#568: CVPs in Market: The Good, the Bad and the Ugly!

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 marketeer group. The wise marketeer group is a media education and advisory services company.

Providing resources for loyalty [00:01:00] marketeers through the wise marketeer 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 Marketeer Group.

Bill : Hello, everyone. I’m Bill Hannafin, the CEO of the Wise Marketer Group, and I’m back for the Wiser Loyalty Series here with Aaron Dauphiné, who’s our CMO. Aaron, how are you?

Aaron: Hi, Bill. I’m doing well. How are you today?

Bill : Good. Really good. Hopefully we’ll have a good experience in today’s conversation. So for those of you that haven’t joined us before on the wiser loyalty series, this is hosted by let’s talk loyalty.

And we’re grateful for Paula for her support. Um, she’s allowed us the opportunity to dig deep into the curriculum, the individual courses in the curriculum of the loyalty Academy. Uh, that’s the one that leads to the designation thousand people out there. So in the world. Uh, that have that so far, but each month what we’re doing is we’re focusing on an individual course and then we’re digging deep and kind of giving you the latest thinking that we can come up with about that particular topic.

So this month we focused on course number 106, which is how to create a winning value proposition. And so we’ve been through a progression of discussions. Where we talked first about creating winning value propositions, like what, what it really takes to do that. Um, how you create the value exchange. Um, and we talked about the differences between, um, different elements of the value prop, uh, to create a good, solid value exchange between customer and brand.

And then we followed that up and talked about what maybe the most loyal, valuable loyalty currency is today. And, and that turned out that there are a lot of options that stand up strongly against. Currency points, miles, all of that. So that that’s interesting. Um, and then we talked about the role of CX in  the CBP, uh, last week that that also was, um, kind of really cracking into how CX impacts the overall value proposition.

So you weren’t wrapping it up today. We thought it was really important to give you some solid, some something to chew on, something to think about. So some current market examples. And so we wanna talk about, we’re gonna say the good, bad, and the ugly. I know we’ve got a couple of good, we might have an ugly, I don’t know if we have a really terribly bad one.

Um, ’cause we try to stay away from being heavily critical of anybody. Um, but we’ve got a few examples for you and, uh, Aaron’s gonna start us off with something that he’s been kind of experiencing lately.

Aaron: Yeah, thanks, Bill. Like, uh, so for me, I think, and I was reading this in a report the other day, maybe I’ll start off with some statistics that are always helpful with findings that are out there, uh, published by some providers, um, something to the effect of, and I might get it exactly, not exactly correct, but I’ll be roughly right on this.

So forgive me for the provider who put this report out, but essentially, That loyalty programs and their influence on customer behavior, um, is about just under 80%. I think the number was actually 79 percent or so, but it’s in around 80 percent of consumers who are more likely to recommend brands that have really, really good programs in terms of loyalty programs.

Um, and I think the number went even higher to around 85%, because it’s an easy number for me to remember at this point. Uh, of those same groups said that they are more likely to continue buying from the brand. So, and, and, and if I recall correctly, it might even have been the bond brand little to report from 2024, that those numbers are coming from.

But, but I’m, I’m just calling them out as kind of guiding posts to say that the importance of loyalty is, is always as strong as it’s been before. And it’s continues to rise and, and some of the differentiators between, you know, what’s a good and maybe not so good value proposition, uh, you know, Uh, as we’ve talked about in previous episodes, uh, really comes down to the perception of, of how well a brand knows you and, and it takes care of you.

So the, the personalization element, which is so often talked about, uh, but also the customer interactions and that’s interactions that are done digitally or in person. Right. And, and, and then going further in store experience. But for me, the. You know, the third element of it all, which I think is increasingly important is this idea of engagement in very, you know, quote unquote, fun ways.

Uh, or if it’s not fun, then at least positive ways. And so having that, that, that, that aura or that giving or sense of, of, um, benefit and positivity rises to the top for me now. Uh, and it’s usually very, it needs to be very consistent with what the brand’s about. I don’t know many brands that are out there about negativity too much, right?

That have loyalty programs are often very positive. So if we, it can’t have. Fun at least at least trying to migrate it towards that positive element is maybe something to aspire to. And so when I think about that, one of the, and this is just the kid in me coming out, one of the programs that quickly rises to the top where the brand promise and the purpose of the retailer is very, very aligned with what their loyalty value proposition is, is Legos.

Insiders program. Um, you know, it’s it has points and discounts and benefits that are very similar to other programs, you know, that you can earn the point site on their website. You can I think you can actually get points for following on their social media accounts and doing company service. All very traditional things.

