#263: Sharing Data, Sharing Ownership & Renting Fashion - New Models Driving Loyalty

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 brought to you by The Loyalty and Awards Conference, the leading annual event for loyalty professionals in the travel industry. Make sure to join us this year from the 10th to the 12th of October in Madrid for the perfect mix of inspiring content and exciting awards. Check out loyaltyandawards.com for more information and to register.

 

Hello and welcome to episode 263 of Let’s Talk Loyalty. Featuring a long overdue catch-up conversation with Simon Rowles, Managing Director of Beyonde a customer experience consulting firm based in Sydney, Australia. With a single-minded focus on identifying, evaluating, and implementing the best global solutions to create compelling loyalty concepts. Simon is someone I always enjoy talking to, to get an idea of some of the latest emerging loyalty and customer experience trends. 

 

In today’s conversation, Simon of course talks about data, but no longer just as the new oil. But now as an even more powerful and profitable asset, as it’s becoming increasingly shareable and that’s, despite our increasingly restrictive privacy laws, worldwide Simon also shares some incredible performance statistics around a way to drive customer or employee loyalty using the power of fractional ownership. He also talks about the increasingly important option to allow loyalty members to aggregate the rewards across multiple programs. For everyone listening, I know you love hearing about customer strategy and innovative loyalty propositions. So please do enjoy listening to Simon Rowles from Beyonde in Australia and some of the inspiring ideas his team are exploring.

 

Paula: So Simon, welcome back to Let’s Talk Loyalty. 

 

Simon: Thank you, Paula. Uh, a pleasure to be back and congratulations on your wedding. 

 

Paula: Thank you so much, Simon. Yes. I think, uh, it’s been an extraordinary time. So certainly the highlight of, I dunno, how many years of, uh, planning and looking forward. So yes, it was interesting to share it on LinkedIn, not something I would’ve thought I would’ve done before, but it seems like it’s the wild west now sharing everything in our lives on LinkedIn. So thank you for your, for your kind words. And thank you for being here, Simon. I know you were in the UK less than 48 hours ago, so to show up to Let’s Talk Loyalty when you’re probably suffering from all sorts of jet lag and all sorts is very much appreciated. 

 

Simon: Thank you, Paula. I dunno if I’m suffering from jet lag, but that’ll come out in the next few minutes, I’m sure.

 

Paula: Absolutely. If you start rambling, we’ll shut you up. Grant. Well, listen, Simon, as you know, uh, first of all, it’s been two years since you were on the show last time. So we will touch back on that. But one of the big changes that I made in that couple of years was our opening question is, is quite different to what we did before. So with all of your expertise, insights there in the Australian, New Zealand market, uh, please do tell me, what is your current favorite loyalty program Simon? 

 

Simon: It was a hard question to answer, because at first I thought what’s my favorite loyalty program. And there’s some, I like them. There’s some, I, I don’t, but professionally the one I really do like is Commonwealth Bank has launched a whole of bank program called Yello, and we’ve been waiting for whole of bank programs to explode around the world. They haven’t really, um, eBucks South Africa, perhaps, uh, Access in India, perhaps. Um, But Commonwealth has gone at, uh, boots, and all they have, uh, leveraged the open infrastructure, the customer data, right. We have open banking, we’ve got open and other categories as well, including, including telco and utility. They’ve bought. Into a telco they’ve bought into utility. And that becomes part of your rewards set under Yello in the Commonwealth Bank, um, app. And, uh, it’s a reward for being a customer. They’re not asking you to go and spend more money. And it’s gonna apply to all of your customers across the board. So they don’t just have to fund it outta banking margin. They’re funding it out of all sorts of other margins from other industries and probably banking the merchant-funded piece work more effectively than anybody else in Australia. So from a professional perspective, they’ve bundled almost all the current themes and loyalty into one program. 

 

Paula: Wow, my goodness. I mean the complexity, the mind, boggle Simon, I mean, we’re all familiar with the, the old reliables of course and banking loyalty, but to get it across the whole bank, I mean, it must have been years in, in development. When did it actually launch their Simon?

 

Simon: It’s launched earlier this year. It’s announced actually earlier this year and it launches later in the year, it launches for home loan customers on a new home loan product first and then rolls to the rest of the bank. Okay. Um, and I think, I dunno that it’s years in production, it’s probably years in thinking. Yeah. But the market’s moved and, and open banking just makes a whole lot of things possible. And if you’re brave and bold and you leverage. Uh, the customer data, right in industries outside of your own, as a bank. Yeah. And go and buy into those categories. Uh, all of a sudden I’m sure. Uh, it looked simple on paper, but probably very complex. Yeah. Uh, under the water, getting all the pieces joined up. 

