Understanding Loyalty in Europe 4.0: One Region, Many Realities (#767)

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

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

PAULA: Today’s episode is hosted by Nyeleti Sue-Angel Nkuna, a customer loyalty strategist with a proven record of helping blue chip global brands forge deeper connections with their customers.

PAULA: Enjoy!

NYELETI: Hello, my name is Nyeleti, and today’s episode is an absolute treat.

NYELETI: We get to reveal the much anticipated Understanding Loyalty in Europe white paper, a research done by Mando-Connect in collaboration with YouGov.

NYELETI: And on the show today, we have somebody that most of you would be very familiar with.

NYELETI: She’s one of our long-standing co-hosts for Let’s Talk Loyalty, Charlie Hills, and she’s joined by her colleague, James Davies, both from Mando-Connect.

NYELETI: And today, we will take a deep dive into this white paper that explores 24 markets in Europe to understand what is the state of loyalty, looking at loyalty appeal, loyalty membership, and loyalty engagement.

NYELETI: Hello and welcome to Let’s Talk Loyalty.

NYELETI: None of you actually need an introduction because you’ve been on the platform before.

NYELETI: Lisa, well, you, Charlie, have been one of our more established co-hosts, but I have the privilege of saying welcome to both of you, Charlie and James.

CHARLIE: Oh, thank you.

CHARLIE: And it’s really exciting to be on this side and actually getting to answer the questions rather than just asking them.

CHARLIE: So thank you very much for having me.

NYELETI: Thank you, Charlie.

NYELETI: And James, welcome to you too.

JAMES: Yeah, thanks for having me back.

JAMES: I think it’s my third session on Let’s Talk Loyalty, so I’m very, very pleased to be back.

NYELETI: So we’re going to kickstart this conversation, as we always do, and that’s to get to understand about what you are reading, what’s on your bookshelf.

NYELETI: So thinking of a non-fiction book, what has inspired you in recent times and what could you share on the program?

NYELETI: I’ll start with you, James.

JAMES: Well, I think I’ve said different books each time I’ve been on, but the one I’m going for today is Eric Rees, The Lean Startup.

JAMES: It’s actually a business book, but it gives you a nice road map of how to build new businesses really efficiently, using rapid iterative design approaches to test and learn your hypothesis as you go.

JAMES: I think there’s quite a lot of nice parallels between that approach and actually how you build and optimize the loyalty program as well.

JAMES: So that’s what I’m going for today.

NYELETI: That sounds interesting, not just test and learn, but also here it’s quite prudent to fill first Tony in that phase as well.

NYELETI: Charlie, what about you?

NYELETI: What’s on your bookshelf that you want to share today?

CHARLIE: I’ve got loads on my bookshelf because I’m really old school and I love a paper book.

CHARLIE: We’re so lucky with all the experts in the paper.

CHARLIE: So many of them are authors as well.

CHARLIE: One of the wonderful things about working with them is you get to see all their books as well.

CHARLIE: So I highly recommend checking out the authors’ books within the white paper.

CHARLIE: But today, I’m actually going to go back to an oldie but a goodie.

CHARLIE: Knowledge is beautiful.

CHARLIE: I think what’s been so interesting at WPP at the moment in terms of how we’re being able to use AI with our WPP open capabilities to sort of look at data and create new data and how we present data that actually we’ve been quite inspired to kind of go back and actually revisit how we’re building infographics and how we can kind of make them even better and even smarter and even more digestible.

CHARLIE: So it’s actually it’s lovely because it’s a book I’ve had on my shelf for years, but it’s sort of become really, really relevant again in the last six months.

CHARLIE: I’ve been using it a lot.

CHARLIE: So I really recommend checking out.

CHARLIE: It’s great for inspiration.

CHARLIE: And the wonderful thing is when it came out, you had to work with a graphic designer and it would take weeks to make each individual graphic.

CHARLIE: And now actually with the power of AI, anyone can do it and you can create stuff that looks fantastic really quickly.

CHARLIE: So I’m currently doing lots of experiments at the moment.

CHARLIE: So I thoroughly recommend that.

CHARLIE: It’s great for presentations.

NYELETI: It’s a great recommendation and especially about simplifying a lot of those complex topics into something visual.

NYELETI: Most of us like to learn in a visual format.

NYELETI: So yeah, I’ll definitely be looking at that.

NYELETI: And both of you have been in the loyalty space for many years, but I’m curious, what is that thing that, you know, pulled you into that loyalty space in the first place in one sentence?

NYELETI: What would that be, Charlie?

CHARLIE: For me, originally it was about data.

CHARLIE: So I’m really unusual.

CHARLIE: I’m a mathematical economist by training, who ended up working in marketing and creative agencies.

CHARLIE: And the thing I loved about loyalty and still love is that you can understand that data and that insight, make it happen in real life and then see what happens really quickly, and then optimize it and do it better.

CHARLIE: And that’s kind of a core piece of really DNA that runs through everything that we do at Mando.

CHARLIE: It’s that, you know, what’s the piece of data?

CHARLIE: How do we activate it?

CHARLIE: How do we learn from it?

CHARLIE: How do we do it better next time?

CHARLIE: So that’s what drew me in initially in my very first loyalty job, which was Boots Advantage Card using their data devolution as part of the graduate scheme there.

CHARLIE: And it’s been a kind of consistent theme throughout my whole career.

NYELETI: It’s always so interesting with the way into loyalty because it’s not one of those straightforward career parts that I think people go into.

NYELETI: What would be that pull for you, James?

JAMES: I think I like the kind of the combination of so many different disciplines kind of all in one.

JAMES: I think it’s that mixture of kind of creativity and a lot of the analytics work, as Charlie said, that kind of goes into kind of developing those loyalty programs, which just, yeah, that’s what kind of appeals to me.

