#171: Loyalty Insights from Italy

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.

CRISTINA: Thank you.

PAULA: Hello, and welcome to episode 171 of Let’s Talk Loyalty.

PAULA: An exciting one for us here in the show, because it means Christmas is just around the corner.

PAULA: Now, as it’s also coming to the end of 2021, it’s exciting for us to bring you some insights from Italy, a country we haven’t explored nearly enough on the show so far.

PAULA: Today, I’m joined by perhaps the most knowledgeable person on the planet about loyalty in Italy.

PAULA: Cristina Ziliani is the Professor of Marketing at the University of Parma, and also she is the head of The Loyalty Observatory, which they founded in 1999 to understand both the adoption and the potential power of loyalty initiatives by and for Italian companies.

PAULA: So if you’re interested in loyalty insights in Europe, particularly in Italy, I know you’ll enjoy this episode with Cristina Ziliani.

PAULA: So, first of all, Cristina, joining me today from Italy, welcome to Let’s Talk Loyalty.

CRISTINA: Thank you, thank you, Paula, thank you for having me.

PAULA: Great to have you, Cristina.

PAULA: For listeners, I will explain that you reached out to me recently to talk about all of the incredible work that you’re doing at the University of Parma.

PAULA: So we’ll be getting to explaining all of that, but I was amazed by all of the incredible work that you’re doing there, and for how long.

PAULA: In fact, I don’t think there’s many academic institutions that have been working on loyalty as long as you have.

PAULA: So I’ll be dying to get the full story.

PAULA: And before we get into that, can you please share with our audience what is your favorite loyalty statistic?

PAULA: Or I think you have a few, tell us your favorite loyalty statistics.

CRISTINA: Well, as you said, we are quite proud of the loyalty statistics of the Loyalty Observatory.

CRISTINA: And then I will go into other statistics, of course, but let me say that the Observatory was founded in 1999.

CRISTINA: So since then, we have worked on almost 70 academic papers on different areas of customer loyalty, CRM, customer experience.

CRISTINA: We have published five books, the latest of which was published in English by Routledge, saying that for the international audience.

CRISTINA: And the Observatory has the purpose of supporting the dissemination of knowledge and research on best practices in loyalty and CRM and customer experience management.

CRISTINA: This means that we do activity with companies.

CRISTINA: First of all, we do training, we do consulting, research for companies, and we have white papers and a yearly conference.

CRISTINA: And the conference has been running now for 21 years.

CRISTINA: We’ve just headed, it was 15 October.

CRISTINA: And every year we get something like 600 participants, loyalty managers, CRM managers, marketing managers from across Italy.

CRISTINA: Over 20 years, it has been 4,000 different participants from 900 different companies.

CRISTINA: We’ve had 160 speakers from Italy and abroad.

CRISTINA: Just as an example, we had Tesco this year.

CRISTINA: We had two American Academics.

CRISTINA: We teach loyalty management and CRM in our master courses at the University of Parma.

CRISTINA: And there, our master students have discussed over 100 dissertations on loyalty and CRM.

PAULA: Wow.

CRISTINA: And thanks to the sponsors that we have had across all these years, because this work couldn’t be done without companies committed to loyalty and CRM, multinational companies, local agencies.

CRISTINA: So we’ve had over 30 sponsors in 30 years.

CRISTINA: These are our favorite numbers.

PAULA: Wonderful.

PAULA: Well, thank you, Cristina.

PAULA: It’s an extraordinary, first of all, to understand that The Loyalty Observatory has been operating since 1999.

PAULA: So I’m thinking there’s plenty of people in the audience who just didn’t realize the industry, from an academic perspective, had anything going back that far.

PAULA: So first of all, a huge congratulations.

PAULA: I know you’ve been involved for a very long time as well, Cristina.

PAULA: So you probably wrote some of those books yourself, did you?

CRISTINA: Oh, definitely.

CRISTINA: I wrote all of them, not alone.

CRISTINA: But with colleagues, of course, older colleagues, younger colleagues, but yes, I’m in all of them.

PAULA: Wonderful.

PAULA: Okay, well, well done.

PAULA: I think all of us know how challenging it is to sit down and write a book, and thrilled to hear that you have one in English.

PAULA: So we’ll make sure that that’s available if the audience are interested.

PAULA: I think you know as well, Cristina, that we love to talk about this show being part of the global voice of loyalty, obviously working with the guys in The Wise Marketeer who use that very carefully.