 

Paula: Absolutely. Yeah, no, and you’re absolutely right, Simon. I mean, we all know, uh, you know, the risk of overstating it we’ve been through a tumultuous few years. It was April, 2020 when you were last talking with this on the show here. Um, but I would love to just get your, your perspective in terms of, in that two years, what do you think has happened with, with loyalty in general? And again, particularly, I guess, in your own market, but even from a global perspective, I mean, I feel, you know, to me, it certainly has been kind to our industry. I always feel that loyalty is countercyclical. Um, many of my listeners will know I got into loyalty just after the big recession of 2008. And to your point earlier, actually, you know, brands that are brave, uh, do see an opportunity when there’s a crisis, uh, particularly globally. So just give us a sense of what’s been happening in the loyalty market there in Australia, New Zealand in the last couple of years?

 

Simon: It’s it’s a very good question. And yes, I would, I would agree. We are counter-cyclical, but we’ve seen an explosion in loyalty in our part of the world. Certainly Australia also in New Zealand with new programs launching at probably the rate of one a month and in some months won a week. Wow. So the adoption has been off the charts, but we’ve also seen, um, a struggle with complexity. So there’s a lot of new loyalty managers coming to market. There’s a lot of new loyalty models coming to market. Yeah. And they don’t know how to navigate it. Um, so we’ve also seen a whole lot of new suppliers come to market. So we’ve had more loyalty platform vendors coming to Australia in the last year than ever before. That all the new programs have been won by internationals coming to town for the first time. And there’s a host of new innovations and Boltons and orbiting solutions that are starting to take off that historically I think would’ve already struggled but perhaps doing everything over screens from any part of the world became normalized and that’s made it more possible, but certainly, the demand is there and the investments going in. Um, the move away from travel possibly helped it a bit because the airlines of a, of the center of gravity, of the Australian loyalty market. Yeah. And was no one traveling. Some brands, I think started to think that there might be a world outside of frequent flyer points for their programs. If they weren’t an airline, uh, retailers, banks. And there’s been a lot of development there, we’ve seen a lot of activity in some businesses where they put big teams on to build out new loyalty propositions under the water that have now coming to fruition now that the pandemics started to be a normal thing. 

 

Paula: Yeah. Yeah. And I guess only time will tell if all of those, um, innovative new propositions are welcomed by consumers because I always think there’s, there’s the risk of obviously fatigue and as, and confusion, so, you know, it’ll be down to exactly how they’re executed, I guess, in terms of how, how they land and what actually really does resonate with customer. 

 

Simon: That’s a very good point. And one of the key differentiators, I think is these are not niche fund plays that apply to only a portion of the base, but have good press coverage or good shareholder coverage in the annual reports. Most of these are scales plays across the very big programs which have several million customers and their advances on the core proposition, so they’re not fly by night, and they look to be really well structured against a good foundation. You’re quite right. Time will tell whether they do pay off. Yeah. But we are already seeing competitive responses to the same thing. So, uh, that for me is an indicator that two ever moved first, uh, got something right If we competitors are following. 

 

Paula: Yeah. Yeah, my goodness. Super exciting Simon. I always love hearing what’s going on. Um, and you know, for people who maybe didn’t get to listen to your last show, the reason I always love talking to you is I guess that you, I suppose really enjoy innovative propositions, you specialize, I suppose. Identifying, you know, global best practice and representing them, bringing it to the Australian market in many cases. Would that be a fair summary of how you, how you would see your, your business, and your services? 

 

Simon: That would be an exceptional summary and you probably said a bit better than I could. That is true. Uh, I, I would add that it’s not just innovations, but it’s innovations that have been adopted by a major player offshore. Okay. So a large bank, like Barclays. Yeah. Which gives it some credence and weight, but also means the innovations been through the pain and suffering of a procurement process with a big enterprise and play with one of the big, um, uh, enterprises. Totally. Yeah. But I think the problem we’re facing at the moment is velocity, there are so many of them being adopted offshore and making it through those gates, those disciplines. Yeah. That it’s becoming quite hard, particularly for a new loyalty manager who’s just for the first time seeing what points program looks like. Yeah. To be able to filter their way through the tools that make sense now, and the tools that’ll make sense in three years time as their program scale. 

 

Paula: Yeah. Yeah, no, absolutely good point. And again, quite remarkable to hear that that level of, um, innovation and opportunity is, is around and, and coming forward. Um, and clearly you’re advising all of your clients and all of that. I always love, love to comment it from the, I suppose, the consumer perspective, because with my, I suppose marketing mindset, I, I, I don’t really understand the technology in the same way that other people do, but I always believe that if I’m excited as a consumer, then I can always figure out the tech and, and find the pieces to build it. So with all of that kind of idea and mindset, Simon, what would you say are the most compelling opportunities for loyalty professionals to be thinking about beyond our traditional earn burn that we love so well? 

