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.
Simon: Thank you.
Paula: So welcome to episode 31 of Let’s Talk Loyalty.
Paula: And today, I first of all have the amusing situation of broadcasting from my wardrobe.
Paula: So with the current environmental situation and that we’re all dealing with at the moment, certainly in Dubai, we are on full lockdown, which I was just explaining to my guest, means I literally can’t leave the house, certainly to go to recording studio or to go to work.
Paula: And so I have chosen to record in the quietest place in my house.
Paula: So I do hope it will give the audio quality that we need for this fantastic conversation.
Paula: So today I am speaking to somebody I would certainly describe very much as another global voice of loyalty.
Paula: Simon Rowles is based in Sydney, Australia.
Paula: He’s originally from South Africa, and he has an extraordinary career in loyalty.
Paula: Now, when I look back through his various achievements, he goes everything from literally creating new products for banks up to really, I suppose, exploring disruptive technologies.
Paula: And that’s, I suppose, the main reason that I wanted Simon to come on to the show today, because it’s certainly an area that fascinates me.
Paula: And I know in the past, when I’ve been sitting running a loyalty program, sometimes I just want some brand new ideas, and Simon is great for that kind of stuff.
Paula: So without further ado, let me welcome Simon Rowles to Let’s Talk Loyalty.
Simon: Thank you, Paula.
Simon: That’s a very kind introduction indeed.
Simon: Great, great, great.
Paula: And you are a fellow colleague in a number of ways, Simon.
Paula: Obviously, the Customer Strategy Network.
Paula: You are a fellow consultant, obviously based in the Australian market, as I said.
Paula: And I know you’re also a certified loyalty marketing practitioner.
Paula: So we both share the CLMP accreditation.
Paula: So we’ve lots of stuff in common.
Simon: We do indeed, we do indeed.
Paula: Great, and of course the overall love of loyalty.
Paula: So as you know, Simon, I always start the show really to get stuck into, I suppose, just educating ourselves on various important elements of our business.
Paula: And I always love to understand my guest’s key favorite statistic about loyalty.
Paula: So before we get into your background, tell us what is your favorite loyalty statistic?
Simon: I think you and I may think in a similar fashion, Paula.
Simon: And I’m always looking for a loyalty program to be an investment that stands up against other investments in an organization.
Simon: So my favorite statistic is return on loyalty, or the amount of spend that a loyalty program produces in a loyalty program base, bigger than what it was before.
Simon: So return on loyalty in pet retail is quite low.
Simon: It’s about 1.2%.
Simon: But in grocery retail, it’s about 5.1%.
Simon: And in fuel retail, it’s about 9%.
Simon: So these are the numbers you can take to your CFO when there’s a discussion about which asset performs best.
Paula: Wow, I love that, Simon.
Paula: Nobody’s actually ever given me a target return on investment before.
Paula: So thank you for answering my favorite question.
Simon: It’s, the data is taken from our sister company, Ellipsis, and it’s taken them years to put these together.
Simon: But these are the, for me, the killer metrics for any loyalty program.
Simon: If you can evidence these and show either that you’re hitting them or not, that lets you stand up your investment in a loyalty program against any other investment the company might be considering.
Paula: Absolutely.
Paula: And it sounds like, Simon, it’s something that we should explore maybe in a separate episode in even more detail, because I know there’s an awful lot of people listening all around the world who would probably love to get into the detail around that.
Paula: So, you know, exactly what is included in those calculations or excluded, and how do you actually stand over them?
Paula: So I’m sure it’s a controversial subject in its own right, but one I definitely think we should explore in the future.
Simon: Always happy to go deeper in the numbers, Paula.
Paula: So we’re off to a brilliant start in terms of the statistics, Simon.
Paula: And before we get into the conversation, I want to ask you so many different things in terms of your current company, for example.
Paula: But before we get into all of that, I’d love to understand for our listeners to appreciate, I suppose, your overall loyalty background.
Paula: So tell us how you got into the field and who you’ve worked for.
