#141: Loyalty Excellence and Innovation with AA Smartfuel New Zealand

PAULA: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals.

PAULA: I’m your host, Paula Thomas.

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PAULA: Hello and welcome to today’s episode of Let’s Talk Loyalty, where the first time I am heading to New Zealand.

PAULA: A country that has impressed me hugely, both in terms of the loyalty propositions on offer, but even more so the sheer depth of engagement by New Zealand consumers with those programs.

PAULA: AA Smartfuel has in fact been ranked the number one program in the country, perhaps because it operates such a generous coalition model, focused on helping Kiwi consumers earn and burn cents per litre across many monthly categories of spend.

PAULA: Boasting over 40 partner brands and 1200 stores, I was delighted to chat to the co-founder Ian Sutcliffe, along with marketing manager for AA Smartfuel, Jordan Tran.

PAULA: And together we discuss why the AA Smartfuel program is so incredibly popular with customers, as well as the latest interesting opportunities and challenges facing this market-leading program.

PAULA: So Ian Sutcliffe and Jordan Tran, welcome to Let’s Talk Loyalty.

IAN: Hi Paula, great to be here, thank you.

PAULA: Great, great, great.

PAULA: Listen, fantastic to have both of you on the show today.

PAULA: You’re actually my first guests from New Zealand, so this is particularly exciting for me.

PAULA: You may know actually from listening, I know you’ve been listening to a couple of the previous shows, but I like to consider myself the global voice of loyalty.

PAULA: So you’re really helping me with that today.

PAULA: Great, great.

PAULA: And I actually had to Google, would you believe as well, whether it’s okay to use the word Kiwi?

PAULA: I didn’t know if that was a nice term or a less nice term, but I think it sounds like a nice term to use, yeah?

IAN: Yeah, very cool.

PAULA: Great stuff.

PAULA: Well, listen, let’s get into the show.

PAULA: As you know, we always start with our favorite loyalty statistic.

PAULA: And the idea is obviously that everybody can listen and learn immediately all about AA Smartfuel.

PAULA: So maybe Ian, why don’t you kick us off with your favorite loyalty statistic?

IAN: Yes, I actually have two.

IAN: Paula, one is a measure that we use throughout the business, which is unique monthly active users, as in card holders.

IAN: And we track it just over a million of those monthly.

IAN: And that’s really just a measure of engagement for us.

IAN: We can blow numbers up by looking at how many people are active quarterly or over a year, but really for our partners, they want engagement.

IAN: So that monthly number is where our focus and attention goes.

IAN: And it’s really important.

IAN: And the other number that I have is household penetration of registered card holders of the program, which sits in New Zealand.

IAN: We have 95% of households have a registered card.

IAN: So for us, there’s a scale and a reach component and an engagement component.

IAN: And those two really go hand in hand, especially when we look at a coalition program for the partners.

IAN: So they’re my two numbers.

PAULA: Oh my goodness.

PAULA: I mean, 95% household penetration.

PAULA: I don’t think there’s any other country in the world that has a marketing program that penetrates 95% of households.

PAULA: It must be the top in the world.

PAULA: Do you think?

IAN: We’ll take it.

PAULA: Yeah, good.

IAN: We’ll take it.

IAN: Probably helps just having under two million households, not millions and millions of them as well.

PAULA: That’s true.

PAULA: Yeah, well, I come from a small country, Ian, so I know what that’s like.

PAULA: So thank you for that incredible statistics.

PAULA: And Jordan, so you’re in the marketing side of AA Smartfuel.

PAULA: So tell me, what’s your favorite loyalty statistic?

JORDAN: So my favorite loyalty statistic is a little bit more general, I guess, more from a landscape point of view, but there was a recent study done here in New Zealand called For Love or Money.

JORDAN: And one of the interesting stats that I read through that was that there’s still a whopping 53% of Kiwis at least, that still prefer interacting with loyalty programs via traditional methods, i.e.

JORDAN: the plastic card.

JORDAN: And I just found that really interesting because there’s so much talk about digitization, everything becoming digital, focus on mobile apps.

JORDAN: It was just a real, I guess, eye-opener and a good reminder to not forget about the people that still love the whole plastic card.

PAULA: Totally, totally.

PAULA: And you’re right, and we should give a shout out to our mutual friend, Adam Posner, for doing all of that work, for coming up with that incredible statistic, because I think you’re right, Jordan, there’s an extraordinary undervaluation, I think, of just the experiential piece of loyalty.

