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 today, I am delighted to be speaking to a gentleman by the name of Jesper Østergaard.
Paula: And Jesper joins me from a very different perspective, I think, to what we’ve done in the past.
Paula: So Jesper is the managing director for the 7-Eleven convenience store brands in Denmark, which is part of the Ryton Convenience Group, which, to be honest, I had never heard of until I started working in convenience retail.
Paula: But having been working in this sector now for the past couple of years, it’s incredibly impressive the work they’re doing across Scandinavia.
Paula: And to give you some sense of the scale of the operation, there are over 38,000 people employed across Scandinavia and the Baltics within Ryton Convenience Group.
Paula: So I think one of the reasons that I find convenience retail so fascinating is purely because, I suppose, as consumers, when we try and go into a convenience store, our number one objective, I think, is getting in and getting out super quickly.
Paula: So I know the industry would use the term reducing friction.
Paula: And obviously, as loyalty experts, what we’re trying to do is we’re trying to connect and we’re trying to engage.
Paula: So how do you do that without causing friction?
Paula: Now, as well as that particular industry excitement, the 7-Eleven team in Denmark recently won a phenomenal award.
Paula: It’s highly prestigious.
Paula: And they basically won the International Convenience Retailer of the Year.
Paula: So you can imagine now with I don’t know how many hundreds of thousands of stores around the world, for 7-Eleven Denmark to win that was absolutely phenomenal.
Paula: So I wanted Jesper to come in and talk about exactly his journey.
Paula: And what I think we’re going to talk about is lots of different aspects to the business.
Paula: And I think like any industry, the first job is get your core product right.
Paula: And we’ll talk about that today.
Paula: And then obviously it’s get your structured loyalty strategy right.
Paula: So we’ll cover both aspects of that.
Paula: So before I get into any specific questions, let me first of all welcome Jesper Østergaard to Let’s Talk Loyalty.
Jesper: Thank you so much Paula.
Jesper: This is really exciting.
Jesper: Thank you for having me.
Paula: Great, great, great.
Paula: It’s great to have you on the other line and you sound loud and clear.
Paula: So it’s fantastic to be able to talk to you today.
Paula: So now before we get into your specific career, Jesper, I think as you know, we always start every episode just with a key loyalty statistic, because I’ve often said it just gives us the sound bite to get an understanding of everyone’s perspective of what’s important.
Paula: Now, you work in convenience retail, so I think the good place to start is, give us a sense of how important or what statistics you like in terms of the industry that you work in.
Jesper: That’s a tough question because there’s a lot of things I like.
Jesper: I think one of the statistics we are really proud of is that the recent survey shows us that 77% of the Danish population actually shops, come to our store and buy products in our stores.
Jesper: So that is a great statistic.
Jesper: Another statistic we really are proud of is that, I think many years ago, many, at least in the Northern European markets, believed that convenience retail would disappear.
Jesper: And I think we have proven over the last couple of years or the last five years, perhaps that we are more relevant to more customers than ever.
Jesper: So it’s really exciting to see on the statistics how that has developed and more and more customers actually comes to our stores.
Paula: Fantastic.
Paula: And that’s a great starting point, Jesper, absolutely.
Paula: So for me, you know, convenience stores are really where I’m doing more shopping, certainly not less.
Paula: So in terms of your whole team and your career, you certainly have a safe future ahead.
Paula: So that’s a great place to start.
Paula: And again, if 77% of Danish consumers are shopping with you, then clearly you’re doing a lot right.
Paula: So we’ll definitely talk through your journey and exactly why you won that award.
Paula: But even before we get into convenience retail, Jesper, I know you did eight years in your career a long time ago, in fact, with Blockbuster Video, which is obviously a very different type of retail.
Paula: So tell us a little bit about that industry.
Paula: And I think you probably learned a lot about maybe understanding what customers need.
Paula: So maybe just give us a summary of your background before we move into 7-Eleven.
Jesper: This week, I’ve actually been on board with the right-hand convenience company for 13 years.
Jesper: So it’s a long time since I left Blockbuster.
Jesper: I left them when they were in a quite good shape.
Jesper: When I left the Danish business, it was actually delivering the best results ever and on the top five in the world.
Jesper: So I think we’ve done a good job.
Jesper: But obviously, everybody knows that renting a physical video, nobody does that anymore.
Jesper: It was a great time though.
Jesper: It was a fantastic place to work.
Jesper: And I think it was a very, to a certain degree, customer-centric company.
Jesper: You could argue not enough because they disappeared.
Jesper: But the way they worked with the customers, the way they worked with loyalty was quite impressive.
Jesper: And I think at that time, I learned a lot that I have taken with me to this job.
Jesper: So Blockbuster was a fantastic company in many countries in the world.
Jesper: It became quite big.
Jesper: And to be honest, looking back, I think that is part of why it couldn’t survive.
Jesper: Because when companies get very big, there’s certain arrogance in the top management.
Jesper: And sometimes they think that, well, we are so big now that we are unbeatable.
Jesper: And what happened really was that, you know, John Hastings and the US came up with Netflix.
Jesper: At that time, that was physical DVDs as well.
Jesper: You had them sent in your mail, then you returned them in an envelope.
Jesper: So it was very simple.
Jesper: And Blockbuster said, well, they’re never going to be this.
Jesper: This is too simple.
Jesper: It’s never going to work.
Jesper: But it did.
Jesper: And suddenly they became very big.
