Paula: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m Paula Thomas, the Founder and CEO of Let’s Talk Loyalty and also now Loyalty TV.
Today’s episode is hosted by Carly Neubauer, Co-founder and Director of Elevate Loyalty and Pay2Elevate, an Australian based company specializing in loyalty and incentive services, global rewards, and digital payment technology.
If you work in loyalty marketing, you can watch our latest video interviews every Thursday on www.loyalty.tv. And of course, you can also listen to Let’s Talk Loyalty every Tuesday, every Wednesday, and every Thursday to learn the latest ideas from loyalty experts around the world.
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Carly: Hello, and welcome to today’s episode of Let’s Talk Loyalty. My name is Carly Neubauer. I’m the Co-founder and Director of Elevate Loyalty and Pay2Elevate, an incentives and loyalty services company specializing in global rewards and digital payment technology.
Today I’m talking to Mark Proctor, Head of Loyalty and Retention at Big4 Holiday Parks. With international experience in loyalty across major retail programs, racing, gaming, and now holiday experiences, I’m looking forward to hearing views and insights from such a seasoned professional. I hope you enjoy today’s discussion with Mark and leave with some valuable ideas and things to consider in your loyalty world.
Welcome Mark. Now I’m really looking forward to this conversation. I know we’re going to hear some fantastic insights. You have such an extensive background in loyalty and across a range of industries and program styles. So let’s kick off.
Mark: Hi Carly. And thank you for inviting me to the podcast. I’m a an avid listener, or definitely in the last few last few weeks since you’re inviting me to the podcast and been enjoying them very much. So hopefully I can add some value.
Carly: Yes. I can’t wait. I can’t wait. So let’s start with our big question that we start every podcast with, which is your favorite loyalty program?
Mark: That is a, that’s a big question, especially for me and when my mind works, it probably reminds me a little bit of the question of who do you support in a, as a football team or a soccer team or cricket team? Cause your answer gives a lot away about an individual and I’m not sure I really have an answer when I first think about that question which then poses the question, well, why not?
Why don’t I have a loyalty program, a favorite loyalty program? And that’s probably twofold. One is how are we defining a program? And the other one is how are we defining loyalty? Which are probably two big questions and we could probably spend an hour and a half talking on just that in itself. And I think that in many respects, we probably have more rewards programs than we do necessarily loyalty programs.
So the reason why I’m kind of probably hesitating slightly is that lots of organizations have programs that you may associate with, for example, a newsletter. I’ve signed up to a newsletter. They say it’s a loyalty program. You’re getting some offers. You get some early access to benefits and it’s labeled a loyalty program. You may also get scenarios where organizations are there really just to drive an incremental booking or an incremental purchase, for example. And again, is that really loyalty? And is that’s how it’s viewed in the consumer’s eyes?
Also, I wonder whether or not we as a, I guess within marketing, I wouldn’t necessarily just label that loyalty professionals, but within marketing often use the word loyalty when what really mean in the eyes of the customer is it’s a habit or it’s convenience, and also there’s an element of, is it just a value exchange?
You know, I’ll give you my dollars and my data and he’ll give me some recognition of my value to you and rewards and convenience. And so when I think of in that element, it’s quite a broad, it’s a quite a broad kind of question in many ways. But what’s one thing is for sure, it’s multifaceted. It’s not one kind of element that defines a program or makes a program good in the eyes of the consumer. If I think about this further, there is a program that I think I’ll share, which isn’t your standard program. It’s, I think often many of the bigger names probably get a little bit more credit than really they deserve in a lot of respects.
And this is a program that I interacted with actually pre COVID working in the city. At the time I was working for Sportsbet and there’s some rumors around the office that all good, I guess. Recommendations start from the old customer endorsement, and it started around people’s coffee or lunch orders or habits. Now, typically, especially when you’re working in the city or going at the office, you get off the train, you go past the local. Coffee, because a cafe, because it was convenient, you’d grab a coffee and you might even get a somewhere where it has a, one of those loyalty stamps that cafes are famous for. And so again, that was convenience and some more habit as opposed to necessarily loyalty. Obviously, some people are very much a coffee snobs and only go to certain places, but I can, I’m definitely not one of those.
To cut the long story short people started talking. But talking about an app and talking about rewards related to it. And so obviously with it being rewards, my ears pricked up and thought, Oh, I might be interested in this and got the name of it and downloaded it and thought, Oh, it’s not that much different to many of these other apps out there where there’s acquisition offers from cafes or places for lunch where you get points. So you get some kind of deals or get some kind of discount. So at first I wasn’t overly intrigued by it, but the more I delved into the app, the more it’s delighted me from a, from not only from a user experience point of view, but from a feature set and a proposition.
And one of the, one of the real compelling components to it was the ability to piggyback. And that is actually a term and a reference used within the app, which is pain point. Picture this, Carly. You’re in the office with your colleagues. You’re in an office with maybe a couple hundred people and someone says, I’m off for a coffee and you’ve got to jump off to a meeting and you go, oh yeah, you buy me a coffee and I’ll get you on later on and I’ll owe you the money.
