Paula: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m Paula Thomas, the founder and CEO of Let’s Talk Loyalty and also Loyalty TV. If you work in loyalty marketing, you can watch our video interviews every Thursday on www. loyalty. tv. And of course you can listen to our podcasts every Tuesday, every Wednesday, and every Thursday to learn the latest ideas from loyalty experts around the world.
Today’s episode is part of The Wiser Loyalty Series, which is hosted by our partners, The Wise Marketer Group. The Wise Marketer Group is a media education and advisory services company providing resources for loyalty marketeers through the Wise Marketer digital publication and The Loyalty Academy program that offers the certified loyalty marketing professional or CLMP designation. I hope you enjoy this weekly podcast, The Wiser Loyalty Series, brought to you by Let’s Talk Loyalty and The Wise Marketer Group.
Bill: Welcome to the Wiser Loyalty Series podcast where your hosts, Aaron Dauphinee and Bill Hanifin, that would be the two of us.
Hi, Aaron.
Aaron: Hi Bill, how are you doing today?
Bill: Good, we’re both from The Wise Marketer Group, and we’re going to tap into one of the courses from The Loyalty Academy certified loyalty marketing professional curriculum and bring all that material to life with current market examples and some additional insights. So, this month, we’re kicking off a new month with fresh content from Loyalty Academy course number 106. Which is titled “How To Create A Winning Value Proposition”. The in quotes, CVP, as we refer to it, and Aaron will get into that and explain it is the centerpiece of loyalty program strategy without a doubt. And it’s an important piece of the broader customer strategy that most organizations have in place.
So this week to get us started, we’re going to talk about what you need to consider when you strike out on creating a value proposition that will gain the attention of customers and really help you to develop the valuable relationships that you seek. In the weeks that follow this one, throughout the month, we’re going to go deeper into specific areas of how you build a value proposition.
We’re going to share some market examples from a variety of brands and hopefully make this really fun. And I hope it’s a good value proposition, which means you stay engaged and you’re happy by the end of the month. So there we go, Aaron, can you just get it started? Tell me a little bit about the importance of the value proposition, what’s involved and, and, and get us started here.
Aaron: Yeah, no, I think I think for sure, one of the things that we often do in this industry is we use acronyms quite a bit. And so, you know, when we talk about CVP, we can’t assume that everyone knows exactly what that is, even though once I tell you what it is, which is customer value proposition, it seems pretty obvious in terms of of what how that would tie together.
But sometimes acronyms runneth amok, and sometimes too many in this particular industry. So start with that in terms of the definition, and And the way that I like to think about it actually is I refer to it some in some instances as the loyalty promise which is obviously then connected and ties to a brand promise and the two go hand in glove, so to speak.
But sometimes you’ll hear that terminology used as well, too, instead of a CVP, but essentially what you’re trying to do is you know, get down to understanding what the sum of all the benefits are for your customers as they go through the interactions, make transactions with you and or have experiences with you as the brand.
And in some instances, actually, that extends to the brands partners that they may have as well, too. So not just solely with the brand, depending on the structure of the overall earning, earning and redemption power that you have in the proposition that you’re putting forward to your members. Ideally, you want to be able to articulate your CVP or customer value proposition down to a sentence or 2.
That should be the goal because then it’s very clear and crisp and you know what, what’s there. And it definitely should express some value exchange. And we’ll talk about value exchange next week in a bit more detail. But to let you know, that is a critical component. And it’s got to be equally compelling.
It’s got to be equitable. And I always like to say that it has to be reciprocal somewhat in some some regards as well, too. And so. I would say you don’t want to have it set once, you know, that old set and forget. That is not what you want to do with the CBP. It should be somewhat iterative and change over time.
But then there’s a cautionary side of that too. You don’t want to make change for change sake per se, but you want to, you know, Make sure that the changes you’re putting into place to keep current server purpose on lend themselves to the original CVP in some form. I mean, there have been instances where people have done complete overhauls, and there’s pros and cons to that strategy and knowing your customer that could be a good thing if there’s a complete shift in the market.
But oftentimes that’s not the case. So, more, more, more times you’re making these more concerted adjustments to the CBP. And so you ask yourself a couple of questions, you know, like, how do I avoid my CBP for being taken for granted or my members taking me for granted to some degree in terms of the book that I were bringing to them?
How do you make sure it’s impactful and keep it impactful? How do you adapt in some in some forms to multiple generations of different people in your customer base? Like, not all my parents program is not the same as my program is not the same as my son or daughter’s program. So keeping that in mind as well, too, as you think about these things in the brand evolution.