JAMES: And really be able to kind of see that kind of applied behavioral kind of psychology in practice.

JAMES: Yeah, it’s just a nice kind of combination of lots of different things all in one career.

NYELETI: And if I had to actually like pressure testers a bit, and say in one word for both of you, and I’ll start with you, James, what is the word that keeps you in loyalty?

JAMES: I’ve gone for evolving or evolution.

JAMES: I think just the way everything shifts all the time is, again, keeps you interested.

JAMES: I think custom needs change, technology changes, and kind of your competition as well changes.

JAMES: So it’s just that kind of constant shift keeps things interesting for me.

NYELETI: Involving is great.

NYELETI: One word, Charlie?

CHARLIE: For me, it was curiosity, actually, which anyone who knows me would be like, yes, absolutely.

CHARLIE: It’s always kind of figuring out the different sector, the different audience, the different program, the different mechanic, the different reward, the new bit of data that comes in, the new amazing capabilities that we might have from one of the platform providers that we’re working with.

CHARLIE: It’s kind of ever-changing.

CHARLIE: It’s quite linked to James, actually.

CHARLIE: But yeah, I’m a very curious creature.

CHARLIE: So I love the fact that there’s always so much to learn and so much to kind of try out and test in our space.

CHARLIE: It’s definitely one of the nippier and more agile marketing disciplines, I think.

NYELETI: I love those, curiosity as well as evolving.

NYELETI: It actually brings us back to the subject of the day, which is the white paper that you have authored and that’s Understanding Loyalty in Europe 4.0.

NYELETI: So looking at curiosity and evolving, you know, Charlie, where are we with this edition?

NYELETI: What would you say is the co-purpose of this research?

NYELETI: And what is the answer for the industry?

CHARLIE: So it’s the fourth edition of Understanding Loyalty in Europe, which is a white paper series that we started with our amazing IP partners, YouGov, so Nick Fishbourne and Dylan Alderson and the team, absolutely brilliant kind of partnership we’ve had with them.

CHARLIE: And actually, we started with the British market, so understanding what the Brits want from loyalty programs.

CHARLIE: And then in 2023, I think it was, we started looking at the kind of the European market and across those 24.

CHARLIE: So it’s been a fantastic paper.

CHARLIE: I really recommend it.

CHARLIE: We actually write it with a community of loyalty experts.

CHARLIE: So there’s some really good kind of stories and case studies in there.

CHARLIE: And in terms of the purpose of this edition, I think it’s threefold for me.

CHARLIE: So the first one is about understanding.

CHARLIE: I think before we commissioned this research and started publishing it, there was no single view of loyalty across Europe.

CHARLIE: And there were some really bad hypotheses that existed, particularly in global loyalty programs, because Europe is a one-size-fits-all solution.

CHARLIE: We’ll have a version for North America, a version for South America, and a version for Europe.

CHARLIE: And it’s like, that’s just not how the European market works.

CHARLIE: So the first thing was about understanding those key differences across those key European markets.

CHARLIE: What became very apparent very quickly, however, was that the data was really interesting, but getting under the skin of it and understanding why is really exciting.

CHARLIE: So the second purpose is about inspiration.

CHARLIE: And that’s why we have this fantastic community of experts who help us build case studies, understand why things look different in each of the markets.

CHARLIE: And they’re all sort of leaders in their field.

CHARLIE: And every year we try and add a couple more experts in, and we have a real mix, which James and I were really passionate about as well.

CHARLIE: So we have academics, we have consultants, we have loyalty leads, we have brands.

CHARLIE: So we take a really broad view of loyalty to build that inspiration.

CHARLIE: And then the third one sort of links back to that point that James and I are both really passionate about, about evolution and curiosity, which is about learning.

CHARLIE: I think you can never sit still in loyalty.

CHARLIE: And I’ve been doing this for a very, very long time now.

CHARLIE: It’s nearly 30 years, which is absolutely horrifying.

CHARLIE: But you’re always learning, always curious.

CHARLIE: And I think that’s what’s really exciting in this paper as well.

CHARLIE: We’ve learned so much more this year than we learned last year.

CHARLIE: And that journey continues each time.

CHARLIE: So those are the three, understanding, inspiration and learning.

NYELETI: I absolutely love that.

NYELETI: And I do know that you look into 24 markets.

NYELETI: And like you said, there are differences, Europe is in one whole.

NYELETI: So the key points of actually even join those inspirations, where is it working well?

NYELETI: Where do we see shifts?

NYELETI: Is it some of the things that I’m really, really excited to get into in this conversation.

NYELETI: But before we even go into those findings, James, would you just take us through the methodology of this paper?

NYELETI: I know that you worked with YouGov and you’ve done so with all the other editions.

NYELETI: But if you could just let us know, how does that work?

NYELETI: Sure.

JAMES: Yeah.

JAMES: So, I mean, for anyone who’s not already familiar with YouGov, they’re a global research and data analytics group.

JAMES: As Charlie said, we’ve worked with them on a series of different papers since 2018, actually.

JAMES: So we’ve got those three which Charlie spoke about.

JAMES: The research methodology for this specific paper is actually really quite simple.

JAMES: Working with YouGov and their profiles tool, we’ve asked a representative sample of 24 European markets, eight core questions.

JAMES: Those questions focus in three areas.

JAMES: So one, looking at membership, actually look how many people are engaging with programs at the moment, how many are actual members.

JAMES: Then the second part is actually how appealing are those programs in that market and the final one is impact.

JAMES: So looking at some kind of attitudinal statements as to actually, how people perceive membership of a law program is impacting them.

JAMES: So we look at those eight key questions.

JAMES: We’ve asked the same eight over the last four papers.

JAMES: So the nice thing is now we can really start to see those trends emerging and see over time what’s going on and then on top of that, on top of our analysis, we’ve also got that wider pool of European experts as well.