And yeah, it’s a lot of this kind of back and forth and it’s quite an arduous at times conversation. You can’t remember who you owe a coffee to. What this app allows you to do is create either a group of people or your marketing team or your level that you’re on or entire organization and you get notified when someone is going for a coffee.
So you can say in the app. Hey, I’m just off down to the local cafe. You get a notification and you can go. Oh, I’m just about jumping a meeting. I don’t have time to. Then I can get one and you basically can go to the app and go piggyback. Can you get me a coffee? And you pay for the coffee in the app. So you don’t have to worry about giving someone money or owing anybody. I’m sharing money. It’s all done in there. And that the person that you’re piggybacking will get that notification. We’ll get the order from the cafe and we’ll walk back with your coffee or your lunch and put it back on your desk, which I thought at the time was just a super cool feature, unique, never experienced it before.
Something that would mean that I will be using that app over and over again, because it was fulfilling a need for me, plus the value that I was getting from it. Not necessarily monetary, but the convenience I said before was extremely high for me and all because of the rewards within the app and the ability to redeem it. The lunch or a free coffee or two for one or whatever it might be was also very compelling. So it ticked the monetary value box. It ticked a bit of a community box. It ticked a pain point element. And, you know, it was all born from word of mouth. Everyone loving the app, everyone using the app. And it introduced new cafes to me that weren’t necessarily on my walk. So it helped with the acquisition component. Now you could argue for a particular cafe was it helping with their loyalty. At the same point, you know, if someone was going to a cafe and because they did like it, the feature of being able to piggyback off someone was just an extra benefit and you got extra points for doing that and bonus points for completing tasks. It was really interactive component of gamification. And I can’t remember if I mentioned the name, but the name is Ritual.
Carly: Yes. Yes.
Mark: So Ritual is the app and within that has a Rewards program. It is very much city based. I have recently in the office where I’m at the moment to try to open that up and there’s nothing unfortunately where local to me, which is disappointing. But yeah when I’m in the city, it’s definitely something that I use, although I can’t necessarily piggyback off anyone.
Carly: Piggyback with your colleagues when you’re out.
Mark: Yes. Yeah.
Carly: So going through your response is awesome. You have talked through how we even defining loyalty and what does it even mean?
And I think that’s a brilliant way to start thinking about what would be your favorite program. And then you’ve taken us all the way through to a particular app. And I agree with you. I don’t think many people would have heard of this, but I think that’s awesome. Because we’re defining why it’s important and why you deem it as a popular loyalty program or why it’s become valuable to you personally as well.
Is it something you would still keep using and especially from a convenience point of view? And do you know if your colleagues and et cetera still use it? Because I think it’s a lesson.
Mark: Yeah, I’m not quite sure whether or not I’m sure they do, working in the city. But obviously, as post COVID times have changed and people are doing a lot more hybrid or work from home apps like that to obviously. So for a little bit, case in point being me that I’m not using it anymore, but I would definitely would if, and I would definitely be introducing it to my team and the office if there was somewhere local, that’s for sure.
I think that probably just to expand a little bit. I think that also speaks a little bit to where the best programs are. And again, back to the question of what’s your favorite one. In some respects, it’s the programs that actually don’t stand out or don’t feel like they’re intruding on you are the best programs. It feels like those that are part of your everyday interactions with the brand, with your lifestyle, with your non-work kind of related tasks that you need to do. It’s just general interactions and personalization and relevance feels natural. If you have a relationship with a friend, it’s not forced. It’s not difficult. It’s natural and easy, and you don’t have to work on it. And my view is that the best programs venture into that space more than the ones that are intrusive, always sending you emails, always trying to get to the next bend because you do tend to find a lot.
You know, with all those programs, a key objective is get an incremental spend. And sometimes that’s at the detriment of the relationship. So is that really fostering loyalty?
Carly: Or is it becoming part of your life and adding value there versus making you work for it?
Mark: Yeah, it’s just, it’s not even a second thought. It’s just what you do. It’s where you go to, to purchase the product or the service that you need which then broadens the question of loyalty which we’ve touched on in previous conversations over the last probably decade. We’ve known each other. Carly is in Florida as being the outcome, not necessarily a program or a one off event.
It’s a all of org task objective, which I think then comes on to some of the challenges we have with loyalty. As an industry and some of the challenges I’ve faced over my career is how we bring an organization along the journey of loyalty rather than it sitting in a silo within a team that struggle to get any kind of, we’ll be the right way of phrasing that. I guess exposure or focus or attention from the business. Often you’ll find you’re having to jump up and down to get that attention.
Carly: And also loyalty going both ways, loyalty from the program to the member and reciprocal loyalty back from the member and that subtle interaction building a true relationship. It really goes both ways.
Mark: Yeah, definitely. Yep.
Carly: So you did just mention as well, your history and loyalty. So let’s go back a little bit as well, because you’ve had a very diverse career. Loyalty focus. Yes. But the industries and even locations from the UK Nectar program, you’ve also worked in racing, gaming, and now holidays.
Do you want to talk to us a little bit about saving Nectar? I think that’s a very popular program. A lot of people will know that name. What was your experience there? And some of tell us some of the highlights, lowlights from working in that program.