Jesper: And I think Blockbuster missed the opportunity of working digital.
Jesper: When they filed for Chapter 11 in 2010, I think it’s sort of the first time where I personally started thinking of disruption, because that was a quite new word.
Jesper: And what was it actually?
Jesper: What did it mean?
Jesper: But I think other companies disrupted that business model simply because, you know, the company didn’t challenge itself.
Jesper: Everything was fine.
Jesper: So why change it?
Jesper: And I think that has learned me a lot.
Jesper: So even though things are quite well now, you have to challenge yourself about the future.
Jesper: And it can be the very near future.
Jesper: So Blockbuster worked a lot with loyalty.
Jesper: They were very good at being customer focused.
Jesper: They were very good at, you know, they knew exactly what type of movies you preferred.
Jesper: And that meant that you received offers within that area of types of movies you wanted.
Jesper: So I think I learned a lot.
Jesper: And Blockbuster did a great job for many, many years.
Jesper: But it didn’t survive because they were not focused enough on the future.
Jesper: So that brought me into this business.
Jesper: And there are a lot of similarities, to be honest, because it’s all about being customer focused.
Jesper: If you are not focused on your customer needs, you will not survive.
Jesper: And that has driven us to where we are today in our Danish business, I would say in the right-hand convenience companies and the seven countries we are in.
Jesper: As you probably know, we are a value-based company.
Jesper: We have eight values and they are our backbone.
Jesper: No matter what we do, we actually decide what to do in our strategies based on our values.
Jesper: One of them is to be customer centric.
Jesper: Never ever forget why you are here.
Jesper: You are simply here to make your customers happy.
Jesper: If you don’t, they will slowly but surely disappear from your business.
Jesper: So I think I learned that with the Blockbuster Company and has built a lot on that since I joined the right-hand group.
Paula: Absolutely.
Paula: And you’ve articulated that brilliantly, Jesper.
Paula: And I’ll go back to one word you used, because as a consultant, it’s something I do see in some companies who clearly will remain nameless.
Paula: But if there’s arrogance at the top level in a company, I don’t quite know how that should be managed, because the world is full of disruption.
Paula: And I think it’s very rare and very brave for a company to challenge itself to say, actually, yes, are we being arrogant?
Paula: Are we being customer centric?
Paula: So it’s good to look back and go, okay, that’s not a mistake we’ll ever make in our careers going forward.
Paula: So nobody realizes it at the time, but you’re absolutely right.
Paula: Customers will leave slowly but surely if they’re not getting what they need.
Paula: Yeah, and that’s really what I mean.
Paula: I’ve seen your videos, obviously, from winning that award in London that we’re going to talk about.
Paula: But in terms of 7-Eleven, I mean, first of all, congratulations, 13 years.
Paula: Yeah, I mean, that’s huge corporate loyalty and professional loyalty you’re demonstrating there to the 7-Eleven brand and to Rytan.
Paula: So tell me, first of all, why were you tempted into convenience retail?
Paula: Because, as you said, at the time people thought that industry might be actually on the decline rather than growing.
Jesper: To be very honest, I don’t think I was tempted by the convenience industry itself.
Jesper: I didn’t really know a lot about it.
Jesper: What I was thrilled about was actually mainly two things.
Jesper: One, that it was an American brand.
Jesper: I like the US.
Jesper: I love traveling in the US.
Jesper: So that was a great fit.
Jesper: The second thing, which was probably the most important, is that I have been living many years ago.
Jesper: I lived in Norway for six years.
Jesper: And the right-hand group is owned by a Norwegian privately owned family.
Jesper: And that itself was just like coming home.
Jesper: Because I love Norway.
Jesper: I love Norwegians.
Jesper: So working for a Norwegian company in Denmark with an American brand, that was just spot on.
Jesper: I couldn’t say no to that.
Jesper: So to be honest, first after I signed the contract, I started finding out what convenience was all about.
Jesper: Luckily enough, I was really happy with the choice.
Jesper: I think it’s a fantastic business.
Jesper: It’s a fantastic company to work for.
Jesper: But it has been a quite challenging period as well.
Jesper: Because many people said to me when they realized where I was going, why are you going there?
Jesper: Because that business will disappear.
Jesper: Nobody will survive.
Jesper: And that was really what people thought about convenience.
Jesper: I think what you could say is that convenience as a channel has disappeared.
Jesper: Because convenience today is more a concept.
Jesper: It’s a way of thinking.
Jesper: It’s a way of delivering to your customers.
Jesper: And to be honest, everybody tries to do this.
Jesper: Even the supermarkets, all kinds of retailing, online or physical, they’re trying to do the same.
Jesper: So it has disappeared as a channel.
Jesper: But it is more important as a concept than ever.
Jesper: And I think we as consumers are all of us restricted when it comes to time.
Jesper: We get more and more busy.
Jesper: We prioritize differently.
Jesper: So we need help in our day to day lives.
Jesper: We need help to save time in certain areas, allowing us to spend more time in other areas.
Jesper: And that’s where we come into the picture.
Jesper: How did we develop?
Jesper: How did we end up winning the price?
Jesper: Well, we are very humble.
Jesper: It was absolutely fantastic to get the price.
Jesper: And I still say, I said it at the stage in London as well, that getting this price is great.
Jesper: But the greatest price we can get is when customers come back to our stores and shop in our stores.
Jesper: So customer growth is really the best price we can get because that tells us that we do something right.
Jesper: So customer growth is a very important KPI for us.