PAULA: And maybe we’re all kind of rushing too fast with them, whether it’s COVID or whatever else, just to be all technical and all savvy, and some people just want to have a nice card they can show at the till.

PAULA: Wonderful, great.

PAULA: And I guess I should add a favorite statistic, because as I said, you are the first New Zealand loyalty program that’s come on the show.

PAULA: And the reason that actually Adam introduced us was because of your results with that particular study.

PAULA: So I know AA Smartfuel was ranked the number one loyalty program in New Zealand and in the second edition of the research and the second time in two studies.

PAULA: So a hundred percent result, which is amazing.

IAN: Thank you.

IAN: We owe Adam a beer.

PAULA: For sure.

PAULA: I agree all owe Adam a beer.

JORDAN: That’s wonderful.

PAULA: So my first-

JORDAN: I’m sorry.

PAULA: Yeah.

PAULA: No, it’s good.

PAULA: I think we don’t often enough step back.

PAULA: Sure we don’t and kind of go, what have we achieved?

PAULA: And I think it’s, is it 11 years that you’ve had the program running so far?

IAN: Yeah.

IAN: So we’re actually just coming up to our 10th birthday under AA Smartfuel, but we started the business before that, before we joined Ventured with the AA.

IAN: So yeah, which, and I mean, by way of background, I guess there’s probably a segue into that for you.

IAN: I’m guessing it was probably 12, 13, 12 years ago, I think, but it was in the era when, do you remember supermarket paper dockets were all the rage, I know they’re big in the UK and they were certainly big over here.

IAN: And this was essentially when you shopped at the supermarket and you got a few cents a liter off your petrol to go and redeem your paper docket at the local gas station for money off your fuel.

IAN: And at the time, my business partner owned fuel sites and sadly, they weren’t affiliated, the chain that he was involved with wasn’t affiliated to any of the supermarket chain.

IAN: So he found himself losing market share.

IAN: You know, the Kiwi consumer has an infatuation with the price of gas, it’s quite expensive.

IAN: So anything they can get off will save a buck or two that they’re into it.

IAN: And at the time, he was pretty keen to find an alternative.

IAN: And I guess the reality is very seldom are the new ideas around.

IAN: So Smartfuel was an initiative that was a play on an existing idea around fuel, but with a number of differences, I guess, to what was in the market at the time.

IAN: And the thing that really kicked us off was, you know, we were just talking about, imagine a consumer proposition whereby the consumer can save sufficient discounts to get a free tank of gas.

IAN: We’re going, that has got to be good just by shopping at a whole bunch of different retailers.

IAN: And that was really the catalyst for us for getting going.

IAN: And really the differences that we had around it were, you know, the fact that you could earn these fuel discounts at multiple retailers rather than just a supermarket.

IAN: We built out reporting.

IAN: We kind of had, we offered breakage for retailers, which was new in this stage.

IAN: So anyway, that’s probably a little bit about the story.

PAULA: Yeah, yeah.

PAULA: It’s a brilliant story actually, Ian, and you’ve reminded me of, I think it was Walgreens in the US who said something similar.

PAULA: So they started with one of their propositions by writing the press release.

PAULA: And that’s what I’m hearing coming through.

PAULA: And from when we talked before, you really decided what is it that customers are going to be wowed by?

PAULA: And absolutely then, how can we make the business work for the consumer?

PAULA: Where sometimes I think we have it back to front, but actually if the consumer loves it, like you can’t really fail.

IAN: No, that’s right.

IAN: And that was, I think that was our, certainly that was our belief.

IAN: And we keep coming back to that proposition time and time again.

IAN: Certainly when we started out on our own, we bootleg the business.

IAN: And you know, you have moments, you know, we could probably write a book on it, but there’s moments there where you go, is this going to work?

IAN: And we just kept coming back to the fact that if we can, if consumer can get a free tank of gas, it is going to work.

IAN: Let’s just figure it out.

IAN: And the other, and I guess the other part of the equation was also thinking about, because we were a late entrant into the market here in New Zealand, was what, how can we make it different for the partner, as in the retailer?

IAN: And the big piece that we did around that was probably unlike most of the programs around the world, essentially retailers purchase, if they’re points-based, they’ll purchase the points for a price, and then they give them away to the consumer, however they deem appropriate.

IAN: But once you’ve bought those points or given them away to the consumer, whether the consumer engages with them or uses them or not, you’ve paid for them.