Simon: Thanks, Paula.
Simon: Probably three major strands.
Simon: Technology first.
Simon: I started life as a design engineer on the mines in South Africa.
Simon: Ended up as the IT director at American Express, and that’s where I discovered loyalty.
Simon: Along the way, worked for two or three startups.
Simon: Destiny, which was acquired by Verifone, In the Bag, which was e-commerce delivery in South Africa, acquired by Woolworths.
Simon: And then finally, loyalty, having picked up on membership rewards at American Express.
Simon: Most recently, I ran the New Zealand office for Amia.
Simon: And Amia, as you may know, is a large global loyalty company.
Simon: And where I am now, blends together those three streams, loyalty, startups and technology.
Simon: And we have a company called Beyond that brings loyalty and customer experience startups to Australia to work with our large corporate clients for the best loyalty and best customer experience products in market.
Paula: And I know Beyond is spelt with an E at the end as well, Simon.
Paula: So I’ll make sure that we include that in the show notes.
Paula: So anyone who’s curious about Beyond can certainly find you.
Paula: And very much, I think I said in the introduction, it’s the disruptive piece that particularly fascinates me.
Paula: And I think it’s a very useful background, obviously, as you said, you’ve been an engineer, so you actually understand the technology.
Paula: I tend to really just understand the marketing positioning of the technology.
Paula: But overall, I think what you’ve told me is that Beyond is really specializing now in bringing those kind of innovative ideas from all other markets and concepts and bringing them literally to big clients in Australia.
Simon: Exactly right.
Simon: If there is a breakout strategy and what we’re finding, if there is a breakout strategy deployed somewhere else in the world in a similar industry to our clients, more often than not, there is some enterprising startup underneath it that invented the strategy, took it to that client, and that client has now launched it.
Simon: Generally, it’s not something a client thought to do previously, but when they met this new solution, they were able to deploy a new strategy that, in many cases, is first to the world.
Simon: So we’re very interested in those kinds of plays that can deliver breakout performance for our Australian clients.
Paula: Absolutely.
Paula: So how do you go around, I suppose, first of all, spotting these strategies?
Paula: And I know we’ve talked about the UK market, for example, as being one of the more mature markets.
Paula: You know, are you in contact?
Paula: I know you talked to us, obviously, as the customer strategy network, and we’re colleagues that I suppose advise you on things that we see that are interesting.
Paula: But how else do you just find out what’s going on in these countries?
Simon: Well, it’s been a long run, whilst Beyond is a company that’s quite young.
Simon: This is something we’ve been looking at for two or three years.
Simon: About three years ago, I got to the point as a loyalty practitioner, where you could spot these strategies offshore when you could build them for your clients in market.
Simon: But there were too many startups offshore, and we got to the point where we switched the thinking around and said, if we stop trying to build them all ourselves, and compiled an offering purely composed of all these brilliant solutions from offshore, what we found was we got to market faster, they had a better product roadmap, they were much cheaper, they were much better supported, and they came with precedence from the market that they were born in, to be able to show a bank or a retailer or a travel company in Australia what it looked like and what it would mean.
Simon: And it’s just so much faster to deliver the value and it cuts so much of the risk out along the way.
Paula: And it’s interesting you mentioned banking, Simon, because that’s, in my mind for with clients I’ve worked with, it’s probably the sector that’s most risk-averse, I guess.
Paula: So to hear that they really are open to the start of mentality and to trying very new ideas, and I suppose coming from the proven methodology of, yes, we’ve done it in another country, are you finding that these clients are coming to you?
Paula: Or are you going to them to go, you’re thinking about it all wrong, or here’s an idea you haven’t thought over, how’s the dynamic working?
Simon: We never obviously say you’re thinking about it all wrong, even if we think that.
Paula: Yes, but you know, it’s always a nice thing to say, here’s ideas, here’s solutions.
Simon: So the issues that those clients face are common in many industries around the world.
Simon: They just see them sooner or later.
