Paula: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals.
Paula: 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.
Paula: So, welcome to episode 23 of Let’s Talk Loyalty.
Paula: Today, I’m going to be speaking to a gentleman by the name of Dan Gipple, who is a United States citizen originally, but a United Kingdom resident.
Paula: So, you’ll hear the American accent, but he is doing most of his work, as I understand it, in the United Kingdom.
Paula: Now, I spend a lot of my life looking for inspiring stories, and it’s very rare that I find them in my professional world, as well as in the world of personal development, where I spend a lot of time.
Paula: And certainly the work that Dan does with his company, Better Points, really has really inspired me into what’s totally possible using the ideas of loyalty strategies to really change behavior for the better.
Paula: So, we’re going to have a really interesting conversation about behavior change for health, mobility and sustainability.
Paula: So, without further ado, let me welcome Dan Gipple to Let’s Talk Loyalty.
Dan: Hi, Paula.
Dan: It’s good to be here.
Paula: Great, great, great.
Paula: So, great to talk to you.
Paula: I know you’re in the UK on a sunny day today.
Paula: And you’ve had a busy week talking to lots of people about behavior change.
Paula: So, before we get into talking about Better Points, I wanted to ask you, first of all, what is your favorite loyalty statistic?
Dan: Okay, let me think for a second.
Dan: I think I’m going to go with, there’s an old statistic that I think is still very much true today, that in business to business, that most customers, about two-thirds of them, actually stop working with a company, not because of the quality of the product or service or the price or the quality of the service, just simply from the quality of relationship.
Dan: That if they perceive that the company is not reliable, that they’re not responsive, that they don’t have the right amount of empathy for understanding of who they are, people will leave primarily for those reasons.
Dan: Historically, it’s about two-thirds of people leave, not because of the product or the price or the quality, but because of the relationship.
Paula: Well, thank you for that, Dan.
Paula: I certainly haven’t done yet enough interviews or even enough work myself in B2B Loyalty, but I think intuitively, we all know that the relationships are critical, but the fact that two-thirds are leaving purely on that basis is quite terrifying.
Paula: Yes, I think it’s, as you said, an old one, but definitely a good one.
Dan: I think these things are human.
Dan: They stamp.
Dan: I don’t think the world’s changed that much since this first study came out.
Paula: Fantastic.
Paula: Dan, I know you are a passionate student of human behavior.
Paula: The reason that I got in contact with you was particularly because of a loyalty program that I saw the BBC doing a particular clip about.
Paula: Now, I don’t think the BBC do a huge amount of documentaries on loyalty programs.
Paula: The particular one that they featured was called Bella Mossa, and was based in the city of Bologna in Italy.
Paula: And I just loved the headline.
Paula: It basically says you get free beer and free ice cream simply for going on a bicycle ride.
Paula: So tell us, you are the loyalty platform provider behind the Bella Mossa program.
Paula: So tell the listeners all about Bella Mossa.
Dan: So Bella Mossa arose out of a relationship that we were able to develop via.
Dan: We work with an EU fund called Climate Kick, which stands with the climate knowledge innovation community.
Dan: And it’s part of the European Innovation Technology Fund.
Dan: And in that, we had the privilege of getting to know people across Europe in similar fields like mobility and sustainability.
Dan: And we were introduced to the city of Bologna.
Dan: And this goes back to 2017.
Dan: And Bologna is an interesting situation because it’s about 3,700 kilometers of very, very old roads and congested streets.
Dan: And over a million people go in there every day.
Dan: So it’s really a tough place for traffic, really difficult.
Dan: And you have a lot of tourists and very, very busy atmosphere.
Dan: So the city of Bologna, an organization called SRM, which is entirely around mobility for the city.
Dan: We started working, first of all, in the first year, under a grant, a climate kit grant with them to do the Bella Mossa program.
Dan: And Bella Mossa is kind of a dual meaning in Italian.
Dan: It means good job, but it also means beautiful move.
Paula: Oh, nice.
Dan: So there’s a nice duality to the name, and we didn’t think of it.
Dan: The whole branding for Bella Mossa was developed and executed by two full-time staff of SRM, Marco Amadori and Giuseppe Ligori in Bologna.
Dan: And both two great guys that we worked very closely with.
Dan: So they developed the brandy and the whole concept.
Dan: And in fact, they were very, very knowledgeable and talented people.
Dan: So they were actually the first people we worked with, first partners we worked with, who we were able to turn to them and say, you can run our back end administration system yourself, because they were knowledgeable enough.
Dan: So it was the first real life proof of putting of our software as a service and capability for other people to run the whole platform.