Mark: Yeah. So, so I started off more of a, with more of a broad kind of marketing degree, had a sandwich at Pirelli tires, and they had a retailer called Central Tire. I really started to raise my interest in, in, in loyalty. And from that, I then went to Coral the Bookmakers, which had a rewards program. And so I started to get that bug and started to get that interest in the world of loyalty. And Nectar and the UK obviously was up there with likes of the Tesco and the Boots Cards of being the program to be a part of not just within the UK, but globally.
So I thought that’d be the best place for me to really cut my teeth in and loyalty, and it’s an interesting space because when working for loyalty, it’s really client relationships. So you’re working with multiple brands, multiple industries, all of which had very different objectives and reasons for being in Nectar, but all utilizing the same tools, you know, the points, the rewards partners, the communication, the segmentation, the data, et cetera. So, but it was all used very differently depending on, like I said the client that you particularly you were managing at the time and their particular objective.
So when I first joined, I had two clients. One was EDF Energy and those listening, and you may have had interactions with someone called Ian Pringle, who used to be actually work for EDF Energy and now is their account manager, which was a long time ago and had lots of very robust and interesting conversation. So as you can imagine with Ian, me being on the client side and him being, sorry, me being on the Nectar side and him being the client.
And the other one was actually American express, which you wouldn’t necessarily expect in a brand such as Nectar, which was very much your family household brand, and not necessarily associated as you would do typically with Amex and that kind of business and corporate since especially 20 odd years ago.
And I can even remember today, one of the questions in my interview, Mr. why do you think Amex has joined Nectar? And without giving you the full hour interview in short, it was pretty much because I wanted to tap into it, to a new audience, into that family audience, because Amex wasn’t necessarily associated to that. And people weren’t necessarily inclined to sign up to an American Express card, but putting the next name on it and having obviously millions of customers that joint venture was one that worked for Amex and was very successful in inquiring customers onto the joint branded next one Amex account.
So you can imagine that was very much an acquisition play from a from an extra dynamics perspective, which then manifested into obviously making sure that they retained the card and continue to use it. So that was utilization and acquisition. Then from an EDF energy point of view, that was acquisition, but it was very competitive space energy in the UK at the time. And there’s lots of door knocking and lots of campaigns. And so acquisition was important, but retention again was a key focus. So those two counts.
And it was no different when I went into other brands and industry was just the power of the data and every client or every client service team had an analyst. So I literally had an analyst that would sit next to me every day of the week, utilizing the data to determine the best segments. Derive insights, build regression models to determine what would happen with identifying a customer’s high risk of churn and utilizing the power of Nectar to try and influence that customer’s behavior to, to drive an outcome, a desired next action that we were looking to try and deliver. So I was very fortunate at Nectar to working across many brands.
And that’s one of the beauties of working in a coalition program. If anyone is considering stepping into loyalty is that you do get to experience in a relatively short period of time, a broad range of brands and industries and challenges. So, you know, Hertz Rental Car, I had EDF Energy, Amex, Whipped Bread is a brand that had restaurants and pubs, Homebase, which were actually the third or the fourth biggest auto program prior to joining to Nectar, so that again was a challenge, yeah, and a few more that probably slipped off my I remember, but yeah, it was great experience and working with really intelligent, smart people and thinkers that as you can imagine, 20 odd years ago, next hadn’t been around that long. So it was really, you know, many of the founders or early starters were still in that space. So it was great to learn from them during that journey.
Carly: I think it’s interesting that you talk so much about the data personalization at that time. And obviously we are talking a few years ago now, and that’s still such a hot topic. It’s like, it’s still being called out as the big thing. What’s new now? And we’re still talking about something that you were doing a long time ago.
Mark: Well, to be honest, segmentation, but also we talk about control cells for campaigns and we had something back in the, in an ethical to follow cell, which was one percent of every customer that joined Nectar was taken off into what was called a follow cell.
So it was literally the control for the program. So, rather than having controls for individual campaigns, we had controls for the programs that allowed us to do those, the insights that demonstrates the value back to the client. There was never one silver bullet that determined the success of any given client.
You would need three or four or five different proof points, campaigns, research, follow cells, and lots of other different types of insights that engagement score analysis that the analyst would look into. And a lot of the approach thinking that was done 20 plus years ago, still surpasses a lot of the things I see today in individual organizations that have their own rewards program, as opposed to necessarily, you know, not going to comment on the likes of Flybuys or anyone like that, but I’m sure that they’re doing exactly the same because a lot of Flybuys are ex Nectar.
But yeah, it’s really just opening my eyes to the sophistication, the detail, the expertise, the robustness in, in how you demonstrate value of a rewards program to a client that is spending millions of dollars that you want to obviously retain. So next I had its own multi objective, which was retaining those clients.
And it reminded me very much of the drug wars of, you know, the drug lords are always one step ahead of the police trying to chase them. And we always had to try and be one step ahead of the clients to make sure that we could demonstrate and they would often challenge and the challenges often were genuine going.