And and again, as I said, they’re not all created equal and, and certainly you want to focus in on your brand’s unique selling proposition or the niche and those points of differentiation and how the brand can serve them within the value proposition. So how do you go about creating this? I guess is probably what most people are probably asking at this point.
And, you know, is there one best practice for creating a CVP or many past Bill, you’ve done many creation of CVPs in your, in your history of working with brands, where would you start? How would you help?
Bill: Well, I can’t resist you mentioned it already, but it’s got to be another 3 letter acronym. K. Y. C. Know Your Customer. And no, not really talking about data privacy. And we’re not talking about anti terrorism measures. We’re talking about. Being on top of the current macro trends that are, you know, what’s happening in the world, what’s happening in the economy, what’s happening in the cultural area, the geographic area where your customer base is, I mean, you need to understand all of these things so that you really have an understanding of the mindset of people and their outlook.
Because you know, for instance, right now we, we saw some research that came from the US and the EU that was pretty clear that people were thinking about programs from a very practical standpoint. So the number one issue for most people was. How can I make better use of my points in a program? How can I get more value out of the equity that I have in this program?
So we saw one number that said 92 percent of consumers returning to loyalty programs for everyday spending. They also talked about the importance of immediacy. Like, do you have a way for me to redeem my points at the point of sale for the equivalent of cash? So people, you know, in their thinking are, you know, within reason, they’re saying how the loyalty program could bring me value, but it’s got to be practical value that I can use in my everyday life. So just that’s one example, but a recognition of something like that. And there probably are others if you did a nice review of what’s happening in in the region and the customer base that you’re working with but it’s a great place to start.
You probably see other things in canada similarly, right?
Aaron: Yeah, I mean, it’s similar for sure. I think some of the research that we’ve seen here talks about like almost half 46 percent of respondents in a survey that I saw not too long ago had indicated that they did not increase their actual purchase frequency since joining a program and, you know, shift and lift are two key components in terms of why you put a program in place.
You want to make sure that they’re increasing your basket size and you’re getting more frequency of visits. So, you know, for only have to be actually taking action and changing their behavior that that’s a little bit lower than I would expected. And I think it’s a function of just too many programs look the same.
There’s this copycat syndrome that’s out there. And it’s a, and it’s a very much a commentary on the value propositions that are in market. They just lack that punch or that nuance of differentiation I alluded to earlier in the program. The other thing that I would say is. Two cohorts that are really quite interesting.
And then we spent a bit of time on in a previous company, it was that with research was the Gen Z and the affluent higher earners. You know, they very much have indicated that they are prone to switching brands in both of those categories or groups. They said that, you know, 50 percent of them again, half, but it’s 50 percent right on the money here.
They’re actively looking for new ways to use their loyalty program equity. But at the same time, if they don’t get that value, they’re not afraid to adjust and shift. And so it’s pretty obvious that brands need to reconsider the traditional model and move to something that’s a bit more experiential, but also the transactional taking the rational and the irrational sides of the brain chemistry together and not moving too far to one end of the spectrum, but being somewhere in the middle or nuanced off to the set of one side or the other, depending upon what the value proposition of the brand is and how those two layer in.
Okay. With the program specifically, so certainly one thing that, you know, they can do is, as I said, offer those non transaction purposes. But also you want to give your members incentive to just engage with your brand. You want to do things that they want to do and be recognized for them doing it. So it really is about them at the end of the day, and you got to keep on remembering that.
How about you, Bill? Do you have a little bit more perhaps can offer some,
Bill: you know, I think it just shows you what we’re really talking about is how their best practices for all of this. So, obviously, within The Loyalty Academy, we talk about the best practices in this course for creating a value proposition. But at this point in time, if you take into account what you just talked about.
How people are looking at things differently. They want different types of interactions, culturally, what’s happening in macro trends, all that. You also have to think about maybe there’s some brand new models that would be more meaningful to people than just collecting points. So I saw something that said 31 percent of loyalty programs allowed members to earn through non transactional means.
Wow. And I thought, okay, that’s, that’s quite a lot. In my experience as a consumer, I haven’t really seen that much of it yet, but I know it’s out there, but for sure. It’s really smart to start thinking about building engagement mechanisms that that are open to people that invite lots of different parts of your customer base instead of limiting it.
And 1 of the examples, like, I saw something else that SMS has become such a, like, a high energy channel for people. There’s, like, a 14 times higher response rate. Wow. For offers in the SMS channel versus email. Wow. And so just like, take that as a data point and then think of the fact that the mobile device is the number one screen for just about everybody now, like 81 percent of emails are now opened on a mobile device.
So people are looking at email, they’re looking at it on their phone, but they’re responding much better to offers that are in the SMS chain. So, I mean, these are all things to think about and these become, they’re vital parts of the. Of the value proposition. And it goes way beyond the old you know, balanced blend of reward and recognition.
