Brand Before Business: How Tekla Turns Experience into Loyalty (#721)

Sarah: The ALA is the peak body representing loyalty and customer engagement professionals in Australia.

Sarah: So it provides research, education, insights, networking opportunities to help brands deliver better loyalty experiences and to match brands with vendors in a safe and friendly environment.

Sarah: The tools that we have now been given by AI to personalize our rewards, our communications, everything around what we do is just phenomenal.

Sarah: As I said before, having meaningful rewards to retain customers is just incredibly important in Australia at the moment, as it is, I’m sure, all over the world.

Sarah: I was really surprised at one of the things that came out was how much more interested the younger consumer is about prioritizing sustainability because I’m always really disappointed at how low this comes out.

Sarah: And so there’s been a massive shift.

Paula: Hello and welcome to Let’s Talk Loyalty and Loyalty TV, a show for loyalty marketing professionals.

Paula: I’m Paula Thomas, the founder and CEO of Let’s Talk Loyalty and Loyalty TV, where we feature insightful conversations with loyalty professionals from the world’s leading brands.

Paula: Today’s episode is hosted by Amanda Cromhout, the founder of Truth and International Loyalty Consultancy.

Paula: She’s also the author of the book Blind Loyalty 101 Loyalty Concepts Radically Simplified.

Paula: Enjoy.

Amanda: Hi, I’m Amanda Cromhout, the CEO of Truth and the author of Blind Loyalty.

Amanda: Today, I have the pleasure of interviewing Sarah Richardson.

Amanda: She is the CEO of the Australian Loyalty Association.

Amanda: Today, she talks through the launch of the third edition of the ALA Australian Loyalty Association Loyalty Annual Insights Report.

Amanda: Her top highlights cover the AI revolution that they’re experiencing in Australia, the cost of living crisis and how loyalty programs are helping combat that, and obviously the need for trust and how all of us have to focus on the ongoing challenge of fraud.

Amanda: I hope you enjoy this interview with Sarah and access to the Australian Loyalty Association annual Insights Report.

Amanda: So we’re so delighted to have Sarah Richardson.

Amanda: She is the CEO of the Australian Loyalty Association.

Amanda: She actually needs no introduction to Loyalty TV and Let’s Talk Loyalty because this isn’t her first time with us.

Amanda: It’s her second or third time.

Amanda: The two of us are trying to work out exactly how many times.

Amanda: So Sarah, welcome to Let’s Talk Loyalty and Loyalty TV.

Sarah: Thank you, Amanda.

Amanda: It’s great to have you.

Amanda: You’re no stranger to anyone in the Loyalty industry, even though you’re at one part of the world and I’m another part of the world.

Amanda: Everyone knows about the Australian market.

Amanda: It’s a prominent market and we’re going to hear about that very shortly.

Amanda: But before we do, I just want to kick off with the first question on Loyalty TV.

Amanda: What’s your favorite book?

Amanda: It might be a business book, it might not.

Amanda: Tell us.

Sarah: Amanda, that’s quite a controversial question at the moment because I’ve been reading a fabulous book that you may or may not have heard of called Thick Face Black Heart.

Sarah: It’s by Chin Ning Chu.

Sarah: Have you heard of it, Amanda?

Amanda: No, but I sound like I need to.

Amanda: It sounds amazing.

Amanda: Tell us more.

Sarah: Well, I really wish they would teach us this stuff at school, but of course, as you know, they don’t.

Sarah: It shows us how to build a successful career by combining mental toughness, which is what she calls thick face, and decisive, unhesitating action that she calls black heart.

Sarah: And I think a lot of people in business operate and utilize these skills, but they might not know about how they’re doing that or why they’re doing that.

Sarah: So just to give a little bit of context, so thick face involves creating this strong sense of self-worth, disregarding self-doubt and other people’s opinions.

Sarah: That doesn’t mean that we can’t take other people’s opinions into account, but often other people are trying to destabilize us, and refusing to be limited by external or internal constraints.

Sarah: And so black heart represents the ability to act, to achieve your objectives without being paralyzed by emotional considerations.

Sarah: So that’s kind of a snapshot of what it’s about.

Amanda: It sounds great.

Amanda: I think one of the reasons Paula introduced this question into the show is for exactly this reason.

Amanda: I’m listening to that guy.

Amanda: I want to read that book, so I’m sure lots of other people are.

Amanda: Thank you.

Amanda: Thank you for sharing.

Amanda: That’s super.

Amanda: So as I say, you’re no stranger to the loyalty industry, but tell us a little bit.