And it always goes back to the question of how do you know they wouldn’t have purchased that anyway? It was always that question that was brought up and I wouldn’t say stumped us, but because every client had different objectives, the way that we answered that was very different. And it was an interesting, robust, I wouldn’t say, I wouldn’t say a challenge. I wouldn’t say a battle. It was a challenge that I really, I enjoyed. And nine times out of 10, we would be successful and others, we couldn’t quite get it over the line to demonstrate some of the value. And that was either intrinsically baked into the business itself, and whether or not loyalty works, and you can argue, and often organizations that are generally everyday, low price, high discount, tend to not step into the world of loyalty. Some have in recent years, but you know, many don’t. And some of those clients that may have come into the world of Nectar at the time, they were probably the hardest ones to convince that spending money on points rather than giving discounts, even though we had lots of case studies was probably the hardest to manage on it.
Carly: Let me ask you there as well, because I’d say a lot of people get that question or face it in a loyalty career. How do you answer that exact question, prove that the consumer wasn’t coming anyway? How do we address that? It’s a big one.
Mark: It’s a massive one. And I said before there’s no one single, proof point or answer, you have to take a multifaceted approach to that question and without getting into, and I’m not the most technical, it’s probably not the right word of it, but it obviously is very highly insights, maths led stats led. So without getting into that, to that world, it’s proof points of your market research and asking questions such like, which can also be very biased, but asking the questions along the lines of if it wasn’t for this program, or if it wasn’t for these points, or if it wasn’t for these rewards, would you, what would your behavior be? Or would you have made the purchase? Or how likely are you to have made that purchase? Often, the question is that slightly differently rather than did the points make you do something is, if we took those points away, would it change your behavior? So it’s kind of like a slightly different twist to the question.
Lots of campaign analysis, every campaign that we sent would have a control. And so therefore we would have a series of campaigns that we could go back to the client to go of the a hundred that we, that we’ve executed for all of these controls add up to an aggregate to a value. Then there would be the more technical piece of the analyst would go into where we would be losing the fellow cell potentially for the natural rewards program to demonstrate these customers that didn’t receive communication, didn’t receive the offers, but we’re still in the Nectar program and receiving points. If they were interacting at you, you know, drove less incremental spend than those that we’re receiving comes, but then you would get that’s the question. Well, people that opt into marketing are more inclined to respond to your marketing and therefore really it’s not a true life for like group.
So over them we had what was called an engagement score. So we would rank customers, not rank, but we’d score customers weighted based on how they interacted, engaged, hence the score with the program, which all organizations can do, for example, how many partners that they acquired from how many partners that they redeem from how many emails do they engage with? How many times do they redeem the offers? How many, what’s their points balance? Do they redeem often? Do they, you know, all these different types of variables that would be placed into this engagement score. And we would do a lot of our segmentation based on engagement score, because if someone has a high engagement score, they’re more likely to respond to you, to your campaign. So our clients were interested in those.
So if you can use high engage versus low engage to go, well, we do. We do, they’re all receiving communication, some are more engaged than others and are the ones that are more engaged in the Nectar program, also more valuable to you as an individual client. So we’re trying to take the collective Nectar program and then applying it to the individual client. A client itself, so there was lots of different ways of doing it and often would leave the analyst to try and work through that with the clients, but trying to then present that to them and explain it to them was also the interesting challenge.
Carly: Absolutely. And always thankful for a good analyst. That’s for sure.
Mark: Yes. Yes.
Carly: So it does lead me on to the next part as well, because obviously that can be a challenge when outlining the value to a client external. What about getting the business to focus on loyalty? Have you ever come across key challenges where you’re internal, you’re running loyalty and getting C levels or the business to really focus on it or show, appreciate loyalty value?
Mark: Yeah, I mean, that’s, I think that’s been a, probably a challenge in the majority of the organizations that I’ve worked in. And I remember my memory just made or time definitely goes quicker as you get older. So this could be longer than five or 10 years ago, but I do recall conversations just generally in the market around how do we get, you know, the likes of a CMO and into the C suite.
And you do see a lot more of that, or people are definitely with marketing experience being in that position or on boards. And I think loyalty in some respects is the next, that’s the next frontier for loyalty because I often find that loyalty is either a department, like I said at the beginning, a department within an organization that often you find, and it varies, it may sit on its own, which it does here at BIG4, or it could sit within a marketing department, or I’ve seen it sit within digital, head of digital role. So often it sits within departments. It’s very difficult to really get that voice.
And I think it also comes back to the definition of loyalty and the purpose of loyalty within your particular organization. So if you view it loyalty as I’m just trying to get an incremental spend and it’s about how we best target and segment and communicate and give reward and do one to one. You can kind of see why it sits in this CRM space or the email space, or because you often have titles where it’s loyalty and CRM. And having done CRM union, that was my, the title of my dissertation was on CRM. I have a very different view of CRM and to what you would typically see within an organization, or you would typically see on someone’s job title, you see CRM manager, CRM coordinator, and what they really are is someone sending emails and SMSs.