PAULA: But I have very little knowledge of the loyalty market in Italy at all.

PAULA: So you’ll have to forgive me, but I would love if you would just maybe give us an overview about how mature or how sophisticated would you say loyalty is in the whole country in general in Italy?

CRISTINA: Okay, well, thank you for the opportunity to reflect also on the Italian market for an international audience.

CRISTINA: Let’s say our observatory runs every year, three surveys, one on Italian consumers.

CRISTINA: Thanks to Nielsen IQ, we have a representative sample of the population.

CRISTINA: So we’ve been able to follow the evolution of Italians being members of loyalty schemes over the years in different industries, Italian switching behavior, that is disloyalty in a sense.

CRISTINA: And what they think of loyalty schemes and so on and so forth.

CRISTINA: From the consumer perspective, the most mature loyalty market is supermarkets, where something around, I don’t have data for this year, but in general, we can say almost 80% of consumers belong to at least one loyalty scheme.

CRISTINA: On average, they are active in 2.5, three loyalty schemes in the supermarket industry.

CRISTINA: And many other industries lag behind.

CRISTINA: According to our latest data, supermarkets was really mature.

CRISTINA: On the contrary, areas like bookstores or electronics, retail chains, pharmacies, drugstores, transportation, probably because of the lack of dominant national retail chains.

CRISTINA: The Italian market is large, but it’s very fragmented because of the lack of a presence on the whole territory of the country.

CRISTINA: The penetration of these schemes doesn’t really reach a high number of the population.

CRISTINA: So there are many more fragmented initiatives.

CRISTINA: Although, this has been rapidly changing over the past, let’s say, seven, eight years, with more and more companies adopting digital loyalty schemes, adopting loyalty apps, and consumers in Italy becoming more familiar with these digital loyalty tools.

CRISTINA: So we’re looking forward to the data from our latest survey on consumers, which is coming up late November, and I’ll be able to share it on our website, because I am confident there will be a picture, an updated picture, with a higher penetration of loyalty activities in many other fields for Italian consumers.

CRISTINA: On the company side, we run a survey every year of brands and retailers related to their CRM practices, the touch points, they connect for consumers, their loyalty strategies.

CRISTINA: So we can see that Italian companies have been a little bit slow compared to, for example, North American ones, to adopt loyalty practices.

CRISTINA: But then when digital kicked off, they have been gaining pace.

CRISTINA: And now we can well say that we are in the middle of the development of CRM.

CRISTINA: It may sound something old, this old expression of CRM.

CRISTINA: We can call it customer experience management, if you want.

CRISTINA: But what I mean is customer databases where data comes from different touch points, they are connected in an individual customer view, and they employ marketing automation and other Mark tech tools for contacting customers and personalizing activities.

CRISTINA: This is something that is done by, let’s say two third of Italian companies across different industries.

CRISTINA: Just to give you a couple of numbers, something like 30% of B2B companies in Italy have a loyalty activity or a customer club that’s B2B, whereas in B2C, the numbers are much higher, and it’s 70%.

CRISTINA: So the penetration of loyalty intended as keeping track of your customers with a database, that’s two thirds of the companies are active and convinced and investing.

CRISTINA: Investments are going up.

CRISTINA: This is something that we ask every year, so investments in loyalty are increasing, and even more after the pandemic.

PAULA: Oh, wonderful.

PAULA: Well, I know you have a killer statistic available for us at the end of the show, Cristina, so we’ll definitely touch on what the expectations are for 2022.

PAULA: But I just also wanted to pick up because I guess one of the reasons I wanted you on the show, Cristina, is because of this close connection that you have with the business world and with the loyalty managers, in addition to you mentioned the students, and it’s fantastic, all of the dissertations and the academic research.

PAULA: But I love the fact that you’re so closely connected to the industry side.

CRISTINA: Thank you.

CRISTINA: Well, yes, you know, it’s the tradition of our department at the university to do applied research as it used to be in management.

CRISTINA: You know, you start with companies’ problems in a way and try to work with them to solve them.

CRISTINA: And so this was the mission of the observatory since the beginning, doing research and disseminating knowledge that is useful to companies.

CRISTINA: And for this reason, we find it necessary to take the pulse of the business, of business every year with our survey.

CRISTINA: As I said, we speak at their own events and we do training for companies.