JAMES: To get their view actually as people operating these markets, to say actually look what is actually going on in the ground, which programs are really performing well.

JAMES: It’s really nice to have that broader perspective.

JAMES: I think in this paper, we’ve got 13 of the 24 markets represented.

JAMES: It’s a nice whole view of the European loyalty ecosystems of work.

JAMES: We’re always looking for more experts as well.

JAMES: I think if there are any Bulgarian or Croatian loyalty experts out there listening to this, we’d be more than happy to have you involved next year.

JAMES: So please do reach out.

NYELETI: I love the way you had put it earlier, Charlie.

NYELETI: It’s a community of experts.

NYELETI: I like the idea that people get to contribute, and it’s a lot valuable, especially from somebody who’s on the brand side to see what’s working in the ground.

NYELETI: But now looking at the study itself, you’ve asked pretty much the same eight questions over the years, and it’s across 24 markets.

NYELETI: Charlie, what would you say stands out to you as being the most meaningful or unexpected pattern?

CHARLIE: It’s such a good question actually, and it really made me think because when we start to look, we start off with membership, and then we lay on appeal, and then we lay on impact.

CHARLIE: And actually, what we’re trying to build is a picture of what loyalty engagement looks like across those different markets.

CHARLIE: So within the paper, you’ll see the European average statistic, which is the mean average, and then the variations by market.

CHARLIE: But we had a eureka moment in that first paper, inspired actually now as I’m answering this question, buy knowledge is beautiful, because what we worked on for a good, took us about a month, was to figure out a way of getting a single visual that would actually show loyalty marketers across Europe, actually what loyalty engagement looked like across those 24 markets, exactly for that question, so we could start to look at the patterns.

CHARLIE: And actually, we did it.

CHARLIE: We were so pleased.

CHARLIE: We started off with a sort of a traffic dial, and we built the loyalty gauge.

CHARLIE: And you can see kind of all the masses in the paper, but how we look at membership and then net appeal and then net impact, and then add it up to get a kind of net loyalty engagement score.

CHARLIE: I’ve got it.

CHARLIE: I’m surrounded by screens.

CHARLIE: I’ve got it up on my screen to the right.

CHARLIE: So as I look, that’s what I’m looking at here.

CHARLIE: And what I think it shows us from a pattern point of view is it really is true.

CHARLIE: There is no one-size-fits-all approach to loyalty in Europe, and there is actually no pattern, which is really interesting because when you look at it, you can see our top three markets for loyalty engagement, Ireland, Great Britain, and Poland.

CHARLIE: And actually, they’re all quite strong on membership.

CHARLIE: They’re very strong on appeal, and they’re really, really strong on impact.

CHARLIE: But when you then look across the 24 markets, actually, we’ve got real variation.

CHARLIE: We’ve got some markets, our bottom three markets, the Netherlands, Denmark, and Turkey, are each at the bottom for entirely different reasons.

CHARLIE: So if you look at the Netherlands, you’ve got quite high membership, but fairly low appeal and fairly low impact.

CHARLIE: If you look at Denmark, you’ve actually got very high membership, but really low appeal and impact.

CHARLIE: And then if you look at Turkey, you’ve actually got very low membership, but very high appeal and high impact.

CHARLIE: And those are three, they sit right next to each other on the graph, but they’re three entirely different stories for three entirely different reasons.

CHARLIE: So I think my key takeout, as much as it feels like a complete cop-out, is that there genuinely is no pattern in loyalty amongst Europe.

CHARLIE: We can have some headlines, it’s a very engaged loyalty market, high appeal, and actually really strong impact scores.

CHARLIE: And if you start to think about the impact of loyalty across emotional and functional metrics versus other marketing disciplines, it’s pretty off the charts.

CHARLIE: It’s another reason it’s so great to work in loyalty markets.

CHARLIE: We have got some general trends, but actually that the pattern and the key takeout I’d want for our audience is there is no one size fits all and you really need to look at it on a market by market basis.

CHARLIE: And obviously within this paper, we’re only looking at the national average as well.

CHARLIE: So there’s huge variation within each of those markets by customer type, by segment, by region actually in some of our markets.

CHARLIE: You know, Germany is a really interesting market.

CHARLIE: We’ve got huge variations within that market as well.

CHARLIE: So, so yeah, I’d say my key pattern is that there is no pattern, which is very cheeky answer to the question.

NYELETI: I think you’re building a strong case for autonomy when it comes to markets in that global to local dialogue that is often had.

NYELETI: But quite interesting, Charlie, you look at loyalty engagement across those three metrics, Loyalty Membership, Loyalty Impact and Loyalty Appeal.

NYELETI: Can you speak a little bit to that and why is it Impact, Membership and Appeal that then comes across as engagement?

CHARLIE: So when we started these white papers back in 2018 with YouGov, we actually worked in partnership with YouGov to build and write their loyalty metrics.

CHARLIE: So at Mando-Connect, we’re really privileged and as I said, YouGov are a wonderful partner for us in that we actually help them shape their loyalty and also their promotions expertise actually in terms of getting those data points right.

CHARLIE: Actually, what we wanted to look at in that was quite a broad view.

CHARLIE: Loyalty can be quite transactional, it can be quite functional and quite a lot of programs across the globe, build that with that at its heart.

CHARLIE: The old school points program that’s all about increasing average order value and maybe driving a bit of frequency and paying people back with a 1% kind of earn and burn rate.

CHARLIE: Actually, what we wanted to take was a broader appeal of that.

CHARLIE: We wanted to see what are the behaviors because that’s a real indication of engagement.

CHARLIE: Actually, are you or are you not a member of the program?

CHARLIE: We look at across Europe.

