#219: "For Love or Money" - Australian Consumer's Loyalty Perspectives For 2022

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: Are you leading a loyalty program in the UK, and wondering what will be important in the future?

PAULA: Would you love to hear brand new research into loyalty trends, so that you can figure out how to future proof your program?

PAULA: Well, to launch Collinson’s new partnership with Salesforce, and Salesforce’s new loyalty management module, these two leaders in loyalty are hosting an exclusive event in London, all about future proofing loyalty.

PAULA: It’s being hosted at Salesforce Tower, right in the heart of the city of London, on Thursday the 12th of May.

PAULA: So to get your free invitation, simply register on invite.salesforce.com forward slash future proofing loyalty.

PAULA: It promises to be a wonderful afternoon, a chance to meet and mingle with other loyalty professionals, and be inspired with some wonderful ideas for the future of your loyalty program.

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

PAULA: An interview with Adam Posner, who’s been a guest on the show before, a loyalty expert based in Melbourne, Australia.

PAULA: Adam is well known in the Australian market for his consulting firm, The Point of Loyalty.

PAULA: And also over the last 10 years for his market report and consumer research study that takes the pulse on customer loyalty and loyalty programs in the Australian market.

PAULA: Today, Adam shares with me his latest insights from the 2022 For Love or Money™ report.

PAULA: I hope you enjoy our discussion about the key points that I found most interesting.

PAULA: And I also hope they’re really useful for all of you listening.

PAULA: No matter where in the world you’re joining us from.

ADAM: It’s a pleasure to be back talking with you, Paula.

PAULA: It’s always wonderful, Adam.

PAULA: I feel like we’ve done, this might be our third one, or maybe even our fourth recording together, but always love talking about For Love or Money™, it’s incredible.

ADAM: Four and the fifth one is free, is that correct?

PAULA: Of course, absolutely.

PAULA: Wonderful, listen Adam, you’re working extremely hard releasing your research report again.

PAULA: I know it’s the 10th edition of For Love or Money™, wonderfully in-depth research report on the Australian loyalty market, which I’ll get you to fully describe for our listeners now in a moment.

PAULA: Before we get into the big topic for today’s discussion, I did put you on the spot there a minute ago and ask you to have a think about your favorite loyalty program from a personal perspective, Adam.

PAULA: So ignoring all of the wonderful things that you study and advise and consult on, just from a personal perspective, what’s your favorite current loyalty program?

ADAM: Yeah, the program that really resonates for me is a program that solves a customer problem.

ADAM: So it’s not just a program that gives me points and perks and birthdays and offers.

ADAM: It’s a program from a brand here in Australia called Super Cheap Auto, which is a automotive accessory brand and retail outlet all over Australia.

ADAM: And you can buy your car seat covers and to wash your car and basically all those accessories for keeping your car in good shape.

ADAM: And their program is incredible because what they do is they make this promise that you can buy anything at the price that it’s displayed on.

ADAM: So at full price.

ADAM: And then because you’re a member, if those car seat covers go on sale, they’ll automatically credit back the difference into your account.

ADAM: And I think that’s absolutely brilliant because it gives trust.

ADAM: And immediately with a program that I’ll buy what I need when I need it, I won’t wait for it to go on sale because I know based on their promise that within two weeks, if that item goes on sale, I will get the credit back.

ADAM: And so can you imagine what that does for trust with the brand for buying at full price, but also one of the real things that really is what actually happens to the credit.

PAULA: Go on, tell us.

ADAM: The credit is used by me to go back again and buy more.

PAULA: Of course, yes, yes, unbelievable.

ADAM: It’s brilliant from a business point of view and solves a customer problem.

ADAM: I love it, and that’s my story and that’s the program.

PAULA: It’s a wonderful story, Adam, and you’re absolutely right.

PAULA: I don’t think we do enough as a loyalty industry to overtly build trust with our customers in such an explicit and simple way, because I think sometimes there’s well-intentioned brands that might build a customer promise like that, but leave it up to the customer to go and claim the difference or to notice or to intervene, I suppose, to get that credit back.

PAULA: So the fact that they’ve closed the loop and really said, we take responsibility for taking care of your spend, that it is going to be super cheap auto to live up to their brand promise.