IAN: So it hits your P&L.

IAN: And for us, so from a margin point of view, what we said was we broke the cost of the rewards away separately to, we put a revenue model around being a participant in the program.

IAN: And we have a, we might talk about that later on, but the idea was from a fuel discount point of view, you earn the fuel discount, 100% of that discount goes to the consumer.

IAN: If they don’t use it, you as a retailer, get it all back.

IAN: So from, and you can probably understand, there’s a reasonably slick system that sits in behind that to kind of work out all the breakage of all the partners, but even still, it works pretty well.

IAN: So the retailer actually, it doesn’t cost the retailer as much as it looks on the surface to the consumer.

IAN: If that makes sense.

PAULA: It does Ian.

PAULA: And I was thinking as you were explaining it, like you obviously had to figure all of this out, literally almost by trial and error, build some models, see how it’s going to work, test them with the merchants.

PAULA: Did you have any, let’s say, loyalty expertise to advise you when you were creating this concept?

IAN: Well, not particularly, but I think that the piece that got us across the line, again, it’s sort of who knows who.

IAN: New Zealand is a pretty small place.

IAN: And my business partner actually had a really good school friend who was very smart with building out code and building systems and in fact, built one of the first online banking systems in New Zealand.

IAN: And basically, two of them got together and tried to map it out and then left it to the brains to go and figure out all these algorithms and how they were going to build it.

IAN: So we had some really smart resource that we were able to tap into it.

IAN: And he’s actually another shareholder in the business.

IAN: So we’ve got kind of the key stakeholders with key competencies invested in the business, which is good.

IAN: Yeah.

PAULA: Yeah.

IAN: And then once we’d established that, then we were very fortunate.

IAN: We sort of ran it ourselves for probably about 18 months in a small provincial town in New Zealand and tried to figure it out.

IAN: We had a couple of oil companies on board and about 30 local retailers.

IAN: So just individual sites, just to prove the concept.

IAN: And we were looking about what the next step was.

IAN: And we were very fortunate that we, the AA, they had a program that perhaps wasn’t as performing as it had been 10 years in the market.

IAN: It was probably getting a little bit stale.

IAN: So there’s only so many retailers to go around in New Zealand.

IAN: And we were tapping some of their retailers, which ended up bringing us together.

IAN: So we actually formed a joint venture in 2010, 2011.

IAN: And yeah, sorry.

PAULA: Yeah.

PAULA: No.

PAULA: And just for my own amusement, I’ll make sure that we’re very clear.

PAULA: It’s the Automobile Association rather than the other AA, which I think in them, again, I’m very familiar with it in the correct sense.

PAULA: Yes.

PAULA: Yes.

PAULA: No, I was thinking about that before we came on air.

IAN: True.

IAN: The Automobile Association.

IAN: You’re absolutely right.

IAN: Although some of the stories could drive you to the other one, I suspect.

PAULA: Oh, bless.

PAULA: Right.

PAULA: Let’s hope we don’t go there.

PAULA: So Jordan, you’re involved in the marketing side of the whole program.

PAULA: So when did you get involved?

JORDAN: Oh, I think I’m pushing eight years now, if I’m not wrong, Ian, and it was actually my first gig out of university.

JORDAN: So I picked it up through the university email as, you know, AA Smartfuel was looking for a marketing assistant.

PAULA: Yeah.

JORDAN: And I obviously shot my shot and here we are eight years later, I still remember the first, my first job when I came into the role was to sign Christmas cards on behalf of some of the directors of the business.

PAULA: Wow.

PAULA: Well done, you.

PAULA: That’s amazing.

JORDAN: Part of the furniture now.

PAULA: I totally agree.

PAULA: And I’ve often said on the show, Jordan, that I really think from a loyalty perspective, that we often undervalue as well, those very simple kind of human touches.

PAULA: So I know what is your total base now, 2.9 unique registered card holders.

PAULA: So I’m sure you’re not signing 2.9 million cards.

PAULA: But at the same time, just to have, I guess, it’s even the merchants and those kind of relationships just kind of done in a human way that builds loyalty in a whole other way that I think is super important.

JORDAN: Yeah.

JORDAN: And I think it’s also a part of, I guess, the Kiwi culture, you know, we’re very hands on, and like Ian was saying before, everybody kind of knows everyone.

JORDAN: So, yeah, it’s always got that you’ve always got that human touch to any kind of relationship here in New Zealand.