Simon: So you talk about banking, half the loyalty market in Australia is funded by banks.
Simon: We pour points into airline frequent flyer programs and other programs.
Simon: And the market’s worth about four and a half billion.
Simon: So whatever happens to them is important to everybody else.
Simon: And on the other side of the market, the beneficiaries of that is generally the airlines in Qantas and Virgin Australia.
Simon: Both of them, both of those industries are fairly aggressive in terms of adopting new loyalty models, new customer experience models.
Simon: In fact, so aggressive on the banking side, that not only do they have their startup hubs and other accelerators, they’re buying into the big global players.
Simon: So Commonwealth Bank is the largest bank in Australia.
Simon: And they’ve taken a stake in Klana out of Sweden, which is the new unicorn for the buy now, pay later category.
Simon: So a very aggressive and bold move to bring the best of the world to Australia.
Simon: And what we’re discovering is most of the value is being produced by these kinds of enterprises that come from other parts of the world and generally not from Australia, because Australia hasn’t been through the regulatory pain that say the UK has.
Simon: Open banking is about two years behind where the UK is.
Simon: Payments reform is slightly behind where the UK is and only last year did the regulator start talking about privacy in a GDPR type of framework.
Simon: So any of the startups born in the UK or Europe are already well experienced and have offerings that are brilliant for banks in Australia that are about to go into that.
Paula: And I guess they’re already future proof as well because obviously they’re already GDPR compliant and all of the various PCI compliant.
Paula: I know there’s a hundred different things they would need to be tested for.
Paula: So tell us some of the ideas that you’ve seen or that you’ve brought to Australia, some of the propositions, because I know some of them are super exciting.
Simon: Well, thank you.
Simon: We think they are as well.
Simon: There’s five territories that everything seems to resolve into for where the majority of the value for new customer experience propositions are being deployed.
Simon: Loyalty, of course, payments, personalization, digitization and identity.
Simon: And the solutions that we’re discovering either touch one of those or many of those and have existed in other markets and proven themselves capable.
Simon: There’s two themes.
Simon: One of them is coming out of the rest of the world.
Simon: And McDonald’s is a great example of how this has worked.
Simon: Last year, they invested in three startups, which did different things.
Simon: But McDonald’s obviously is a significant marketing machine.
Simon: But to get into personalization and digitization, they invested in a startup called Dynamic Yields out of Israel, which is aware of what’s happening in the drive-through, what the weather looks like, that it’s Paula and not Simon, that the kind of food you like, what’s happening in the kitchen, what they can offer.
Simon: And it’s almost an Amazon recommendation engine for the drive-through windows.
Simon: They invested in a mobile marketing company out of New Zealand called Klexer, which allows them to know where the customers are.
Simon: And they invested in a company out of Israel called Apprenti, which is AI-driven conversations.
Simon: So the server always knows what you’re saying, and you always know what the server’s saying.
Simon: And all of this makes the whole process frictionless.
Simon: So that’s a model that we’re bringing to Australia for our clients, finding those kinds of step change value.
Paula: And how far are you down the road of executing with these various types of startups?
Simon: It depends what the state of play is in their industry.
Simon: So obviously there’s a downturn coming.
Simon: Covid has affected everywhere in the world.
Simon: Banks are doing surprisingly well.
Simon: Australian banks are seen as the shock absorber of the nation.
Simon: Airlines are doing exceedingly badly.
Simon: And in the middle, we have supermarkets doing very well, but very busy.
Simon: So we’re seeing a lot of action in the banking end of the market.
Simon: New solutions coming to market, consideration for the new solutions that we’re bringing to market.
Simon: Same in the airline sector, strangely, whilst they are taking a beating, they’re not taking it lying down.
Simon: And in the supermarket front, there’s a whole bunch of value that’s been delivered in their own accelerators.
Simon: So Woolworths is our largest supermarket in Australia.
Simon: And they have a unit that’s brought together the best of loyalty, the best of customer experience, all their digital assets, and they call it Woolies X.