CHARLIE: In our British study, we actually look at how many programs you’re a member of, which programs you’re a member of.

CHARLIE: But obviously, if we did that for 24 markets, we would be killing far too many trees in the establishment of the paper.

CHARLIE: We keep it quite top line.

CHARLIE: First, we look at behavior.

CHARLIE: Then we wanted to overlay that rich emotional loyalty.

CHARLIE: How much do you like loyalty is really important.

CHARLIE: Do you think it’s a good idea that brands should reward their customers with loyalty programs?

CHARLIE: Do you join when you’re given the chance?

CHARLIE: Do you think all brands should have a loyalty program?

CHARLIE: Those are the three metrics there.

CHARLIE: They were written very closely in partnership with YouGov combining their research expertise with our loyalty expertise to make sure that we had that breadth of depth of emotion.

CHARLIE: Then impact is just so important to anyone in the industry at the moment.

CHARLIE: It’s all about the business case, the brand impact and the customer impact.

CHARLIE: We’ve tried to represent that in the four impact metrics that we have.

CHARLIE: We look at loyalty, we look at spend and then we look at emotional connection and also recommendations.

CHARLIE: It’s not a perfect set.

CHARLIE: In the British study, again, we have six impact metrics that we look at, but across Europe, that’s how our headline for.

CHARLIE: That’s why we combined it so that we were getting that behavioral, attitudinal and impact view so that loyalty marketers would have a good set.

CHARLIE: But depending on what your loyalty question is, then actually, or your loyalty challenge or opportunity is, those metrics can really vary in importance.

CHARLIE: I think one of the big insights that came out for me in year two was work with Zsuzsa Kechmar of Antavo.

CHARLIE: We were brainstorming her contribution to the paper.

CHARLIE: Obviously, they have their big paper.

CHARLIE: We had a lightning moment where we suddenly realized that actually, a high engagement market is fabulous and on paper looks great.

CHARLIE: As a loyalty marketer, you’re like, I’m going to go and launch my version of my program in that market.

CHARLIE: But actually, the bar is really high in those high engagement markets because it’s really sophisticated.

CHARLIE: The brands and the programs have been there for a long time.

CHARLIE: You’ve got to be really amazing to do well in that market.

CHARLIE: Whereas actually, perhaps in a lower engagement market, you can launch something simpler.

CHARLIE: It’s just a good example of how actually depending what your loyalty opportunity or challenges, you really need to think about what the data is telling you.

CHARLIE: Thank you to Juju for that one.

CHARLIE: That was a great conversation actually that started quite a debate amongst the experts as you can probably imagine.

CHARLIE: But yeah, it’s really thinking about the data and getting under the skin of it for your particular brand.

NYELETI: I think the theme metrics do make it holistic and give a very comprehensive view.

NYELETI: But also there’s some surprises.

NYELETI: The next question goes to you James in terms of what did you find particularly surprising with this edition?

NYELETI: But just to preface it, Charlie, I mean you mentioned earlier that in Denmark, for example, the membership is high but engagement is low.

NYELETI: What would be that gap?

NYELETI: Is it the idea of the emotional engagement that you spoke about in order to actually attract those loyalty members beyond a transactional perspective?

NYELETI: But over to you James, what were some of the surprises you found?

JAMES: It’s always interesting to see obviously the wider picture from year to year, but there’s always just one or two little quirks in the data that makes you ask those questions actually what’s going on there.

JAMES: I think the one that stood out to me this year was actually around that spend impact as well, specifically in Great Britain.

JAMES: It’s obviously our home market, but it was just quite interesting to see from last year when we ran the research in January 2025, we actually saw a 10 percentage point dip in that spend impact metric, which is still high.

JAMES: It still shows that loyalty programs are still having a very positive impact.

JAMES: But it was just an interesting one to think about actually why what was causing that dip this year versus last.

NYELETI: How significant is that dip from the last year, James?

JAMES: It went from 56 percent to 46 percent, saying actually loyalty programs are impacting how much they are spending, how much they are spending more.

JAMES: So I think there’s a few things going on there.

JAMES: There’s obviously an extended cost of living crisis.

JAMES: So just generally people are spending less as a whole.

JAMES: You also start to think about that as we’ve just touched on briefly there, just the fact that, look, Great Britain is one of the most, it has one of the highest scores in terms of membership for loyalty membership.

JAMES: So is there a bit of market saturation going on there?

JAMES: There’s something between those two metrics, between those two points, which I think is quite interesting.

JAMES: And also when we kind of look back at when we were doing, when we ran the 2025 research, what was kind of going on, like we know within the UK, a grocery is probably the, well, it is the biggest sector, biggest lot of sector.

JAMES: And I was trying to think actually what was happening at that time that might cause a spike in that number.

JAMES: And I think we had lots of things kind of going on.

JAMES: We had member pricing, which by that point had kind of spread across the kind of grocery sector.

JAMES: So yeah, it really had kind of proliferated around.

JAMES: And I think maybe that’s also had a bit of an impact into it.

JAMES: So I don’t think we know kind of for sure, but I think there’s a few bits kind of going on there, which might lead you to think 2025 was particularly big.

JAMES: And yeah, we’re really interested to see actually what comes next when we run this research again next year.

JAMES: Where is that kind of spend impact going to be?

NYELETI: It’s quite interesting, because to your point, that dip could just be the macro elements, right?

NYELETI: A lot of people are feeling very tight financially at the moment.

NYELETI: And is that a reflection of just that?

NYELETI: Or could loyalty programs actually respond to that and deliver more points, or not necessarily points, but benefits that can actually supplement that?

NYELETI: So more on the instant gratification elements as a way of addressing the macro concern.

NYELETI: What are your thoughts on that in terms of what should brands actually do when they see these numbers?

JAMES: Yeah, I think it’s a really good point.