PAULA: Yeah, yeah, sure.

PAULA: So how has the proposition evolved, I guess, from in the beginning?

PAULA: So again, you’ve set the scene, Ian, in terms of it is a coalition program, a couple of fuel only rewards partners, if I understand it correctly.

PAULA: But the earn side in the beginning, was that in the grocery space?

IAN: No.

IAN: So the earn space has always been around fuel and going back to looking at my business partner who was looking to try to drive volume back into his sites.

IAN: So fuel was the reward.

IAN: And we’ve stuck to that all the way through.

IAN: We’re evolving it slightly as the program matures.

IAN: But primarily, well, solely really fuel is the reward.

PAULA: OK, right.

PAULA: OK.

PAULA: So earn and burn on fuel, fantastic.

PAULA: And I saw another lovely statistic that you sent me over, Ian, which was that 5,000 card holders redeem a full tank of fuel every month.

PAULA: So 50 liters of fuel and 5,000 people every month.

PAULA: You must be incredibly proud of that.

IAN: Yes, and I think it’s taken a long time to get there.

IAN: We look at those million active card holders on a monthly basis and we have, that’s earning and burning.

IAN: I think we have about 500,000 a month redeem a reward for fuel.

IAN: And that varies.

IAN: As you saw there, I think we have 60,000 that redeem over 50 cents a liter, 5,000 a free tank and then every denomination in between.

IAN: But the big shout out really is to our partners.

IAN: They are the people who issue the discount.

IAN: So they’ve got it right behind the program.

IAN: They market it really well.

IAN: And it is a very generous program.

IAN: And I think that’s probably part of its success.

IAN: And just to give you a sense of that, we have an energy partner, so a company called Contact Energy here.

IAN: They offer 30 cents a litre when you pay on your energy bill a month.

IAN: So rather than the discount, the incentives coming up front, like most power companies do for switching, give you a couple hundred bucks for switching.

IAN: This is just a monthly play, 30 cents a litre.

IAN: Every month, it’s loaded onto the card holder’s card.

IAN: There’s a communication goes out, reminding them, keeps the partner front and center.

IAN: And they see lifts in retention rates.

IAN: Same if you’re buying fuel, you buy 40 bucks of gas at BP or gas, they’ll give you six cents a litre.

IAN: So that adds to the 30 cents a litre.

IAN: So you’re now at 36 cents a litre.

IAN: So that’s how the program works.

IAN: Supermarket, you get six.

IAN: We’ve got a pet store online that gives you 20 cents a litre.

IAN: So it’s really easy to start building a, what is a meaningful savings that you see, you see in your back pocket by the time you’ve redeemed it at the fuel station.

PAULA: Yeah.

PAULA: Yeah.

PAULA: And it’s not easy to negotiate those.

PAULA: So well done again to you both.

PAULA: I’m sure there’s plenty of them.

PAULA: Work goes in at 40 partner brands, over 1200 locations, and I’m guessing that’s growing on an ongoing basis or would you say you feel like you’re fully, you know, optimised from a partner portfolio?

IAN: There’s still a couple of categories that we would like to secure, but again, you know, New Zealand is a reasonably small country, so there are only so many retailer brands stroke categories that you can capture.

IAN: There’s a set, you know, I’ll look at it.

IAN: There’s three or four big loyalty programs in the country and almost two sets of retailers.

IAN: So you’re scrapping over retailers, you know, to try to bring them on.

IAN: And so we’ve been very fortunate to, you know, there’s two supermarket chains in New Zealand.

IAN: We have one of them, Flybuys has the other.

IAN: And so we’ve been really lucky to get some of those key partners that you need to make a program successful, you know, fuel, oil, energy, fuel supermarket energy with.

IAN: So you’ve got a regular retailer that you can transact at, which makes sense for the consumer.

IAN: And then we have other retailers that are less frequent, but they tend to have probably higher reward values.

IAN: You know, like we’ve got Bridgestone, who are a tire manufacturer, so that’s once every two years, you might be buying tires.

IAN: So it’s not in your consideration set all the time, pet food is probably monthly.

IAN: That’s quite good.

IAN: So we just look, there’s one or two categories we’d still like to secure.

IAN: Tail care we don’t have.

JORDAN: I think the other pieces, we’ve also got, there’s a big opportunity and Countdown, obviously being a partner in our program, and being one of the biggest supermarkets here in New Zealand have a really great opportunity to be working with a lot of the supplier brands as well.