Simon: 12 million loyalty program members are managed out of there.
Simon: They’ve deployed features called Scan and Go, which is very similar to Amazon Go, subscription models.
Simon: And there’s a whole lot of that innovation happening inside their walls.
Simon: Some of it will be apparent in the near future.
Paula: And that’s amazing, actually, because again, grocery, as you said, is one of the few sectors that’s still trading.
Paula: And for them to continue, and I suppose I’ve had some very poor experiences, unfortunately, here in Dubai in the last couple of days, trying to literally send some grocery shopping to somebody else, because there’s a whole movement, and I don’t know if this is happening actually in Australia, Simon, but there are a lot of people in this country that are not earning, they’re completely out of work, and they can’t even get out of the country.
Paula: So there’s a few people who thankfully, like me, are still working and want to donate or support these people, but the supermarkets cannot cope.
Paula: So I’ve already had one major concern where somebody else’s credit card details were in my account.
Paula: So clearly, I won’t name exactly who did that.
Paula: And then a second supermarket, I placed an order for this family, and it’s in a different emirate to me, but I was given a delivery date more than two weeks away.
Paula: And this is for a family who’s hungry.
Paula: So just the whole subject around Covid and grocery is one that I think we’re all fascinated with.
Paula: So I’m super impressed to hear that in Australia, hopefully clients of yours are managing to deal with that crazy situation and still managing to innovate and deliver new solutions.
Simon: It’s a very good point.
Simon: We see two different mindsets.
Simon: One is very recession focused, costs get rid of people.
Simon: Qantas as an airline has made sure that they hang on to all the people.
Simon: So whilst they’re not in the air, they’re making sure that they’re ready to play the game when it starts on the other side.
Simon: They see their frequent flyer program as a natural hedge.
Simon: Historically, 30% of their market cap was the frequent flyer program.
Simon: In the grocery area, we know a lot of staff have been moved from office jobs to the front line to make sure that the online ordering does work.
Simon: And it was bulletproof to start with.
Simon: But what they’re doing now is making sure that those people who are either elderly or vulnerable have access to those slots.
Simon: And yes, for you and I, they might be two weeks out.
Simon: But for the elderly and the vulnerable, they’re being made available.
Simon: And there’s a large job to be done to determine who’s vulnerable.
Simon: Because you can obviously pick up from a loyalty program membership.
Simon: Vulnerable is much more difficult to quantify.
Simon: So they very much are wrapping themselves around the customer and making sure that they look after their customers.
Simon: And I certainly haven’t heard of any cases where wrong credit cards have been embasked for.
Paula: Yes.
Simon: Those kinds of errors.
Paula: Yeah, absolutely.
Paula: And just overall with Covid, I know I did an interview about, I think it was a month ago now with flybys.
Paula: And we were literally just talking about the run on toilet paper.
Paula: And that was just beginning to kick off.
Paula: And I’ve talked to people in the US where I believe riot police have to be brought in.
Paula: So what is the state of play or the energy out in Sydney, for example, where you are in terms of dealing with Covid at the moment?
Simon: I think our part of the world has done phenomenally well.
Simon: We are one of the few parts of the world where we’re talking about seriously flattening the curve and having fewer and fewer infections day by day.
Simon: It’s devastating for anybody who’s lost anybody.
Simon: But I think our deaths have been lower than they may have been.
Simon: From a loyalty perspective though, there’s a few things happening.
Simon: So credit cards are funding half the market of value, and that was flying to airlines.
Simon: Use of credit cards is down, spending is down.
Simon: So there’s less value flying to airlines, and therefore airlines not flying, there’s less value in the frequent flyer program.
Simon: So we think there’s a run on the bank for airline frequent flyer program points, which are the two biggest programs in the country.
Simon: Not because of anything that they’ve said, but because a lot of the steps they’re taking look like what banks did when there was a bank run in 2008, or even during the Great Depression.
Simon: They’re slowing it down.
Simon: So redemptions are more and more difficult.