Amanda: You and I met at a loyalty conference in Italy many years ago, and we became friends then, industry friends and friends.

Amanda: But tell us more about what brings you to be the CEO of the Australian Loyalty Association.

Sarah: Well, I’ve built a career in loyalty and customer engagement over many years, and it was quite a lot of years ago that we did meet first in Milan.

Sarah: But the thing that I’m most passionate about is developing successful loyalty programs, driving member engagement, leading industry initiatives.

Sarah: There is just so much that we can do in loyalty that’s beyond just marketing to our customers, getting them to purchase more and to acquire new customers, only to have them fall out of the bottom of our funnels.

Sarah: So I’ve always been just incredibly passionate about loyalty.

Amanda: Yeah, and you’ve been with some incredible brands, and it’s just great to see you bring it all together in an association environment.

Amanda: So I think it leads beautifully into my next question for you.

Amanda: Tell us about the Australian Loyalty Association.

Sarah: So the ALA is the peak body representing loyalty and customer engagement professionals in Australia.

Sarah: So it provides research, education, insights, networking opportunities to help brands deliver better loyalty experiences and to match brands with vendors in a safe and friendly environment.

Amanda: But you do so much more than that.

Amanda: Like tell us a bit around, like I’ve been honored to come to one of your events and it really was a world class event.

Amanda: Like I’m very boldly and proudly talk about the South Africa industry.

Amanda: And I think from my own personal experience, I saw some great parallels between the two industries, like a big, big advanced markets with great programs, great advanced loyalty thinking.

Amanda: But actually when you’re there, it feels like a smaller community or a big community, but it’s definitely a community, whereas I don’t feel that when I go to other markets.

Amanda: I’ve been to other markets and it feels like everybody’s just kind of there and competing.

Amanda: And whereas I felt a real sense of community, I think from my viewpoint, looking in from the outside, you’ve got your conference, you run training courses, you do community, you know, do other events.

Amanda: So I think, I mean, tell us a little bit more about what the ALA does for the industry.

Sarah: Yeah.

Sarah: And thanks for your kind words, Amanda.

Sarah: We are really proud of what we built here.

Sarah: And I always say to my staff, the one thing that we can hang our hats on in terms of our success is looking around the room and just seeing nobody on their phones, nobody feeling lonely.

Sarah: And if you do see anybody like that, go over and introduce them to people.

Sarah: And I was so delighted to come to South Africa and so privileged to be one of your speakers at your conference, Amanda.

Sarah: And I felt the same vibe with what’s happening in South Africa.

Sarah: And some of the programs that you have running there are just world class.

Sarah: I was so impressed with the speakers that you had on stage as well.

Sarah: So in terms of the ALA, and we, for our sins, are expanding into Southeast Asia and New Zealand.

Sarah: So it is expanded.

Sarah: We’re now calling it Loyalty Group APAC.

Sarah: And so under that is the ALA, so Australia, and we have now developed the New Zealand Loyalty Association, which we’re calling NZLA, and the Southeast Asia and India, which is called CILA.

Sarah: So these are starting in 2026, with some big research events in Singapore and in Auckland.

Sarah: So we’re just setting that up at the moment.

Sarah: We’ve been incredibly lucky.

Sarah: With our existing sponsors who are supporting us in these new markets, and also building advisory boards of just amazing brands and leading loyalty experts.

Sarah: So very exciting time for us at the ALA.

Amanda: That’s super.

Amanda: Congratulations.

Amanda: I had no idea.

Amanda: That’s great.

Amanda: Super.

Amanda: Well done.

Amanda: Lovely.

Amanda: So it leads us into why we’re really chatting at this time for the loyalty TV audience.

Amanda: So you’ve just released the ALA Annual Loyalty Insights Report 2025.

Amanda: It’s your third edition.

Amanda: Tell us a bit about how you cut, you mentioned to me it’s sponsored by Mastercard.

Amanda: But tell us a little bit about the research methodology bringing this report together and then we’ll talk about the insights.

Sarah: Yes, it’s by far the largest research piece on loyalty in Australia.

Sarah: So we survey 3,717, to be precise, members of the public and their representative of the Australian population.

Sarah: And we also include social listening to try and figure out what the trends are overall and how they might be impacting on loyalty.

Sarah: And we also do trend analysis.

Sarah: So there’s some very strong trends in Australia at the moment that we’re seeing in other like countries around the world.

Sarah: And so matching all of that information to really try and find out what’s going on for consumers.

Amanda: So I’ll come on to the trend analysis, because I swear I want to really understand, so to share with the audience, because you should say you feel it’s matching other markets, maybe other markets want to match Australia.