And from a CRM perspective, my view, and this was really pre all of these wonderful tech platforms, and it was a lot of, you know, Microsoft and data access and filling out Excel spreadsheets, is it’s more of a philosophy than it is necessarily a philosophy, a department or a tool or a job title. It’s, it has to be top down. It has to be brought in from the C suite and loyalty is no different. CRM, because it’s a, you know, the acronym that tech love to build and it sounds a lot easier to build a tech called a CRM platform than it does one to one marketing or relationship marketing or whatever it used to be 20 odd years ago. Which, as you said, right at the beginning, our aspirations haven’t changed. We’re all still talking about that golden record of the single view of the customer or unified records, or the one, the aspiration of one to one.
Nothing has changed 30, 40, 50 people are still, you go back to the old scenario of the corner shop. It was all one to one. I knew who your dog was. Your cat was your name of your goldfish when you were going to, that was one to one marketing, probably at its finest. Or it’s most pure rather and where, because it was a lot easier because you’re only dealing with maybe 40, 50, 60, 70 customers in a corner shop with dealing with scale. And that’s why tech comes in and it’s almost like tech leads the way and it should never be leading. It should be that the strategy and your vision that’s leading and in the text, the enabler.
So I think that’s the one of the challenges is that do we properly communicate the value and the extent to which or to what loyalty means in the context of loyalty as an outcome? And the only way we’re going to get loyalty as an outcome is all of org, not a loyalty department and not a loyalty program or an email or a few points here or a few rewards. It’s and going back to again, there’s so many correlates. There’s so many similarities to CRM, and I’m getting flashbacks to late nights in a dark room, listening to music choices that no one would want to hear about.
But maybe I’ll tell you once we’ve stopped the podcast, Carly, is where I was heading with this is we talk about omni channel today. We talk about making sure we’re making the moments that matter. And if you come back to the CRM piece, which I’d hate you actually using the acronym, that customer relationship management, managing that properly will derive a loyalty outcome as a, from a customer’s perspective, and we talk about channels too much, whereas from a CRM perspective, it’s actually touch points and it’s every touch point, regardless of whether that’s an email, digital, Bing website, in the store, a customer complaint, the physical product that you’re using, all of these are touch points and all of them are feeding onto whether or not I’m going to buy this product.
Again, create that habit, create that convenience, create that emotional collection, which will then feed into loyalty. And so sometimes I just think that we, the word loyalty, is far too easily thrown around and used within organizations. And if I’m proven being completely honest within our industry as well, it’s just in some respects, it’s just a given. Loyalty is used everywhere. And I sometimes wrestle with that is because what do we, when you look at lots of organizations, metrics, when it comes to loyalty, it’ll be commercial metrics often. Yeah. You might throw the odd NPS or would you recommend or satisfaction and stuff like that, but it’s engagement with the program. It’s have you bought more? Are you retaining them?
And whilst I don’t necessarily have that answer the top of my head right now, are they the necessarily the best metrics determine the true sense of loyalty. That’s probably where I’m heading with this, because, you know, for example, I have a retention target. Our program is a subscription target, a subscription program, where you pay 50 and you stay for two years. And so one of my targets is not only acquiring, but making sure that they renew. And so I’ll be tasked with retention. What’s your retention rate, Mark? And what’s it going to be next year? And are you going to achieve your target? And then it’s Mark, it’s not there. Why haven’t you? Why have you not delivered it? Or it is there and not the program must be great. We don’t need to do much. And it’s so one dimensional and it’s so narrow. It’s every interaction and the customer has with the brand of the product or the service that will contribute towards that.
And we’re just far too narrow and blinkered, I think with how we measure program success, put loyalty aside, program success, and then loyalty as a separate thing. And I think putting them together sometimes poses me questions, difficult questions when you ask what’s your favorite loyalty program, because I wonder if actually the two should sit together.
Carly: When you talk about defining success, do you have other metrics or ways you would include to define success, whether it’s your current program or others? Because we talk about it being more of a behavior. Loyalty doesn’t have to be a program. And even if it is a program, there’s so many facets as to what can make it effective and create a strong engagement and relationship. Well, what would you think of as success if you were to take it all, strip it all back? What does success look like?
Mark: Yeah, I think it is very, it is too easy to quickly go down the one dimensional route of what success is. Have you achieved your objective? Have you delivered against a vision or a mission or objective or a goal or a target?
Therefore that success. And I think that is too easy. That’s it. One dimensional. And I think success within, I guess, loyalty within programs, within, you know, individually, if I think broader success. Is only that’s not true. It’s very closely linked to failure. If you think of innovation, you think of great ideas, you think of probably most things that you’ve done in your career or developed yourself or it’s never, it’s rarely the first thing creates the success. It’s the journey that you go on and the failures and the learn and the ability to learn from those failures whether that be intentional mistakes or unknown.
So for me, success is, and success, especially with an individual is one that is, is comfortable with failure to the point where that they can be the most successful that they can be. Because if you’re not successful with that failure, then arguably you’re not achieving as much as you could because of the boundaries that you place around yourself. And that probably then extends itself to I’ll say loyalty, but you could apply it to anything, but then loyalty is whether that be creating a program, testing something new is, or best not do that, or I’m not quite sure, or I’m not confident in doing that because I’m not sure, you know, the chain around the neck of, I’m not convinced.