PAULA: I think that’s extraordinary.

PAULA: And really, we’ll have to get them on the show, Adam.

ADAM: No, just remind me because I’ll try and find the right person for you.

ADAM: So yeah, you should get them.

ADAM: I’d love to hear what they say from an internal point of view.

ADAM: I mean, I never worked on it.

ADAM: I’m just a consumer of the program.

PAULA: Perfect.

PAULA: And let’s say a very well-informed consumer, huh?

ADAM: Well, I just love it because I keep on saying it solves an issue out there.

ADAM: How much do you hate going to buy a beautiful outfit?

ADAM: And then on the Monday, you see it goes on sale.

ADAM: Does that make you happy?

PAULA: Oh, it’s absolutely super frustrating.

ADAM: Yeah.

ADAM: And so they’ve solved that.

PAULA: Yes, exactly.

PAULA: And I think it is particularly for a commodity product where there’s probably a huge amount of comparison shopping in that sector.

PAULA: So it might not be the same with the fashion brand or sometimes with luxury retail, for example, there’s almost a pride in buying things at full price, that there’s no association around discounting as a model.

PAULA: But in this sector and in anything, I think that’s seen as a commodity, it’s a genius loyalty strategy.

PAULA: So and I like the fact that you said it’s if you’re a member, you get the credit back.

PAULA: It’s not just by being the customer.

PAULA: So it’s a differentiator, yeah, yeah.

PAULA: Wonderful.

PAULA: Okay, so that’s exactly why I asked this question, Adam, so I could get super inspired by a brilliant idea that somebody’s come up with because it’s not a unique problem in the Australian market.

PAULA: It’s definitely a global problem.

PAULA: So hopefully people listening can have a think about that for their own businesses, right?

PAULA: You have sent me the highlights and I suppose the keynotes of the latest round of your research called For Love or Money™, it’s a wonderful piece of research.

PAULA: We did an episode on it last year.

PAULA: The audience absolutely loved it and I hope a lot of people went to your website to download it last year and hopefully again this year.

PAULA: So first and foremost, Adam, tell me, why did you get into this huge piece of research and work?

PAULA: I can imagine you probably don’t have a good night’s sleep now for weeks with all of this work going on.

PAULA: So tell us why you started all of the work.

ADAM: Yeah.

ADAM: It’s an interesting story.

ADAM: I mean, 10 years ago, this year is the 10th edition and I cannot believe my baby is 10 years old already.

ADAM: It was a random conversation that I had with a friend and his name is, and I’ll call him out, is Pete Noble here in Australia.

ADAM: I was in loyalty.

ADAM: I was consulting and I had the business and I just couldn’t find an Australian based study around consumers insights to loyalty and loyalty programs.

ADAM: So that’s 10 years ago.

ADAM: I mean, a lot of the US based studies, but I couldn’t find anything.

ADAM: So I thought, wow, why don’t I just do it?

ADAM: And I didn’t realize, it’s the old story, sometimes if you know too much detail, you don’t do things.

ADAM: I didn’t realize, you know, A, the appetite for it, but B, where it would go.

ADAM: And so we put together a brief and we, this is all done with an independent research company.

ADAM: So I don’t do the research myself.

ADAM: I commission the research and a professional, and it’s done on a robust Australian population of a thousand plus Australian adults over the age of 18.

ADAM: So it gives us a 95% confidence level and a 3% margin of error.

ADAM: So it really gives us a great sentiment of the population.

PAULA: Wonderful.

ADAM: Anyway, so that’s the backstory 10 years ago, a random coffee.

ADAM: We did the study and at that stage, it was funny, we just published the study and we had hundreds and hundreds of downloads.

ADAM: We couldn’t believe it.

ADAM: It was free at that stage and as you know, now, I actually put a price on the main report.

ADAM: But also the media grabbed onto it because we had brands mentioned and so it just grew from there.

ADAM: Then every year there on, I’ve just got a mission to keep being curious.

ADAM: My mission for this research is, A, it helps me with my consulting.

ADAM: Absolutely.