Amanda: So what would you say are your top three insights, your top three insights coming out of the report?

Sarah: Well, this AI revolution, which is just affecting every single part of our lives.

Sarah: And as loyalty professionals, it’s having a massive impact on our roles and our jobs, as it is for every aspect of society at the moment.

Sarah: So that, which is incredible, like 12 months ago was hardly spoken about.

Sarah: It was just something that may or may not happen.

Sarah: Well, it’s happening.

Sarah: And the other things that we’re seeing are this cost of living crisis, which is a cost of living crisis for the middle class, basically.

Sarah: And this need for rewards over experiences, because people are having trouble buying food for their families.

Sarah: And so $10 or $20 off the shop for the month is making a really big difference.

Sarah: And one that I noticed reading the report is around the experience through the loyalty program, so signing up, earning, redeeming.

Sarah: It needs to be seamless.

Sarah: Consumers have no time to worry about a process that’s clunky or hard to engage with.

Sarah: And there’s so many fabulous loyalty programs in Australia, that if the one that you’re engaged with is not working properly, then you’re just going to move on to the next one.

Sarah: And in total, all the aspects of that experience through the loyalty program is more important than the value of the rewards, which are really important, as I’ve just said.

Sarah: So getting that customer experience right is getting harder and more important.

Amanda: Isn’t it amazing that so many, I mean, we’ve been in this industry quite a long time, as we said, we met many decades ago.

Amanda: Can I say that?

Amanda: We met a long time ago.

Amanda: And even then, I think we were talking about how it has to be seamless.

Amanda: And it’s just remarkable that that can still be a hurdle in today’s world.

Amanda: But you’re right, it is.

Amanda: And the other point you made there that apart from AI, which we can come back to, but the cost of living crisis, we saw in our annual report that comes out in South Africa, that the third biggest concern South Africans have is around cost of living, but actually how loyalty programs are one of the main tools that consumers use to combat that, exactly as you’ve just said, like that the $10 off can make all the difference.

Sarah: So I think businesses really think that consumers are doing them a favor or that loyalty is not a real thing, but they actually really do care about the loyalty programs.

Sarah: And if you take benefits away, they get pretty narky about that.

Sarah: Just picking up on something that you said about the seamless customer experience that we were talking about a few years ago when we first met, was the fact that this becomes more and more complicated.

Sarah: And so as loyalty marketers, it’s not a set and forget.

Sarah: We’ve made this seamless now.

Sarah: There’s more channels.

Sarah: It’s highly complex from our perspectives to set these things up.

Sarah: There’s no more finish on Friday at lunchtime and go to the pub for loyalty marketers, unfortunately.

Amanda: Dumb.

Amanda: Tell us a little bit how just coming out of your, they were your top three, but how does this, what would you, what does it tell us about the Australian landscape?

Amanda: Like, tell us more about how this report’s given us highlights into the Australian landscape.

Sarah: Yeah, well, the report is showing us that the programmes being run in Australia are becoming increasingly sophisticated, and brands are focusing on personalisation.

Sarah: I’m even sick of hearing myself talk about personalisation.

Sarah: But again, the tools that we have now been given by AI to personalise our rewards, our communications, everything around what we do is just phenomenal.

Sarah: And I’m still surprised at how few brands are doing it properly.

Sarah: And I’m really hoping to see in the next couple of years, an increase in personalisation.

Sarah: Obviously, then there’s this barrier to personalisation where we don’t want to become creepy, as we call it, and overstepping that mark.

Sarah: And digital engagement is just through the roof.

Sarah: And as I said before, having meaningful rewards to retain customers is just incredibly important in Australia at the moment, as it is, I’m sure, all over the world.

Sarah: Yeah.

Amanda: Yeah, yeah, totally, definitely.

Amanda: So what would you say, having seen the executive summary of the report, what would you say is driving brand loyalty in Australia, if it’s anything different from what you’ve just described?

Sarah: Well, what’s coming out really strongly is this desire for trust and we’ve seen so much happening in fraud, in loyalty.

Sarah: So it’s like this race to the bottom or the race to the top between loyalty prevent fraud and fraudsters who have the same tools as loyalty programs.

Sarah: And because even though points and value within loyalty programs is money, the security around it is not the same as money.

Sarah: So it’s an obvious place to go.

Sarah: And so that trust, not only for our data but for our rewards to ensure that we’re not going to go into our velocity account and find that there’s no points left is pretty strong.

Sarah: And it’s something that loyalty programs are going to have to start focusing on significantly more.

Sarah: So in terms of the shift to the types of jobs that you’re going to see crop up much more readily and loyalty fraud prevention is definitely going to be one of it.