JORDAN: And then that opens up a whole other world, I suppose, when on one hand, you’re talking about the retail brands, all the companies, and then you’ve got the other side of the supplier brand.

JORDAN: So yes, the opportunity to be earning AA Smartfuel discounts, you know, when you purchase a packet of biscuits or some chips, you know, there was, I remember Ian talking to me early on when I first started and, you know, the this ideal state of being able to say to someone, you can actually walk into the supermarket with the AA Smartfuel card and walk out of it, you know, with half a tank of gas in your pocket.

JORDAN: It’s almost the dream, but almost it’s very easily a reality.

PAULA: Totally.

PAULA: For sure.

PAULA: And I have to say you’ve touched on one of my favorite topics, I guess, Jordan, and the upcoming trend or the I think I suppose it’s just it hasn’t really been optimized or figured out yet.

PAULA: And it is the brand piece.

PAULA: So all of those incredible, you know, whether it’s Coca Cola or biscuits or, you know, it’s just an incredible portfolio that really wants access to engaged customers.

PAULA: You’ve got engaged customers, obviously, Countdown has them as well.

PAULA: So so I’m going to right now say we need to have a follow up show, even if it takes, I don’t know, a year or two.

PAULA: But just to figure out exactly how that comes through with your program.

JORDAN: Yeah, that’d be great.

JORDAN: I mean, I know the guys are working hard on that and they’ve and they’ve developed a few really great programs so far to utilize that side of it and to leverage those relationships that they already have.

JORDAN: So yeah, definitely.

JORDAN: I think 12 months times it’ll be a whole different ball game, which is quite exciting.

PAULA: Yes, yes, yes.

PAULA: And I’m obviously hoping to have Countdown on the show at some point as well.

PAULA: I did talk to some of the guys there just to hear what they’re doing and they spoke very highly obviously of working with you guys.

PAULA: So hopefully further down the track, we’ll have the story coming from their side.

PAULA: So I guess I wanted to touch on as well from both of your perspectives.

PAULA: What would you say are your biggest challenges from a loyalty perspective?

PAULA: And that might be in the context of the pandemic.

PAULA: And I know New Zealand is obviously having a very tough time at the moment, gone into a new lockdown.

PAULA: And here we are August 2021, when we all thought we’d be coming out the other side.

PAULA: And so I think COVID brings its own particular challenges.

PAULA: But even as a coalition, would you say there’s particular things that you haven’t cracked as yet?

PAULA: Or what would you say you’re still kind of focused your energies on?

JORDAN: I think there’s probably one challenge that we’re facing, and we’ve probably always been under the microscope a little bit, is just the piece around, obviously we’re a fuel discount program, so it’s very heavily fuel focused.

JORDAN: And you got a bunch of questions around, what if I don’t drive?

JORDAN: What if fuel is not relevant to me?

JORDAN: But also obviously looking to the future, is fuel going to be around forever?

JORDAN: So that’s one of the challenges that we’ve got.

JORDAN: And it’s obviously on our radar to go, where does the program go in the future?

JORDAN: It feels so good to be around for a long time, and it’s not going away anywhere.

JORDAN: But for us, it’s always focusing on what’s relevant to the consumer.

JORDAN: Today or yesterday, it was fuel discounts.

JORDAN: What is it tomorrow?

JORDAN: I guess it’s a challenge, but it’s also quite exciting to be able to keep your finger on the pulse in that sense.

PAULA: Yeah, yeah, makes sense, absolutely.

PAULA: And while we’re talking about it, Jordan, I did see that there are rewards, for example, with Qantas, and also something about, I think, carbon offset.

PAULA: So it sounds like you’re already putting solutions in place around these relevancy concerns.

JORDAN: Yeah, actually something we recently launched only a few months ago, obviously, not the greatest of timing with COVID and things like that.

JORDAN: But it was definitely the step in the right direction when we start talking about, how do we continue to stay relevant to customers especially from a reward choice point of view.

JORDAN: Reward choice is obviously a big topic at the moment with regards to loyalty.

JORDAN: They’re giving the consumer the option to choose or how they want to be rewarded.

JORDAN: And that was just one step that we took.

PAULA: Yeah.

JORDAN: You know, Qantas Points and the Qantas brand is a great one here down under.

JORDAN: And obviously the idea of this aspirational reward, fuel discounts is very transactional, very, I guess, functional.