ADAM: But B, it educates and helps the community because the insights in Australia and New Zealand, my mission is to identify insights that inspire loyalty markets to take action, to lift their loyalty programs and strategies out of what I call the sea of sameness, so that they become a real robust strategy within the business.

ADAM: You and I have discussed this before.

ADAM: They’re not just a marketing work in progress item, but a boardroom agenda, the loyalty strategies and programs all across the business.

ADAM: So that’s my passion point for the moment.

ADAM: To answer your question maybe in more detail than you might have expected.

PAULA: Well, you know, but I want to acknowledge you, as I said, for the huge amount of work because I cannot imagine undertaking something of that scale and articulating it in a way that’s so powerful and so useful to such an important market, actually.

PAULA: I do believe the Australian loyalty market is very sophisticated and increasingly so.

PAULA: And certainly this year’s research will indicate some of the big interesting trends that are happening.

PAULA: But also, I do love all of your kind of soundbites, Adam.

PAULA: And I really believe this thing about the sea of sameness.

PAULA: You know, it’s something that consumers I’m sure would probably actually use those words if they had the chance themselves.

PAULA: So this challenge that we have sometimes as a consumer to say, why would I bother joining that loyalty program?

PAULA: Like finding a compelling proposition can be super challenging.

PAULA: And I’m sure we’re the most demanding customers in the world, given that we do this professionally.

PAULA: But yes, I often stand at a retail counter and challenge the poor person to tell me why I should join their loyalty program.

ADAM: It’s funny you say, tell me why, because part of my consulting, I always say to clients, get your team to tell me why in 10 words or less.

PAULA: Exactly.

PAULA: Exactly.

PAULA: Yes.

PAULA: Yeah.

PAULA: And if there’s a C of sameness type proposition, you can guarantee they won’t be able to.

PAULA: Brilliant.

PAULA: So listen, I have picked out my top three favorites from your wonderful 10 major insights, Adam.

PAULA: But even before I talk about those three, I do love your very simple definition actually in section one, where you articulate that obviously loyalty is not a loyalty program.

PAULA: And we’ve talked about that on this show before.

PAULA: So I didn’t call the podcast Let’s Talk Loyalty Programs for exactly the same reason.

PAULA: And you really articulate and explain those three elements, the three Bs of loyalty, dare I say it.

PAULA: And so I’d love you just to share that with the audience just to get us started.

ADAM: You know, it’s continuous learning for me.

ADAM: And a while ago, I realized that everyone talks, as you’ve said, about let’s do loyalty.

ADAM: And then I asked them the question, hang on a second, what do you mean by let’s do loyalty?

PAULA: Yeah.

ADAM: You want a loyalty program or do you want your customers to be more loyal?

ADAM: And so I believe that to get a frame of reference around loyalty is not a program, what is loyalty?

PAULA: Yeah.

ADAM: And getting a definition of loyalty and then deciding once you know what loyalty actually is to your brand, then you can decide what a loyalty program can do to drive those loyalty outcomes.

ADAM: So loyalty is an outcome and it’s based on three Bs.

ADAM: It’s a behavior, which is transactional, you spend more and more often.

ADAM: It’s a belief, which is attitudinal and it’s emotional.

ADAM: So that’s that trust, love and recommendation.

ADAM: And there’s now a belonging.

ADAM: It’s my third B, so behavior, belief and belonging, where you actually feel connected to the purpose of the brand, which has become far more prevalent these days in the last perhaps two years.

ADAM: And I’m reading everywhere the word, do people connect with the purpose of the brand, like Patagonia and their purpose and various other brands that have got a greater purpose.

ADAM: And these consumers are far more connected to the social connection, the cause and charity and their purpose.

ADAM: And that’s why I’ve pulled in belonging as the third B of loyalty.

PAULA: I love it.

PAULA: I love it.

PAULA: It’s a very important distinction, Adam.

PAULA: And again, for anybody who’s sitting and reflecting on their own loyalty campaigns, initiatives and programs, to keep it quite broad, I do think belonging is a critical piece.

PAULA: So important to have that in the definition.

PAULA: So let’s get into them.

PAULA: I suppose my first, I suppose, favorite insight, Adam, this time around, was in the fifth section of For Love or Money.