Dan: So what we did for it was it was for a period of time during the spring and summer, both 2017 and 2018.
Dan: And it’s really interesting the cultural differences between the UK and some of the other areas of Europe.
Dan: And I have to hand it to SRM of Bologna.
Dan: What they did was they actually launched this program and it was entirely around sustainable mobility.
Dan: And as you come into town, please walk or cycle, take public transport, get out of your car and you would be rewarded with points that you could then go to it.
Dan: And again, yes, go get a beer, go get an ice cream, get a cinema ticket.
Dan: And they launched it, they made commercials in the cinemas, they had events in the street.
Dan: And in the first six weeks in 2017, there were something like 25,000 downloads of the app.
Dan: And we created the Bella Mossa branded app on the Better Points platform.
Dan: So 25,000 in six weeks, our servers about melted down because we hadn’t had, well, it was so funny because out of the blue, our technical people were witnessing every morning, at about seven o’clock, at eight o’clock in the morning UK time, our volume was just going crazy.
Dan: It was, so it was really, really great fun for us.
Dan: And it really helped us develop.
Dan: And basically, over the two years, what ended up happening was across the two years, 22,000 people in Bologna participated.
Dan: And what the research showed is that 78% of them actually walked more, 63% used their cars less, and about 60% cycled more.
Dan: So there was really radical change in the behavior of the people that participated.
Dan: And we actually had about 800,000, and you look at the numbers, the numbers are terrific.
Dan: They’re 800,000 foot journeys that we were able to track because our Better Points platform has a GPS tracking app where you can track the different travel modes.
Dan: So you can actually see in your app if somebody is walking, cycling, riding the bus, taking a train, etc.
Paula: Great.
Paula: So everything qualifies basically.
Dan: But we even track the car journeys because we don’t reward the car journeys, but we want to know if they’re in a car.
Dan: And then we’ll send a message and ask, was this a single car journey?
Dan: Because we want to determine, we need to, every time we do a program like this, we have to be able to identify who are the people driving in the cars on their own.
Dan: And, you know, for many people, they don’t have a, you know, they often don’t have a choice.
Dan: There may be something in their life that says, they can’t, sorry, this is the only thing I can do because of who I am and where I live.
Dan: But other people have choice.
Dan: So anyway, you know, there’s about a half million public transport journeys.
Dan: We got well over 5,000 people to start car sharing.
Dan: 600,000 people took cycle rides.
Dan: We had something like 85 corporate partners.
Dan: We mitigated nearly one and a half million tons of CO2.
Dan: And it was a huge success.
Dan: And what was amazing about it, Paula, is it was just the whole culture really caught fire with it.
Dan: And we found that the story was actually, it was really kind of propagated across all kinds of media.
Dan: We found it on the World Economic Forum website.
Dan: So it’s been terrific for us.
Dan: And it was a great result.
Dan: But I have to say, our platform did its job.
Dan: But a vast amount of the success of this is right down to Marco Giuseppe, who did an absolutely phenomenal, phenomenal job with SRM.
Paula: Okay.
Paula: Well, well done, Marco.
Paula: So we’ll definitely link to the BBC interview on the show notes.
Paula: And we’ll make sure to link to Marco’s profile as well.
Paula: And I think I said to you, Dan, before we came on air, that in fact, I don’t usually talk to technology providers on the show because there’s a consumer intention behind that.
Paula: But for something that drives social change, it’s something I’m so personally passionate about that I really believe in what you’re doing.
Paula: So it’s really great to be able to talk to you about it.
Paula: So, yeah, so it’s an amazing case study.
Paula: And I suppose one of the reasons I really liked it was, I suppose, the EU funding model, because I think, yes, with the best will in the world, we would all love to be rewarded with free beer and free ice cream, you know, purely for getting out of our car.
Paula: Maybe, you know, I don’t know how many times was required.
Paula: But tell me about the funding model and the EU.
Paula: And is that the type of thing that other listeners in Europe would be able to consider applying for?
Dan: Well, the European Innovation Technology Fund has a range of funds in it.
Dan: And one is like the Horizon 2020 program, which has a whole different set of streams.
Dan: And there is a very, very big stream under Horizon 2020, the area of mobility, and they have different streams for sustainability.
Dan: And then they have these knowledge innovation communities.
Dan: So they’ll have EIT health, they’ll have EIT digital, and then they have the climate kick organization, each with different focuses.
Dan: So if you’re a small company or an academic, if you’re in a university, it’s well worth looking at these funding calls.
Dan: They do require amount of co-funding, so they don’t just give you 100% of the grant if you’re a business.