JAMES: I think what we’ve observed probably in the market is just the fact that you really can’t stand still.

JAMES: Like you can’t, I think one of the experts said it quite nicely.

JAMES: You can’t set it and forget it.

JAMES: It’s got to be something which just adjusts and builds and responds to consumers over time.

JAMES: So yeah, I think it just kind of highlights that, that look, you can’t just have a program, forget it.

JAMES: You’ve got to kind of see what’s going on.

JAMES: And there’s lots of great examples, again, of those kind of offering that immediate kind of gratification.

JAMES: We really like the kind of the Costa kind of little treats perk where rather than having to wait for that kind of eighth coffee, you get something more immediately.

JAMES: And actually, we saw a few programs do that, especially at that kind of time, where actually people just want a little treats more and more and often rather than having to save up for to be rewarded kind of further down the line.

NYELETI: And now we’ve just spoken to what brands can do in terms of addressing this concern.

NYELETI: But I’m also curious because this report, to the point that you raised, Charlie, shows some stock differences across markets, UK and Ireland showing very high engagement across the board, while you have Denmark and Netherlands that have high membership, but lower appeal and impact.

NYELETI: What does this reveal about consumers and how they are relating to loyalty programs, so putting it on the consumer perspective?

CHARLIE: Yeah.

CHARLIE: I mean, we’ve seen some really interesting trends and patterns since we first started the European reports.

CHARLIE: And actually, I think we could write a whole paper just on what’s been happening over the last four years, actually, as opposed to what’s happening now.

CHARLIE: And that might be one of the things that we start to look at next year, and obviously as we start to think about global reports and all those kind of developments and innovations.

CHARLIE: But I think there are some really interesting things we can see about how consumers are thinking and feeling and behaving about loyalty programs when we take that historic view.

CHARLIE: So if we look at Appeal, in 2023, in the first one, when we were looking at European Appeal, our European average was 56% thought that all programs are a great way to reward customers.

CHARLIE: That’s actually increased to 59.5.

CHARLIE: So that’s a chunky increase.

CHARLIE: When we looked at, do you think every program should offer a loyalty program?

CHARLIE: 42% said yes, now we’re up at 49%.

CHARLIE: I think that one for me is always, are we hitting saturation?

CHARLIE: Are we hitting a point where actually enough brands, there are enough programs?

CHARLIE: And it never ceases to surprise me that we haven’t hit saturation yet, particularly in some of the really high membership, advanced sophisticated markets.

CHARLIE: James and I obviously, we know the British market, probably best of all, the Irish market as well.

CHARLIE: Those are really sophisticated markets with a lot of programs and we haven’t hit saturation yet.

CHARLIE: Although we are starting to see some signs that maybe we’re hitting there.

CHARLIE: And then actually, we had 35% in 2023 saying they would join the program every time they’re given a chance.

CHARLIE: And that’s actually increased as well to 43%.

CHARLIE: So I think what that tells us is that consumers still really like loyalty programs and actually they want more of them and they want to keep joining them, which I think is probably the only way that would happen is if they’re getting value from the programs and actually they’re seeing that mutual value exchange of effort versus reward paying off.

CHARLIE: So I think we’ve seen a steady increase in appeals.

CHARLIE: I think that’s really good.

CHARLIE: We’ve only seen a slight increase in membership at a net European level since 2023.

CHARLIE: So we started at 61.3%, we’re now at 63.3%.

CHARLIE: But again, when you break that down across the 24 markets, you can see we’ve got some mega markets and some minor markets.

CHARLIE: And so actually that European picture is great to see an average and it’s great to see that more than half the adults in Europe are members of at least one program.

CHARLIE: That’s amazing.

CHARLIE: But actually the European average is less interesting, I think, for membership than when you look at it on a per market basis.

CHARLIE: And then on impact since 2023, again, we’ve got a fairly steady pattern, which when you think about how much the world has changed, the economy has changed, politics has changed, cost of living crisis, you know, we started doing these reports post the COVID pandemic, but we were actually doing the British reports during the COVID pandemic.

CHARLIE: So we’ve seen huge kind of changes, but actually they’re fairly consistent.

CHARLIE: So loyalty was at 43% impact, now it’s at 42% impact, so fairly steady.

CHARLIE: Recommendation was 36% now at 34.5, so fairly steady.

CHARLIE: The emotional impact of a loyalty program, 33 and now 33.3, so fairly steady.

CHARLIE: The one where we have seen the change actually in contrast to James’ kind of individual market story versus last year was on spend.

CHARLIE: So back in 2023, consumers would say across Europe, 29% said, yeah, being a member of a loyalty program makes me spend more, and that’s actually increased to 35%.

CHARLIE: So that’s a chunky increase.

CHARLIE: We think that as a net European picture, that is because we’ve now got a lot more loyalty programs, we’ve got more sophisticated loyalty programs.

CHARLIE: We’ve got some really clever mechanics where consumers are incentivized and rewarded specifically for spending more with the brand.

CHARLIE: We’ve also had things like member pricing come in across Europe, which is really spiked membership, but also really increased spend because as you walk into the grocery or you’re in your online basket, you can literally see the compare and contrast of what it is as a member versus not.

CHARLIE: Some of those deals are a real headline grabbing deal.

CHARLIE: We’ve seen that increase.

CHARLIE: Overall, there are some really interesting shifts.

CHARLIE: I think what we’re seeing is they like them more.

CHARLIE: Membership is pretty solid and impact is pretty solid.

CHARLIE: It paints a fairly good picture, I think, for what the industry is doing.

NYELETI: I think that’s great to know that we are not yet above saturation.

NYELETI: You did say that it’s across Europe, so an adult has at least one membership, but it’s more interesting to look into the markets.

NYELETI: As an example, what is the average in Britain?