And then, oh, well, I’ll do a lot of, I’ll do a business case. I’ll do tomorrow while convince the CFO that it’s. That it’s worth doing. And again, it comes back to hard dollars, which don’t get me wrong. I’m, you know, at the end of the day, business needs to make the money. So I’m not saying we should just throw the textbook out and just chuck everything at the wall and see what sticks.
Cause it’d be fun, but I think I saw a video not that long ago, actually, where Jeff Bezos of Amazon talked about, I don’t know if it was success necessarily, I think it So in how most of his programs fail and it’s the successful ones that pay for the failures.
And a good example is addressing a customer need in the spirit of that’s what’s going to drive the loyalty or the positive experience to, for them to come back. And it’s the Amazon Prime and it’s the free delivery. The free delivery is by far and away the most obvious, but in some respects, the cleverest single benefit that’s probably been offered in many regards in any rewards program. Yes, they’ve added lots of other things onto it and that you pay for it. And I believe Jeff Bezos did say that was an idea that came about and took it to CFO was commercially, you’re committing suicide here, it doesn’t work because delivery is probably one of the most expensive things you will do, especially trying to do that, you know, across, I mean, if you just take Australia, I mean, I worked at the Good Guys for when I first came to Australia and that was getting into the world of delivery and the Amazons coming in and the eBays and free delivery. And, you know, it’s very difficult to do delivery. Across a massive country like Australia, if you have if you don’t necessarily have distribution centers everywhere, but I won’t get down that route. So delivery is expensive and the belief was no, that’s what customers want. It’s a pain point. It’s a point of difference.
It would fulfill, tick so many other boxes other than necessarily the business case based on how much is the product costing and how much does delivery and how much we’re charging the customer for the membership. It just doesn’t work out, but it’s actually more about the long term play. It’s not the short term, and it’s about what’s that going to do for us as a business in terms of our vision, our growth, our revenue, our aspirations to be whatever Amazon’s was at the time.
But, and you can see how successful it is. People always go on about how amazing the Amazon Prime proposition is. It’s always put up there in case studies. It always talked about how Amazon Prime customers are X many times more valuable than none, but then obviously every loyalty marketer will go, yes, but that’s probably somewhat self fulfilling because your most valuable customers are the ones that are joining Amazon Prime anyway.
So there’s a piece that would Nectar and Amazon would need to be working through if I wanted to keep Amazon as part of Nectar to demonstrate the value outside of that, but yeah, that’s, that’s something that when you look at success, I think often it’s the failures that you go through to get to that success, and it’s your ability to venture into that world. And then success isn’t always measured on a balance sheet, especially when you’re coming up with an idea that has never been tested, and there’s an unknown, you have to go with a degree of a leap of faith, you’ve done your research, customers want it it’s awesome in so many ways, yeah.
It’s easy for me to sit here and say this, especially in not being a CFO or a CEO that has the ultimate end responsibility. But as someone in loyalty, we often, it is a world, the loyalty space, and us as professionals, and this is not discounting any others, but it is a space of ideas that always coming up with new ones.
But I can tell you about nine times out of 10, they’ll stop at the point of, Oh yeah, too difficult, or it’s going to cost a bit too much, or it’s the right thing to do really. And I bet that would be actually a point of difference in the market and really elevate this, but nah, not going to do it. And so I think a successful person, successful organization is one that can actually push those boundaries further than others.
Carly: Absolutely. When I look at your personal history as well around the different industries you’ve worked across, cause you’ve worked in loyalty across some really diverse industries. Do you have a particular favourite or one that stands out to you where you think, Hey, that was particularly fun, enjoyable. I really loved working, whether it’s the consumer electronics, whether it’s racing and gaming, like where you personally love.
Mark: I did. I did enjoy wagering. I first started it in the UK at Coral and they were, they probably really I’m not, that’s true. I did a little bit at early, but they at scale. So I worked specifically on what’s called Telebet which is you phone up, and this was pre, you know, internet business. Big as it was and as user friendly as it was.
So the high rollers would call. And a lot of people would call to place the bets and there’s a lot more live betting. So I got to experience the interaction with a customer very early on, which I think is super important for anybody in any organization to get close to the customer, but specifically within the loyalty space.
And as a result of doing that, they had to create an account because you couldn’t just take a bet from anybody had to have an account and account number in there for an email. And then, and so that was really the venture into, well, we’re collecting data on these customers. I would then speak to a lot of the traders and some of the ones that would say yes or no to a bet, especially to high rollers.
And I can, I’ll never forget some of the early conversations. They would literally know everything about their customers. And it was go, it was really a window back into the days of the corner shop of I want to one relationship. And so I thought this is, this is great. I’m getting really hands on experience here of understanding what individual customers want and then been able to take that into potentially a broader rewards program.
So we did, we had tiers back in the days, we had different value offerings based on the value that you introduced. I think it was, you know, typical silver, gold, platinum or black, or I think black would not have been the top tier back in the day. And, yeah. We had big events like a Cheltenham or a Euro 2000 or 96 or whatever it might have been.