But when you start to get into what the programs are about, it starts to offer uh, the convenience of, of things like, you know, having uh, one account for a household. And you can think about that, you know, a father, a mother, or, or a partner situation that are buying for one child or multiple children to have different accounts.

They can consolidate it into uh, similar logins and memberships. They’ve got simple checkouts. They’ve got this VIP program and, and of course the apps. And one of the other elements they have is there’s a lot of Lego land, like type of stores that you can go to and you, um, uh, have a passport app. So you can go whenever you’re around the country and, and your child can get a stamp with you’d like an official passport, but at the Lego store, so it really becomes much more engaging.

And it’s kind of a bit of a, a no brainer because, uh, the perks that they have, uh, they get, uh, for the individuals who are members of this, they have access to new collections and that’s always important. So that’s kind of that element of exclusivity and, and being the first on, on a cool draft or, or they get a cool gift.

And so if you have a child that’s really into this type of thing, Product in terms of a play toy. Um, it really is a bit of a, uh, an obvious Eddie type of program to be involved in. And so I’ve become familiar with it from a number of my friends who have had small kids and built out, but in most recently, you know, it, one of the best things that I think is also important in this community, uh, or part of me in this program is the access to a really sense of a community connection.

Um, you know, there, there goes beyond just. It’s the consumption and receiving of a product, and then earning some points on it, and it gets down to, um, the members in this program can participate in Lego ideas. I think they even have the opportunity to engage with, like, an insider’s community, and there’s this co creation element that comes into play, so you can submit your ideas for what you think should be created by Lego.

And actually have that come to be  a toy as a function of being a part of this program. So it really, really truly is engaging. And I think that’s, that’s a good value proposition. As I said, that aligns to what the brand’s about, uh, of having fun and play.

Bill: You know, I love the idea of co creation that maybe it’s just a term that marketers ought to think about because we’re always thinking about engagement.

How do you create it? And we’re thinking about doing it somehow digitally. But think about just actually to be able to put hands on to a product and participate in creating something with the product that that’s such a big takeaway. And so that that makes me think of 1 that I’m fairly positive about.

But for a different kind of reason, which is Ace Hardware. So Ace Hardware is, um, you know, it’s a hardware retailer in the U. S. Um, well, they’re beyond the U. S. But those are the ones that I’ve seen. And. They have, um, just incredibly high service levels. They have a very rich inventory. Uh, there’s just high availability of product.

It’s ease of access to the store. So much better experience than going to a  big box store for a DIY project. And the people are absolutely, I mean, just. Can’t imagine they’re, they’re not only, uh, well informed, but they’re really friendly and they’re fun to be around and everything, but ACE has done some interesting things, one of which is that they really centered themselves around a few brands, say in the grilling area.

So outdoor grilling, cooking outside, they’ve, they’ve got partnerships with, um, with green egg and with Weber and with Traeger and with some others. And, um, they have events, they have events where they are showcasing all the grills and everything they have, but they’ll bring in chefs and people barbecue brisket and pork and chicken and do all these things on the grill and they’ll have people You know in the parking lot to enjoy something like that.

So it’s It’s very much experiential and fun and they’ve got all the accessories and knowledge to help you You know have more fun do a better job when you’re out there cooking on the grill and stuff But my takeaway from the entire program is that you know I haven’t said it, but yeah, they have a loyalty  program and it’s one of those that they always ask me for my phone number at the point of sale.

And then they, they’re registering my purchase. And eventually I get some sort of communication that says, Hey, you’ve got something here that you can redeem. But, um, it’s inconsequential to me and it’s a very interesting thing because if. If I had walked into ACE and they didn’t have a loyalty program, I probably wouldn’t have given it too much thought.

I might’ve thought I’m coming here anyway, for all the reasons I just mentioned to you. Oh, it’d be great if they have a loyalty program, maybe I could earn some benefits along the way. The fact that they have one and it is not impactful to me is interesting. So it’s not a negative, but it’s sort of a disappointment in it.

And I wish it was, there was a way that they could incorporate that into the story experience a little bit more. Have it be more meaningful, and it might just be maybe it’s pay with points at the point of sale, something like that. Maybe it’s more immediacy, or maybe it’s less asterisks, because they’re always.

Whatever you can redeem is usually a subject to, and there’s a very long list of things subject to that you can’t redeem for, which becomes kind of, you know, just too tedious for most people to read and try to figure out. But, um, but to me, it’s just that ACE is, uh, It’s doing really, really well just with experience and creating community, especially in that grilling area and other things.

