Welcome to Let’s Talk Loyalty an industry podcast for loyalty marketing professionals. 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.
This show is sponsored by Comarch, a global provider of innovative software products and business services. Comarch’s platform is used by leading brands across all industries to drive their customer loyalty. Powered by AI and machine learning, Comarch technologies allow you to build, run, and manage personalized loyalty programs and product offers with ease.
For more information, please visit comarch.com.
Hello and welcome to this episode of Let’s Talk Loyalty. I’m your host, Paula Thomas, and this week I’m reviewing my second interview with Rob Burgess, who is the founder and editor of Head for Points. Head for Points is the UK’s biggest frequent flyer and business travel website.
And this conversation in September, 2021 was inspired by the industry’s interest in paid loyalty programs. And as you can imagine, Rob had some fascinating insights to share, both from his own experience as well as his community of frequent flyers. Rob and I had both noticed how many paid loyalty programs or subscription-based programs were becoming an integral part of loyalty programs, business models around the world throughout the pandemic.
Of course, we also realized how difficult they are to get right. Firstly, we have to prove the value to a member in order to confirm a subscription. But if you can’t get that value proposition clear, it will definitely drive compelling customer loyalty. And we had some fascinating insights and statistics that I’ll share with you in a couple of minutes to explain the difference in the psychology and the results of paid programs versus free loyalty programs.
We also agreed that with the mass adoption of brands like Amazon Prime, that is overall helping educate the consumers about the importance and the simplicity that they can enjoy if they do subscribe to a brand they trust for a reason, they understand. The key, of course, is to make sure there is a mutual value exchange so that you can enjoy the recurring revenue and the member gets benefits that they really feel are worthwhile.
One key principle is that Rob believes in the importance of flexibility. He talked about showing customers a clear intention to take care of them, and of course, increase the level of interaction and engagement. One great example he shared is IHG and its Intercontinental Ambassador program. This is a hugely successful paid program with benefits including free room upgrades and late checkouts as exclusive benefits to its paying subscribers.
Another high-profile example we discussed was the new coffee subscription program launched in the UK by Pret A Manger. This is an extremely generous subscription program. Obviously catering to people who love their morning coffee and is one of the key success factors in terms of how Pret A Manger managed its business throughout the pandemic.
In terms of flexibility, they offered a first month free to attract new members, and we agreed, this is a super example of how guaranteed benefits drive adoption and usage and really seem to resonate with consumers throughout the various UK lockdowns.
One of the key points I also mentioned when I was chatting with Rob was a survey I mentioned earlier. It found an incredible insight that I really think is worth mentioning again today. I think it’s both counterintuitive and compelling as inspiration for anyone considering launching a paid program. It was a survey conducted by McKinsey in 2020. And essentially it states that members of a free loyalty program are 30% more likely to spend more on that brand.
But in fact, members of a paid loyalty program are actually 60% more likely to spend more on that brand. I think it just proves that we value what we pay for, and I think we all know how frustrating it is to have people join a loyalty program but not engage. A paid loyalty program, of course, has much higher usage as well as a higher risk of churn.
This was a super interesting conversation with Rob Burgess from Head for Points, so I’m hoping you’re gonna listen back to the full episode. It’s available at letstalkloyalty.com/ 143. That’s all for today’s short summary, tune in tomorrow when I’ll be talking with Dr. Chris Arnold about the role of community in creating loyalty and the increasing challenge of delivering powerful environment sustainability and governance for brands without being accused of greenwashing.
Then on Thursday, we’re learning about a superb new loyalty study from our friends in Epsilon, showcasing a holistic new way to measure the relative loyalty of leading consumer brands in Australia. Thanks again for listening to Let’s Talk Loyalty.
This show is sponsored by The Wise Marketer, the world’s most popular source of loyalty marketing news, insights, and research. The Wise Marketer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 245 executives in 27 countries as certified loyalty marketing professionals. For more information, check out thewisemarketer.com and loyaltyacademy.org.
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