And we would be brainstorming little gifts that we could give our high rollers, whether that be a little tie pin or an amazing pen or a little money clip, because cash was still king back in those days, especially going to the races or a little. So just these little surprise and delights that would be delivered in really well curated, nice package that the, back in the old days, it was still direct mail was still massive.
And doing that really was a point of difference because all the bookmakers know about me doing a difference. So it was a really nice introduction into Insert one to one loyalty, tearing the value of understanding the value of your customers and the difference and not everybody’s equal.
And so not everybody should necessarily get the same and understanding what makes them tick and what’s interesting. So that probably that and the piece of work I did with Pirelli and Central Tire working on a project for them, and it got me there. Yeah, probably the bug for being able to understand execution or ideation through to execution and then through to did it work or not. Which probably didn’t, and it’s just where I’m a bit more analytical than I am creative. So it helped me in that space. And I also used to say sneer or snigger. That’s probably not the right word, but I also smile a little bit when my colleagues in marketing were talking about TV and radio and brand and various other things. And they were scratching their head to try and determine whether or not what they were doing was successful or not. I could just go.
Carly: You could measure it.
Mark: Yeah. I could measure it. So that was something that I enjoyed. Yep. I enjoyed it.
Carly: It sort of sounds like you were in the early days and your team, whoever you worked with, you’re like a human CRM really.
Mark: Yeah.
Carly: It was more manual, but CRM.
Mark: And yeah. Yeah, so I got to play. I was never the person, you know, saying yes or no to the bets. I was always stood behind them, but I was able to work in that space of scale through DM and through email and then through that one to one piece to try and determine pain points and issues and challenges that we might be able to work on as an organization.
And that’s why I’m saying it goes back to the organization. It’s not about, what can I work on the loyalty program? It goes back to what are the customer’s issues with the proposition that we currently have as a, as an org, as a product, as a service, not what’s wrong with my individual program.
Carly: Yeah. The business focusing on loyalty, not loyalty selling up to the business.
Mark: Yeah. Yeah, definitely.
Carly: What would you think in regards to sort of the biggest challenges we might be facing industry wise? If you think more broadly out of your business as well, but industry any big challenges you think we’re facing in the next few years?
Mark: You know, obviously the pending changes to privacy act, I think we’ll have some interesting conversations, challenges for loyalty going forward. There’s obviously that conversation around third party cookie deprecation in Google. I think I’ve just delayed that by another couple of years and I was listening to a podcast on why that is, which I won’t get into, but I think there’s some interesting developments in that space, whether that be in America and also in the UK.
So that the privacy piece, obviously the ability for log2u, which is very data rich and can capture a lot of first party data is actually we, can utilize that in the world of consent and what is classified as personal identifier information, because again, that will may change and, you know, the conversations that everybody’s having at the moment around AI and whether or not that is something that will be an enabler to many opportunities, but then you overlay security of that information that they’re potentially using may pull us back further than we would like. So it’s a bit of a murky world that we need to keep our eyes on very much. And I think I read something this morning that Eagle Eye and Tesco have Just got a, some kind of partnership and exploring AI and personalization.
So we’re all still threat, you know, it’s like the gold at the bottom of the rainbow this one to one or however people want to use it. It’s the gold at the red bottom of the rainbow. And how can we achieve that at scale and tech has always been the solution as we’ve got with, you know, CRM systems and our CDPs and Martech and multi platforms. And they’re all trying to help organizations to do that, which then makes our ecosystems and our tech platforms and complicated. And then we end up on ourselves, we’ve gone too complicated.
So I think actually as some challenges for organizations, not just necessarily in the space, it’s just, the complexity of doing business, you know, again, 5, 10 years ago was death by data. That’s not changed, but it’s death by data, death by tech, death by integration, death by it’s just AI private. It’s just a really challenging world to be in.
And so I think as a future piece, if you go back to some core principles of rewards, a loyalty program, rewards program, what do you want to call it? You know, around simplicity and value and convenience. I can’t help but think, and it goes back to some of the early conversations around how we just make something embedded in the day to day lives of our customers that, you know, it’s not difficult. It’s part of doing business. It’s simple to understand. There’s no pain points. It’s kind of, it’s kind of going back to basics. Brilliant basics is a term you might have heard a few times. It’s just getting our core proposition and our core user experience, right? Rather than always trying to strive for, I wouldn’t say the impossible, but yeah.
Carly: Maybe two fans drive.
Mark: Yeah I’m, I am a pretty simple individual in many respects. Sometimes I can get too deep and meaningful and thoughtful and, but I can go down too many rabbit holes. And I think that’s why simplicity works for me because I think simplicity works for consumers. You just have to look at our daily lives, Carly, and how chaotic they are, how consumed we are with tech and social and emails and life and kids, if you have them and work and just, you know, travel and work from how everything just seems really challenging.
And it was always, you know, time is precious. And I think where organizations and therefore the challenge for loyalty is where we can address customers’ pain points or help in their day to day will probably bear more fruits than trying to stick on a CV or stick on you or stand up in a conference to say one to one.