 

Simon: The earn and burn is always gonna make sense. Um, and I think we are not looking for things that are completely different to that this industry’s not gonna be wiped out. Okay. Um, by  whatever comes next. Yeah. It’s not TVs are gonna replace movies. Okay. But I think it’s, uh, very much in the foundations of, of the data. So historically we’ve had loyalty coalitions, which are fundamentally enterprises were offer the same currency, but really underneath was a data sharing play. You joined a loyalty coalition, so you could sell your product to the other coalition partners. And we’ve seen them struggle all over the world unless their owner-operated, but the principle remains companies want to collaborate. And we’ve had several goes at data coalitions, customer data, outside of loyalty coalitions with possibly the most famous for our part of the world in Australia, being a company called Data Republic, brilliant idea, banks, retailers, airlines, everyone pouring their customer data in the bucket, and you could learn all sorts of things that you couldn’t learn otherwise and you couldn’t market much better because data’s the heart of, uh, the whole loyalty game. And we had this theory, that data is the new oil, well, Data Republic crashed. And I think one of the reasons it crashed is data isn’t the new oil. That was a, um, Uh, Clive Humby, uh, saying from 2006 and he was right at the time. Yeah. But it’s changed. Customer data really is more like plutonium than oil and, uh, it doesn’t get used up. You can use it again and again, and every time you use it, it makes new things. So we’re more and more starting to lean onto the theory that customer data is the new nuclear waste. You’ve gotta dispose of it. You’ve gotta look after it. It’s dangerous. You’ve gotta protect it. No one really knows what’s going on with privacy laws. Yeah. Uh, there was GDPR, but that’s changing. Uh, California stepped in. I think Ireland has said all those popups on your, uh, websites don’t count anymore. And Data Republic crashed because the part we believe, uh, the partners got scared. What does this happen? What happens if this gets to the front page of the paper? Well, customer data is the new nuclear waste. We’ve now got an answer. Um, historically used to be able to encrypt data at rest. You used to be able to encrypt data while it moved, but you had to open it up and see that that was Paul’s details when you were analyzing it. The new technologies, uh, that have come to market now. And we’ve seen two launch in Australia and there’s several of them, the UK, Uh, encrypt at risk. So even if you’re hacked, even if you’ve got bad actors, even if your analysts aren’t doing what they should be doing, you have no risk. There’s processes that wrap around that in terms of the governance. So it’s not possible for the first time ever, really for two companies who have customer data to share that customer data and work out things that they may not have worked out before. The only thing you have to have is the customer’s permission to do it. But that does mean you get much richer offers art in front of customers and an example Barclays and Vodafone in the UK collaborates, Vodafone knew who their handset customers were, but they didn’t know if a customer also had a broadband contract with a competitor and working with Barclays, they were able to work that out. And Barclays was able to put an offer in front of that Vodafone customer to say, wow, you’re with a competitor of Vodafone, not in as many words, there’s an offer for you. Vodafone went from one product to two, two products the customers always gonna be better. Basket sizes up retention goes up. Uh, and we are seeing that happening across the board as this new technology moves away from anti-money laundering and so on where it first started and scales to be able to match customer data. And it means you can run your own loyalty with your own currency, across several different companies, you have different currencies. You don’t even have to announce it as a coalition, but you can collaborate with partners that make sense. We’ve got a telco and a supermarket that want to do that and not let their competitors know what’s going on, but it just means your first party data gets better. But one thing you need to have is the customer’s permission that you can do that. And most loyalty programs, and probably only in loyalty programs have a rule that says, and we’ve checked most Ts and Cs for the big ones and our part of the world. We will use your customer data to give you offers from our partners.

 

Paula: Yes. I think that has been explicitly built in so much, my goodness. Simon. It’s absolutely mind-blowing that that level of, um, solution, I guess, has emerged, you know, in the context of GDPR, because, I mean, we all know. You literally can’t even raise the, the words data, certainly in any program I ever worked on without the legal people being wheeled in, um, absolutely to, to forbid, as you said, Ireland is often the hotbed of regulation around it, but sounds like everybody’s actually getting comfortable with this idea.

