we will become.
And so, yeah, so the journey really this year was we were due to launch the week after we went international lockdown. Wow. So that was interesting. Yeah. We went in a period of knowing that while ever, you know, people were following with all the businesses that we were working with them. We really looked hard at that question. Should we be ourselves on ice for awhile while you just weather the storm? And thank God we didn’t because it would be still on ice. You’re very hard to Thor at this point. So Boeing and we kept investing in tech and we kept investing in development and we kept pushing the proposition. And we then re we went into a beta in October.
So we did have, we’d have a legacy engagement app called Virgin red volts, which is really different to what we’ve got today, a highly engaged group of people, but very, it was very engagement focused. It was competitions and quizzes and stuff like that. But we had a great audience that we could launch with and learn. So we went, we went into beta for, from the end of October until last week, pretty much till we launched the flight of customers. So we got a great rich insights, understood the pain points, really work to listen, learn and develop. And so we did that for a period of time. And then we launched obviously last, it was on the ninth to February issue with the flying club base.
And there’s, there’s just short of a million in the flying club. So it’s, it’s not a small audience by any stretch. I think, you know, for, for us, the things, the positives out of this is, you know, our continual testing learn and we’re just iterating all the time. Like I said, we’re not classical. It’s very much MVP at the moment. We have really grand plans for what we can create and I get great news is, you know, there’s going to be a hell of a lot more partners on board, even in the next couple of months, completing the ecosystem. Okay. They media active and we went live with Virgin money last week for a personal current account switching, which you can earn 15,000 points.
So in the next couple of months, we’ll have the completeness of the Virgin companies and then we’ll be bringing more third parties on to really compliment the offering and make sure that members can value across all of the reward types. And I’m really thinking out the everyday rewards for us is important because again, you know, we’ve, we’ve got the travel in spades. We can do that very easily, but making sure that people are getting value from all types of points holding.
Absolutely. Yeah, you’re right. I mean, travel, you know, no question, you know, Virgin is a world leader and, and that’s extraordinary. What I loved that I saw you have added in as well to the proposition. Kelly is essentially all of the affiliates and partnerships. So shopping online and urging earning Virgin points for those. So I think that’s one actually again, very kind of pandemic friendly. So I guess is, is that one working well for you at this stage? You know, again kind of two, three weeks in.
Yeah. So the, the everyday earn is super important and it’s a behavioral shift that we really want to get our members engaged in early doors. So try it to try and do that. We’ve launched an incentive as well. So you get 500 anybody who joins a bedroom rights gets 500 points on their first earn. Okay. So we want to ingrain that behavior because then unlocks your ability to go anywhere, right. And there is shift some of your everyday practices to shop via the Virgin red portal. You’re earning money for the stuff that you’re doing anyway, by switching energy shopping at John Lewis.
Yeah. I saw the big all of the big retailers. You know, we’re only at the start of what we want to do in that space. We’ve got about 40 merchants at the moment. We can scale that to 1500, but it’s making sure that we’re picking the ones that are really valuable for our members and it’s going to be a massive focus, but we’ve also got other categories, which is probably worth talking about. So we’ve, we’ve touched on the everyday treats, which is the attainable rewards from 200. And we developed that based on insight as well, around the Virgin Atlantic customers, you know, a large, quite a large proportion of them having less than 10,000 points. So making sure that they’re engaged in the currency early doors is, is really important. And then we’ve got travel, which we’ve all talked about and know, and extraordinary experiences, which is more around, you know, it is how do we, how do we bring the Virgin as to the product it would be working with?
We’ve got Virgin experience days. We’ve got, we’ve got London theater direct. So they’re all the cool ones, but then how do we go above and beyond? And so if you go on a voyage, for instance, how do we make you feel special for being a member? And we can do fun stuff with competitions, with galactic and the merchandise and all that good stuff I’ve talked about already and then points for good is another area that we’re really passionate about. So it’s making sure that we’re giving members lots of ways, easy ways to give back. And that’s of course, the charity community and sustainability angles. So we’ve got charity partnerships at the moment ranging from guide dogs for the blind and Edinburgh food bank and quite a few others, which were actually, they were crowdsourced.
So we did, Oh yeah, definitely idea. That’s brilliant. Or that with our members, because it goes, which is probably underrepresented anywhere actually is, you know, if I’ve got, if my son’s playing for his local football team and they’re, you know, they need new kit or, or whatever it is, like, how can we facilitate giving back to more things? And I think that that message really landed for us when, back in lockdown, one where the community spirit with never been more alive when you’re at the end of your driveway, banging pots and pans, then HS with your neighbors. It was just such a lovely moment that we wanted a box. So we’re, we, we’ve got, we’ve got a few community-based, but definitely more what to do in that space.
We’ve got a very cool partnership with carbon engineering. They are they’re Canadian based company then leading edge pioneers and carbon removal. So that’s like the future of settings settings. Great. It’s there are other new modern angles and then members can donate points to, to enable that business to scale because it’s only when it scales can really start, you know, doing what it needs to do. So it’s very, very cool business. And then another area, which, again, we’re, we’re loving is our partnerships with Virgin startups.