PAULA: Yeah.

JORDAN: But the idea of banking up a bunch of Qantas Points for your trip overseas to Hawaii or Fiji or wherever you want to go is a little bit more on the aspirational side, which was quite exciting.

JORDAN: And obviously relevant, you know, to those that aren’t necessarily motivated by fuel discounts as it is currently.

PAULA: Yeah, yeah.

PAULA: It’s funny, I do notice my own behavior is very much in the travel space.

PAULA: And I’ve been spoiled a little bit actually because I did work in the airline industry a few years ago.

PAULA: So now, of course, I want to fly business class, even though I have to pay for a show.

PAULA: Any kind of points I can earn with Emirates particularly, obviously based in Dubai is super exciting for me.

PAULA: So that’s really good.

PAULA: So a fairly new redemption piece you mentioned, Jordan, yeah, on the quanta side?

JORDAN: Yeah, that’s right.

JORDAN: So in terms of the way the program works, you’re still earning, and it’s interesting the dynamic, because you still earn AA Smartfuel discounts at those 1200 retailers across New Zealand.

JORDAN: But as you earn them, obviously you’re saving them up, and they’re loading up on your account, almost like a bank balance.

PAULA: Of course.

JORDAN: And then what we’ve done is we’ve enabled the customer to then choose, well, I can either go into BP or gas and redeem them on fuel, or I can go into the app and I can choose to convert them.

JORDAN: So you’re actually literally using the technology within the app to turn the fuel discounts as a currency into Qantas points.

PAULA: Lovely.

JORDAN: Oh, like you also see it into carbon offsets.

PAULA: Yeah.

PAULA: Okay.

PAULA: Lovely stuff, yeah.

PAULA: And again, having seen it in Ireland, I know it was always supremely popular.

PAULA: Again, from a supermarket perspective, suddenly to be able to convert them into Avios as it was at the time, it just inspires people.

PAULA: So it might feel like it takes longer, but again, I think the airlines are getting better even at doing like, you can use those points for maybe part payment towards your travels.

PAULA: So again, maybe just makes the whole dream a little bit closer.

JORDAN: Exactly.

PAULA: Great, okay.

PAULA: So Ian, yeah, so from your perspective again, you’re a co-founder of the business.

PAULA: What would you say are the biggest challenges for AA Smartfuel?

PAULA: And is it a COVID thing or just more general business growth?

IAN: I think COVID obviously hit a lot of people.

IAN: For us, it’s a moment in time.

IAN: We just know that our partners need a bit of support.

IAN: Some are still trading through like the supermarkets.

IAN: They’ve got their own challenges around everything, but they’re still trading.

IAN: Being a fuel program, that pretty much grinds to zero pretty quickly when no one’s driving around.

IAN: So our fuel partners have been hit pretty hard.

IAN: For this moment in time, we’re just looking to how do we support those partners?

IAN: So we’ll send communications out less about fuel, but more about that they’re open or there might be a few other things that we need to do with them.

IAN: So we’ll just generally look at how we can help them through.

IAN: So that’s just a moment in time.

IAN: But I think probably the biggest area for us is just the post GDPR, not that it affects us specifically in the New Zealand landscape because we’re only focused around New Zealanders.

IAN: But that said, I think the awareness of privacy and how people store information, the security of information, is becoming more and more prevalent and more and more top of people’s minds.

IAN: So just keeping ahead of that, keeping to making sure we reassure customers, make sure our systems are good.

IAN: And we’re lucky, we’re partnered with a very trusted brand in terms of the Automobile Association.

IAN: So that helps us considerably.

IAN: Lovely.

IAN: From a partnership point of view.

IAN: But you’ve still got to stay on top of it.

IAN: Cyber security, it’s not going away.

IAN: It’s only getting worse.

IAN: So those are things that probably keep us awake.

IAN: And we know we just got to keep moving forward with that.

IAN: What you might do one day isn’t going to be good for the next day.

IAN: So I think that’s one area.

IAN: The other part is then of course, or not of course, but use of data.

IAN: I think from a coalition point of view, partners are becoming, when you join a coalition program, partners are becoming increasingly, or increasingly required to be able to get decent insights out of that data.

IAN: And whether that’s directly from us, or how do we utilize some of that anonymized first-party data so that we can provide good insights or good data sets or big build out custom audiences for our partners without almost betraying the trust of the consumer.