PAULA: And you talk about the growth in the impact of structured loyalty programs through the pandemic.

PAULA: And it has been my firm belief since I started in loyalty back in 2010, just after the big kind of global recession, that at times of uncertainty, loyalty programs are an amazingly powerful tool.

PAULA: And I think that’s what’s coming through in your research.

PAULA: So I’d love you to share the insights in how our loyalty programs are impacting consumer behavior now in 2022.

ADAM: Yes.

ADAM: So the insight that you’ve chosen is very, I guess, relevant to today versus perhaps in the beginning of 2020, and we all know what’s happened in the last few years.

ADAM: And so I was very interested in looking at the impact of loyalty programs on brand engagement across deciding to purchase from the brand, the impact of loyalty programs on actually purchasing and the impact of loyalty programs on recommending.

ADAM: And so those three key motivating aspects and interactions.

ADAM: And in 2020, just for one of those three, deciding to purchase, did a loyalty program have an influence?

ADAM: And 63% said, yes, it did, but in two years later, post-pandemic, or let’s just say two years later, it’s now 76%.

ADAM: So it’s got a big jump in the impact that a program’s had on influencing a person’s decision to purchase from a brand.

ADAM: Actual purchasing, another big jump, it was 71% this year versus 56 two years ago, 56%.

ADAM: So another big influencing factor of members saying that a program has had an impact on their actual purchasing behavior, I call it pre-pandemic, you know, because the study was done just before, and now we’re two years later.

ADAM: So I believe that the programs have had a huge impact over this period on consumers.

PAULA: Yeah.

PAULA: And the recommendation piece as well is incredibly powerful, yeah?

ADAM: Yeah, I don’t even, you know, I don’t want to overwhelm people with statistics, but you know, that one in itself, the jump has been, I think, 46% said in 2020, 46% said that a program influences them to recommend.

ADAM: And this year, it’s now 59%, so just under 60%.

ADAM: So another significant jump in members saying that programs have an influence on them recommending a brand.

ADAM: So those three influences decide, purchase and recommend all have jumped in the last two years.

PAULA: Extraordinary.

PAULA: And the reason I suppose I picked that as my most favorite, Adam, and it goes back to the point you made already.

PAULA: We fundamentally, I suppose, believe as loyalty professionals that loyalty programs, initiatives and investments belong at the board level.

PAULA: So the conversations that we want to have, that’s exactly what that cohort and those stakeholders and those budget holders need to understand.

PAULA: And I think what your research does is it offers an independent validation of that, because we’ve all been the loyalty managers saying, my program is helping people decide or buy more or recommend us more.

PAULA: But because you have a vested interest in it, it’s not as credible as you saying, this is what people are telling me when they have no vested interest.

PAULA: So I think that independent piece is super powerful.

ADAM: That’s an interesting perspective.

ADAM: I like what you just said there.

ADAM: And yes, it is.

ADAM: It’s an independent point of view versus a brand that’s siloed within their own customer base.

ADAM: So I think you’ve highlighted something really interesting, which is good for me to hear from you as a third party, say that that’s what I’m aiming to give insights and benchmarks that are driving loyalty managers to go and do their own study and all analysis to see how they rank.

PAULA: But also to avoid the risk of being dismissed.

PAULA: So I definitely think if I have a vested interest in proving how great my loyalty program is, it’s just not credible or not as credible.

PAULA: And also there’s the inevitable bias that it’s my program, they’re my members, of course, they’re going to tell me wonderful things to my face or directly or explicitly when I ask them.

PAULA: So again, there’s the power of professional researchers to say that this is something that’s being said, regardless of having any reason or any bias.

PAULA: So that’s why I like this particular one.

PAULA: Yeah, super powerful.

ADAM: That’s a good one for you to find to jump out at because I do love that one as well.

PAULA: Yeah, absolutely.

PAULA: Yeah.

PAULA: And as you did say, Adam, there are 10 sections and we’re not going to do all of them just as today.

PAULA: The next one I wanted to pick up on, I suppose, is probably around, you know, what people are interested in as rewards.

PAULA: And the whole section seven is all about, you know, what is interesting, what’s sexy.