 

Simon: Everybody getting comfortable with the idea is probably not quite where it’s at at the moment. Okay. But some brave players are getting comfortable with it. So particularly amongst our banks, we’ve got this theory that, uh, the transaction is the new cookie. Okay. So whatever you did, and the bank knows what you did, cuz they’ve got your transactional data. Defines who you are. And retailers are very interested in what that data is. We have, uh, from three of our banks launches of capabilities, which fundamentally monetize their transactions. Uh, the transaction does become the new cookie that identifies who you are. Yeah, they can find you a retailer and a bank can find you and they can make an offer to you. Now it’s not widespread. And these are, these are recent launches. Okay. So Westpac is one of our big four banks. They launched a, a program called DataX, uh, ANZ does another of our big banks. They have partnered with their venture division to launch, I think, called DataCo and our biggest bank Commonwealth Bank, the guys who are launching my favorite Yello Program. They’ve had a collaboration for some time with Australia’s version of Dunnhamby called Quantiv. All of them are looking to play this first-party data game in a sharing fashion. Not all of them use the same technology I’ve just mentioned, but we do know that one of them do. And one of them, and it’s Westpac they’ve said, We will help you, our corporate clients, our retailers, we will help you launch loyalty programs because we can match our two sets of data together. 

 

Paula: Yeah. Well, I mean, certainly, you know, yes, absolutely. I think banks are the most risk averse, in fact. So even if others haven’t yet spotted the opportunity, I think if the banking sector has found ways to be comfortable, that they’re protecting all of the relevant interests, um, that’s absolutely extraordinary growth. So definitely one that, uh, seems to be, uh, exploding for you. Um, I suppose, you know, thinking about it from a consumer perspective, that explicit permission piece that you mentioned Simon, do you think that is clear enough for the consumer? Do you think that we’re, you know, opting into things that perhaps we mightn’t, you know, cuz I think we all kind of ignore the terms and conditions. We tick all the boxes and you know, we, we trust the brand, I think to take responsibility for us, but we don’t really understand the detail. So what level of comfort do you have that consumers really do understand what’s happening behind the scenes? 

 

Simon: It’s probably it’s good. It’s a good question. It’s probably fairy, because some customers and some programs will understand and have an expectation. But of course, we know that not all our customers are the same. Yeah. So some won’t and some will be surprised when suddenly an offer arrives from another, another partner. Yeah. So I think it’s gonna be, it’s gonna be widely spread. So. From fully expecting it all the way through to hating the idea that it might ever happen. Yeah. for customers the same will be true of the executives sitting inside the enterprise. Yeah. And we’ve seen that in terms of these launches from our banks in Australia, we’ve seen exactly the same reaction amongst their executives. I would hate if this ever happened, then I’m thinking of myself as the only customer in the world. Yeah. All the way through time being expecting this for years. Yeah. And obviously, an overlay of is this legal and are we allowed to do this? Yeah. And you know, how desperate am I to get my numbers? 

 

Paula: Absolutely. Yeah. And I guess we have all been trained and, you know, we’ve seen enough of the cookie tracking, I suppose, to, to not be surprised anymore. So I guess it’s, you know, when I think about myself in that situation, I probably would be a little surprised in, in the, uh, initial, um, the first time I might see it, but again, it comes back to the brand trust and how it’s presented, um, and managed to, to see if I’m comfortable continuing that relationship, I guess.

 

Simon: Yes, it’s a minefield. The privacy game is a complete minefield. Totally. So you would have to, as a brand, as part of your engagement, I think, ensure that you’ve got explicit permission to be doing this. Yeah. And that would, um, that would help some of the executives in the enterprise to feel more comfortable that there’s explicit permission for this particular piece. Yeah. to be getting, uh, a Vodafone offer from a Barclays. Yeah. Uh, as an example, But in, in other instances, potentially the airline frequent flyer programs, which are the most aggressive and best users of some of this data. Yeah. It would be any surprise at all and they’d move quite quickly. Yeah. But to be, to be clear, these things have all launched. They’re all available. They all run in pilot, but we haven’t seen a huge scaled version of it. Okay. But we have this fabulous solution to an existing problem, and two are gonna be drawn together, you know, by gravity, we can’t see it not happening. 

 

Paula: Totally. Totally. I can hear that. And I’m just smiling, as I think about your data is the nuclear waste, um, you know, analogy. So definitely. One to watch out for and, and probably the right way to frame, frame it, Simon. I agree that it’s absolutely, um, it has to be handled with that level of concern, um, in order for it to deliver properly. Uh, but the stakes are super high, so everybody’s got a vested interest. I can imagine. Now if I was sitting in a bank, um, and, and spotting this as a business opportunity, it does seem, as you said, inevitable and, um, and very exciting. So hopefully that’s one that, uh, we continue to see, uh, growing. Yeah? 