CHARLIE: Oh, goodness.

CHARLIE: I should know this off the top of my head, but I’ve only got the gauge in front of me.

CHARLIE: James, have you got what the British percentage is?

JAMES: For 2020-6, we’re at 86%.

CHARLIE: Which is bad, right?

CHARLIE: That’s nearly 9 in 10 adults and members of at least one program.

CHARLIE: And what’s particularly interesting in the British market is actually some of our biggest loyalty sectors, where the biggest spend is.

CHARLIE: So if we look at the kind of financial services, for example, you’ve got Amex, MasterCard, all these really, really big programs.

CHARLIE: Every bank in Britain has a really big program that people are a member of.

CHARLIE: But for some reason, the Brits don’t actually recognize those as loyalty programs.

CHARLIE: So actually, I reckon our membership is actually even higher.

CHARLIE: I think we might be almost at about 100% in the British market because we’ve got some really big sectors that just don’t talk about themselves as loyalty programs, but actually are.

CHARLIE: So yeah, it’s fascinating when you start to get into the detail of it.

NYELETI: It is pretty fascinating, but then it makes me wonder, do you feel loyalty programs today are true differentiator of brands or have they just become somewhat of a hygiene factor?

CHARLIE: It’s really interesting.

CHARLIE: So as part of WPP and the loyalty groups, we’ve got some really big agency powerhouses that we work with, and we will talk across the group.

CHARLIE: This is one of the big questions that we address and we think about quite a lot.

CHARLIE: Is it a differentiator?

CHARLIE: How is it a differentiator?

CHARLIE: Should the loyalty program act in service of the brand or can it enhance the brand?

CHARLIE: I think when you look at the big programs that we’ve got, we’ve got four or five big programs in Britain that really dominate.

CHARLIE: In grocery, we’ve then got coffee coming into the top 10 now, and then we’ve had an explosion in the restaurant sector of new programs and also in retail.

CHARLIE: We are almost at a point where nearly every big brand has a program.

CHARLIE: But what’s really interesting is they do all do them differently, and actually they use them differently from a brand point of view and a business point of view.

CHARLIE: So no, I don’t think we are at a point where it’s a commodity and where actually everyone has the same old program.

CHARLIE: I think perhaps we were at that point 10 years ago when everyone had a points program and everybody got one point back for every pound that they spend, and it was all kind of the same.

CHARLIE: But now actually there is so much variety both in the design and the execution, that I don’t think actually they are commodities anymore.

CHARLIE: I think what is interesting is when you look at the brands that don’t have them.

CHARLIE: So if you’re in a highly loyalty sector where nearly everybody has a loyalty program and you haven’t got one, then I think that’s a particularly interesting position to be in.

CHARLIE: And most of those brands, because obviously we’re a very big group, we’re aware, are actually looking at getting one and how they can activate one for their business.

NYELETI: It’s quite interesting because that tension that I see in some of these numbers, high participation but limited emotional connection and advocacy, I would have thought maybe there’s something in the way the programs are designed today and that looking at the transactional points, earning and points redeeming.

NYELETI: But would you say in the case studies that you’re seeing some differentiation in terms of a bit of innovation that’s happening in the program design?

NYELETI: Do you want to speak into that, James?

NYELETI: What are some of the strong case studies that you have seen?

JAMES: Yeah, I think it’s something that’s really nice about this paper is that obviously we have a point of view on our home market.

JAMES: We see the programs that we’re interacting with on a daily basis, so we get to know them really well.

JAMES: But the fact that we just have this pool of European experts who bring to light actually what is unique and differentiated in their particular market.

JAMES: I think it’s a really interesting topic around actually, look, is it hijacking factor?

JAMES: Is there still some kind of differentiation?

JAMES: I think you can really see that, yes, for the good programs, for the ones who are making an effort investing, there are some really good examples out there.

JAMES: I think, again, I’d urge everyone to read the paper and to go and explore some of those programs, but I really like some of the more niche ones, which I’ve never come across.

JAMES: I think there was one example from the Czech Republic called Tino, I think it was.

JAMES: And our expert there was talking about the fact that actually, it’s a beauty product.

JAMES: And just the way they’ve pulled in the opportunity to sample products is just a really lovely example of how you can do something a little bit different from your competitors who were in that market, largely doing points, to actually put product in people’s hands, get them a bit more loyal to your service, and give them the opportunity to try things again before they buy.

JAMES: And it’s just those little stories that there’s lots of nice ones dotted around the paper.

JAMES: So yeah, definitely give it a read.

NYELETI: I definitely like that example, the more experiential loyalty-based programs.

NYELETI: And so back to you, James, for a loyalty leader listening to this, what feels like the most important shift that they should be paying attention to right now based on this research?

NYELETI: Looking forward.

JAMES: Yeah, I think as Charlie said, you’ve got to view the research within the context of the market you’re in.

JAMES: But if we are looking at the most significant shift, I think it’s that, whilst we’re not at market saturation just yet, a lot of the markets are heading that way.

JAMES: And for some of the markets where it is still quite low, you can see just everything is trending upwards.

JAMES: So it feels like if you’re not at that point, you might be getting there soon.

JAMES: So I think that is probably the main shift that I would be paying attention to.

JAMES: And I think what that means for brands really is that you’ve got to think about your strategy in a scenario where all of your competitors are offering some form of loyalty program.

JAMES: And many of them might look quite similar to you.

JAMES: And I think what we’re seeing is that there’s a lot of quite short-term approaches to that at the moment.

JAMES: We’ve seen gamification come up time and time again as a way to cut through the noise.

JAMES: And it is, it’s a great way to kind of offer something different.

JAMES: But again, if everyone starts doing the same thing, you’ve got to actually then think about what’s kind of coming next and how you can kind of continue to build on your program and differentiate yourself as well.