Simon: They’re reducing the volume of redemptions, they’re switching off redemption options.
Simon: On the payment side, Commonwealth Bank, the biggest bank, came out with some contactless stats last week.
Simon: So contactless payments have gone through the roof for Apple Pay, Google, Garmin, all versions of contactless payment.
Simon: And the contactless payment limits have gone up.
Simon: So the penetration of payments is way up, but we know the volume of payments is way down.
Simon: So we think there’s a problem in there for the grocery sector, because that would mean that loyalty IDs probably aren’t being presented at point of sale.
Simon: So that flurry of transactions is happening in supermarkets and supermarkets only.
Simon: They’re not identifying their customers.
Simon: They don’t know that it’s Paula coming through the till and buying goods for another family.
Simon: So we think that’s going to be a problem down the line in terms of data mismatch that they don’t have presentment rates being down.
Paula: My goodness, yeah.
Paula: And just, I suppose, socially, I know you’re not in full lockdown like I am in Dubai, but how is everybody feeling?
Paula: Is business being done overall, or is it very much the crisis mentality that seems to be happening in so many other countries?
Simon: I think it’s half and half.
Simon: So both are represented.
Simon: There is the crisis mentality, and particularly if you’re in retail, some of the reports reckon 25% of retailers won’t survive.
Simon: And I think if you’re not in grocery, you’re doing it very tough.
Simon: But we’ve seen in other sectors, both behaviors exhibited.
Simon: So some building for the future, and we are more heavily engaged with them than we ever have been, because they’re building for the turn when it comes.
Simon: Whereas their competitors are laying off people, don’t have time for strategic projects, trying to cut costs to the bone, which we certainly understand.
Simon: But we don’t think we’re going to be prepared for the turn when it comes.
Paula: Absolutely.
Paula: And I know one of your general asks, Simon, is really this is obviously a global audience listening to the show right now, and you’re looking for new ideas, you’re looking for disruptive technologies.
Paula: What are the kind of opportunities that you think you could bring to Australia if there was somebody listening and said, do you know what, this is what we’re doing?
Simon: That’s probably quite simple.
Simon: If you have enabled a first to the world strategy somewhere else in the world where you can evidence some large corporate trusted you to bring it to market, then Australia needs you.
Simon: Because there won’t be an analogue of your play in Australia.
Simon: And you won’t have any competitors if you come and play with us.
Paula: I like the way you describe it as coming to play.
Paula: It sounds like so much fun.
Paula: And I suppose in general, in terms of trends as well, Simon, what sort of trends would you say are emerging?
Paula: And let’s put Covid to one side for the moment.
Paula: So, for example, there’s, with the Loyalty Magazine Awards, there’s the new Eco Loyalty Awards this year, for example.
Paula: And I think that’s probably actually something that’s been in Australia’s mentality for a long time.
Paula: But are there any other trends in loyalty?
Paula: You mentioned card linking, for example, earlier on.
Paula: Are there other ideas like that, that I suppose loyalty program managers listening should be thinking about?
Simon: Card linking is one, but it’s an unusual market.
Simon: So we are late to the party with card linking, not because we don’t need it.
Simon: The banks need it, because as payment reform comes in, they need to go and fetch funding somewhere else and retailers are generally the target.
Simon: The retailers need it because they’ve been doing it discreetly behind the scenes for some time now, that if you didn’t present your loyalty card, they’d remember you from your payment card.
Simon: But the regulators said last year they can’t do that.
Paula: Can I just ask you, sorry Simon, just for people who may not be familiar with card linking, just to explain to listeners how it actually works.
Simon: So the simple definition, as I understand it, is you load your loyalty card against your payment card number.
Simon: When your payment card is presented, it’s the same as if your loyalty card had been presented.
Paula: Brilliant.
Paula: Yeah.
Paula: Okay.
Paula: Yeah.
Paula: And actually we have executed that.
Paula: I know the guys I work with, Liquid Bar Codes have done that certainly in Denmark.