CRISTINA: And this is a privilege for us because, well, we really can see behind the scenes how loyalty is organized within companies, how knowledge about customers is disseminated across the different departments, across decision levels, because this is where very often the problems reside.

CRISTINA: It’s not in the tools, the problem of having a loyalty culture.

CRISTINA: It’s in sharing knowledge, sharing information, bringing it up the chain to decision makers.

CRISTINA: And being a university, we are also very lucky because we train the next generation of loyalty managers.

CRISTINA: Lots of our master students, they go on and take up positions in loyalty and CRM and digital research.

CRISTINA: It’s also very good because you develop the language of the industry and you stay connected.

CRISTINA: And I think this is the educational mission that we also have at the observatory.

PAULA: Wonderful.

PAULA: My God, I certainly don’t think we have that in Ireland.

PAULA: I could be wrong, Cristina, but you know, when I think about my own pain points, when I came into the loyalty industry, it would have been just extraordinary if there had have been an initiative like The Loyalty Observatory to tap in to the extraordinary depth and breadth of knowledge.

PAULA: And for listeners, I will say that you’ve done actually an incredible amount of work specifically for us in Let’s Talk Loyalty with a huge presentation and detailing, obviously the work as we’ve talked about that The Loyalty Observatory is doing, but also really good insights in some of the most interesting loyalty models and concepts that are happening in Italy.

PAULA: And I know you’ve chosen some as well with the perspective of innovation, because that’s obviously something I’m always looking to bring to the audience.

PAULA: I think as you’ve commented, supermarket loyalty is very well established.

PAULA: And for people in that industry, obviously you’ll have incredible depth of knowledge.

PAULA: But there’s I think a total, you sent me five different consumer loyalty programs that are popular in Italy.

PAULA: And I’m going to pick up on one of those maybe to talk through today, but you also talked about a couple of B2B loyalty programs.

PAULA: So it seems that there’s some very well established models.

PAULA: And maybe it is that B2B doesn’t suffer from the fragmentation problem that you identified earlier.

PAULA: And maybe that’s why that’s them coming through so strongly.

PAULA: But it wasn’t one actually, they’re not them segments that I’ve seen many propositions for.

PAULA: So very exciting for me.

PAULA: So tell us first of all, will you, about this utility loyalty program, Cristina?

PAULA: You showcased it for me.

PAULA: And again, anyone listening to this will be able to connect with The Loyalty Observatory and connect with Cristina to actually look at these programs and her overview.

PAULA: But tell us about this energy company and their environmental loyalty program.

CRISTINA: Well, thank you.

CRISTINA: Yes, this is a very interesting case.

CRISTINA: Because, first of all, the energy industry embracing loyalty is a very interesting case.

CRISTINA: Having run the conference and the observatory for so many years, we were looking at the attendees database recently, and we said, wow, almost all the Italian energy companies were attending this year.

CRISTINA: This is really interesting, because until five years ago, there was no talking about loyalty strategies, let’s say not talking outside the company about loyalty strategies.

CRISTINA: On the one side, because of legislation issues, the market has been privatized, has become more competitive over the past few years, and this is the reason why new companies have sprung up, and they definitely are competing to get new customers, engage customers, and keep the customers they get.

CRISTINA: And because of many of these companies being new, they started loyalty digital first.

CRISTINA: 15 years ago, there was one major energy provider, and they would run a lot of direct mailings with paper.

CRISTINA: And everybody knows in the industry how cumbersome it is, how expensive.

CRISTINA: And today, you see these examples, like the Sogenia case that you asked me about.

CRISTINA: They created a loyalty club that is totally mobile.

CRISTINA: So it’s based on the company app.

CRISTINA: And it’s based on the concept of a community of people who want to live a green existence, because this company is 100% green energy.

CRISTINA: And so what they do, they create a sense of community among people who share in this view of being green, of having a small carbon footprint.

CRISTINA: They try to make it also gamified, the fact of living a green existence with reducing your consumptions and using green products.

CRISTINA: And people get engaged in games and learning how they are reducing their footprint and how they are benefiting the environment and the community.

CRISTINA: For example, they adopt bee hives, the community is a very interesting thing.

CRISTINA: They adopt square meters of forest.

CRISTINA: So it’s a very, it’s one trend, and I’m sure you can confirm this, across the world of loyalty, that many companies are trying to adopt this sustainability approach.

CRISTINA: And so, you know, it’s mandatory in a way for an energy company.

CRISTINA: And so it’s a very interesting challenge.