Dan: So you have to be able to find a way to match or at least put in a third to do it and qualify.
Dan: And that’s never been easy, but I think the benefit of this is you get connected into this incredible network of all the exciting innovations happening in universities and research institutes.
Dan: And then we got connected to all kinds of businesses.
Dan: So we work very closely with an organization called Data Group in Italy, and that came completely out of Climate Kick.
Dan: And there’s a number of companies across Europe we work with as a result of it.
Dan: So if you’re a small company like we have been, it is a way to just get very right in the midst of an ecosystem of really incredible innovation and talented people.
Dan: So I highly recommend it.
Dan: But you do have to keep your eyes open, watch the co-funding and the administration of it.
Dan: The reporting for the European Union, I think you can imagine, is fairly non-trivial.
Paula: Okay, okay.
Dan: So it’s a serious thing, but it’s well worth it.
Paula: Yeah, for sure.
Paula: And I’ve certainly done some work myself, Dan, with Enterprise Ireland, which is a fabulous institution.
Paula: So again, I know what the accounting requirements can be like.
Paula: But I think it’s important to be able to justify the funding.
Paula: And we all know that budgets are tight.
Paula: So if you’re going to be applying for grants like this, I think there’s absolutely no harm to maybe make sure that we do all of that measurability at the end.
Dan: Absolutely right.
Dan: And the teaching is some good disciplines too, by the way.
Dan: A little bit painful sometimes, but you get through it.
Paula: So that’s one fantastic case study, obviously.
Paula: But I’d love to go back to, I suppose, why did you get into this whole business in the first place, Dan?
Paula: So you’ve described yourself as an entrepreneur, and there’s clearly a lot of technology capabilities that you guys have.
Paula: But why did you decide to focus on this particular area?
Dan: Well, I originally just started out of marketing and sales, and I was working for AT&T in the States doing international advertising, and I was offered a job all too many years ago, that I want to say, to come over to the United Kingdom and work for, I first worked for Young and Rubicon, and then I worked for Ogilvy and Mather.
Dan: At that time, there was an organization, Ogilvy and Mather, called Ogilvy and Mather Direct, that had this whole battery of terrific accounts.
Dan: And I ran the BT business, but there was also Amex there.
Dan: There was a huge amount of charity accounts.
Dan: And so it was, it was, that organization was knee deep in a lot of loyalty programs at that time.
Dan: And I had a chance to work very close with BT, and I was commissioned every year by BT to do a review of all the major loyalty programs in the world.
Dan: So that was just like manna from heaven for me, because it was great.
Dan: Because I just spent, I just spent, you know, over a period of months gathering detail, gathering the mail packs, gathering the brochures, and you know, really doing full blown study of all these programs.
Dan: And looking at the results and talking to people and providing any report to BT.
Dan: And what that led into was, Ogilvy also did a whole bunch of real good studies back then in customer service and satisfaction.
Dan: So it just gets wonderful incubation period.
Dan: And then I was finally commissioned by BT to do a full blown, very lengthy study on loyalty.
Dan: And it took me about six months to do it.
Dan: And it led to this whole revelation.
Dan: And you know, there was people back, I’m going back 20 years or so, but there was Bain and Company and a guy named Frederick Reichfeld, and a bunch of other people who really carefully pointed out the difference between repeat purchase, customer satisfaction, and customer loyalty.
Dan: And we call all these programs loyalty.
Dan: And they are loyalty programs, and you can split hairs if you want, but there is a real simple truth that a customer can be completely satisfied.
Dan: They can like your product, they can like your price, but if something better comes along, they’ll go.
Dan: But that’s not no, you know, just because they bought the product again, doesn’t mean it’s loyalty.
Dan: And so we got to this whole thing of customer retention.
Dan: How do you, you know, I did a lot of consulting to help help retain customers.
Dan: And the reality is that customer loyalty is much more about emotion, it’s much more about affection.
Dan: It’s customer loyalty is really like, let’s say I’ve got a great product, got a great TV set, and I love that TV set, but then somebody offers me another one that’s just as good, but it’s a lot cheaper.
Dan: So why wouldn’t I get that TV set?
Dan: And it might be just because somebody in the TV company that made my TV did something great for me for customer service and actually reached out and did something nice for me, where a bond was created.
Dan: And that may not be the best example, but there’s this…
Dan: So what this led to was I just found this fascinating, the whole emotional affection of bond.
Dan: And then that led into behavioral theory.
Dan: So then all of a sudden you start looking at things like personal constructs theory and self-determination theory, and there’s theories for everything out there.
Dan: I mean, what are the intrinsic needs of people?
Dan: What are the drivers?