IAN: So we’re conscious of that, and it’s just the demand side of it is increasing in terms of utilizing that to make good decisions, and that’s quite exciting.

IAN: So we’re working with that all the time.

PAULA: Okay, yeah.

PAULA: And would you believe Ian, I’m literally recording a second podcast today directly on the topic of privacy and all of the data protection complexity.

PAULA: And I’ve already told him that, and he’s a good colleague of mine, Richard Dutton, I’ve already said, I’ve been avoiding you because it scares me so much.

PAULA: So you’re absolutely right.

PAULA: Yeah, I think we’ve all heard the horror stories.

PAULA: And again, as consumers, we know what it would be like now.

PAULA: So I don’t know if you heard, for example, in Ireland recently, the health service was hacked.

PAULA: So medical information was captured and there was all sorts.

PAULA: And everyone I know got a phone call, would you believe, from these hackers?

PAULA: Like it’s unbelievable.

PAULA: It’s honestly terrifying.

PAULA: So you’re totally right.

PAULA: You’ve got the AA brand to support you and you obviously have to support it back, but there’s absolutely no way we can build loyalty without those fundamentals being top of mind.

PAULA: So yeah.

PAULA: And as you said, I also have been on the end of the partner expectations, which are clearly not unreasonable, but are very difficult to balance with them.

PAULA: Again, making sure, as we said, the customer is totally trusted and trusting.

PAULA: So I know that also came through in Adam’s research as well.

PAULA: So well done on flagging that.

PAULA: As you said, it’s not going anywhere.

IAN: No, I think it does add the opportunities, as you start looking forwards around that, probably a few years ago, still in some quarters, this idea of personal information, actually building out cohorts of non-identifiable, just behavioral cohorts, non-identifiable using first-party data to kind of do that, I think presents, with as cookies have disappeared or disappearing, it certainly presents really good opportunities in a responsible way for coalition programs that have a bunch of behavioral information that doesn’t betray the customer, but also can add a bit of value back to the partners and serve up relevant offers.

PAULA: Yeah, yeah.

PAULA: And you’re absolutely right, actually, it is about that whole piece.

PAULA: First of all, what is the consumer’s expectation?

PAULA: I think when they give that data, and I think all of the research I’ve seen has said, well, look, if you use it to give me more relevant offers and I get to benefit, then I’m totally fine.

PAULA: But again, obviously makes you sure that people take care of it.

PAULA: So definitely one that will evolve very carefully, would I say.

IAN: Yes, I’ll be interested to listen to your other podcasts then.

PAULA: You sure will.

PAULA: Absolutely.

PAULA: Yeah.

PAULA: Yeah.

PAULA: He’s already had to decipher plenty of acronyms for me.

PAULA: And again, the global complexity of it all is only getting more confusing, I would say, for big global brands.

PAULA: So that’s up and coming.

PAULA: So the final area I had then, guys, was, I suppose, my favorite topic of innovation.

PAULA: I’m always kind of keen to see if there is anything that either has been particularly impactful, perhaps, that you’ve done with the AA Smartfuel program or anything that you’re thinking about in the future, because I’m always looking to inspire people with them.

PAULA: Yes, we all know about the points and the discounts and the rewards and the program structure.

PAULA: Coalition programs are clearly not going anywhere.

PAULA: But is there anything that you’re doing or have done that you feel is quite different to other markets that we could talk about?

JORDAN: There’s one area that I think we’re quite focused on.

JORDAN: And it is quite innovative in the sense that, and it kind of dovetails from the conversation that you and Ian just had around, how can we leverage the technologies that we’ve got and some of the out of the box solutions to be able to, and we inverted commerce, we call it internally liberalized data.

JORDAN: And that’s really for us to be able to leverage data a whole lot better, but also to help our partners do that as well.

JORDAN: You guys spoke about, as being a coalition program, it’s our job to ensure that we’re doing right by the partner, but also right by the consumer, which is an interesting challenge, but there’s definitely a few pieces of work going on internally.

JORDAN: And it’s an innovative way to kind of, to look at how we can liberalize the data, all above board from a consumer point of view, and as transparent as possibly can be, and as expected of the customer, but also enabling in a way that partners can really get the most that they intended to out of a loyalty program, would that be really understanding who the customers are, what they’re doing, the insights that they can use to drive really meaningful experiences and bring them back in store.

JORDAN: It’s a really exciting and innovative kind of project that we’ve got going on.