JAMES: And again, it’s something that we ask the experts, look, what is the market trends kind of for 2026 and beyond?

JAMES: And so yeah, there’s lots of nice kind of examples of where things might be kind of going, whether that’s kind of agentic kind of ecosystems, all of those kind of big serious shifts that might kind of fundamentally change how kind of consumers are going to be shopping kind of in the future.

JAMES: So yeah, there’s lots of interesting things to kind of think about and kind of plan for potentially.

NYELETI: Absolutely.

NYELETI: And concretely, maybe Charlie, could they be things that brands today may be over relying on or maybe underestimating when it comes to loyalty?

CHARLIE: Yeah, it’s a really good question actually.

CHARLIE: I think five years ago, a brand would go, I need a loyalty program or I have an old school loyalty program and I just need to optimize it.

CHARLIE: And the answer was pretty much you need a points program with a promotional calendar and the opportunity to do double points.

CHARLIE: And then I think what’s happened in the last sort of five years, certainly a lot more in the last two years is there’s a far more customer centric and brand centric approach to loyalty.

CHARLIE: I know you’ve seen this as well, which is where actually you’re going, what does my brand need?

CHARLIE: What does my audience need?

CHARLIE: And whenever we’re talking to clients, we’re working on a really interesting project at the moment, actually designing a new loyalty program.

CHARLIE: And it’s like, what is unique about your brand for now, but also for long term loyalty?

CHARLIE: Because actually what you need is something that sets you apart.

CHARLIE: And then you need to bake that into the DNA of your program.

CHARLIE: So it’s almost program design in reverse, I think, whereas in the past it was, here’s the answer.

CHARLIE: Now it’s like, actually, what’s unique about you?

CHARLIE: What’s something that only you can do that only amplifies and enhances your relationship with your consumers that then sort of brings them back into the brand ecosystem?

CHARLIE: And that, I think, as long as you do that, then actually the tactics can be quite straightforward.

CHARLIE: James has talked about gamification.

CHARLIE: Pretty much every program in Britain is doing spin to win at the moment because it’s the bog standard of gamification capability of most of the platforms, right?

CHARLIE: So it’s where everybody starts.

CHARLIE: But you can execute it in a way that’s unique to you, with your unique partner prizes, with your unique experience.

CHARLIE: So it’s a really good example of sort of taking a one size fits all solution, but adapting it to your particular program and your particular need.

CHARLIE: And I think what I’m really excited to see is now AI and the platform capabilities are really hitting the next level.

CHARLIE: You know, it’s the stuff that we were promised five years ago that actually never kind of materialized, but now it’s really here.

CHARLIE: It’s actually right, what can we do with that?

CHARLIE: Who’s going to be brave and who’s going to start to do really kind of cool things that we’re going to see?

CHARLIE: So I think that’s the next evolution of it.

CHARLIE: It’s like, what is unique to me?

CHARLIE: What can technology enable me to do?

CHARLIE: But critically, what is that my customers want now and for the long run?

CHARLIE: We, I write a lot about sustainability in loyalty and corporate social responsibility and the importance of actually, even though we’re in a cost of living crisis now, and even though every single one of your customers, whenever you talk to them just tells you that they want a discount off the product or money or a financial reward, it’s really, really important that programs are baking in corporate social responsibility and long-term sustainability programs into their program now, so that when consumers then in three or four years, hopefully will be through some of the challenges that we’re facing at the moment, then actually those longer term goals will play as well.

CHARLIE: So I think over reliance on short-termism is also something to watch.

NYELETI: I think it’s a very important point, not even just when in three and four years time, when we were over the crazy economic situation, but when your younger shoppers are much older who insist on the sustainability.

NYELETI: So really looking at what do our customers need in the future is a very strong point.

NYELETI: So thanks for bringing that up.

NYELETI: When we started this, Charlie, you said some of the fundamentals of this right paper is around understanding, inspiration and also evolve in knowledge.

NYELETI: I definitely do think that what the two of you put together in collaboration with YouGov really touches all of those points.

NYELETI: But before we go, we’ve looked at different scenarios across markets, but is there any market for each of you that really stands out in terms of what brand leaders can take up and look into that market for?

NYELETI: So maybe like a favorite market or an inspiring market or just something that you want to point out in the 94?

CHARLIE: Such a good question.

CHARLIE: I’m obviously, it’s like Eurovision, I’m obviously going to say the British market for which I apologize, but that is because my role in the paper is as well as kind of looking over it is to be the British market expert.

CHARLIE: But we do a lot of conferences, we do a lot of work across WPP, we’ve got the Loyalty Summit, CXM, where we’re coming out and we’re looking at programs.

CHARLIE: And I do fundamentally feel very privileged to work in the British market because I am reliably informed.

CHARLIE: And I think you can see in the paper, it is one of the most advanced and sophisticated kind of loyalty markets out there, partly because of longevity, partly because of investment, and partly because Brits just love loyalty programs.

CHARLIE: Memberships off the charts, appeals off the charts.

CHARLIE: So they give the brands in that market more license, I think, than in other markets to experiment and do interesting things.

CHARLIE: And then we’ve got those huge, iconic, big programs, you know.

CHARLIE: If we look at Tesco Club Card, if we look at Nectar, if we look at Boots Advantage Card, and actually co-op membership now in number four, and Amazon Prime in number five, then actually those are huge programs that we can learn from.

CHARLIE: And they’re doing a really good job of personalization, smart applications of AI, kind of like a slightly clunky jobs in terms of gamification, if I’m completely honest, like the challenges that they’re doing, a pretty old school.

CHARLIE: But again, there’s a lot you can learn from the kind of the big stalwarts.

CHARLIE: But then what we also have is an explosion of mid-size programs, which is really interesting.