Jesper: When we started the journey in Denmark, it actually started with the fact that I asked my management team, so if you have a day off or it’s weekend and you want to go out, you want to buy some lunch, where do you buy that on the go?
Jesper: And to be very honest, most said not in 7-Eleven.
Jesper: And that really struck me.
Paula: Yeah.
Jesper: And you know, we are not that different from our customers in the stores.
Jesper: So I decided we have to change that, because if none of us want to buy our lunch in the 7-Eleven, why should the customers buy the lunch in 7-Eleven?
Jesper: So that actually started the journey.
Jesper: And we said we have to change this.
Jesper: And then we started developing the strategy.
Jesper: And we decided that we want to, you know, traditionally many years ago, we were actually more like a kiosk chain.
Jesper: And basically we sold traditional kiosk products like magazines, tobacco, gambling, lottery, things like that.
Jesper: And we decided if we are supposed to be here in 20, 30, 40 years and survive, we have to change that.
Jesper: So we decided we want to go from being a kiosk selling a few food products to become a food destination selling a few kiosk products.
Jesper: And that is two very different worlds.
Jesper: It requires different skill sets.
Jesper: It requires different operation.
Jesper: It requires actually different locations.
Jesper: So we had a lot of planning going on seven, eight years ago.
Jesper: And that has all led to where we are today.
Paula: I love that.
Paula: And it’s so simple, Jesper, but it’s so true.
Paula: Like if we don’t want to buy our own products, why are we selling them?
Paula: So it’s a very clever mindset.
Paula: And I know one thing I learned about the writing group as well with my research is that lovely value as well around simplicity, you know, and keeping it really clear what you’re doing, who you’re doing it for and why you’re doing it.
Paula: So that’s what I’m hearing coming through in terms of evolving or maybe more than evolving.
Paula: I think it’s revolutionizing your entire store concept.
Paula: Is that fair to say?
Jesper: Yeah, I think that’s spot on actually.
Paula: Wow.
Paula: Well, I could only imagine.
Paula: And remind me, Jesper, it’s about 200 stores you’re operating in Denmark.
Paula: Is that right?
Jesper: Currently 175.
Paula: Okay.
Paula: Fantastic.
Paula: A massive amount.
Paula: And a huge amount of staff, I’m sure, as well, just to keep all of that running.
Jesper: Yes.
Paula: So, did you want to mention something there?
Jesper: No, I just wanted to mention that obviously Denmark is a small country.
Jesper: We’re only five and a half million inhabitants.
Jesper: So, related to that, I mean, 175 stores is still a quite big company in Denmark.
Jesper: But we have dreams, and one of them is that we want to grow.
Jesper: And I’m absolutely sure there’s room for at least 50 to 100 stores more than we have today.
Jesper: And especially with the concept we now have, because that has become more relevant to more consumers than ever.
Jesper: So, we have a very good basis.
Jesper: We have a very good concept to build on.
Jesper: And every time we have opened quite a lot of new stores recently over the next, sorry, the last 12 months, and they all are very successful.
Jesper: So, I think we have hit the nail here in terms of what the customer actually expects from us.
Jesper: But it’s extremely important for us not to become arrogant, not to become big and fat and sit in the office and think now everything is solved.
Jesper: Because we as customers, we as consumers, we change just so fast these days.
Jesper: And if we are not ahead of that, we can soon be irrelevant if we are not focused on it.
Jesper: So, we are very customer centric.
Jesper: We talk a lot to our consumers.
Jesper: We visit our stores very often.
Jesper: Very often we remind each other in the office that never forget the customer.
Jesper: Don’t just sit at a desk and do something.
Jesper: You have to make sure it works at store level and it’s something the consumer requests.
Paula: Wonderful.
Paula: Well, again, super simple and really bringing it back to basics.
Paula: And I will say, of course, I come from a similar size country to you.
Paula: So, Ireland has about 5 million people as well.
Paula: So, I know that 175 stores is incredible for a country of our size.
Paula: So, I’d love to hear the ambition as well, of course.
Paula: Brilliant.
Paula: So, I love the research piece.
Paula: And as you said, it seems that you’ve got a proven model.
Paula: You know, if you feel like you’ve really nailed exactly what’s currently working.
Paula: And you have your eye on the future as well.
Paula: I can very much hear that, Jesper, in terms of what you’re doing.
Paula: I’d love to talk about loyalty, obviously, now, to get into the nuts and bolts of what we do on this podcast.
Paula: And I think where I’d love to start is a point that came up in lots of different interviews already.
Paula: And I know it’s something that you believe in because we’ve talked about it.
Paula: And I suppose this idea of the C-suite and the executive team leading the loyalty and the belief in loyalty.
Paula: So it’s one of the reasons, actually, I wanted you on the show, because you have said to me, we’re at the early stages of our loyalty journey.
Paula: I actually think you’re much further ahead than you think you are.
Paula: But tell us about how you think about loyalty as an executive team.
Jesper: It’s great to talk about loyalty, because I think it becomes more and more important.
Jesper: And if you analyze your own private life, most people will realize that you are actually very loyal to certain brands or certain chains or you have some behaviors where you sometimes get surprised about how loyal you are to some brands or chains.
Jesper: So I think loyalty is extremely important.
Jesper: Over the last couple of years, I realized that loyalty is probably much more important than I ever thought.
Jesper: And I truly believe in that the companies that implement a successful loyalty program have management teams that truly believes in that it’s the right thing to do.