Dan: When they buy products, what are they trying to satisfy?
Dan: And you have this whole wonderful field out there, behavioral economics, behavioral change.
Dan: All this stuff has been studied really for the last 20 years.
Dan: You have the whole behavioral insight team that spun out out of number 10.
Dan: They did wonderful things here in the UK in the last 10 years, according to nudge theory.
Dan: So I’ve just always found it a really fast…
Dan: I’m sorry, that was a bit long-winded, but I always find it’s a really incredibly fascinating topic.
Dan: And what, frankly, the people…
Dan: I just don’t think people look deep enough about what’s really going on psychologically.
Dan: Why did that person stay with that organization when there’s clearly better products out there?
Paula: So, Dan, I know one of the things that you have done a huge amount of research on is really the whole psychology of human behavior.
Paula: And I think for anyone who’s running a loyalty program, they might not have had the time and the opportunity that you had, for example, you mentioned that British Telecom commissioned you to study loyalty programs for over six months.
Paula: But if we haven’t had the luxury of that level of study, where would you recommend that a loyalty manager can go to get a really good understanding of either behavioral theory or human psychology?
Dan: Well, OK, I mean, you’re probably well aware, Paula.
Dan: I mean, you can go online and you can find lots and lots of theories out there.
Dan: There’s more than a few.
Dan: I think there was two that I really started with, and then there’s a third one that actually is within the Better Points platform.
Dan: And I think there’s a couple that are really interesting from a loyalty perspective.
Dan: One is personal construct theory.
Dan: And personal construct theory is really where somebody is in their life going through experiences, and as they have experiences, they’re developing perceptions, and out of that, they’re constructing out of those perceptions, beliefs, behaviors, attitudes, and a just construction of their worldview.
Dan: And in that sense, I mean, let’s take an example.
Dan: Let’s say I was very young and a student, and I had to ride an old dirty bus to my school every day.
Dan: Well, I would have a, you know, growing up, that probably wasn’t thrilled to do that.
Dan: It probably wasn’t great for my self-esteem, as I saw people driving by in fast, fancy cars.
Dan: And as I grew up, I probably told myself, I don’t want to be on buses anymore.
Dan: And there is a reality in bus transport that the people’s perceptions are very, very out of date in this country.
Dan: And it’s something that the bus operators struggle with.
Dan: And the reason being is people had experiences.
Dan: They dealt with staff.
Dan: They, you know, they had, and so they built this construct that says, I don’t want to ride a bus.
Dan: So trying to get someone 20 years later, in marketing terms, to break through that construct is tough.
Dan: So I like construct theory, because if you can actually look at a psychographic group and go, okay, what’s their belief set?
Dan: What are they constructed?
Dan: What were their experiences?
Dan: Okay, how do we begin to work with that?
Dan: A second one that I think I always find very, very useful is self-determination theory, which is really based that, you know, this is people have three core intrinsic drivers that they’re always trying to meet in their life.
Dan: And the first one is autonomy in that they’re an independent person.
Dan: No one’s controlling them.
Dan: They have the right and freedom and opportunity to make their own choices as an individual.
Dan: The second one has to do with that they feel like they’re competent.
Dan: They know what they’re doing, they’ve got skills, and they can demonstrate that competence in their life.
Dan: The third one is just simply that they are able to do these things, but in relationship with other people.
Dan: How do they relate?
Dan: How do they feel they’re perceived by other people?
Dan: And in loyalty program terms, I mean, just take an airline program, just take a classic mileage plus program or something like that, which I think is a great program.
Dan: But you look at the issues of how do those programs in the different point levels, areas of reward, the preferential treatments, which are all great and wonderful.
Dan: How do they impact on people’s self-esteem?
Dan: How do people identify with that?
Dan: How are they satisfying their sense of how they want to be perceived?
Dan: And am I able to make, do I have any choice of where or how I fly?
Dan: I mean, all these things come into play.
Dan: So I like those two theories.
Dan: I think from a loyalty perspective, I think they’re really fascinating things to look at.
Dan: And the Better Points platform, there’s one loyalty, I mean, one behavior change approach called COMB, which is C-O-M-B, which stands for Capability, Opportunity, and Motivation.
Dan: And this is a behavioral theory.
Dan: It’s kind of a combination of behavioral theories developed by Professor Susan Michie out of University College London with some other people.
Dan: And it’s basically saying when you’re trying to market to somebody, trying to change somebody’s behavior, you have to ask the question is, do they have the capability of doing what you’re asking them to do?
Paula: Sure.
Dan: So if you’re asking people to come out of the car, well, do I actually, can I walk?