 

Simon: Yes, indeed. I mean, it’s, it’s fairly well deployed in the UK already. Um, okay. Uh, Boots have used it, uh, TSB used it, Lloyds have used it, so it’s not uncommon. Uh, it’s starting to mainstream as a marketing player. Okay. But the beauty for all of us who are loyalty professionals is we are the only ones who have explicit permission from customers to make offers from partners. 

 

Paula: Yeah. For. Okay, so moving on then beyond, uh, the data play. What’s happening would you say Simon in the reward space? Um, for the, the kind of projects you’re looking at?

 

Simon: Several things all at the same time, and to go back to your foundation of earn and burn, the, the burn still needs to happen. Rewards still need to happen. Uh, Several movements there we are seeing because of the explosion of programs as a customer, you have an explosion of points and because of the explosion of card linking and other good tools, you’re not able to opt-out or ignore them. They’re starting to automatically accrue them. What do you do with all these buckets of minor points balances in different programs. We’ve seen two or three plays come to market, but the first to really do it was a points.com type play, which has always existed in travel. Yeah. Starting to appear in retail and banks and TD in Canada and Starbucks have a, so mechanism much like you might have switched your frequent flyer points for hotel. You can now switch TD to, to Starbucks. We’re seeing that happen on a wider, uh, scale though with new offerings and again, not heavily. Um, adopted from a company in the US called Bakkt and a company in the UK called Swapi letting you bundle all those points together into a single balance. And obviously you have to get every program that’s potentially a collaborator to allow that to happen, but we’ve seen in terms of introducing those models to Australian clients, strong appetite to play because there’s upside to them in terms of switching their points to, to different currencies, as a customer, though, you can see the win I take my whole digital life, uh, Bakkt goes as far as adding, um, crypto as the Swapi. My whole digital life, which is loyalty points, gaming points, crypto, whatever else it might be gift cards, and bundling them into a single balance. 

 

Paula: Wow. Okay. Nice and simple. And that’s live in market already. Simon, you said? 

 

Simon: They are both in pilot and they’re parts of the world. Um, okay. I’m not sure how much is public yet. And most of them lean quite heavily on, on certainly backed leads quite heavily on crypto. Crypto is a bit of an unusual one we find because, uh, you’re either, massive supporter or a massive Denier and there’s cases to be made either way. We’re seeing a good one sitting in the middle, being a company in Australia called Upstreet, which instead of you issuing points or crypto. You issue something in the middle called a Fractional Share in the company that you’re shopping and they’ve proved very, very successful with some of the metrics that they’ve deployed in terms of reduction in churn and uplifting revenue by giving customers a share in the company that they’re shopping. Wow. So they’ve run a trial with a subscription business, which as you can imagine, most of the subscription businesses, as we know, outside of a Spotify, Netflix, a very high churn. Yeah. They chopped churn by 48%. Wow. Now that’s a nice number if you’re a loyalty manager. Yeah. Um, and giving away a share in your own company and it wouldn’t be a whole share each time it would be a piece of a whole share. If you think about how small a loyalty role would would be, um, Means the customer becomes more loyal to you. So that’s part of the churn. They also raised revenue per customer, 36%. Wow. Because of a whole bunch of better behaviors inside that. So as a, as a loyalty manager, those are two numbers that you would really like. Yeah. And you’re not giving away somebody else’s currency, like a coalition. You’re not giving away a ties to a TV. Yeah. Not giving away a piece of your company, so these customers become owners in your own enterprise and we seeing. Strong, I won’t say demand, but very strong interest. We haven’t seen any major adoption. We’ve seen strong retailer adoption. We think it’s time for, for bank adoption. Okay. And again, a funding of your wealth life, your retirement savings together with these incremental pieces that you can earn. Yeah. Uh, strong theory that it applies heavily to younger members of the market. They may not be able to buy a house, but they can earn a share in Tesla. 

 

Paula: Wow. So I was going to ask exactly that. What kind of categories is it appearing? Is it, uh, it sounds like retail. Yeah?

 

Simon: Heavily retail? mm-hmm . And as you can imagine, most retailers have always given away their own product, now they’re giving away a piece of their own business. Yeah. Also professional services. So upstream have some good cases where they have employee loyalty programs, and the employee, instead of getting, uh, 50 bucks on me, birthday and a hundred bucks at Christmas. And I, and I forget the categories so that I’ve made those up. They’re getting pieces of the. They’re getting shares on the company as rewards for whatever the good behavior is or whatever the, whatever the anniversaries are. Yeah. And they’re seeing much stronger interest in those rewards than historically they would have with the one case that, uh, up street mentioned was during a black art period for that company where they made a lot of trade shares, somebody had hit an award level, expected their 25 bucks worth of shares and didn’t get them. Yeah. And were all over up street to say, But I’ve earned them, give them to me. But in lack period, obviously they can’t trade, it’s like I had to wait a few days for their award. Yeah. That’s fairly high, uh, attractiveness, I think for an employee award. 