So start Virgin startups is, is, is one of the businesses that gives loans to small, very small businesses to get up. Okay. Yeah. And we’ve got a couple in there at the moment. So fragrance being one of the very popular months, this is a one man band who is producing gorgeous scented candles at home pretty much. And he is doing great on the app actually is really doing really well. So we’ve got loads more of those. So we’ve got a whole, you know, 15, 20 small businesses that we’re supporting within our channels.
Wonderful. So essentially anyone who has Virgin red points can convert them into contributions towards the startup, the incubator at businesses. Is that right?
That’s that’s right for carbon removal, but actually for the startups, you just buy products, their products, and then you, you can buy directly.
Wonderful. Okay. So it’s a marketing service to get them in front of the, the Virgin customer base. Yeah. That’s beautiful. Beautiful. Wow. And I liked the distinction you made Kelly, because I had seen the carbon removal concept again on your website. And I hadn’t really made the distinction between all set and removal. So you’re right. One is kind of, you know, I suppose preventative on one is starting to fix the problem and we all know it’s a problem. That’s going to take a lot of fixing bottom, you know, to go out and find those solutions. And again, help Virgin customers support those kinds of businesses to, to really make the difference that they can potentially make. That’s extraordinary.
Yeah, definitely. And doing it in a really easy way because you don’t want to have faff in these situations. So you would totally one click you’ve made the contribution.
Lovely, lovely, lovely. And just when you were talking about experiences, I do remember, and Disney plus was part of the proposition maybe only in the early stages. Is that still something you’re working with or, or is that still part of your proposition
Disney plus you can earn points when you subscribe to Disney plus through merchant funded office. Okay. That’s through our shopping Porsche, but as a direct partnership, we don’t have anything like that just yet not to say that we wouldn’t love a direct partnership with Disney. Yeah. I definitely watch my fair share of stuff from Disney plus having a three and a four year old, so,
Oh my goodness. Okay. Wow. Okay. So you’re probably up to speed on all the cartoons Kelly that I certainly am not.
I really am.
How big is the team Kelly then in terms of urgent red at this point, you know, because as you said, it’s already been a couple of years in development and a huge amount more to go with your, your global ambition. So, so where are you at at that stage at the moment?
Yep. So we, we started from, from zero probably late. I think it was late 2018 and we’re now a permanent fixture of about 110. Wow. Yeah. With some, with some contracting resource and that, you know, the two large areas are the CMA space. So in my area where I look after business development, partnerships, research, insight, customer support, and marketing and brand and acquisition, and then the CTA space where that’s, where a lot of the product owners set and development and you guys order.
So they’re the big functions and then we’re supported by a brilliant finance team as well, but very, very, very close workings with VML. So the main hub for Virgin, of course,
Of course. Yeah. And the part of your journey that I’m familiar with Kelly in terms of, I know it was invitation only late 2020. So I think that was early November, as you said, you started to bring people across from the volts product and, and now into, into flying clubs. So, so what’s the next phase, I guess, for Virgin red.
Yeah, sure. So just, well, domination really that’s cracking the UK in the first half of the year. So fighting with the flying club guys, we wanted to get value to them as soon as possible, given the current situation with, with them rolling out to the rest of the Virgin companies in April, we’ve got a brilliant campaign launching on TV and digital a bit later on, and then we’re going to just continue building, developing, enhancing the product. And then we’re going to be really focusing our efforts on the us and getting to market out there as soon as we possibly can.
Wow.
Oh my goodness, Kelly, it’s an extraordinary opportunity. I’m sure it keeps you awake some nights, very late trying to keyboard the whole show on the road. But I love the proposition. I have to say. I think particularly the integrity of what you said at the beginning, which is this idea of really, you know, having the maximum engagement, maximum usage, all of the Virgin points and you know, rather than trying to build it as a P and L you know, like really to, to build it as a way for people to love the brand. So I do think that deserves extraordinary recognition and to you the team, and, and obviously that the man at the top, in fact, it was reading one of the quotes I think, was on your homepage, Kelly, whereas where Richard Branson literally is closer to saying that imagination is one of our greatest gifts.
And I can see that coming through in everything that you’re doing with Virgin red. So I think it’s a beautiful program and I don’t have any more questions from my side. Kelly, is there anything else you wanted to touch on before we wrap up?
No, I don’t think so. No, that was great. But yeah, I look forward to talking more when we’ve got more to share.
Absolutely. Yeah. And I said to tell the guests before Kelly, I really think we’ll need to kind of be in touch like at least once a year to got to go my goodness, where has Virgin red gone to am in the last months? Because I can see from all the stuff you’re doing, it is built for the future. And as you said, with kind of innovation at the core, there’s bound to be some lots of new things coming down the track. So we’ll certainly be watching very closely from our side. So with that, I will say, thank you so much, Kelly, best from everyone at let’s talk loyalty. Well done and great to talk to you. Thank you. Take care.
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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. For more information, check out thewisemarketeer.com and loyaltyacademy.org. Paula Thomas (43:44): Thanks so much for listening to this episode of Let’s Talk Loyalty. 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. Or, just head to your favorite podcast platform, find Let’s Talk Loyalty, and subscribe. Of course, I’d love your feedback and reviews, and thanks again for supporting the show.