Jesper: And they have management teams that are involved themselves.
Jesper: It’s not just something you give somebody in your company to deal with.
Jesper: So you need to own it across the different departments in your organization.
Jesper: Obviously, there shall be one single owner, primarily owner, and that is, in our case, the marketing department, which I think is quite often the case.
Jesper: But if the marketing department or the head of marketing is not getting that support from the management team, I don’t think you will succeed.
Jesper: Over the last couple of years, I have been really, really studying a lot of different schemes across the world.
Jesper: I’ve been traveling to visit some of the concepts.
Jesper: I have been talking quite a lot to you, and you have inspired me a lot.
Jesper: I have been listening to some of your podcasts, and there was one podcast where one stated that although you might, as a company or a chain, think that your customers are very loyal, and although you look at the perhaps top 10% most loyal customers, they will still spend 50% of their consumption in that area at your competitor.
Jesper: I think that really opened my eyes, because sometimes we do think we have very loyal customers, but if there’s still 50% to go for, we just have to get started.
Jesper: As you say, of course, we started some years ago, and we have different programs in place.
Jesper: But I think what we’re looking at now and want to implement over the coming, let’s say, 12 months is a more holistic program that embraces our entire business and not just certain categories or certain products.
Jesper: So we want to make sure that what we implement does not end up being a discount program where you just discount some of your products and sometimes where the customer is actually willing to pay full price.
Jesper: That does not create loyalty.
Jesper: So I think it is really important to crack the nut on how do you really create real loyalty?
Jesper: How do you actually make your customers come more frequent to your store?
Jesper: If you look at coffee, which is coffee is a big business for us.
Jesper: But if you have a customer buying 10 cups of coffee a week and only five of them is in your store, how can you make that customer buy all 10 or at least eight in your store?
Jesper: Then you have achieved what I think is true loyalty.
Jesper: If I look at loyalty programs across at least in Scandinavia and the European markets, I would guess that at least 70 to 80% of them are basically discount programs.
Jesper: I’m not sure they create true loyalty.
Jesper: So I have really been trying to dig into the companies that from my perspective have done a great job.
Jesper: And I’ve been trying to understand what they have been doing.
Jesper: And they have sort of been the basis for our project team in terms of working with what we think is the right thing to do for our 7-Eleven business in Denmark.
Jesper: So it’s a really exciting journey.
Jesper: And just the fact that you might get 50% more out of your most loyal customer is exciting.
Jesper: So there’s a lot of upside here.
Jesper: I think there’s a lot of growth to be captured.
Jesper: We just have to do it right from day one, I think.
Jesper: So we would rather spend a little more time on the project than introducing something we don’t think is 100% right thing to do.
Paula: Well, incredibly reassuring there, I suppose, Jesper, because first of all, I’m super happy that you learned something and something opened your eyes in terms of a previous podcast.
Paula: And I do believe, and we all say, you know, from the consulting side of the industry or maybe the practitioner side, you know, there really is so much specialized expertise that really can really guide you in terms of your overall strategy because it’s such a refined and evolving field of marketing that it’s great to get those kind of ideas and to know that you’re listening and factoring them into your own growth plans is super exciting for me to hear.
Paula: Great, great, great.
Paula: And I also I love what you said about true loyalty.
Paula: I was in London actually just last week or two weeks ago, in fact, at the loyalty conference.
Paula: It’s called the loyalty surgery.
Paula: And I think every single speaker used the words emotional loyalty.
Paula: And I really do.
Paula: I hear that coming through in terms of your intentions.
Paula: And I do believe that, you know, the intention of the executive team, as you’ve said, is what drives the overall performance.
Paula: And what we don’t want to be are, you know, transactional databases of you do this and you get that because the world has been disrupted beyond that.
Paula: So yeah, so I know we will have plenty more exciting conversations in the future between us about all of those ideas.
Paula: So tell us a little bit about what you do do currently in loyalty.
Paula: And I suppose for listeners who are not familiar with 7-Eleven, first of all, I’ll say, to be clear, I work with the technology provider that powers your platform, which is super exciting for me.
Paula: So I do get an inside track.
Paula: So we know liquid barcodes and we work together indirectly on that.
Paula: But what I think I learned, I suppose, when I came into the industry was it is this whole idea around the friction, that really reducing friction is what is the biggest challenge and perhaps why convenience retail is so late relatively speaking into thinking about the benefits and power of loyalty programs.
Paula: So I’d love to, I suppose, with that kind of background and context, just tell us a bit about what you’ve done so far and some of the things that’s maybe inspiring you in terms of growing your overall relationship with your customers.
Jesper: Sure.
Jesper: I would say we have sort of two headlines we have been working with for a long time.
Jesper: And one is actual loyalty schemes or programs.
Jesper: Quite simple, but they seem to work.
Jesper: And the other area is the way we communicate.
Jesper: We decided some years ago that we wanted, if I take the last one first, we decided that if we should succeed in becoming a destination for healthier, quality food on the go, we needed to work with our brand perception.
Jesper: Because years ago, if you ask somebody in the street in Denmark, 7-Eleven, what does that tell you or say you?
Jesper: What does it mean to you?
Jesper: People said, typically Coke, pizza, newspapers.
Jesper: And that’s fine.
Jesper: We want to sell that stuff.
Jesper: We don’t want to lose these customers, but we cannot build our future business on these customers.
Jesper: So we had to change the perception of our brand in order to attract new customer groups.