 

Paula: Totally. Well, when it comes to sticking Simon, you know, I can’t imagine, you know, many propositions really competing with ownership of the company, even if it is fractional. And again, I, I don’t have the bandwidth this morning to figure out exactly how, how big you would want that to get either as an employer or as a loyalty program operator. But, clearly, those people putting a lot of great thinking into it. And what I always love again, is this idea that if it’s a simple, compelling proposition, then automatically everything else kind of falls in place behind it. When the proposition makes such clear sense. 

 

Simon: I agree. Uh, it is a difficult one to explain first time around. Yeah, but we do find with the younger cohorts in Australia, they understand their investing game, not all of them of course mean stock helps them get there. Yeah. But being able to earn a piece of a share of a company is always gonna be better than, uh, something disposable. It’s also, we are also seeing the same cohort in fact, have a strong interest in, in ESG and particularly carbon. Sure. So we’re seeing some very good carbon related to rewards coming to market and one that if you were to write it down and explain it, you’d think the attractiveness would be very low, but we’re seeing the attractiveness being very high is much like a fractional share in a company it’s a fractional share in a carbon credit. So in Australia as a polluter, a minor, or similar, uh, you have to buy carbon credits before you do whatever it is you’re gonna do as the offset. Yeah. We have a, um, A very successful startup coming to market called BetaCarbon. And we see strong demand from our retail clients for their offering. And the offering is you get a, a fractional piece of a carbon credit, an Australian carbon credit as a customer. And we see the demand coming from the younger cohort, cuz what that means is, you’re earning over time as rewards from your favorite apparel, retailer. Pieces of a carbon credit that you’re then gonna sit on for the rest of your life. And what that means is the pollutant buy it and the pollutant pollute. So in a way, You’re stopping the polluter, making the planet any worse. Wow. Now, as I said, if you’d written that on a piece of paper a year ago and said, oh, is this for a plan? You would’ve struggled.  

 

Paula: Well, writing it down as your, as you’re telling us Simon, I’m sitting there going, oh my goodness. Wow. But what I am loving, I suppose, is, you know, again, understanding, first of all, the demographic that these ideas are appealing to, because, you know, if we think about, you know, fractional ownership, you know, just to go back to that one for a minute, I would’ve assumed it was perhaps our generation. So, you know, people, you know, who, who understand, you know, buying and selling of shares, you know, so for that younger demographic to be so tuned into the opportunity. And with the carbon credit idea to actually prevent a company from, you know, polluting long term, that’s an extraordinary insight and an extraordinary level of power to give to a consumer. Again, even in its tiny fraction, sometimes they feel like with loyalty, you just have to give people the idea that they’re making a difference. That they actually do buy into that. And then the word-of-mouthpiece grows. And I mean, we all know that ESG is, is, is a massive opportunity anyway, in terms of like, it has to, things have to change quite dramatically. So I love the fact that that’s something that people can feel that they’re they’re, you know, signing up to long term and changing behavior long term. 

 

Simon: I agree. It’s it’s it’s exceptional. And that possibly is one of the major changes over the last couple of years is the attitude, certainly from large corporates and some of our, I mean, we discovered beer carbon through a client who wants to offer it as a reward in their program that they’re about to launch and they have just become a B Corp. Okay. So they’re very serious about what it is that they’re doing for the planet. Um, yet to be seen how well, uh, a fraction of a carbon credit behaves as a reward compared to whatever else they might give away along the classic lines. Yeah. But there will be a segment, uh, that give it a go. Hopefully it’s a big enough segment to, to make it meaningful and comparable. Yeah. Um, and while we talk a big enough segment, um, We’re also seeing the banks offering the capability for you to track your carbon footprint. Uh, NatWest launched it last year, uh, Commonwealth Bank, the developers of the Yello program, my favorite program have launched it this year. Okay. It’s been a pilot for a part of the year and will be offered to the whole base. They’ve got close enough to 10 million customers towards the end of the year. Um, and, uh, a bank in New Zealand Kiwibank, which is also a, B Corp will be doing the same. Now that’s not a loyalty program, but what we’ve seen for bank loyalty is that the app is the loyalty program. The better your app, the better the services in your app, forget points and prizes and all the other wonderful stuff. Yeah. We, as loyalty professionals know about the better your app, the better your attention, which is where many of the, uh neobank in the UK have gone. Yeah. And many of the big banks have, then had to follow. And Barclays is a good example of putting all the wonderful stuff that a neobank like a Monzo might do into their app. Um, Commonwealth is doing the same. They rank the best app in Australia by Forester. And this is one more service that sits inside their app. That’ll be adopted by a percentage of their base who really appreciate being able to track their carbon footprint. 