CRISTINA: And the company, thanks to this approach, with, you know, engaging customers, having them going through steps in this new sustainable life, they have been able to reduce the cost churn by 40 percent, 70 percent of people register to the program through the mobile, their mobile phone.

CRISTINA: And I think they launched only a few years ago when they have a 30 percent penetration of their residential customer base, which I think is very good for this type of program.

CRISTINA: And also, on our website, we have an interview with the marketing manager, Sorgenia.

CRISTINA: I know it’s in Italian, but we can use translation tools and maybe for those who want to learn more.

CRISTINA: I think it’s a very interesting case.

PAULA: It is absolutely, Cristina.

PAULA: And Sorgenia, am I right?

PAULA: Is that how you pronounce the name?

CRISTINA: Yes.

PAULA: Yes.

PAULA: Wonderful.

PAULA: Yeah, I mean, I would love to interview them myself if I had the opportunity.

PAULA: I don’t know if you know or if I mentioned even for listeners that I used to work with Electric Ireland.

PAULA: Going back now, I’m going to say it would have been 2014, 2015, and we didn’t really have maybe the necessary tools to build something that’s entirely environmentally focused.

PAULA: But again, internally, there was fabulous interest in really focusing on connecting with this key customer passion point.

PAULA: And I think what fascinated me as well, having come from, let’s say, I was working in telcos loyalty and banking and all of these other industries, where always what we wanted to do with those loyalty programs was to increase the customer spend, perhaps.

PAULA: You know, it was a cross sell or an upsell, but of course, for an energy company, you cannot incentivize increased usage of the product.

PAULA: In fact, you have to disincentivize it.

PAULA: So I just found that an incredible mindset.

PAULA: So obviously, Sorgenia has really understood exactly how to connect with people in a way that really matters to them.

CRISTINA: Yeah, I think so.

CRISTINA: You’re right.

CRISTINA: It’s a different, completely different approach.

CRISTINA: Moving away from transactional loyalty and focusing on engaging customers on different points.

CRISTINA: So that’s also something that we are seeing in other industries, I think.

CRISTINA: I think companies trying to move away from pushing purchases per se.

PAULA: Totally.

PAULA: Yeah.

PAULA: Yeah.

PAULA: And again, just for listeners who might be interested in understanding more of the consumer programs in Italy, I’ll just mention, obviously, you do have Payback, who were on our show, originally a German coalition program.

PAULA: And I also recognized the name of Luisa Via Roma, which I know is a premium fashion brand, which has invested very heavily in loyalty and plenty of others.

PAULA: So I know once people do go looking at your website, Cristina, you’ll be able to share lots more about all of those programs with them.

CRISTINA: Yeah.

PAULA: Yeah.

PAULA: Fantastic.

PAULA: And then can you maybe just talk us a bit through the two B2B programs in very different sectors?

PAULA: And the first one you’ve highlighted for me is a cruise company called Costa.

PAULA: So I think it’d just be interesting.

PAULA: I know that’s been done in other markets, but also just to see that, you know, it’s great to see, I suppose, the travel industry focusing on, you know, recognizing and rewarding people that are selling, you know, big high ticket items like cruise.

PAULA: And then the one I loved was you mentioned a program for bars and restaurants.

PAULA: So completely different concept, which I haven’t seen again.

PAULA: So I’d love you just to talk us through a bit of those two programs.

CRISTINA: Yeah, those are very, very interesting in my viewpoint.

CRISTINA: First of all, because to my knowledge, there’s not much research and insight into B2B programs.

CRISTINA: And of course, because we also are consumers, we as researchers, maybe we pay a little bit more attention when the loyalty schemes are B2C, you know.

CRISTINA: So it’s something that we, you know, I think we should address, trying to share and gather more knowledge, more evidence about successful B2B programs, which for their nature, don’t get advertised and sometimes they go on for years and years, like the Forica Street Club, which is the bars and restaurant one that you mentioned.

CRISTINA: I think, if I’m not mistaken, I’m sure they have been on the market for at least 15 years.

CRISTINA: I remember, I think it’s something like in 2006 or 2007 for the first time, but they had already been there.

CRISTINA: What is really interesting about this scheme is the company that originated it because Partesa, that’s the company that launched the scheme, they are wholesalers of beverages.

CRISTINA: And this company belongs to a big group, an international group producing beverages.