Jesper: So we very deliberately years ago started working in terms of marketing with both tactical communication, which we’ve done for all the years we’ve been in Denmark.
Jesper: Very simple.
Jesper: Create some traffic when you run the campaign, but then it sort of slows down and you really don’t build the emotional perception around your brand.
Jesper: So some years ago, we introduced two lines in our communication.
Jesper: One was to drive traffic here and now.
Jesper: And the other is much more long term, where we wanted to get people more emotional about our brand.
Jesper: And we have actually ended in the situation now that, you know, five years ago, seven years ago, if you came into a 7-Eleven and wanted to buy a freshly made sandwich and that this did not have a brand name on it, that was not 7-Eleven.
Jesper: People were hesitating.
Jesper: They thought, could that be fresh?
Jesper: Is the quality okay?
Jesper: But since we started changing or working with change of the perception of the brand, today our best quality food, we simply call 7-Eleven products.
Jesper: And the Danish consumer today know that buying a product labeled with 7-Eleven, then they trust it.
Jesper: They know it’s fresh.
Jesper: They know it’s high quality and they know it’s good for them.
Jesper: So that journey has been extremely important for us.
Jesper: That has allowed us to be a totally different business today compared to 7, 8, 9 years ago.
Jesper: And we have attracted totally new customer groups.
Jesper: We have younger people.
Jesper: We have more female coming into our stores.
Jesper: We have people very focused on their health coming into our stores.
Jesper: So today we really embrace, I would say, 90% of the Danish population, which is fantastic.
Jesper: That gives us so much new opportunities.
Jesper: When we talk about our loyalty programs, we started out with quite simple, you know, old-fashioned, small credit card size.
Jesper: And we made a stamp each time we bought a product.
Jesper: That could be coffee, it could be a sandwich, it could be a hot dog, it could be anything really.
Jesper: But it was a limited number of products.
Jesper: Since we started that, we have had that for five years.
Jesper: Together with Liquid Barcodes, they have developed a very good app for us.
Jesper: That works perfectly well.
Jesper: Basically, the programs are still the same, but they are now digitalized.
Jesper: So most customers actually use the app for it.
Jesper: And that is fine.
Jesper: It works fine, and we believe it creates some kind of loyalty.
Jesper: But again, it is still what I think more a discount program than actually creates true loyalty.
Jesper: So what we are looking at going to do in the future is actually having a more holistic view on how we can create loyalty.
Jesper: How can we get the emotional feelings with and not just tactical communication about.
Jesper: You can save something.
Jesper: We want to be in a situation where when a Dane in Denmark feels hungry or thirsty, the only brand they should think about is 7-Eleven.
Jesper: That is our goal.
Jesper: So we want to be very top of mind.
Jesper: And the last analysis we made two months ago showed that we have moved dramatically towards that.
Jesper: But I still think there is so much opportunity.
Jesper: So what we currently work on is how can we put all these single programs together in one big program that will be more relevant, take out friction.
Jesper: We are talking about easier access to the stores, self-checkout counters.
Jesper: We already have that.
Jesper: But we want to be able to make it even easier for the customer.
Jesper: I think friction is important if it’s perceived as something negative.
Jesper: But I think we need to remember as well that friction is not necessarily long time in the store because we do have more and more customers that wants to be able to sit down and enjoy their coffee or their food.
Jesper: So friction is not necessarily about whether it takes five minutes or one minute.
Jesper: But if people perceive it as it takes too long, then friction is really important to work with.
Jesper: So we want to be able to take care of both the customer that needs a break, sit there for half an hour, and the customer that just want to get in and out as quick as possible.
Jesper: So all these things goes into the project team that now works on this.
Jesper: And I think it’s quite important to mention as well that the project team consists of not just marketing, but IT as well.
Jesper: I think IT is essential working on a program like this.
Jesper: Then we have operations, we have finance, and I’m there myself as well, which I think is quite important.
Jesper: So we have most areas in our business is represented in the project team.
Jesper: We have been slightly sort of a…
Jesper: We don’t want to put a timeline on it yet.
Jesper: We don’t have a final implementation date.
Jesper: But as I said earlier, we would rather spend a couple of more months on doing the right thing than forcing it into the market.
Jesper: But we do believe there’s a lot of opportunity.
Jesper: At the same time as we work with loyalty, we actually work on a business-to-business program.
Jesper: If it’s okay, I’ll just put some words on that as well.
Paula: Love to.
Paula: Yes, I wasn’t aware at all about that, Jesper.
Paula: So I’m fascinated with B2B loyalty.
Paula: It’s a whole different ballgame.
Paula: Tell us, what are you doing?
Jesper: Well, actually for some years, we have tried to incentivize our franchisees.
Jesper: I need to mention that most of our stores are franchise in Denmark.
Jesper: We have some fantastic franchisees.
Jesper: And they have played a very important role in terms of winning that award in London this spring.
Jesper: And many of them have been very good at contacting businesses around their stores, offering them different things.
Jesper: You can order this and I will deliver that to you.
Jesper: And we have just made an analysis.
Jesper: And we actually have quite many companies doing that in certain stores in the greatest cities in Denmark.
Jesper: So what we have decided is that we want to make it a little more commercial.
Jesper: We want to make it easier.
Jesper: So we are currently talking about whether we should have an app for it for the businesses or we should introduce it online.
Jesper: But at least it has to be digital.