 

Paula: So it is purely, you know, in my mind it sounds like a CSO initiative then Simon, like just being useful for, for the sake of, of, you know, impressing the customer and driving that utility, as you said, for, for the app itself.

 

Simon: I think so. Absolutely. Uh, Cogo works because it can see your transactions. So you are shopping at this retailer caused this much of a carbon footprint and your fuel purchase caused the much bigger carbon footprint. It gives you the opportunity to upset them. But yes, it’s utility in the app for those people who had want it. And it would have to come from a bank because yeah, externally. Uh, you wouldn’t, you’d be able to do it, but you wouldn’t get the scale. So the fact that three banks have scaled it across their whole customer base means there must be some demand from customers. Yeah. And there must be some utility and they then differentiated from their competitors in terms of the features that roll into their apps.

 

Paula: Yeah, but I also, it, it sounds to me like a very clever solution to go back to my, you know, ideal world of simplifying things for consumers. You know, if you can track and report my carbon credit based on my purchasing behavior. And I’m not having to understand how to account for all of that, because, you know, I think we’ve probably both seen technology that allowed you to track your carbon credit, but you had to input the data, for example. So, I mean, honestly, that was just not something that was ever gonna work for me. So I love that the banks are facilitating that. And again, as a consumer, I can quite simply say, okay, yeah. If I took a load of flights this month, it’s definitely going to impact. So I guess that I’m more motivated to, to find ways to solve that. And yeah, I, I would trust that bank that that’s giving me that data a bit more. 

 

Simon: I’d agree. Uh, and I think to a, as an addition to a degree, the bank has to play that game cause they’re sitting in the middle. Yeah. But the real demand is coming out of, uh, the retailers and particularly they’re apparel retailers. So there’s a multitude of initiatives coming out of their apparel. Retailers, see some of the worst polluters in the world. Yeah. Because of the right tip, which, uh, clothing is deployed around the world and how little of it gets used and how fast it gets changed. Yeah. And fast fashion, if you’re a sustainability, um, watcher has a lot to answer for. So we seeing multitudes of different sustainable plays being deployed as loyalty plays, not just as a don’t feel so guilty, but as a here’s, what’s better for the planet. Now, one of them is a startup in Sydney called Rntr., and they add a button on a website that lets kind a apparel brand rent out their clothing more than once. So you might only wear it 10 times, uh, your friend might wear it 10 times and somebody you’ve never met what wears it 10 times through Rntr., the. The whole process gets managed. So it’s not something that’s gonna go to landfall. Um, and there’s several other plays around that world that try and make a secondary market out of clothing, uh, Reflaunt, which comes outta Europe, but also has a base in, in Singapore does the same thing. And that then becomes the loyalty program, uh, the loyalty offering for that enterprise, for that particular cohort who have a very strong view about sustainability and their view. We see being pushed by the retailer because the retailer knows that can’t plug any more goods. Yeah. And on now stepping into a far more, um, responsible position, becoming B Corps themselves and doing something about the things that this cohort cares about. 

 

Paula: Well, having just worn a very expensive wedding dress that clearly needs, uh, you know, another purpose in life time. And I’m hoping somebody listening is either already doing that in the, the wedding dress sector, dare I say it, but, but, you know, joking aside, I genuinely believe that I will take my dress to, um, somewhere where it can be, you know, uh, re-loved and re-worn and absolutely to me, that’s important. So fast fashion, I agree is something that I have enjoyed my whole life. I still enjoy it, dare I say it, but there is an element of awareness now that I can’t really in good conscience, continue to shop at the same way without some adjustment in terms of either the retail’s behavior or my behavior to make that more sustainable.

 

Simon: So these guys are tapping into exactly that yeah. That there’s now something that can be done. It doesn’t necessarily have to go to landfill. Yeah, I think today, much of it does go to landfill. Sure. But there are ways in which you might buy differently and ways in which you might dispose differently on the back end of dispose is a very hard game and what we are seeing for some of the retailers even closer up the cycle is even returns as a hard game. I think, uh, target has just introduced a fee for returns, cuz they’re just trying to slow that down. Yeah. Because being able to process them is, is very difficult. They might have that wrong. It might not be target. Okay. But just returns of good goods in general is a problem for, for many of these retailers, that whole cycles, a problem for, for many.