Dan: Am I able to walk?
Dan: You’re asking me to walk.
Dan: No, I’m 75 years old.
Dan: I’ve got arthritis.
Dan: I can’t walk.
Dan: So do they have the capability?
Dan: Do they have the opportunity?
Dan: No, I’m sorry.
Dan: I’m not going to get out of my car.
Dan: There’s no sidewalks.
Dan: There’s no safe place for me to walk.
Paula: Yeah.
Dan: And the third one, which is motivation, is what you’re asking me to do.
Dan: Is that issue impacting on my sense of self?
Dan: And is that giving me a choice?
Dan: Or do I feel like I can decide how to do it?
Dan: So the self-determination theory comes into this third component.
Dan: So we’ve actually taken that Combi theory, and we have a person who works with us on our management team by the name of Hannah Bowden, who’s getting her PhD in behavior science right now.
Dan: And her work has been taking this theory and turning it into what we call digital behavior change techniques.
Dan: That when you’re working on customer journeys or user journeys where you’re developing a loyalty program and you’re moving people through steps, there’s certain things you can do through communication, messaging, social media, content, incentives, etc.
Dan: that will hit those areas in that motivation model, in that behavior change model.
Dan: So it’s actually over time, from a Better Points perspective, we’re getting increasingly, increasingly rigorous how we do this.
Dan: So that may be more than your listeners need.
Dan: But yeah, I mean, those are three different models that you can go to Google tomorrow, right now, and have a look at, and they’re well worth it.
Paula: Absolutely.
Paula: And I think previously, Dan, you’d also mentioned a couple of books.
Paula: One, I think, Fred Reichfeld, who, as we both know very well, and if you have any way of helping me get him on the show, I would be very grateful.
Dan: I don’t know him, I don’t know him, but I do know he’s the person that was, you know, his book, Loyalty is Not Free, I think that’s the title.
Dan: Yes.
Dan: It was a real revelation to me.
Dan: That’s a great resource.
Dan: The other one that I liked, and this goes back 20 years, but the other one I really liked was a book that said, Customer Satisfaction is Worthless.
Paula: Oh my goodness.
Dan: By Jeffrey Gitmer.
Dan: And that was, I hope I pronounced his name right, but that was the basic message that, you know, a customer can be completely, utterly satisfied.
Dan: Hey, I’m really happy with your company.
Dan: I like your product.
Dan: Sorry, I’m leaving.
Paula: Yeah, I know.
Paula: How frustrating.
Paula: I mean, marketing managers around the world are listening and absolutely connecting.
Paula: So thank you for those, Dan.
Paula: Super useful.
Paula: One I will add into the show notes as well that I found fascinating from reading last year was a professor from Stanford University by the name of Yu Kai Cho.
Paula: And he has a whole gamification model, which really looks at the eight core drivers of human behavior.
Paula: And I know he runs courses and all that kind of stuff as well.
Paula: So again, I think for anyone listening who really wants to understand the deeper human psychology, there’s some good, again, quite nerdy models that people can go and completely get stuck into because we can all resonate.
Paula: Again, they’re common to every human being on the planet.
Paula: So you’ve probably come across his work as well, I guess, along your way.
Dan: Well, I haven’t, you know, it’s funny if you just give me one.
Dan: I got to go to that as soon as I get off the recording and take a look at it.
Dan: There you go.
Dan: We use gamification all the time.
Dan: So in the Bella Mossa program, we use a technique called gamification loops.
Dan: So as somebody first enters a user journey, they will have one kind of experience.
Dan: And then based upon what they did, they go into a different loop of gamification.
Dan: And so ideally, the gamification gets increasingly personalized to who that person is, where they are, and what travel mode are they doing, or what level of exercise are they doing.
Dan: And so the whole idea is you’re continuing to…
Dan: I mean, there’s all kinds of…
Dan: There’s angles to this that work in combination.
Dan: So there’s this fascinating stat.
Dan: I mean, the whole world out there has bought wearables and Fitbits and things like that.
Dan: But there’s a reality, and I want to be careful here.
Dan: I don’t know the exact stat, so I don’t want Fitbit to hear this comes to me or anything.
Dan: My understanding, let’s just say it that way, and I might be off by some points of magnitude.
Dan: But within a first few months of somebody getting a wearable, I think it’s roughly about a third just stop using it.
Dan: And if you go out six months, I think you’re at least around 50% stopping using it.
Dan: And it doesn’t mean these devices aren’t great, because they are great.
Dan: Of course.
Dan: They’re terrific.
Dan: They’re incredible, wonderful.
Dan: Yeah.