PAULA: And there’s lots of new ways for members to be rewarded, whether it’s, you know, you know, the existing ones, I suppose, like a catalog, but then moving into the exciting ones.

PAULA: And I know you also do a lot of analysis, Adam, around different demographics.

PAULA: And I was saying this to you all fair, so it’s wonderful to have insights by gender, which we’ll talk about specifically in this, you know, ways for members to be rewarded, but also the different demographics.

PAULA: And when I was reading this, I had to first of all go back and remind myself, which demographic am I?

PAULA: Because it’s just not something I have to remember very often, but you do cover all of them.

PAULA: But there was also just a wonderful thing, as a slight aside, I was reading something by Seth Godin this week, and he was talking about what’s the next generation going to be called?

PAULA: So we know about our baby boomers, we know our Gen Z, our Gen X and Gen Y.

PAULA: And Seth Godin said that the next generation he thinks is going to be called Generation C.

PAULA: So C for COVID, C for carbon and C for climate.

PAULA: Isn’t that super cool?

ADAM: I’m not sure they’ll be the right age yet for my study, but I will watch out.

ADAM: 10 years time they might.

PAULA: Exactly.

ADAM: In which case, that’s 20 years, we’ll book another session with you.

PAULA: We totally will.

PAULA: Yeah, there you go.

ADAM: But yes, I do look at the generations and the genders.

ADAM: So that’s why for every brand that’s got a program, they might have a different cohort or a generational skew, and they’d be more interested because they’re the one gen Z on their strategy or in their program, or they’ve got them.

ADAM: So what’s the nuances that comes through in the study?

PAULA: So tell us those nuances, Adam, then specifically in this whole section about tracking new ways for members to be rewarded.

ADAM: So I think it was in 2020 again, for the first time, just got to double check it was 2020, yes.

ADAM: I looked at the market around the world to see what’s different about what programs are doing in terms of different ways for rewarding or engaging their members rather than the traditional type programs that we all know of.

ADAM: And there were seven or eight that I identified and I included one that’s standard award that we all know, which is the earning rewards for a catalog because everybody’s doing it, airlines and so on.

ADAM: And then I explored others like, you know, and they’re becoming more prevalent now, cash back to save your money and your telco and your electricity and your utilities.

ADAM: So solving more cost of living in services problems, right?

ADAM: Rewards for recycling, that’s become more prevalent.

ADAM: Two years ago, they were all quite new.

ADAM: Earning cash back to help you save your super funds.

ADAM: So that’s your retirement fund.

ADAM: Again, quite unique a few years ago, I wanted to see those.

ADAM: Earning shares is another thing that’s become more prevalent.

ADAM: Earning cryptocurrency, you know, that’s also become far more hot topic this year.

ADAM: And then even a funny one from one of the pizza brands that were giving people points for purchasing competitors brands, which was, wow, why would you do that?

ADAM: It’s just so unique and very brave.

ADAM: Anyway, long story short, I took those eight and I researched them in 2020 to see how they ranked it and their appeal.

ADAM: And in 2022, I did it again.

ADAM: So two years later, interestingly, and I’m not quite sure why, but earning rewards from a catalogue, the good old staple diet, the standard has actually increased in appeal.

ADAM: Funnily enough, it still ranks number two.

ADAM: But it’s increased over over that period.

ADAM: I don’t know why maybe people are safer feeling safe.

ADAM: I’m just hypothesizing.

ADAM: I don’t know why specifically.

ADAM: What really fascinated me is when you to your question, when you break down all those rewards based ideas into your demographic, as you say, your gender and your generations.

ADAM: Yeah, early cryptocurrency, which is so topical now, still ranks low on on all of those eight.

ADAM: Yeah, but it’s significantly more of appeal to men and to Gen Z or Gen Z.

ADAM: Significantly more.

PAULA: Yeah.

ADAM: So, for example, I’ll just give you a quick stat on that.

ADAM: So generally, the population said that 32% were interested in earning cryptocurrency as a reward.

ADAM: Right.

PAULA: Yeah.

ADAM: For men, it’s 37 and for Gen Z, it’s 44%.

ADAM: So quite significant differences.