Amanda: I mean, your market’s had its fair share of challenges there, hasn’t it?

Sarah: Yes, there was another one just two days ago that came up as well.

Sarah: And I won’t mention brands, because I feel like it’s not their fault.

Sarah: Yeah.

Sarah: They’re just they’re trying to do the best and then as soon as they’ve got something set the fraudsters will find a way to get in.

Sarah: And that’s not everyone’s just trying to do their best around the world, right?

Sarah: And it’s a shame that people have to resort to that.

Amanda: I did an interview on Loyalty TV or Let’s Talk Loyalty a while ago with Michael Smith, who obviously is very well known in the industry.

Amanda: And he was at your conference the year I was there.

Amanda: And I think just from last year being at your conference, listening to Michael and listening to him a few weeks ago on another webinar that he was doing, how his story hasn’t changed, as in he’s changed his mind, and how it’s advanced because of how the fraudsters are using the same technologies that we’re trying to use from an AI point of view.

Amanda: So it was actually fascinating.

Amanda: And as you say, they are as advanced, more advanced than we are as practitioners.

Amanda: And it’s just a chasing game to try and keep up with them.

Sarah: It’s a weakest link, unfortunately.

Amanda: Yeah.

Amanda: Yeah.

Amanda: So your report looks at the main program mechanics and benefits.

Amanda: Talk us through those results.

Sarah: Well, consumers still love points based systems and tiered rewards.

Sarah: The thing that has come through a little bit more strongly this year is paid or for some reason people call them subscriptions.

Sarah: Yeah.

Sarah: It’s like paying for gold, I suppose, is how you could view it.

Sarah: So we’re not only seeing programs who are just charging to become members of the programs, but also tiers, so a lot of programs are dipping their toes into this paid tier and to, I guess, to see how it goes, to see how consumers react to it.

Sarah: So instead of building towards gold, you basically pay for it.

Sarah: And I feel like there is an aspect of society that is liking this as an option, or certainly a segment of society that is liking this as an option.

Sarah: Obviously, your accountants in your business love it because you get some that’s a lot easier to predict numbers into the future.

Sarah: So I think there’s an enormous amount of benefits for this from the consumer perspective, but also from the perspective of the brands running lots of programs as well.

Sarah: There’s just so many so many benefits to it, especially in terms of the psychology of humans and how we react to things that we have paid for, you know, the sunk cost fallacy that everybody in loyalty knows about.

Amanda: So what you’re saying, it’s not just paid for like a subscription model, it’s paying and it’s not just a freemium model where it’s a here’s the free proposition, pay for a new proposition.

Amanda: You’re saying here’s our tiered system and you can get the higher tier by paying into it.

Sarah: Yeah, okay.

Amanda: And does that skew towards one particular industry?

Amanda: And do you see it more in travel and retail or?

Sarah: Yeah, it seems to be most prevalent in retail at the moment, but I’m envisaging that especially anybody who does the two-day foundation course where we talk an awful lot about this, that there are a lot of benefits to at least trying it.

Sarah: You know, it’s a lot less high-risk than completely scrapping your program and making it a paid program.

Amanda: Yeah, yeah.

Amanda: Okay, very, very cool.

Amanda: We’re not seeing that here in South Africa yet, so that’s actually super nice to hear about.

Amanda: And tell us a little bit about the brands in the report.

Amanda: Which brands are faring well, coming top of the leaderboards per industry and so on.

Sarah: Yeah, look, I won’t mention brands, but the industries that always do very well in loyalty are retail, travel, hospitality are the ones that consistently perform.

Sarah: And I think the reason is because they, well, especially retail, find it very hard to get data any other way.

Sarah: And all three of those have mechanisms that allow loyalty to thrive.

Sarah: So anything from lounges, priority queues, other people seeing that you have a gold card, being able to hold events at a venue as such, all of those are great leavers for loyalty.

Sarah: Whilst the other sort of industries that struggle, say insurance or banking, they don’t have any of that.

Sarah: It’s an invisible relationship that you have with your consumer to a certain extent.

Sarah: So yeah, we find, although the banks here do an amazing job, actually, I think compared to any other country that I’ve seen, the banks in Australia do fabulous loyalty programs.

Amanda: I’ll challenge that from South Africa’s point of view, but we’ll have a deeper discussion.

Amanda: But yeah, super.

Amanda: It’s good to say, I mean, it’s interesting, isn’t it, how travel and hospitality is just still so prominent in our lives in the loyalty industry and obviously retail.