Jesper: And the idea is that if you run a company with 30 or 40 employees and you have a meeting Friday morning, you can order 40 sandwiches, 40 freshly squeezed juices, etc.
Jesper: And you will have that delivered.
Jesper: And currently, we don’t see that that is covered in Denmark.
Jesper: Nobody has taken that position.
Jesper: And we have been talking to some companies and they think it’s a great idea.
Jesper: They would definitely use it.
Jesper: You never know whether they will when it’s there.
Jesper: But we do believe there is a big opportunity for us here when you talk about business to business.
Jesper: And the great thing is that our idea is that the order will then go to the closest store.
Jesper: So by doing this, we will actually help growing or creating comparable growth in that store for that franchisee.
Jesper: Because we use existing premises, we use that store and the store’s back room and kitchen facilities.
Jesper: So it’s actually quite exciting.
Jesper: We believe there’s a lot of opportunity there.
Jesper: We think these two things have to be linked.
Jesper: So there has to be a loyalty element in the business to business as well in terms of the more you buy from us, the better discounts you get, the more it has to give you some benefits if you are loyal to us.
Jesper: So these projects are actually working quite closely together as we see them as one big project.
Jesper: And that’s really exciting.
Jesper: I don’t think anybody else has done that yet in our marketplace.
Jesper: So we look forward to see how that can develop.
Paula: Oh, my goodness.
Paula: Yes.
Paula: No, that’s super exciting.
Paula: And it reminds me, actually, many years ago, I worked with British Airways and a brand I’m still very fond of, as you can imagine.
Paula: But similar to your thinking, there’s a number of decision makers when it comes to volume purchase.
Paula: So whether that happens to be an executive assistant in the office, rather than the individual passenger on the airline, if you can build in a loyalty strategy focused on everyone in the decision making, I really think you can build an extraordinary business.
Paula: And it’s a very different loyalty strategy, but it can all sit under the one brand and under the one platform.
Paula: And it’s just thinking differently about what their needs are versus an individual customer.
Jesper: Exactly.
Jesper: That’s how we think it, actually.
Paula: Yeah.
Paula: Well, it’s certainly very clever.
Paula: And I will keep my eyes out for you to see if I see anybody else in convenience retail with a similar one.
Paula: But I think you might be first to market around the world with that kind of idea, Jesper.
Paula: So well done you again.
Paula: Thank you.
Jesper: That’s exciting.
Jesper: But if you see anything like it, let me know.
Paula: Of course, of course.
Paula: Well, I’m sure all of our listeners as well will be very quick to correct me if I’ve missed it.
Paula: And there’s a couple of specific functions that operate on your current consumer program, Jesper.
Paula: I’d love to just talk about because I think there’s learnings and some, I suppose, new technology ideas that not every retailer might even be aware of.
Paula: And I suppose the one that I’m particularly passionate about is like mobile pay.
Paula: I know in Denmark is a popular form of payment.
Paula: And my understanding is if somebody pays in 7-Eleven using mobile pay, which I think is like Apple Pay, and you can let me know, but that they automatically then get their loyalty points or stamps without having to scan a card or scan the app.
Paula: Is that true for 7-Eleven in Denmark?
Jesper: It’s true in terms of that.
Jesper: That is our goal, but we have not introduced that yet.
Jesper: But we are actually working together with Liquid Barcodes on that because we think this is really about taking out friction.
Jesper: It’s about making it easier.
Jesper: So it’s definitely high on the agenda.
Jesper: It’s part of the program, but that is not introduced yet, but it will be.
Paula: OK, fantastic.
Paula: Well, again, I know we’ve talked about it in the past, and I’ve written about it.
Paula: So it’s one of those things.
Paula: I think the generic term is payment linked loyalty.
Paula: So whether it’s mobile pay or a particular other form of payment, if you can reduce that particular double card swiping, I think customers really love us in the markets that I’ve kind of written about.
Paula: So yeah, that will be super exciting for you as well.
Jesper: And you’re absolutely right about mobile pay.
Jesper: We were the first convenience chain in Denmark that actually signed up with the company allowing us to offer that payment solution for the customers.
Jesper: And that has become quite popular because, you know, everybody has their phones on them.
Jesper: Not necessarily everybody has their wallet with them.
Jesper: So that has made sense and that works pretty well.
Jesper: And now, as you said, we want to link that together with that.
Jesper: You actually get your stamps automatically.
Paula: OK, OK, fantastic.
Paula: And tell me then, are there other technology ideas that are inspiring you, Jesper?
Paula: I mean, we’ve, you know, talked about all of your travels around the world, you know, what’s happening in Asia, what’s happening in the United States.
Paula: So, you know, everything and anything from, you know, augmented reality, artificial intelligence.
Paula: Like, is there something that you would say is resonating with you as a managing director to go, I think my customers would like if I could do something in that area?
Jesper: I think this is a really interesting area.
Jesper: And I was in Shanghai in March, attending the NACS Asia meeting.
Jesper: And that was really an eye opener.
Jesper: I went to China some years ago, seven years ago, as well as Shanghai.
Jesper: And I must admit that it was a totally different city.
Jesper: So much has happened in the digital area.
Jesper: You could enter stores.
Jesper: And I couldn’t because I was not in the system.
Jesper: But people actually entered stores and paid just by their face.
Jesper: Whether we will end there without GDPR rules, I’m not sure.
Jesper: But there’s a lot of inspiration to get there.
Jesper: And it’s all about making it easier for the consumer.