Paula: And it really has been a surprising hit in more than one way.
Paula: And I think the obvious benefit of not having to present two pieces of plastic or even two apps is the easy piece.
Paula: But actually one of the unintended benefits was the lack of a need to print a receipt.
Paula: So particularly in convenience retail, in an environmentally conscious consumer mentality, if you can actually say, no, just send that receipt to my email, that has become something that consumers absolutely loved but didn’t know they wanted.
Paula: So I do think, you know, payment linked loyalty, which is a slightly different phrase that I would use for the same thing.
Paula: I do think that that is an emerging trend.
Paula: And, you know, again, like you, I look to lots of markets around the world for what’s going on.
Paula: And that’s when I think that consumers, as soon as they get it, they kind of go, that’s amazing, but I don’t even have to open the app.
Simon: Exactly, exactly.
Simon: So your definition of payment linked loyalty actually is the end game.
Simon: And Barclays in the UK for the last year has been running a solution called Bink.
Simon: It sits inside the Barclays app for 30,000 customers.
Simon: And will go live later this year for the whole base of every single Barclays customer.
Simon: And it delivers exactly that, payment linked loyalty.
Simon: You can get rid of all your loyalty cards.
Simon: That’s a win for the customer.
Simon: You can see all your loyalty balances inside the bank app.
Simon: Now that’s a win for a bank like Barclays who’s competing against all the startup banks.
Simon: But at the same time, it means you always present your loyalty ID whenever you go through the tool at any participating retailer, which is a win for them because their scan rates go up.
Simon: And it’s one of the only solutions we’ve seen that delivers value to all three parties at the same time.
Simon: Because it’s invented in the open banking era in the UK, which Australia is about to go into in July of this year, it’s a brilliant solution.
Simon: It solves a series of problems that both the customer, the bank and the retailers face in Australia.
Simon: And if you think particularly of at the moment, when loyalty IDs are not being presented at retail, that problem goes away.
Simon: It makes the bank far more valuable in their customers’ hands.
Paula: It sure does.
Paula: And again, just to be clear with my own understanding, the dependency on that solution is on the credit cards having permission and being willing to open up basket level data, I guess, to the loyalty program providers.
Paula: Is that right?
Simon: My understanding, not quite to that depth.
Simon: So it acts as a loyalty ID.
Simon: It injects the loyalty ID at the till.
Paula: Okay.
Simon: But it doesn’t take out any skew level or basket level data and present that to the bank.
Simon: So everybody maintains their own data as they would have in the normal loyalty ecosystem.
Paula: Okay.
Simon: Nobody gets an advantage over anybody else in terms of data.
Simon: There’s a couple of slightly unusual features that you’d need to deal with if you’re coming to Australia.
Simon: One of them is that we have four payment schemes, not just Visa, Master and American Express.
Simon: We have those three.
Simon: We have a local scheme called FPOS, and it’s a little bit like Interac in Canada.
Paula: Mm-hmm.
Simon: So you’d need to be able to pick up transactions that flow through those rails.
Simon: And some of the Visa and Mastercard transactions actually do flow through those rails from some retailers.
Simon: So that makes it more complex than in other markets.
Simon: And the other thing is that many of the loyalty programs at retail in Australia are fairly sophisticated in that they have member-based pricing.
Simon: So you get a discount in real time because it’s Paula proffering her loyalty card.
Simon: Most of the card linking solutions we’ve seen can’t do either of those two things.
Paula: So there’s still a few gaps in the overall technology solution.
Simon: Not for all of them.
Simon: So we’ve seen one of two that we think will be winners for Australia.
Simon: And obviously those are the ones that we’re working with.
Paula: Exciting stuff.
Paula: You also mentioned Simon Disruptor, something to do with the first class upgrades.
Paula: And I never quite understood what that proposition was, but clearly we all want first class travel upgrades.
Paula: Tell us about that Disruptor.
Simon: So this is one of my favorites.
Simon: It’s a company out of Edinburgh called Upgrade Pack.