CHARLIE: So those guys are all up at sort of 14, 15 million members plus.

CHARLIE: But actually, there’s a lot happening in the kind of one to five million member mark.

CHARLIE: We’ve got some really interesting things happening in the restaurant sector.

CHARLIE: So if you look at what Pizza Express are doing, I mean, who would have thought that we’d be looking at the Pizza Express and the Nando’s programs and going, wow, in my opinion, those are actually even potentially even stronger than the big kind of McDonald’s QSR type programs in terms of how they’ve brought their uniqueness to the program.

CHARLIE: So Pizza Express did a lovely Snowball Doughball promotion, which was really cute, but also really effective.

CHARLIE: They really baked their brand DNA into every single tier.

CHARLIE: They make sure that every visit is a rewarding experience rather than, you know, you’ve got to come five, six, seven times to claim for a food item.

CHARLIE: So they’re a real kind of positive disruptor.

CHARLIE: Coffee is a fantastic sector, you know, it’s probably the best at integrating pain points into the loyalty program.

CHARLIE: So, you know, the integration of wallets.

CHARLIE: As James talked about, Costa Club is one of our favorite programs because it does a really good job of making sustainability in a commercially sensible way.

CHARLIE: So, you know, it’s twice as good effectively if you bring your own cup, but that works for the consumer, obviously, because they get their coffee twice as quickly.

CHARLIE: But it’s also great for the planet because we’re not reusing and throwing away lots of cups.

CHARLIE: And it’s great for the business because one of the most expensive bits of the coffee is the cup that you walk out the door with.

CHARLIE: So there’s lots and lots and lots happening in that market.

CHARLIE: So that would be my favorite.

CHARLIE: And I could talk about the British market for hours, but I won’t because I’m conscious that it’s only one of the 24 markets.

CHARLIE: And all the other experts will tell me off when I’m in Amsterdam next month.

CHARLIE: They’ll be like, you should be talking about all the others.

CHARLIE: So yeah, that would be my favorite market.

CHARLIE: Sorry, James, it’s possibly your favorite market, but I’m sure you’ve got some other things you like as well.

NYELETI: You’re not allowed to say Britain, all of that.

JAMES: I can’t say Britain, no.

JAMES: I think what I really like about this paper is that just some of those national stereotypes that you associate with certain countries, you do actually see come out in the data.

JAMES: It’s really interesting to see some of the Scandi countries with their highly technical consumers.

JAMES: Some of the technology coming in there and then likewise the German market as well.

JAMES: Some really valuing slightly more transactional loyalty program.

JAMES: I think probably if I’m not going to say Britain, I’ll probably say Germany.

NYELETI: I think that’s fair enough.

NYELETI: Charlie kept it at home and not only did you say Germany, but you were very kind to mention a few other cases.

NYELETI: I think you covered it all.

NYELETI: But I actually love that example of that restaurant element.

NYELETI: It’s not just every visit becomes an experience.

NYELETI: I think if all loyalty leaders will look at like, how does every visit to the store, to the online environment with whatever product that you have and become an experience, then that tension between membership and engagement would perhaps start to diffuse over time.

CHARLIE: Definitely.

NYELETI: I love everything that we’ve discussed, especially bringing back to your two words, curiosity and evolving, and definitely I feel like my curiosity and evolving knowledge in the loyalty landscape has increased.

NYELETI: I want everybody to get ahead of their hands on this paper.

NYELETI: So could you let us know how can they do that and how could they remain in contact with both of you?

JAMES: Yeah, I can take this one.

JAMES: So we’ll try and include the direct link to the paper in the show notes.

JAMES: But if you go to mando.co.uk, you can access our European paper on there, as well as all of the other ones that we’ve mentioned.

JAMES: So you can see the previous years, as well as the bits that we’ve done on the UK particularly and promotions as well.

JAMES: Then getting in touch with both of us, I think we’re both on LinkedIn.

JAMES: So I’m James Davies at LinkedIn, and Charlie, I think you’re Charlie Hills.

CHARLIE: But I am.

CHARLIE: I’m one of those lucky.

CHARLIE: I got in it so early.

CHARLIE: I think I’m actually Charlie Hills 1 at LinkedIn, which is really shocking in terms of there’s plenty of us all over the planet.

CHARLIE: Yeah.

CHARLIE: We’ll pop all those links in the show notes as well.

CHARLIE: One of the questions I sometimes get asked is, do I have to pay for the white paper?

CHARLIE: I’m like, no, they’re all absolutely free.

CHARLIE: You can go right back, download all the European ones and all the British ones on loyalty and promotions as well.

CHARLIE: They’re all freely available.

CHARLIE: There’s some good summaries on there as well for any listeners that just want the stats because I know there’s quite a few of you out there as well.

CHARLIE: There’s some nice kind of just blogs on the website where we’ve just kind of summarized the key stats so you can lift those bits as well.

NYELETI: And some very beautiful graphics on that, you know, knowledge is a beautiful element.

CHARLIE: They’re definitely getting better.

CHARLIE: James and we’ve got an amazing designer and analyst in Mando.

CHARLIE: They did a particularly good job on the Impact ones last year, actually.

CHARLIE: They really kind of ramped up the visual presentation from the original stuff.

CHARLIE: So yeah, it’s looking at the future every year.

NYELETI: Well, then congratulations to you and the entire team for pulling together such a strong paper.

NYELETI: And thank you for being on the show today.

NYELETI: It’s been really engaging and all the best with the paper as you roadshow it.

NYELETI: I know that you’re soon going to be at a summit, Charlie, and probably a lot more in terms of getting this knowledge out there.

CHARLIE: Thank you very much.

CHARLIE: It’s been a really, really, well, it’s been a real pleasure.

JAMES: Yeah, thank you for having us.

NYELETI: Thank you very much.

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

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