Jesper: So that is really in our alley.
Jesper: That’s where we have to have our focus.
Jesper: How can we make it even easier to show up in our stores?
Jesper: I think technology helps us a lot when it comes to artificial intelligence.
Jesper: I think there’s a lot of help to get when it comes to our support office.
Jesper: It’s more like in finance, etc.
Jesper: Where we’re using that.
Jesper: I’m not sure exactly where we would be able to use it in the stores.
Jesper: But we do consider whether we should implement parts of that in our auto-replenishment systems, helping the franchisees with the ordering and make sure that it’s the right order, depending on the weather, depending on occasions or happenings in that local area.
Jesper: So I think there’s a lot of help to get there.
Jesper: Overall, the digitalization has helped already, but I think we are just using a fragment of the opportunities there are.
Jesper: So it’s something we are looking very much for developing.
Jesper: Our company in Sweden is perhaps slightly ahead of us when it comes to looking at what the technology offers us.
Jesper: So in Sweden, we are currently developing a test when it comes to unmanned stores.
Jesper: So everything is self-serve, as you’ve seen in a couple of other countries in the world.
Jesper: I think what we are good at in the right-hand group is actually if something is developed in a country, we are quite good at sharing and then copying it if it works.
Jesper: So I think that solution would work in some places in Denmark, like bigger universities, bigger companies, etc.
Jesper: So we are looking at different areas when it comes to technology.
Jesper: I think it’s really important.
Jesper: But I think we are still in the people business, and I think the technology should not take over the people element.
Jesper: And when we talk to our consumers, they still think, the majority still think it’s important that there is a person when they come into the store.
Jesper: It creates some trust.
Jesper: It creates some safety.
Jesper: So I think we should do both.
Jesper: But I could not see for me in the future 100 stores in Denmark with no people working there.
Jesper: I don’t think that would work.
Jesper: Again, what I remind my team of is that a lot of the products we are selling can be bought everywhere, quite often at lower prices.
Jesper: So what we are selling is actually time.
Jesper: We are selling experiences in the store.
Jesper: And a very important part of that experience has to do with the interaction with people.
Jesper: So I don’t think we will ever have only stores with no staff working and self-serve.
Jesper: But it’s definitely going to be part of our business in the future.
Paula: Wonderful.
Paula: And you’re very lucky to have made it to Shanghai, Jesper.
Paula: I have to say, I’m a little envious on that one.
Paula: As you know, I’ve written about facial recognition and paying with your hand.
Paula: And as you said, I have no idea how those technologies will land in Europe.
Paula: But I do think there’s an element maybe of the fun factor.
Paula: And I’ve seen some robotic technology where it becomes almost a part of the theatre of an experience.
Paula: So there probably is a way to do it where it doesn’t detract, but actually does enhance the in-store experience.
Paula: So I’ll be certainly keen to hear how your colleagues in Sweden are getting on.
Paula: And definitely next time we meet, we can talk about how you plan to bring that to Denmark.
Paula: So just a final few questions then, Jesper.
Paula: I always, as you know, look at loyalty programs around the world in different industries to bring learnings maybe from one into another, where it mightn’t be obvious what’s working.
Paula: Like if you were to tell our listeners what your favorite loyalty programs are, even just as a consumer, because we know you travel frequently.
Paula: So there’s lots of ways that you’re probably paying attention to loyalty programs.
Paula: So what loyalty programs do you personally admire?
Jesper: I have a couple that I admire, and that has been very inspirational for the work we currently are doing in our business in Denmark.
Jesper: And one is actually, and that is perhaps easy for some people, but 7-Eleven in the US and Canada has developed a very good loyalty program, which is much more holistic than the one we have.
Jesper: I think it’s still early days, but I’m sure over time it will prove that it is a very strong program that actually makes the business more relevant to more consumers, and it actually creates true loyalty, which I’m looking for.
Jesper: So I think that is worth to look at.
Jesper: Another loyalty program is actually, to a certain degree, one of our competitors, because it’s Starbucks, and coffee is big for us as well.
Jesper: But I must admit that what I’m excited about with the Starbucks program is that you basically don’t really get a lot of discounts.
Jesper: You still pay more or less normal prices for your products.
Jesper: But somehow they have managed to build a program that really captures their customers and make them come again and again to the stores.
Jesper: And I think that is the most important task for a loyalty program.
Jesper: That is really to make sure that the customer becomes more loyal.
Jesper: And everybody can introduce a program where you give a lot of discounts, then it’s going to be very costful for you.
Jesper: And I’m not sure it creates true loyalty.
Jesper: But Starbucks has made something that really seems to work.
Jesper: That’s exciting.
Jesper: The third one and the last one I want to mention is perhaps a little traditional because it is a chain, a store chain, but it’s not really a chain that has a lot of stores, but it’s Nespresso.
Jesper: I think the way they have introduced that product, their coffee machines, the coffees has been really impressive.
Jesper: And I think if you first become an Nespresso customer and you start buying the capsules, it takes a lot for you to go for something else because the quality is very good.
Jesper: The service you get, no matter whether you are in contact with them on the phone and the store online, it is outstanding.
Jesper: Their service levels are fantastic.
Jesper: So you feel so well treated.
Jesper: You feel so welcome.
Jesper: And that, I think, makes sure that you don’t leave them again.
Jesper: Of course you do sometimes, but I think their program overall globally has been very strong.