CRISTINA: However, their strategy for the distribution of their beverages in Italy is to distribute not only their brands, but to act as wholesalers of many other different brands, because bars and restaurants, and this sector in general, they thrive on variety.

CRISTINA: So they need to serve a variety of brands, a variety of innovative things.

CRISTINA: So the whole idea is really interesting, because this company distributes and sells products from many different countries and companies, not only theirs.

CRISTINA: And they create this concept of supporting bars and restaurants in their marketing.

CRISTINA: That is, they do a lot of training.

CRISTINA: They have, for example, the Beer University.

CRISTINA: You know, Italy is not a beer country, at least it’s not officially a beer country, although the culture of beer has definitely developed over the past 30 years.

CRISTINA: But they teach bartenders how to know more about the product, how to serve it, you know, how to store it, how to tell the story of the beer to customers.

CRISTINA: Then they offer many services, like, you know, everything that you need to manage your bar from a subscription to the cable TV, to, you know, filter and other stuff.

CRISTINA: So they want their scheme to be a support tool for these businesses, not only again incentivizing more purchases.

CRISTINA: Then on the side, on the side of this education and support and giving services, they analyze in-depth the purchase patterns of the different bars, because you know very well that depending on the audience of the bar and restaurant, the consumption of type of drinks, you know, can be completely different.

CRISTINA: So they provide targeted offers.

CRISTINA: And based on your shopping history, every bar gets, you know, special offers, special prices and innovation that is tailored to what that bar may want to continue shopping or may try and so on and so forth.

CRISTINA: So it’s a nice mixture of CRM, again, and a service approach to this.

CRISTINA: It’s a very, very interesting approach.

PAULA: It’s absolutely fascinating.

PAULA: So am I right in understanding that the objectives then are, as you said, education and obviously offers, so, you know, and obviously highly relevant, but not directly incentivizing sales as such.

PAULA: That’s that’s obviously going to be a result as well, but they’re not actively setting out to reward the level of purchases by the sounds of it.

CRISTINA: Yeah, they also reward that.

CRISTINA: But as you said, for me, the way they put it is a nice mixture of, you know, again, we support you with education and services.

CRISTINA: And of course, we also reward you.

CRISTINA: They have a reward catalog with, you know, products for the bar that you can get with points.

CRISTINA: And the points you earn because of your purchases, of course.

CRISTINA: So you can get, you know, espresso machines of the latest generation for your perfect espresso coffee and stuff like that.

CRISTINA: So everything is very, very well conceived around, you know, this idea of 360 degrees needs of the bar.

CRISTINA: So this is the the interesting point.

PAULA: I can see particularly coming out of COVID, Cristina, that there’s probably a lot of countries that would really, you know, need the support of a program like this, you know, because again, my my outsider knowledge, I’ll call it of the Irish bar scene, is that there are, you know, lots of grants and support coming through from huge companies like Diageo.

PAULA: But I don’t know if they have the data and the integration that you’re talking about in terms of understanding the profile of the individual bars.

PAULA: And to your point earlier, it’s certainly a sector in Ireland that would be, you know, very fragmented.

PAULA: Whereas I think markets like the UK, they have big chains of bars and restaurants.

PAULA: We don’t really have the same in that hospitality sector, let’s say.

PAULA: So yeah, it’s a great concept and amazing.

PAULA: They’ve been doing it for so long.

CRISTINA: Yeah, absolutely.

CRISTINA: Absolutely, actually, it’s interesting what you said, because of the quantity and variety of data about the bar and restaurant scene in the country.

CRISTINA: I don’t know, but I guess they could cooperate with suppliers in sharing insights like other retailers do.

CRISTINA: Of course, you know, given the fact that they belong, the company belongs to one beverage group may be an issue here, but definitely they have a picture which is broader than the picture that the single beverage company may have.

PAULA: Yeah, fascinating stuff.

PAULA: And then the other one is the Costa, which I think is itself an Italian company.

PAULA: So I guess they’re obviously trying to incentivize people to book cruises.

PAULA: Not sure, obviously, whether COVID has impacted them.

PAULA: I’m sure it has.

PAULA: But tell us maybe a bit about that, just loyalty proposition.

PAULA: Because again, we don’t hear too much about loyalty for travel agencies.

PAULA: That’s right.

CRISTINA: Costa, again, is another scheme that has been on the market for many, many years.

CRISTINA: Very quiet.

CRISTINA: They talk with their customers a lot in a very personalized way.