There’s so many more elements to what you would call a value proposition these days that we didn’t think about in the past.
Aaron: Yeah, no, I’d agree. And I think if, you know, some of the terminology that we’ve heard and been propagating out into the marketplace for 2024 hinges around four keywords that, you know, really will serve as guidelines to help frame up some value propositions.
And we can, we’ll get more into this over the next couple of weeks four weeks because there’s five weeks on this particular topic in the month of July. But, but the first one is around trust, right? So, you know, when people are making a commitment to build trust with their customers or brands are making a commitment to build trust with the customers, I should say it really should be a north star to some degree in terms of how you guide and work towards creating those customer experiences.
If you to your point, if you ignore those macro trends that we’ve talked about, and I mentioned as well to you’re just never going to be able to build that trust with your members on your end, your customers. The 2nd word is about relationships, right? You know, building a value proposition today is truly about building quote unquote, customer loyalty and and delivering value in ways that customers want it. I think that’s the key in ways that customers wanted, not in the way that the brand necessarily wants it. And so if we do that, well, obviously behavior change will come natural in a response. So, one of the favorite quotes I believe that you have said before, and and I like as well too, is quote, relationships grow at the speed of trust.
End quote. Right? Like, that’s a good way to describe describe that and link the two, two terms. The third is transparency, of course. I love this word. This is one of my favorites. I don’t think it’s overused word. I think it’s actually not used enough, or at least it’s talked about about it as to whether it’s actually enabled is, is another question.
And so it mm-hmm, shouldn’t. Lose its meaning in the sense of talking and not walking the walk and instead of just talking the talk, so to speak. But I think, you know, if we want to to do well in transparency, we need to have a realistic view of what the customers needs ours. We need to be able to deliver on those in a very honest approach or in a genuine approach for the, there’s some element and equity that comes here, so because if you miss on that, and it’s disingenuine then, you know, members are pretty savvy. They’re going to pick up on that and they’ll not punish you, but they’ll certainly adjust to some degree and may may may just walk away from the relationship. So, you’ve got to appear to be very clear, open, honest in your approach.
So, there’s a fourth one too, Bill, you talk about this one, a lot more than I do. Why don’t I let you in on it? The last
Bill: It’s gratitude. You know, I, I, I think the gratitude is, you know, it’s a good way to wake up in the day and have an attitude of gratitude. You’ve heard that one. We’re, we’re grateful to Paula Thomas and Let’s Talk Loyalty for being here today.
But, you know, it’s, it’s a secret power that people just don’t put into play enough and and we need to talk to our customers more often. We need to ask them questions. We need to listen to them. And then we need to say thank you for your business and so basic that you would almost say, like, please, Bill, but you know what?
It’s it’s powerful, right? And people don’t hear it enough today. So when you, when you listen and say, thank you, that even so, what are we talking about? We’ll get into it in a future installment here, but communications and how you talk to people that that’s important, so.
Aaron: I really love that. Thank you for your business.
That’s, that’s really critical. So, no, that’s a, that’s a good takeaway. You know, we’ve been doing these for a while. We certainly hope that everyone enjoys these short podcasts that we do each week. When you start to string together the episodes throughout each month, we hope you get a full takeaway and a lot of knowledge on a particular topics that we’re putting together in pursuit of customer loyalty.
And just a friendly reminder because we, we oftentimes don’t talk about this enough, but we’re really proud of the fact that, you know, we’ve got a community of professionals who’ve earned their certified loyalty marketing professional CLMP for in the acronym form from The Loyalty Academy. And we’re just nearing and about to surpass 1000 individuals around 53 countries worldwide.
So we’re really excited about that, that kind of benchmark and that KPI that we’ve put into place. And so if anyone out there would like more information on how to become a part of the community, leading this industry into the future. Please don’t hesitate to visit us at loyaltyacademy.org. So that’s about it.
I guess we’ll as always I’ll do the stay loyal and, and see you next week.
Bill: That’s great. Thanks, Aaron. Thanks everyone.
Aaron: Bye now.
Paula: This show is sponsored by Wise Marketer Group, publisher of the Wise Marketer, the premier digital customer loyalty marketing resource for industry relevant news, insights, and research. Wise Marketer Group also offers loyalty education and training globally through its Loyalty Academy, which has certified nearly 900 marketers and executives in 49 countries as certified loyalty marketing professionals.
For global coverage of customer engagement and loyalty, check out thewisemarketer.com and become a wiser marketer or subscriber. Learn more about global loyalty education for individuals or corporate training programs at loyaltyacademy.org.
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