Jesper: And sometimes when we talk about evaluating or developing our customer service level in our stores, we quite often talk about Nespresso.
Jesper: How do they do it and how have they accomplished where they are today?
Jesper: It’s pretty impressive.
Paula: Sure.
Paula: And all three examples really are ones that I love as well, Jesper.
Paula: So thank you for all of the homework and the research.
Paula: I think you know I judge the Loyalty Magazine Awards in the UK.
Paula: And I’ve seen some of the entries for your colleagues in the US and Canada for 7-Eleven.
Paula: And absolutely breathtaking results, which again we can never publish or disclose or whatever, but internally you have access to.
Paula: So there’s definitely incredible work, including some cool stuff, which I think is probably hard to rationalize, but the augmented reality concepts.
Paula: There’s some really good fun that I know 7-Eleven’s done in the US that you can definitely leverage.
Paula: And to your point about Starbucks, I was reading about them actually even in China yesterday.
Paula: And they have a whole gifting proposition, which again to the point about building true loyalty, I really think they have a lovely idea around, say it with Starbucks.
Paula: So the whole kind of gifting concept and bringing people together using your loyalty platform and loyalty program, to me, that’s something that Starbucks does better than anyone.
Paula: And then obviously in espresso, I mean, it is a phenomenal brand.
Paula: And I have talked a bit about customer experience with actually Mike Atkin on a previous episode where we say, you know, a customer experience drives loyalty in addition to and way beyond your loyalty program.
Paula: So I think you’re right to pick up on the outstanding service of Nespresso just to really pick up on how they’re driving that kind of long-term emotional connection with their customers.
Jesper: Thanks.
Paula: Cool.
Paula: So great work.
Paula: And just, I suppose, the last couple, in terms of resources, Jesper, that you tend to rely on, either for your own industry insights or even for marketing initiatives or trends, what kind of conferences do you like to go to or what kind of resources would you recommend for listeners?
Jesper: That is a tough question because, to be honest, we don’t go to a lot of conferences internationally, but we attend the NACS shows.
Jesper: And I think, to be honest, the NACS shows when it comes to insights and sharing practices, I think the one in London has been the best.
Jesper: The one in the US is just so big, it’s difficult to sort of get a lot out of it.
Jesper: But the one in London has been very good.
Jesper: I was the first time this spring at the NACS show in Asia.
Jesper: That was fantastic because of the technology.
Jesper: I think if you get a chance, you should go there.
Jesper: That was really exciting.
Jesper: But apart from that, we quite often attend to some Scandinavian conferences, which are very good.
Jesper: There’s a Danish company called the Pi Group, PEJ.
Jesper: They are doing very well when it comes to trends within the supermarket industry, convenience industry, trends in general.
Jesper: It can be fashion, any kind of trends.
Jesper: They have a very strong and sort of predicting what happens in five and ten years.
Jesper: And every time we’ve been listening to them and look forward in our own business, we must admit that they sort of hit the nail every time.
Jesper: So we use them quite a lot.
Jesper: We have sometimes them coming to our internal conferences with franchisees, and they have been attending in a couple of other countries in the right-hand group as well.
Jesper: So they’re definitely very strong.
Paula: Wonderful.
Paula: Well, I’ll make sure to put that in the show notes because it’s not one I’d come across before, but you’re absolutely right.
Paula: You know, there are people who specialize in understanding where consumers are thinking, probably before any of us consciously realize it.
Paula: So it’s worth investing in that type of expertise, so that you’re building your strategy on where overall humanity is evolving to.
Paula: So that makes an awful lot of sense.
Jesper: Good.
Paula: Great.
Paula: So I suppose we’re going to probably wrap up now, Jesper.
Paula: Is there any other area in terms of either loyalty or marketing that you wanted to pick up on, or any other things you wanted to include before we close?
Jesper: No, I think we’ve covered most of what I wanted to talk about.
Jesper: The only thing I’d say is that loyalty has always been part of my agenda.
Jesper: But the last couple of years, I have really, really, really tried to get a lot of information about great loyalty programs globally, because I think there’s so much opportunity.
Jesper: And it fits perfectly well into our value saying we have to be very customer focused, because the only thing we want to do is to become more relevant to our consumers.
Jesper: So talking to you during the last year, listening to podcasts in general about loyalty has really inspired me.
Jesper: I think I’ll stop this session by saying that personally, I believe that the management team has to be on board.
Jesper: If you want to succeed with the loyalty program, don’t just give it to somebody that has two hours a week to work on it.
Jesper: It’s huge.
Jesper: If you want to do it, you need to know and understand that it takes some resources to become successful.
Jesper: We do believe we do the right thing, but we will see when we implement it.
Paula: My goodness.
Paula: Well, I couldn’t have asked for a better close, Jesper.
Paula: You’ve reassured me that there’s a future for all of us who work in the industry.
Paula: So I’m delighted that we’re learning and listening and inspiring each other.
Paula: And I definitely hope that we get to do this again in the future, when you’re further down the journey with your project team.
Paula: So from my side, I just want to really thank you for your time and insights.
Paula: So Jesper Østergaard, just say thanks a million from Let’s Talk Loyalty.
Jesper: Thank you very much.
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.
Publisher’s Note:
This transcript was generated with the help of AI and podcast publishing tools such as Apple Podcast’s transcription service.
In the interests of efficiency and minimising our costs as a small business, it has not been checked by a human.
If you have any comments or concerns about the accuracy of this content, please do contact us for changes or corrections.