CRISTINA: You know, this business, which has been growing before COVID, for the decade before COVID, the cruise business, at least in our country, has been growing, is an infrequent purchase industry.

CRISTINA: So you have all the challenges of a business where you don’t see your customers very often.

CRISTINA: And at the same time, you have a very big difference between your frequent customers and the occasional ones.

CRISTINA: So the polarization of your customer base is very strong.

CRISTINA: And this makes the case for CRM, for a club.

CRISTINA: They actually used to have, this is the latest information I have, it might not be totally accurate.

CRISTINA: They have six levels based on how frequently you travel with them, the type of cruise you take, the level of the type of cabin you have, and the services you buy, more or less exclusive.

CRISTINA: And you accumulate points based on the services you buy and the frequency.

CRISTINA: And this entitles you to one area of Loyalty Rewards that we call Privileges.

CRISTINA: So, you know, special services, exclusive services, advanced bookings, guarantees that if you can’t travel, then you are saving your spend for the next one.

CRISTINA: And I think I don’t have data on this, but I have the feeling that this dialogue that they have built over the years has really helped is helping the company going through the turbulent years of the pandemic where they didn’t travel or people were afraid and maybe are still a little bit afraid of traveling.

CRISTINA: The other interesting thing of this scheme, as you mentioned, is the B2B side, the fact that this is a type of consumption where the advice and suggestion of the travel agent is consistent.

CRISTINA: So, the company has been working on two levels on the B2B side.

CRISTINA: They incentivize travel agencies, the partner companies, and by providing, for example, software, services, customer support, and they have a loyalty program for the travel agents.

CRISTINA: And at the same time, the second level is they incentivize the individuals working with the travel agents, so the employees, so for every cruise they sell, they can choose rewards from a set of different products that they can request for themselves.

CRISTINA: So it’s an interesting approach.

CRISTINA: We see that also, for example, in the beauty industry, where perfume shops and drugstores, it happens that it’s the employee and the company as a whole that get rewarded for the purchase or for being active in promoting the brand.

CRISTINA: So it’s interesting because this approach, again, has been going on for many years.

CRISTINA: It’s a testimony to how important the loyalty of the channel partners is, not only consumers, especially when the market gets crowded with more competitors.

CRISTINA: So that’s another interesting case.

PAULA: Wonderful.

PAULA: And remind me, Cristina, I was just trying to remember, how long have you been with the university yourself?

CRISTINA: Oh, well, let’s say, I must say that I graduated from that university many, many years ago, and then I moved on for my PhD and for my experience abroad to other universities in Milan and the UK, and then I came back.

CRISTINA: So I must say that I’ve been in research for it will be 30 years next year.

PAULA: Oh, my goodness.

PAULA: That’s just incredible.

PAULA: You know, I mean, congratulations, I can see how much you love it.

PAULA: You’re smiling, you’re excited.

PAULA: It feels like it’s like a never ending passion.

PAULA: So it’s almost like there’s so much we could talk about.

PAULA: But tell me just about the recent conference, Cristina, I know we recorded something for your audience.

PAULA: I know you had a lot of content, as you mentioned from, you know, from the US, from other academics, and I’m sure plenty in Italian as well.

PAULA: But what were the key themes that you felt maybe coming out of that?

PAULA: You know, we’re coming up now to the end of 2021.

PAULA: And I think you presented all of the big research with the companies, wasn’t that a key focus for you?

CRISTINA: Yeah, thank you.

CRISTINA: Yes, the we presented results from our consumer study.

CRISTINA: And on that side, let me just say, what is interesting to share with Italian companies is the increase in the number of touch points that consumers encounter every day.

CRISTINA: It is something that we read about everywhere, don’t we?

CRISTINA: We talk about customer journeys across touch points.

CRISTINA: We talk about designing the experience by adapting and connecting touch points.

CRISTINA: So Italian companies, they need to know on which touch points they can encounter the majority of their customers.

CRISTINA: And this is the reason why on the consumer side, what we do, we map the touch points that have the highest reach in different industries.

CRISTINA: And we present the market with these results, which is very interesting to prioritize your investments.

CRISTINA: Just to give you a couple of numbers.

CRISTINA: In the supermarket industry, in Italy, we still have paper flyers where you present offers and coupons.

CRISTINA: And this is something that is massive.

CRISTINA: And you spend a lot of money printing those flyers.

