In 2017, the UK country’s largest broadcaster Sky TV, launched its VIP programme, the first tenure-based programme in the industry which promises customers that “the longer you stay, the better it gets”, with a clear intention for its customers to feel loved and appreciated.
It began by offering exclusive live experiences to over a million customers a year, and then, as a result of nationwide lockdowns, it pivoted to delivering even more extraordinary & innovative virtual experiences.
In my conversation with Rob Chandler, he shared some fascinating models on how Sky VIP thinks about loyalty and how they create new and exciting ways to really say an explicit “thank you” to its loyal customers.
Enjoy this episode of “Let’s Talk a LITTLE Loyalty” for some fascinating insights on how to truly differentiate your brand, no matter how competitive the industry.
PAULA: Welcome to Let’s Talk Loyalty, an industry podcast for Loyalty Marketing Professionals.
PAULA: I’m your host, Paula Thomas, and if you work in Loyalty Marketing, join me every week to learn the latest ideas from Loyalty Specialists around the world.
PAULA: Thank you.
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PAULA: Hello and welcome to my summary show of an interview with the leading entertainment company in the UK, Sky TV.
PAULA: This incredible company operates across five European countries, entertaining 22.5 million customers, and is earning over 12 billion in revenue.
PAULA: So I knew that their loyalty strategy would be as fascinating to all of you guys listening as it would be for me.
PAULA: And Rob Chandler was a superb guest who shared some incredible insights.
PAULA: As usual, I started by asking Rob his favorite loyalty statistic.
PAULA: And the one he shared has perhaps become my favorite one because it keeps just coming through more strongly with every piece of loyalty research that I read.
PAULA: In particular, I’m thinking of this year’s Bond Brand Loyalty Report, which also emphasized this key consumer insight.
PAULA: So it is gaining even more momentum in North America in 2021.
PAULA: So here it is.
PAULA: 73% of customers think that the purpose of a loyalty program is for the brand to show its loyalty to them.
PAULA: But 66% of marketers think exactly the opposite.
PAULA: So it’s no wonder we have so much confusion in the industry around what success looks like.
PAULA: What an incredible perspective this simple statistic and mindset can bring to any organization.
PAULA: Rob then went on to share the business context for the introduction of the Sky VIP loyalty program, which was launched in 2017.
PAULA: Following a period of transition for the company, which was of course by then a very mature business in an increasingly competitive market.
PAULA: Sky realized that customers were starting to defect over time and becoming less loyal, even though Sky does have some of the world’s most exclusive content.
PAULA: For example, the Premier League football rights.
PAULA: So there was clearly no concern about the quality of the product or even its pricing.
PAULA: Instead, there were a number of challenges and one of those top concerns was that customers simply didn’t feel valued by the business.
PAULA: Like many companies, especially utilities, Sky had been focused on acquiring new customers all of the time, with the results that the best deals and offers were being given to them, rather than to customers who had already been loyal for a number of years.
PAULA: Customers then, of course, learned how to gain the system.
PAULA: By threatening to leave, they too could get the same great deals.
PAULA: Customers said they were tired of this approach, and Sky was being called out on it.
PAULA: So, for the first time, the business took the brave decision that all current customers could get the same deals as new ones.
PAULA: It was a huge decision for them, and truly marked a step change in their approach to managing and taking care of customers.
PAULA: Sky VIP was then conceived as the icing on the cake, a way for Sky to demonstrate its loyalty to customers with a vision to help them become more emotionally connected to the brand.
PAULA: So then, of course, they would stay longer.
PAULA: It was a huge challenge, one that’s hard to measure, but clearly one that customers would, of course, love.
PAULA: So, Sky VIP was launched in 2017, and the proposition is laser focused on tenure, or, quite simply, how long a customer has been with Sky.
PAULA: Through this process, it created four tiers, all based entirely on this information.
PAULA: The benefits of the program start the moment you sign up with the free gift of a movie, then supplemented by the opportunity for millions of customers to enjoy unique experiences that only Sky can offer.
PAULA: Quite simply, they wanted to bring customers closer to the things they love.
PAULA: Before the pandemic, the VIP program was rewarding over a million customers a year, including unique service benefits for the top tiers.
PAULA: For example, they enjoyed the fastest service, something I think a lot of loyalty programs completely miss out on as an opportunity.
PAULA: It is an entirely experience-based program, with no points or currency in its structure.
PAULA: And Rob and his team created what they call a loyalty equation to ensure they were truly creating something that customers would value.
PAULA: Rob then shared a model he learned from a leading loyalty expert by the name of Gabe Zichermann, who is one of the world’s leading experts in the gamification of loyalty.
PAULA: Gabe’s model is built on noticing the various ways to create loyalty using an acronym SAPS, which stands for status recognition, access to unique benefits, power to influence the brand, and finally, stuff.
PAULA: Rob had learned from Gabe’s work that the status, access and power drivers are harder to do, but they do cost the business a lot less.
PAULA: Rewarding customers with stuff requires the least effort, but is actually much more expensive.
PAULA: We then talked about KPIs.
PAULA: For Sky, the VIP program is designed to drive down customer churn as a result of the increased emotional connection they would have with the brand.
PAULA: They call this measure ITS or intention to stay, similar to a net promoter score.
PAULA: Of course, it is incredibly difficult to measure and prove, but the entire leadership team were behind the strategy and were giving Rob and his team the time to build it and prove it.
PAULA: Finally, we talked about the challenges of running an experience-led program through COVID-19.
PAULA: The entire team had to pivot, of course, to virtual experiences.
PAULA: And this, in fact, has now become a really useful format to ensure that Sky customers in every corner of the country could be rewarded equally, not just those in the main urban areas as they had been before.
PAULA: With the country in lockdown, Sky created free and exciting content on health and education for kids, and then built an entirely new portfolio of online experiences with leading entertainers, who, of course, were locked down this time last year, like everyone else.
PAULA: So, in this case, clearly, adversity was the mother of invention, and I really loved how Rob and his team found the silver lining in an otherwise very difficult time.
PAULA: So, in summary, I learned that Sky as a company operates with a real commitment to excellence.
PAULA: Having listened to its customers, it changed the rules from growth at all costs to a model based on integrity and being loyal to its customers.
PAULA: And that, for me, was a powerful example of just what’s possible when a company’s leadership truly wants to take care of its customers.
PAULA: I really hope you’ll find the time to listen to this entire interview with Rob Chandler, all about the Sky VIP program.
PAULA: It’s episode 39 and was released in June 2020.
PAULA: Thanks again for listening to Let’s Talk Loyalty.
PAULA: I’m your host Paula Thomas, and I look forward to talking with you again on Thursday.
PAULA: This show is sponsored by The Wise Marketeer, the world’s most popular source of loyalty marketing news, insights and research.
PAULA: The Wise Marketeer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 170 executives in 20 countries as certified loyalty marketing professionals.
PAULA: For more information, check out thewisemarketeer.com and loyaltyacademy.org.
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