JORDAN: And it’s definitely challenging to get me wrong, and we don’t have the golden egg solution or anything like that, but it’s definitely a challenge we’ve taken on the chin and we’ve got, there’s definitely ways to do it.

JORDAN: And it’s almost just a challenge of looking at things differently, I think.

PAULA: Yeah, yeah.

PAULA: You’re absolutely right, Jordan.

PAULA: And Ian obviously alluded to it, and we all know that cookies will be disappearing.

PAULA: Interestingly, obviously been put on the long finger, I think now till the end of 2023, if I’m not mistaken.

PAULA: But I think that is just to give people like us time to catch up and to build those permissions, first party data and systems.

PAULA: So I’m very impressed to hear actually about all the amazing technology piece.

PAULA: And it sounds like it’s entirely kind of built internally from what you’ve said.

PAULA: Is that right?

PAULA: Yes.

JORDAN: Yeah, and look, it’ll be definitely an element of bringing in the tools that we need as well at the same time as building it out internally.

JORDAN: Because there’s definitely a lot of efficiencies in using what’s already out there.

JORDAN: But from what we gather, being a coalition program, we’ve probably got a little bit more complexities than I think other loyalty programs do when they own it in-house.

PAULA: Totally.

PAULA: I’m putting that on the agenda for our follow-up interview, Jordan.

JORDAN: Yeah, now that I’ve said it, we’ve got to have to deliver on it, aren’t we?

PAULA: Totally, and it’s on your LinkedIn profile as well.

PAULA: I’ve seen it, so we can’t hide.

PAULA: Very exciting.

PAULA: And Ian, from your side, is there any kind of big ideas or innovations that you’re looking to, or are you happy?

PAULA: Again, obviously, data and insights that Jordan just talked about is extraordinary in terms of delivering on that anyway, but have you any other kind of things that you’d like to explore, do you think?

IAN: Well, we have a few things sort of on the burner, but I think an opportunity that we see, which is not, I wouldn’t say it’s innovative, but Jordan touched on it earlier, was around today.

IAN: We obviously have those direct relationships with distribution partners in terms of retailers and some that own the brand as well as the retailer.

IAN: But we certainly see an opportunity to work closer with the brand owners and really that will allow us, hopefully, to provide insights to those brand owners because they’re quite hard to get.

IAN: So we just see without saying too much, we see some opportunities in that space and we think that that’ll work quite well with our existing partners.

IAN: I wouldn’t say it’s innovation, it’s just a bit of different thinking.

PAULA: Okay, well, sometimes it just takes the different thinking, Ian, I think just to kind of nail something if it hasn’t been delivered before, whether it is for your partners or for your consumers, you know.

PAULA: So yeah, I think that sounds super exciting.

PAULA: So I’ll certainly be watching very closely.

PAULA: So I think that’s all the questions from my side, guys.

PAULA: Were there any other, I suppose, closing points or thoughts that you wanted to comment before we wrap up?

IAN: Not from our point of view, if you haven’t got any more questions.

PAULA: I think it’s amazing.

PAULA: So tell us, where can people find out more, whether it’s you guys directly, if people want to reach out to connect with you or just to find out more about the program.

IAN: Yes, so just through the program, there’s a brief overview on the website at aasmartfuel.co.nz.

IAN: So that will give them a little bit of insight into that.

IAN: If they want any consumer insight, our Facebook page is pretty useful in terms of the way people talk about the program and share their savings and the scale.

IAN: That’s quite useful.

IAN: Otherwise, they can reach out to probably via you if they need a personal email address to talk some more.

PAULA: Yeah, happy to, Ian.

PAULA: No problem at all.

PAULA: Great.

PAULA: And Jordan, from your side.

JORDAN: I think I would be doing the marketing team a disservice if I didn’t put a plug in there to download the AA Smartfuel app.

PAULA: Oh, brilliant, brilliant.

PAULA: Absolutely.

PAULA: Okay.

PAULA: Well, well said.

PAULA: Well, listen, guys, it’s been an absolute pleasure to hear all about the program.

PAULA: I love the innovative thinking.

PAULA: I love the way you built a consumer proposition and then retrofitted the business model to make it work.

PAULA: I think it shows true, I suppose, loyalty to your customers.

PAULA: So yeah, I just want to say thank you so much to Ian Sutcliffe and Jordan Tran from Let’s Talk Loyalty.

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.

PAULA: Thanks so much for listening to this episode of Let’s Talk Loyalty.

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