And so I really congratulate him on that.

Aaron : That’s interesting to me because I think we’ve said this before, you know, the, the hard benefits relative to the soft benefits and the connections to the customer experience, you know, they all have to be seamless and come together and coagulate nicely in terms of a overall package and delivery to the customer.

And you don’t have to have the most sophisticated, um, Hard benefits. Like I think of the Explorer Pass by North Face, right? It’s a fairly basic points based loyalty program, uh, you know, that you earn points when you make a purchase. Pretty simple. I think it’s to get 100 points and, and 10 back. So, you know, the, the quick math in terms of, of what the equation is, but where they go and tie to the brand promise through the low connections with the loyalty program is really about what the brand itself stands for, right?

Um, You know, you can move points for, you know, referring a friend. That’s pretty basic in terms of a list program, but bringing out a reusable bag back into the store, checking that up, um, you know, checking in and then the North face app at a national park. So you’re not even in store. You’re in a different type of environment and you’re still happy to earn points.

Um, you know, and then we know with them, of course, their, their emphasis is always on community. Um, Providing emotional reasons to be part of it and often, you know, plays the card of the eco friendly and the sustainability option, which is good. And that ties through. But, you know, they encourage customers to trade in old gear, uh, you know, uh, do sustainable behaviors and they get rewards and extra discounts for that through.

So it really is, um, connected to what the brand’s about, including, you know, just much like we talked with Lego, where you get certain product releases. Um, that are ahead of the time. I believe I’ve read it somewhere that with a North face and explore program, you can actually test  unreleased products in like extreme outdoor conditions, uh, before they even come online.

Like you’re, you’re kind of on the microcosm of, of their best customers. And that’s what it really is because you want those customers who are in your loads program to be representative of, of who, who you want as a customer base, uh, the most, both from a perspective of, of, uh, you know, Obviously making more incremental dollars from them, but at the same, but at the same time, like aligning to the brands and products that you’re, you’re putting into the marketplace, um, for utility.

So I think, you know, there’s another example of how that ties through that the base program isn’t, isn’t robust, but it’s just integrated so incredibly well with what all the other interactions are. Uh, and it’s fun, like you’re happy. It’s a positive experience being a part of the Explorer pass program.

Bill : that’s really good. Yeah. You know, we, um, we wrote an article about some of the good, bad, and ugly similar topic, which we’ll put, make sure is in the show notes for this episode. Uh, so people can have a look at that, but I was just thinking some of the brands that stand out in that same category, outdoor, um, equipment, camping, and all those sorts of things, Um, backcountry.com is one.

Yeah. What’s that?

Aaron : You’re probably gonna say REI, but who else did you say? Sorry. Yeah,

Bill : REI Is that, that’s one. And I was thinking about backcountry.com, which is, which is an online retailer, but they, they both do what you’re talking about. I would say neither program is particularly, um. You know, knock me in the head and impress me with the value you’re giving me.

But, um, REI gives you 10 percent off everything after you pay a one time membership fee. And then, uh, Backcountry, I think has a very like perfunctory type of program, but that’s really not what matters. It’s, it’s the, they each have similar, and I won’t go into them, but similar kind of features of just the associates, the guidance, the knowledge, the fun, the community, all of that, like they, they not only sell you things, but they show you how to use them to your benefit and have a lot more fun with them than you ever imagined.

Aaron : That’s great. Hey, I know we spent, uh, this episode a little bit more than usual on, on retail. Typically we’re in travel and hospitality and Well, there are sectors, QSR, um, I, and we could  talk about a bunch of those as well too, but, um, maybe in the interest of time, we can roll up on another sector other than retail and thoughts.

I don’t know. Do you have any best or good, bad and ugly, um, kind of advice around, uh, um, travel perhaps, because I just love travel and maybe that’s where I want to hone in on,

Bill : you know, the airlines, uh, I couldn’t resist. I told you that I had a couple of impressions about the airlines, but I have empathy for their situation because of the type of business that they’re in, um, you know, but interesting thing about the airlines is when you have when you have choice.

Um, I, I think maybe there was a time when I felt like the frequent flyer program, the structure and nature of it would influence which airline that I chose to fly on. Um, these days, I feel like the cabin experience has been so degraded across all of the airlines. So I wouldn’t even single out, I’m talking about U.