Simon: And it was born a couple of years ago, and this year has taken off.
Simon: And to their credit, they’ve done very well in a Covid world where airlines have had to slow everything down.
Simon: But again, it’s a beautiful solution that solves for everybody in the equation.
Simon: So the simple answer is banks need customers to stay customers.
Simon: So it’s a retention tool.
Simon: So what you’re able to do as a bank is give your customer Paula a subscription, but give it to her for free.
Simon: And with that subscription, Paula can buy, as often as she likes, upgrades on any flight that she’s booked.
Simon: That’s 75% of what the cost would have been.
Paula: I’m hooked already, Simon.
Paula: I knew I liked this idea.
Paula: How on earth does that work?
Simon: So that’s brilliant for you as the customer.
Simon: It’s also brilliant for the bank, because obviously you’re going to remain a customer of that bank.
Simon: And as it turns out, it’s also brilliant for the airline, because the airline has Paula buying an economy class ticket today, upgrading it this afternoon for 75% of the cost.
Simon: So they get rid of inventory that previously would have been flying empty, and then releases the economy class seat for the airline to sell to.
Simon: For Simon, I’ll be the back of the bus and you’ll be at the front.
Paula: And I’d love to, you know, again, we won’t get into it now, Simon, but there are a lot of upgrade offers obviously coming through from the airlines anyway.
Paula: Like I think I once did upgrade myself to business class for a special occasion.
Paula: So, you know, they do try and sell them at full revenue.
Paula: So, you know, I can imagine the debates that would go on in terms of why would you sell them at 75% off if you can get 100%.
Paula: But I guess that comes down to the conversion must be tiny, eh?
Simon: Yes.
Simon: So, imagine the number of times you’ve walked down the aisle to the back of a plane and seen all those empty seats up front.
Paula: Okay.
Paula: Okay.
Paula: So, and I guess as the technology gets more advanced as well, I’m sure it can be done more cleverly at the gate, for example, when somebody, and again, they haven’t had the chance to sell it at 100%, they definitely won’t at that stage.
Paula: Yes.
Simon: Well, I’m not sure what will happen at the airline end.
Simon: That sounds like a very good idea, and I think you should patent that very quickly.
Simon: I’ll give you their phone number.
Paula: We shall definitely call later.
Simon: But the real value is for all those enterprises with large customer bases like banks, how do you in the new world, where maybe the points-based loyalty programs are still doing their job, but not enough of a job?
Simon: How do you drive retention of your best customers?
Paula: Absolutely.
Paula: And I know something I always struggled with, Simon, and I think every big company struggles with is, you know, it’s that it’s just the boredom factor.
Paula: After you go through the life cycle and, you know, three or five years in or whatever it is, you know, literally, you just need something new to talk to customers about.
Paula: And again, it doesn’t mean you change the basics, but you need something new and a little bit sexier just to kind of go, here’s the latest wow factor to drive the word of mouth piece, particularly.
Paula: I always think, you know, if people talk to each other and the fact that I remember that one idea that you talked about maybe 12 months ago means clearly they’re on to a winning idea.
Paula: We’re talking about it now live on air.
Paula: So upgrade pack people.
Paula: I will have to get them on the show as well.
Paula: That’s amazing.
Paula: And any other ideas, Simon, before we wrap up in terms of cool stuff that you think is happening around the world that we should be thinking about?
Simon: There’s one other that we’re working with at the moment, which comes out of Canada.
Simon: TD Bank launched it in 2016.
Simon: And what we now know of your bank relationship is it’s all digital.
Paula: Yes.
Simon: And the value that you can deliver in your app determines the value you have to your customers.
Simon: And if you look at a number of the startup banks in the UK, they are mobile only, and the mobile offering is absolutely brilliant.
Simon: So how, as an incumbent bank, do you follow that?
Simon: You’ve got a couple of problems.
Simon: One is you started later down that road.
Simon: You’re not born digital.
Simon: And you’ve got a multitude of different technology stacks.