It’s just, I mean, it’s not very, I don’t know. I don’t find that necessarily inspiring or innovative because everybody’s talking about it. I’d love to someone to stand up and go, you know what? We’re just going back to basics. We’re keeping it simple. We’re getting the core right. We’re getting the customer experience, right? We’re getting the product right. The whole organization is behind loyalty. And. And we will, of course, utilize the data we have to be more targeted and be more personalized, more relevant, but not at the detriment of, I need a team of 20 devs and a team bigger than Ben Hur and a million analysts just to try to make that work, because Invariably, there’s even a conference I went to a couple of weeks ago.
What’s the biggest challenge you’re facing as a marketing department? Everyone’s talking about data and tech and integrations and consolidation and quality and it feels like we’ve created our own problem by constantly having this aspiration that feels that tech is leading to a degree as opposed to necessarily what the customers want, because research customers will always say, Oh, yeah, I want relevant personalized offers.
I mean, who wouldn’t, but it’s at what price at the price of having to send you 10 emails or the price of having to collect lots and lots more data from you. And I think, so that’s going to be the, again, the challenge is what data are people willing to share and who are they willing to share it with and therefore comes back to the broader trust that their organized customers have with your brand and your organization, which is all of org. It’s not loyalty.
So I think it, I think that’s the, I think they’re the challenges. It’s not loyalty specific. It’s organization wide, which then loyalty is a, is then looked upon to either solve for it or navigate around it. Because it again, it ends up being a department and an individual that goes, that’s your problem now, as opposed to, no, it’s everybody’s.
Carly: This is a company wide culture.
Mark: Yeah. Yeah.
Carly: Well, also, I think if anything, you’ve really wrapped back to your earlier comments around the good programs or loyalty, behavioral engagements. Once we don’t think about, we don’t notice them or they’re more subtle in our lives because we just value them and they’re there and we like them or we enjoy interacting with a particular brand versus having to work for it.
As you said, receiving 10 to 20 emails and keep reminding and working at something. So I really love this a lot. Before we finish out and close the discussion as well. Last question. What’s something that you’re most proud of? Career, history, industry, anything.
Mark: Oh, my word. I hate those types of questions. That’s my personality is not in someone that necessarily that is an easy question to answer or gravitate towards. So I’ll probably keep it a little bit vague, but broad in that this is no probably different to a lot of us.
And I always like an analogy. God, we’ve probably not spent that much time in the last recent years, but if you may recall, I do like an analogy.
So picture yourself as a, an artist and you can imagine them. You know, Maslow’s hierarchy and often, you know, that self actualization piece versus just needing food and water is flipped on its head. So get yourself as an artist, walk into a gallery and you see your piece of art or collection on a wall, and you’ve got hundreds of people looking at it and thinking, that’s awesome.
I guess, in a, in terms of loyalty and myself, we are very lucky that we can live in a very similar world to that, in that when you create a program or improve a program, you can sit back and look a bit like the art gallery and go, are people enjoying, are people interacting it? What’s the feedback on it? Without pounding on any one particular program or activity, I think that’s what probably, I guess, most satisfaction or proud of is, if I go to Melbourne Racing Club, where I, I created that program and someone is using it or goes, Oh yeah, I’m a member and I’ve just used my points for an experience or I got myself a free pint from it. You know, I don’t necessarily go, Hey, yeah, well that’s, you know, like that was my baby that’s still kicking.
But I just go, Oh, great. I made a, I made a, I said difference, right? I know it’s not changing the world here, but I’ve been able to provide some value or I’ve given someone a smile or I’ve given someone joy or whatever it might be in a, in the context of a program that may have had my fingerprints on it. So I think that’s probably it’s when you’re in a, in the space and someone references it, or you hear a chat or hear a conversation and someone’s goes, Oh yeah, I got this email and I got this offering. I got this and I got that. And I love this place or when probably the big one is when you get customer service, have a look after the customer service team here at big forum when they send emails going in and it’s a positive and it’s great about your team. Great about the brand. It may reference, the program was great or the program allowed me to do something.
Or I got a, my son’s, my son and daughter got a free bike hire at the Big4 Park ’cause I’m a Perks Plus member. Those little things that puts a smile on the customer’s face is probably’s probably one I’m most proud of, as opposed to one single big project or big launch or big career.
Carly: That’s awesome. I’m sure so many loyalty managers and people that work within the industry could totally resonate with this as well. Because if you’re working on a program, there’s nothing better than seeing or hearing the feedback around a member, enjoying it, getting some value or adding value to their life as well. So that’s awesome.
Mark: Yeah.
Carly: Well, an enormous thank you for so much. Conversation insights and your views on loyalty, the industry and where we need to look at as well. So such a big thank you, Mark. I really appreciate you coming on the show today.
Mark: No, thank you. Thank you, Carly. And yeah, this was my first podcast. So I must admit there was definitely a few nerves, a bit of trepidation, a bit of, how’s this going to go? Be great to listen back to.
Carly: Awesome. Thank you so much.
Mark: Awesome. Thank you.
Paula: This show is brought to you by the Australian Loyalty Association, the leading organization for loyalty networking and education in the Asia Pacific region.
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