S. airlines now. So if I just threw into the bucket of American Delta, United, Southwest. Um, JetBlue, principally the ones that I would, you know, throw into the pot and make a decision, who do I fly on a business trip, but, um, but the cabin experience, um, listen, all the plans are, I, I get a wry smile every time they say we have a completely full flight today, because I said, of course you do, it’s every day.

And so there are no extra seats. You know, I think the newest upgrade out there undocumented is when you have an open middle seat in your aisle. That means you can actually spread out and get the proper room that you would like to enjoy. But it’s almost become to the point where I can’t work on a laptop during a flight, except in rare circumstances, I can recite to you, which snacks they’re going to offer on each airplane each airline, because they haven’t changed them and probably over 3 years.

And I think that’s. You know, considering that they swap entertainment out on a regular basis and hey, we’re all kind of demanding these days consumers. So I think snacks could be upgraded more than every 3 years, you know, so I just think the experience in the cabin has becomes just kind of a burden, a burden, some to the point where.

They’ve got to do something. And I don’t know if maybe you, can you think of an airline that’s done something different to make that change up? Cause it’s not an easy thing to do either. Let’s acknowledge that to, to make equipment changes, to reconfigure cabins. It’s expensive and time consuming.

Aaron: Yeah. So actually just coincidentally, I was reading this week about Qantas and one of their flights, I think it’s, uh, one of them out of Oz into London, UK, I believe is, is a, is a flight and they reconfigured the entire, uh, the whole Plane so that even the premium economy and economy now have different degrees of pitch.

I think 33 degrees of pitch. I can’t remember which one, which is pretty deep. I’ve got some proper holding places for your, for your, um, electronic devices. So you can do some work, things like that. And they moved, I think of something like From what would typically be in that traditional plane that the I can’t remember which which Manufacturer plane it is, but they usually be 300  people and they moved it down to something like 235 or 240 So that they’re they’re focusing their product to be much more amenable to not be an issue and and to be a differentiator obviously In terms of comfort and convenience, um, that then, you know, the little things like getting the same old stale snacks and whatnot, don’t become a begrudging point because there’s comfort and convenience.

And so now it’s about upgrading these other elements. And, and I think about that from a perspective of, you know, when I redeem for my airline flight. Um, typically I’m at the status point with their airline that I fly with typically Air Canada, um, where I looking at premium, uh, economy redemptions, or if we’re traveling for business, that’s usually my starting point versus premium business and kind of doing the triage from there.

But when it’s a redemption, I have a different criteria about how I kind of think of things. things, whether it’s nonstop or, um, the location, the duration of the flight, like all of these things kind of get read matriculated to some degree when it’s a redemption. And for me, when it’s a redemption, it really comes down to, um, it’s, it’s kind of my personal loan and I want to enjoy the flight and I better get there.

there in the most efficient amount of time. So nonstop versus one stop versus two stop becomes a prioritization and the type and the cities that I’m, that I’m flying into, um, in terms of that product offer, you need to need to come up, but you know, there is a difference between when I purchased and when I redeemed for points.

And so the loyalty program needs to be aware of that. Um, when I click the button that says use points. Um, it should have the information understanding from my previous redemptions of what actually is, is more beneficial to me than if I don’t have that clicked and I’m, and I’m just paying full price for a flight and, and to have that nuance and understanding between the two, I think is something that’s long overdue and, and needs to be put into place as a subtlety.

That’s just my opinion on airlines at this point.

Bill : That’s good. That’s good. Well, enough said. Probably got to wrap it up a little bit. Those are all really good examples, a little bit of good, bad, and the ugly about what we currently see out there in the way of, um,  customer experience impacting the CVP for loyalty.

Um, Hey, we hope that you really enjoy these episodes. We try to keep them as concise as possible. And when you string together the individual episodes throughout the month, I think you get a really good body of work, um, some good takeaways to think about, things to think about to how to improve. The value proposition in this case, um, that you’re offering your own consumers.

So, um, just to recap it, we covered, I guess, five episodes this week based around our course number one Oh six and the loyalty Academy, which is how to create a winning value proposition. And in the loyalty Academy is the one who offers the certified loyalty marketing professional designation, which now has just about a thousand people across 53 or 54 countries, I believe right now.

And so, um, Love to have you be part of that community. Uh, hope you get a taste for what it’s all about just by listening to these episodes. And, um, we’re looking forward to coming back in August with, uh, with another fresh topic and a bunch of new insights. So, um, stay tuned.

Paula: Thank you so much for listening to this episode of Let’s Talk Loyalty.

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