CRISTINA: They also have this environmentally bad side to them.

CRISTINA: And companies are continuously questioning whether they should reduce this investment, stop distributing them.

CRISTINA: And they have introduced digital flyers, so where customers can just check their offers and so on.

CRISTINA: The good thing of digital flyers is that if you have a database, you can personalize them.

PAULA: Of course.

CRISTINA: So retailers are moving quickly into this because they have this opportunity and they can recruit more suppliers paying for digital targeted advertising also.

CRISTINA: And so when you ask Italian consumers, have you seen a digital flyer from your retailer or have you seen the paper one or have you seen nothing at all telling Italian companies that the digital flyer today is as distributed as the paper one, actually not distributed, it is seen as much as the paper one is visible.

CRISTINA: That’s a very important piece of information.

PAULA: Very important.

CRISTINA: This is the logic behind some of the data that we collected about consumers.

CRISTINA: Another and last example on the consumer side is the study we did this year on food delivery.

CRISTINA: Food delivery exploded during the lockdown, and although in Italy it’s concentrated in some larger cities, not everywhere, not small villages or towns, still it’s a booming industry.

CRISTINA: And the number one touch point is the app.

CRISTINA: The second one is the website.

CRISTINA: So it’s totally digital.

CRISTINA: And that’s very, it may sound obvious, but it’s very interesting to see what are the touch points, where the brand should be if you want to reach your customers.

CRISTINA: So those were some of the highlights that we presented from the consumer research.

CRISTINA: And then moving to what you were asking, the company survey, on that side, every year we, it’s an observatory, so what we do, we monitor some questions every year, trying to see what kind of data you have in your database, what kind of tools you employ, where are you in terms of analytics, so that we can take the pulse of the market.

CRISTINA: This year, we did a few new things, like mapping MaTek investments, because this is a growing concern and a growing opportunity, but still, Italian companies, in many cases, due to their size, which is, for example, totally different on average from American companies, they don’t have the culture or they don’t want to invest so much.

CRISTINA: So we want to contribute to defusing this idea that these tools exist, they can be introduced, they can definitely improve the loyalty and CRM activities that you do.

CRISTINA: Just to give you an example, we asked Italian companies, are you using your customer database to optimize your digital campaigns for acquisitions on social media?

CRISTINA: Like sharing with Google and Instagram and Facebook.

CRISTINA: And only 7% of companies said we do it regularly, which is a very interesting number.

PAULA: Yeah, it’s a big opportunity.

CRISTINA: Yeah, it’s a big opportunity.

CRISTINA: It means that there’s also a need for education.

CRISTINA: How do you enhance your digital strategy with a customer database?

CRISTINA: What can you do?

CRISTINA: Because there are lots of things that you can do.

CRISTINA: And so we explored MarTech a little bit.

CRISTINA: We explored the type of data that companies would love to work with, but still aren’t really integrating again, social media data is something that lots of companies are interested into pulling into their customer databases, but they’re still struggling to do that.

CRISTINA: And it’s an area where they will work.

CRISTINA: We looked into the familiarity with analytics.

PAULA: OK.

CRISTINA: Because that’s the other point.

CRISTINA: You know, if you want to obtain insight from data.

CRISTINA: 90% of Italian companies have customer databases of some sort, but not many of them are able to extract the type of analysis that could inform customer experience management, for example, and designing experiences across the different touch points.

CRISTINA: And in fact, when you ask Italian companies about analytics, again, the picture is very fragmented.

CRISTINA: The majority of companies are familiar with descriptive statistics and regularly looking at your customers’ retention and churn and customers going up and down the loyalty ladder.

CRISTINA: But then if you ask them, do you use predictive?

CRISTINA: Do you use prescriptive models?

CRISTINA: Then the numbers become very small.

CRISTINA: So again, there’s a lot of interest, lots of opportunity.

CRISTINA: I think it’s going to change rapidly because of everything that’s happening in digital, with marketplaces, with the example of digital companies.

CRISTINA: It also is home to Amazon Prime, so companies are pushed to see what some best in class are doing.

CRISTINA: So it’s very interesting times for Italian companies.

CRISTINA: For sure.

CRISTINA: With the advantage of digital and loyalty at the same time.

PAULA: And I think you also did the same, Cristina, if I’m right.

PAULA: Your conference, you did have, obviously, in-person.

PAULA: Great to know that there are in-person conferences coming back, but you did also have a virtual aspect, I think you told me.