Dan: I’ve got one sitting in front of me right now.
Dan: But there is a reality that to keep people engaged and to keep using things or keep them in a program, it has to be…
Dan: Gamification is one great way to do it.
Dan: But the device or the program in question needs to be able to recognize who is this person, where are they at in their own journey and whatever the topic is, and how does this system increasingly respond in a tighter and tighter focus over time in a more personal level.
Dan: So, for example, William, I saw that you walked half a mile longer last week.
Dan: So, why don’t you do this?
Dan: And by the way, we’ll give you an extra 200 points or an extra prize draw if you bring a friend this time or attend this event.
Dan: So, you actually start at Better Points.
Dan: We have implementation people and engagement people who watch the programs live.
Dan: And we break people into groups, segments, and we try to personalize the journey as much as we can, watching what individuals are doing.
Dan: Now, we can’t yet do that on an individual level.
Dan: We just can’t do it yet from a system point of view.
Dan: However, let’s go out two or three years when we’re able to further.
Dan: We’ve got a very strong vision for using machine learning and good people who know what they’re doing in this.
Dan: So, we’re progressively moving forward.
Dan: Okay, so the content is more personalized, the messaging that comes back through the app, the feedback, the praise, the gamification loops, all of these things occur.
Dan: And you’ll notice I’m not talking about points much.
Paula: Yeah, of course.
Dan: You know, I know the name is a bit misleading, Better Points, but we’re not, you know, incentives is just one component of this.
Dan: And one of the things that we do with incentives is what we’re looking to do is, so we might use financially backed points to begin with, or financially backed points for prize draws.
Dan: But if we do our job well of behavioral change, by the time that person has been through a couple of gamification loops, they’ve gone out, they’ve moved to past 150 minutes a week of physical exercise or something, they’ve met a friend, they’ve socialized.
Dan: Now they’ve moved from financial engagement to emotional engagement.
Paula: Yeah.
Dan: And now you start moving into the area of true loyalty.
Paula: Yes.
Dan: Where you’re actually people have built some affectionate bonds, they’ve built some self-esteem, they’ve hit those markers.
Dan: I made the choice to go for this walk.
Dan: I feel competent now that I could run.
Dan: I didn’t feel like I could run before.
Dan: And I really feel motivated to do it.
Dan: Now you’re talking.
Dan: So, you know, I think we’re actually quite fortunate because we’re dealing in the areas of physical health, physical activity, how people, you know, riding a bus and all this stuff.
Dan: I think some of the loyalty programs, things that people are trying to do sticky loyalty with, whether you’re a retailer or a particular product category, I think it could be tougher because I’m dealing in areas that are actually pretty emotive.
Paula: Of course you are.
Dan: And I think there’s a real challenge for marketing loyalty managers out there who are actually running programs for product categories that aren’t necessarily off the cuff that emotive.
Paula: Yeah.
Dan: So I think there’s a real challenge in how you actually build these programs and user journeys and experience to hit that kind of true loyalty market, that whole thing of, oh, I really feel an affectionate bond with this brand.
Paula: Yeah.
Dan: I think it’s very challenging.
Paula: It is challenging, Dan.
Paula: And I don’t know if you came across, there’s one very good press release, in fact, and I’ve talked about it on the show before because it comes from the loyalty program that I love most in the world, which is Vitality down in South Africa.
Paula: I’m sure you’ve come across that one.
Paula: But in fact, your point about wearables is one that Apple released some very interesting statistics.
Paula: And it’s because of the 20 years of expertise, I think, that Vitality bring to the party.
Paula: So Vitality obviously have a combination of multiple reward mechanics, which is, I suppose, a combination of instant gratification, short-term rewards, longer-term rewards, obviously phenomenal communications and segmentation.
Paula: But Apple did testify that the combination of the Vitality program using the Apple Watch did see sustained behavior change.
Paula: That is outstanding, exactly.
Paula: So yeah, I think that’s exactly what you’re saying is, you do need the expertise and the understanding of the human psychology to make sure that you build a program that you know will be delivering results in 12 months’ time, not just in 12 weeks’ time.
Paula: So I love what you’re doing in terms of self-esteem.
Paula: It’s something I’m very passionate about.
Paula: So you’re definitely in an area that I love.
Paula: And I know, again, offline, Dan, you talked about you guys are interested maybe in working with other loyalty programs and maybe in a sector that is more functional and more transactional and using, I suppose, your emotional approach to loyalty to connect in with bigger loyalty programs.
Paula: So maybe talk to us a bit about how you see some opportunities for partnerships with maybe some of the listeners.
Dan: Yeah, it’s one of our key areas that we’re focused on.