 

Paula: Yeah. Yeah. Wonderful. So, listen, we can’t possibly, I suppose not briefly chat, let’s say about some of the, um, the other kind of crazy stuff that we’re all excited about and really don’t yet understand dare I say so, I’m sure you get asked about NFTs, we’ve briefly touched on crypto in one context, but what’s your, um, I suppose, short version in terms of, you know, what’s the, the role of NFTs to drive loyalty? 

 

Simon: That’s a tough question. I’m not an expert. And, uh, and I do defer to the experts, some of which you’ve had on your show and I recommend them to anybody who’s got the same question. Sure. In the loyalty work that we’ve been doing, there’s uh, the outlandish, of course, but there’s some applicable concepts that we’re still trying to understand and work our way through. So one of them is, an NFT as a membership token for rights within a loyalty program. And we see some of those have some legs. We haven’t seen anything scale. Of course. Yeah. And these are new applications of things that didn’t exist before. It’s not a better version of, uh, something that exists today. It is a new applications and we’re trying to work out as the rest of the world is trying to work out what these are, but we have seen some real applications of the real play. Before they were called NFTs, but these are digital assets, and, uh, BlockV is a company that works with Ben and Jerry’s. And Ben and Jerry’s for, I think perhaps their 10th anniversary. One of their anniversaries in Australia launched what they didn’t know was an NFT, but it was an NFT which was a virtual twin of an ice cream. And with your phone, you could head to the beach and you could find an ice cream. There was only one, and it was unique and you could take that ice cream in, into a Ben and Jerry store and get a free version of the real version of that ice cream. Wow. There’s a beer version in Australia as well. Okay. Um, and in that instance, we are seeing them work very well. We know Vodafone have done very similar work in London, doing exactly the same thing, being able to find PlayStations and so on. Yeah. And convert them into the real thing. Uh, so those are real, but the, the minor problem with them is they’re not loyalty, Those are acquisition or advertising. Yeah. And those are bringing people in the front door and of course, you’re gonna get a name and an email address to go with whatever it is that you’re doing. But we do like those ones because those are real. And you can point to how it might perform rather than having to bet very big on something that, uh, hasn’t played art yet.

 

Paula: Yeah. Yeah. That’s super fun. Yeah. And I’m smiling to myself because beer, ice cream, and PlayStations, I mean, , you know, absolutely. 

 

Simon: How can you lose, maybe it’s the category, maybe it’s the category and not the NFT. 

 

Paula: Exactly, exactly. I mean, it doesn’t sound very affordable or scalable, but it’s definitely, as you said, it’s a, it’s a publicity driver. It’s um, you know, word of mouth, it’s fun, bit of gamification, so great stuff. We’ll definitely have to stay, uh, in touch and follow up. I’m sure there’ll be plenty more next time we talk Simon. So listen, is there anything else that I haven’t you asked you about as yet, Simon, that you think is important, um, in terms of new ideas, new propositions or anything that’s exciting you that, uh, we should, uh, talk about.

 

Simon: I think Paula we’ve covered all the ones that are making the most sense to certainly to our team at the moment. Thank you. Okay. Uh, I’m sure there’ll be another one tomorrow though. So, uh, I’ll, I’ll let you know because they’re appearing, they’re appearing every day. 

 

Paula: Absolutely. Yes. Yes. Well, we do follow each other very closely on LinkedIn Simon, so I’ll certainly be paying close attention and hasn’t when anything just, uh, pops up, we’ll make sure to get you back on the show. So with that said, I want to say a huge, thank you Simon again, for coming on, at such short notice this week, um, after all of your travels sharing all of your wisdom and insights, where’s the best place for people to find you? Is it LinkedIn? If they want to connect with you? 

 

Simon: As always, uh, as review too, I suspect portal, LinkedIn’s the best place to go. And, uh, you’ll find links off to our various websites and benches there. So if we can be useful, we’re very happy to.

 

Paula: Great. And I’ll make sure to link to both Beyonde and to your own personal LinkedIn profile, of course, in the show notes. So with that said, Simon Rowles, Managing Director at Beyonde. Thank you so much from Let’s Talk Loyalty.

 

Simon: Thank you Paula.

 

This show is brought to you by the Australian Loyalty Association. The leading organization for loyalty networking, and education in Asia Pacific, their international virtual loyalty conference will take place on the 25th of August, 2022. Register now to hear global experts discuss current trends in loyalty marketing, there will be fantastic networking opportunities, questions and answers, gamification and great prizes to be won. Visit australianloyaltyassociation.com to find out more.

 

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