PAULA: So, you know, certainly I know it’s very far away now, but for next year, for example, I think anyone listening to this show internationally, if they’re interested in the Italian market, it sounds like something they can follow and join with you as well.

CRISTINA: Absolutely.

CRISTINA: They’ll be welcome.

CRISTINA: And our materials, again, this year, we had several speeches in English.

CRISTINA: So the videos are on our website, and everybody’s welcome to watch them and download them.

CRISTINA: And a lot of the other material may be in Italian, but we are very happy to have a conversation and share some contents and provide some background.

PAULA: Wonderful.

PAULA: So it sounds like for anyone listening, perhaps if they do have an interest in the market, they could perhaps find you on LinkedIn, for example, and connect with you for specific questions they may have.

CRISTINA: Sure, absolutely.

CRISTINA: The Observatory and myself, we are on LinkedIn and looking forward.

PAULA: Oh, that’s very generous of you, Cristina.

PAULA: Well, listen, I think we have done a huge amount.

PAULA: And thank you again for the extraordinary amount of work preparing the strategic perspective on the loyalty market in Italy.

PAULA: Still can’t believe The Loyalty Observatory was set up in 1999.

PAULA: I think that’s absolutely a real testament of innovation to you and to the university.

PAULA: Are there any other key points that you wanted to mention before we wrap up?

CRISTINA: Oh, well, yeah, let me say that.

CRISTINA: Well, first of all, I would like to thank you for this opportunity.

CRISTINA: And, you know, having worked on loyalty for 20 years, we are looking now towards our next 20 years.

CRISTINA: Hopefully, you know, my younger cooperators, you know, and professors, not myself, but what we would love to do is to strengthen the connections with centers and groups and, you know, academics and companies that really are interested in loyalty and want to do research, want to do, you know, to share views, because very often, we have the same questions.

CRISTINA: It will be incredibly useful to know if someone else in another country has tried to find an answer.

CRISTINA: So what I would like to do here is to just say, let’s get connected.

CRISTINA: And, you know, thanks also to your podcast.

CRISTINA: I think this is becoming a reality.

CRISTINA: I would love to, you know, start a network or develop a network of, you know, centers and people who are interested in loyalty research.

PAULA: And tell us then on the company side as well, Cristina, I know it’s called The Loyalty Observatory.

PAULA: What’s the actual website for people who are interested more from the research perspective just to, you know, find out what you have presented?

PAULA: And anyone interested in your findings?

PAULA: Where’s the best website to find all of that information?

CRISTINA: Okay.

CRISTINA: Our website is www.osservatoriofidelta.it, okay.

CRISTINA: So osservatoriofidelta is the Italian for Loyalty Observatory.

CRISTINA: And again, we have an English version of it.

CRISTINA: Be patient, because the majority of the content is in Italian.

CRISTINA: So it’s quite a summary.

CRISTINA: But again, as I said, all our publications, our white papers, our slides for 20 years, they are available up there.

CRISTINA: They are mostly for Italian managers, so the prevalent language is Italian.

CRISTINA: But we cover what’s happening across the world.

CRISTINA: So hopefully, the content will be…

PAULA: Totally.

PAULA: And because I know my own spelling in Italian is not very good, Cristina, what I’ll do is obviously we’ll be sending this out by email the whole episode.

PAULA: So all of the show notes, I’ll make sure to link directly to your profile on LinkedIn directly.

PAULA: We’ll link to The Loyalty Observatory and anything else that you want to share with us to make sure people can find you at least.

PAULA: And then, as we said, reach out and have conversations as appropriate.

PAULA: I think that’s probably the best approach.

PAULA: Yeah.

CRISTINA: Thank you.

CRISTINA: Lovely.

CRISTINA: That’d be great.

CRISTINA: Wonderful.

PAULA: Great.

PAULA: Well, listen, on that note, I will say we’re recording in November, but releasing literally, I know, coming up to Christmas.

PAULA: So I will wish you and everybody listening to the show a happy Christmas.

PAULA: That feels very strange to say.

PAULA: But most importantly, Cristina, it’s been a fabulous conversation.

PAULA: So I want to say thank you so much to Cristina Ziliani, professor at the University of Parma.

PAULA: Thank you so much from Let’s Talk Loyalty.

CRISTINA: Thank you, Paula.

CRISTINA: Thank you very much for having me.

CRISTINA: And Merry Christmas.

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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