Simon: So Hussain Romana is the CEO of Flybits in Canada.
Simon: And he talks about Frankenstacking.
Simon: It’s a Frankenstein of systems bolted together, just make it impossible for you to make your bank app.
Paula: Yeah, so true.
Simon: Indeed.
Simon: So his company, Flybits, produces a context aware experience for every customer, which is different for every customer, in the mobile banking app, using not only data based on that customer, which is what are their products, what do they use, what are they spending, but also contextual data.
Simon: Where are they?
Simon: What’s the weather?
Simon: What’s public transport look like?
Simon: The TDME app in Canada tells you when you should catch your train home, because it’s monitoring what the traffic looks like and where public transport is.
Simon: So the investment arm of one of the big banks in Australia has taken a stake in Flybits.
Simon: And I think Flybits will make a big difference to whichever bank in Australia is brave enough to pick it up.
Paula: Yeah.
Paula: Well, as you said, bravery, the mindset is there, but just not for everyone.
Paula: So I think certainly at a time like this is when we separate out, you know, the big boys.
Paula: So I hope they certainly go for it.
Paula: And the big girls, of course.
Paula: Well said.
Paula: Brilliant.
Paula: Anything else then, I suppose, just in terms of loyalty resource assignment, I always love to know how people stay up to date.
Paula: So where do you kind of, you know, what do you read?
Paula: What do you listen to?
Paula: What are the kind of various places that you think, I suppose, that the thought leaders are emerging and that we should maybe be paying attention to?
Simon: Various for me, from different areas.
Simon: There’s a guy called Benedict Evans, who has a newsletter.
Simon: He’s ex-Andresen Horowitz.
Simon: And he talks about software eating the world.
Simon: And he takes really technical and difficult concepts and breaks it down for what does this really mean for the consumer market.
Paula: Brilliant.
Simon: There’s a marketing professor called Mark Ritson, who you may have heard of.
Simon: And he talks about marketing in the same fashion as you might talk to your mates down at the pub.
Simon: Very straightforward with lots of swearing.
Paula: Okay, so beware.
Simon: Indeed.
Paula: Hilarious.
Simon: Bob Hoffman is an ex-advertising guy who thinks most advertising is absolutely rubbish today.
Simon: And he’s incredibly exciting to read.
Simon: He’s so funny.
Simon: And then lastly, I’d suggest the wise marketer as being the Bible for anybody who is a loyalty marketing professional around the world.
Paula: Yeah, yeah.
Paula: We’re all fans of the guys in The Wise Marketer for sure.
Paula: And again, because this is going out in audio, I’ll make sure to get those into the show notes as well.
Paula: So we can link off to all of those various people you’ve recommended, Simon, because I know lots of people will want to read up on them.
Paula: So is there anything else then that you wanted to talk about today, Simon, before we wrap up?
Simon: No, I think that’s more than enough from me.
Simon: Thank you, Paula.
Paula: Wonderful.
Paula: So I think we’ll just repeat, first of all, that there is an opportunity in the Australian market, if there are any disruptive tech ideas out there dying to get a foot in.
Paula: And I’m guessing you’re open for business globally as well, Simon, if there’s anybody looking for advice.
Paula: Okay, absolutely.
Paula: Well, listen, it’s been super insightful, Simon, always so much fun talking to you.
Paula: And we’ll definitely get back into the numbers and the return on investment conversation in another show.
Paula: So just want to say thanks a million from Let’s Talk Loyalty.
Simon: Paula, thank you very much for having me on.
Simon: It was great fun.
Paula: Thanks so much for listening to this episode of Let’s Talk Loyalty.
Paula: If you’d like me to send you the latest show each week, simply sign up for the show newsletter on letstalkloyalty.com and I’ll send you the latest episode to your inbox every Thursday.
Paula: Or just head to your favorite podcast platform.
Paula: Find Let’s Talk Loyalty and subscribe.
Paula: Of course, I’d love your feedback and reviews and thanks again for supporting the show.
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