Dan: And I think a few categories.
Dan: We’re running a really interesting program right now around recycled electrical goods.
Dan: And electrical retailers in Europe are under some fairly severe obligation to ensure that at least 60% of the products they release in the market are recycled properly.
Dan: The problem is they got no data connection to the customers.
Dan: So unless that customer fills out the warranty when they buy it, they don’t know how long the customers kept that product, where that product ended up.
Dan: So we’re working with them to where we actually motivate the customer to recycle an electrical product at a particular location.
Dan: So we’re able to track their product in the brand and we’re able to feed back that data back to the electrical manufacturer.
Dan: So they can then turn around and hopefully build a kind of circular connection back to that customer for repurchase.
Dan: So you’re tying in the customer wanting to do something good for society, being to come in, they recycle the goods.
Dan: And then the theory is that electrical manufacturer will recognize that and praise them for it and give them some sort of offer to repeat purchase and stay with that brand.
Dan: And I think for electrical manufacturer’s product, it doesn’t matter if we’re talking TVs or refrigerators, I think getting sticky loyalty can be pretty tough these days because a lot of it’s very commodity.
Dan: There’s a few others.
Dan: Insurance company, we’re actively working with insurance companies right now on terms of churn rate.
Dan: Insurance is facing massive disruption.
Dan: Just like take automotive insurance.
Dan: You have these incredible new car subscription models or shared subscription models or models that move away from classic ownership.
Dan: And every single one of those has insurance as part of the package.
Dan: So if you’re a classic car, just car insurer where you’re offering car insurance, how are you going to compete with that?
Dan: In health insurance, there’s a lot of disruption too going on there in terms of who provides insurance.
Dan: So try to help and ensure retained loyalty, reduced churn rate is something that we think we can help a lot at because we’re all about how people move, whether it be physical activity or health or how they travel.
Dan: So that kind of industry is a natural for us and we’re looking forward to that.
Dan: We’ve talked with a major grocery supermarket chain that has a major loyalty program about how do we motivate people to increase their purchase of really healthy foods.
Paula: Love it, yeah.
Dan: Particularly amongst demographic groups that don’t necessarily do that very well or don’t have necessarily the economics to do it.
Dan: And that’s a very serious issue.
Dan: Because a lot of times people don’t make…
Dan: And back here you are, back to capability and opportunity.
Dan: Do people have the budget to buy some of these foods that are actually really much better for them?
Dan: Do they have the time?
Dan: Do they have the space to do?
Dan: So it isn’t like you want to do a program where you’re quote preaching to the choir.
Dan: You want to get to demographic groups that actually really need these healthier foods and they need a way to afford them.
Dan: So giving them a loyalty approach that motivates them to do it, but also with the offers, the discounts or the two-for-ones or whatever it is in a way that they really recognize.
Dan: And of course, it goes without saying, yes, they want to build a loyal customer base out of it.
Dan: So these are all kind of works in progress for us right now.
Paula: Amazing, amazing.
Paula: And I particularly love the point you made earlier, Dan, about just progressive behavior improvements.
Paula: And I think that’s something, you know, again, I study as much of this as I possibly can myself.
Paula: And it is those small behavior increments that really add up over time.
Paula: And as loyalty practitioners, I think we have to be patient.
Paula: And it’s not something I’m always the best at being, I have to say.
Paula: But genuinely, you know, from a commercial perspective and just from a human perspective, there’s no point expecting overnight sensations.
Paula: We have to be in this for the long haul.
Paula: So I love that you’re doing that kind of machine learning approach in order to understand if somebody has made progress versus last week, versus last year, and having the communication cycle around all of that.
Paula: So it sounds like you’re doing great work.
Paula: One that particularly interests me is, I suppose, the whole field of different psychological change.
Paula: So, for example, sorry, I mean like mindfulness behaviors and meditation.
Dan: OK, sure.
Paula: I’m sorry, I should say for listeners, sorry, there are aircrafts that fly over where you live, which we can’t test.
Paula: We can’t suspend.
Dan: Sorry, I’m only 20 minutes away from Heathrow.
Dan: I’m sorry about that.
Paula: That’s OK.
Paula: Not to worry.
Paula: We’ll have to just…
Paula: The subject is so interesting.
Paula: I think we’ll just miss the aircraft.
Paula: But anyway, so yeah, I guess the key question for me is just around, do you see or have you explored?
Paula: There are some pieces of wearable technology now around the field of meditation.
Paula: So I don’t know if that’s a field that you guys are going to get into or is that something that you see as quite far down the track?
Dan: I think it’s a really interesting field.