Amanda: It’s good to hear financial services as well from a banking point of view.

Amanda: Okay.

Amanda: So really what I’d like to sort of draw the conclusion of the report is, was there anything that came out that was particularly surprising for you?

Sarah: I was really surprised at, one of the things that came out was how much more interested the younger consumer is about prioritizing sustainability because I’m always really disappointed at how low this comes out.

Sarah: And so there’s been a massive shift for the younger segments in terms of how much they care about whether or not companies are caring about sustainability.

Sarah: And so I think that’s a really good sign, and whether they say that and whether that translates to their buying habits, I’m not sure.

Sarah: The report obviously cannot corroborate that information, but it is something that I will now ask brands about if they are seeing this shift.

Sarah: Official listening is certainly indicating very strongly that this is a trend, which is good to see because I feel like it’s just not important enough to the consumers within a loyalty setting and it’s disappointing.

Amanda: Yeah, and I haven’t seen a skew towards the youth in that measure anywhere else.

Amanda: Like I’ve read a few reports around the world where we are starting to see results of consumers saying they are more focused on expecting the loyalty program to work more for sustainability or the environment and so on.

Amanda: But I haven’t seen the skew towards the youth.

Amanda: So that’s great.

Amanda: It’s come through in your market.

Sarah: Well, I need to look into it a little bit more deeply, but from first viewing, that’s something that really stood out for me.

Amanda: Yeah, great.

Amanda: Lovely.

Amanda: So Sarah, is there anything else you want to leave us with from this report?

Sarah: Well, overall, the report really reinforced the importance of staying close to customer needs, and innovation was something that also came out, I feel as if a lot of these prominent loyalty programs don’t use their top customers to innovate.

Sarah: They don’t ask them about new products, new aspects of the program, etc.

Sarah: Coles here does this top 50 members, and they use them in all sorts of ways to find out about innovation moving forward.

Sarah: So I think it’s a great opportunity that businesses have to really utilize their top customers and even their unhappy customers to find out how they should move forward with the program.

Sarah: So it’s something that I don’t see very often that I think should take hold in the next couple of years.

Amanda: Yeah, for sure.

Amanda: That’s interesting.

Amanda: Is it an official sort of like top 50 club for Coles?

Sarah: Yeah.

Sarah: And I was always fascinated because they seemed like very ordinary, round of the mill consumers, but because there’s so many different ways to earn points at Coles and their partners, that those top 50 are generally doing that across all of the brands where they can earn points.

Sarah: And so it’s even more insightful for Coles or FlyBuds to be able to understand so much more about why they do that, how they feel, but they also are very good at looking at other segments and finding out from them what it is that they feel.

Sarah: And Qantas or Qantas Recolent Flyer is excellent at that as well.

Sarah: They have Red Planet where they survey their members and find out what they think about various things and even sell that information at an aggregate level as well.

Sarah: So using your members to find out more about how to make your product and your program better is a massive opportunity for lots of programs.

Amanda: Definitely.

Amanda: Definitely.

Amanda: Super, super.

Amanda: We could carry on chatting all day.

Amanda: How do our listeners get hold of the report, Sarah?

Sarah: So we have our event in Sydney on the 30th of October, where the report is presented by the research agencies.

Sarah: And the report is free of charge to people who attend that event.

Sarah: And then for a month, it’s not available.

Sarah: And then after that, so that would be around the 30th of November, you can go to the ALA website and download it.

Sarah: We want it to be free for consumers.

Sarah: We’ve decided not to charge for it.

Sarah: So, yeah.

Amanda: Okay.

Amanda: So from the end of November, everybody can access it.

Amanda: Okay.

Amanda: Amazing.

Sarah: The association website and download it.

Sarah: But the other two reports are available.

Sarah: And so if people want to see those, they can go from today.

Amanda: Yeah, I’ve seen them.

Amanda: They’re available, easy to find.

Amanda: Wonderful.

Amanda: Okay, Sarah, thank you.

Amanda: And everyone can obviously find you easily on LinkedIn.

Amanda: And so I’ll put your LinkedIn bio into the speaker notes as well.

Amanda: So thank you, Sarah.

Amanda: It’s been amazing to chat to you.

Amanda: And congratulations on your report.

Amanda: I know what it takes to pull out a report like this.

Amanda: So I know it’s a huge undertaking and thank you for doing it for the industry.

Amanda: And thank you for sharing it with Let’s Talk Loyalty and Loyalty TV.

Sarah: You’re so welcome, Amanda.

Sarah: It’s been amazing to chat.

Paula: Thank you so much for listening to this episode of Lets Talk Loyalty.

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