Dan: And I know that there are companies out there that are doing really terrific work in that.
Dan: And there’s no question that use of app-based wearables or just phone-based apps can really help on helping people move along programs of mindfulness and meditation, reduction in stress.
Dan: And I think it’s a huge value.
Dan: And I think one of the areas that we are looking at is the area of mental health, particularly at work.
Dan: And if you look at the statistics of the levels of stress, anxiousness, worry, the levels of absenteeism that are occurring, I hear statistics between a cost to the UK economy between 70 to 100 billion pounds a year, which is kind of like the unknown.
Dan: You know, it’s just like this huge kind of saber that runs through the profits of companies and companies up until recently really have not recognized how bad it is.
Dan: So there are programs that are very, very successful in helping people to do breathing exercises, to have kind of program-timed things that help you walk through periods of meditation.
Dan: And I think these things are immensely valuable.
Dan: It isn’t something that Better Points on our development path is really focused on, because we are more around the area, things that are more around physical activity.
Dan: Now, that being said, though, the statistics that go around, if you could get somebody who is in a deep cycle of inactivity, so if you go up to any NHS trust has this wonderful chart slide of a circle of deep cycle of inactivity, of how over time, somebody who doesn’t feel well, they sit down on a couch and they don’t move, they don’t eat very well, and then they kind of don’t, then they feel worse, and then they try to get up and do something that doesn’t go well and they get down.
Dan: It’s just like this huge negative circular path that people go down.
Dan: And if you can get people out of this, depression, self-esteem, everything goes to the floor.
Dan: If you can break people out of this and get them up past 150 minutes a week, the whole area of stress, anxiety, depression, these things just get so much instantly better just from getting out and walking.
Dan: You know, the endorphins come back alive, they get sunshine, they get vitamin D, they begin to feel some self-esteem.
Dan: And so we believe that what we’re doing does very much in the same territory for mental health as some of these other things.
Dan: And it’s just different.
Dan: I don’t see that as our core strength, but I do think it’s immensely valuable what other people are doing.
Paula: And I think you make a really good point, Dan, because I know every single one of us as human beings knows that it’s when we need it most that fundamentally, unfortunately, we feel least like taking these behavior changes.
Paula: So anything you can do and clearly are doing with the platform in terms of driving that behavior change and incentivizing it, making it social and building those emotional connections is inevitably going to help with that overall mental health.
Paula: So well done.
Paula: It sounds like you’re doing great work.
Dan: Yeah, well, this one, no, you may be reminding me something.
Dan: We’ve got some wonderful people on our firm, and we’ve had a wonderful one by the name of Carrie French, who spends a lot of her time just talking to our users.
Dan: And she has been, over the last couple of years, just continuing to go and capture user stories.
Dan: And every week or so, she’ll release another user story from one of our programs, and she’s always talked to these people personally.
Dan: And you know what really, you know, really consistently comes out of the user stories is people suddenly have hope again.
Dan: And this is something you don’t talk about in business terms very, very much.
Dan: But if somebody’s in a deep cycle of inactivity, or they’ve been ill, we constantly get user stories from people who’ve actually had cancer, or they’ve had, you know, heart trouble, or they haven’t been able to do the things that they want to do.
Dan: And you make the point that it’s when you’re feeling worse, you don’t want to do anything.
Dan: You don’t want to do it.
Dan: So the fact that something comes along and helps motivate and get you going, then all of a sudden, you know, a bit of hope comes back.
Paula: For sure.
Paula: And it might just be the free beer, sorry, or the free ice cream.
Dan: Free ice cream.
Paula: I think we’re simple creatures, Dan, you know, it’s not that complicated.
Dan: It’s not that complicated.
Dan: Absolutely right.
Dan: That’s really cool.
Paula: Brilliant.
Paula: Well, listen, I think you’re doing great work, Dan.
Paula: I’m totally inspired, as I said, by the approach that you’re taking, by the depth of knowledge that you’ve got in Better Points around what drives human behavior and the fact that there is, you know, a company like you guys really driving sustainable change.
Paula: So just before we wrap up, is there anything else that you kind of wanted to touch on for listeners?
Dan: Paul, I just think I’m really pleased to have the chance to just talk about all this.
Dan: You don’t get very much opportunity to just kind of sit and just discuss all this.
Dan: So I’m very grateful you gave me the opportunities today.
Dan: Thank you.
Paula: No problem at all, Dan.
Paula: Well, listen, keep up the good work and yeah, I’ll make sure all of the listeners have access to links to everything we’ve discussed today.
Paula: So I will just say from my side, thanks a million for talking to Let’s Talk Loyalty.
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