ADAM: And that’s when you dig into the data and you dig into that, that you suddenly realize that certain ways of rewarding members appeal to certain audiences.

PAULA: Which is super important.

PAULA: And again, you know, the whole idea about obviously building our proposition with our member profile, our ideal member profile in mind, will definitely be very well informed.

PAULA: If you do have perhaps, I’m thinking back actually to your super cheap auto guys, you know, they probably have more of a male bias, for example.

PAULA: And I know I’m totally generalizing there.

PAULA: But if they do, then it’s for them perhaps to suddenly think, oh, maybe cryptocurrency is something that we should be exploring for our members as well.

PAULA: Whereas it might be less prevalent for a brand that has more of a female bias.

PAULA: So definitely important to understand that.

ADAM: Exactly.

ADAM: And you know, without getting into that specifics, you’re spot on.

ADAM: It’s about understanding who your audience is, you know, getting to get a sense of where the skew is and then finding your appeal.

ADAM: So for me, that was the most fascinating in this section is where perhaps, you know, cryptocurrency is a benefit has moved over two years.

ADAM: It’s a lot of talk about NFTs in loyalty programs, and maybe you should find, get some people on your show to talk about that.

ADAM: Yeah.

ADAM: And crypto, because a lot of brands are exploring that right now, especially in their loyalty programs.

ADAM: So yeah, interesting area that you found.

ADAM: Again, another one of those nuggets hidden under the rock of hundreds and hundreds of insights.

PAULA: Exactly, Adam.

PAULA: Absolutely.

PAULA: Yeah.

PAULA: No, I can imagine.

PAULA: And just give us a sense, then, the finished report.

PAULA: I know it’s out now and it’s been in design for, I don’t know what to just say, six or eight weeks.

PAULA: It’s taken just to have it beautifully presented.

PAULA: So what kind of depth of presentation is the report?

ADAM: Well, it’s 101 pages.

ADAM: So anyone who wants to do some live reading in bed one night, you’ve got 101 pages to read the report.

ADAM: But I do give a free executive summary, as you know, which is just a snapshot of some of the areas.

ADAM: Just quick, as you said, sound bites.

ADAM: Some I give a little bit more detailed.

ADAM: Some is too much to actually give the info.

ADAM: So the executive summary is always free to download to get people interested.

ADAM: And there’s still some value in them.

ADAM: I often get feedback that there’s some great insight in that on its own.

ADAM: But the full report is going to be available for purchase.

ADAM: And I haven’t got a price quite nailed, but it will be on the website.

ADAM: By the time we release this show.

ADAM: Where people go to download it, yes.

ADAM: And then I also present the research to brands and their marketing teams, which also comes part of the consulting practice that I provide.

ADAM: So yeah, big report this year.

ADAM: And something I haven’t mentioned to you.

ADAM: In fact, I forgot to mention it to you, but it’s coming soon.

ADAM: I did a special edition this year.

ADAM: And this special edition is actually looking at what you would have seen in my study called the six currencies of collection that members care about.

ADAM: So you know what I call the six currencies of collection that members care about and how you build your program benefit structure.

ADAM: So your financial layer, your memory or experiential layer, your utility or time-saving layer, your personal personalization, egoic status layer, your choice, give me choice layer and your social community layer.

ADAM: So those, I researched them in this study.

ADAM: But I think it’s in the special edition where I actually provided 61 different benefits under each of, in total, that belonged to those six currencies.

ADAM: And I got members, the research panel, to evaluate them all from an appeal point of view.

ADAM: So I’m releasing a totally unique report in a few weeks’ time that just looks at those six currencies and all of the benefits underneath them.

PAULA: Nice, nice, nice.

PAULA: And is that one that you’ll be charging for, Adam?

ADAM: Yes, that will also be.

ADAM: Again, I invested big time this year.

ADAM: But it’s very much for loyalty managers who really want to know how to build their program structures and benefit layers so that they really connect with their members.

ADAM: And it’s now got a ranking and a rating and percentages and stats.

ADAM: And it’s across all the genders and generations.

ADAM: So it’s another biggish report.

ADAM: It’s about 30-odd pages.

ADAM: It’s not as big as this one.

ADAM: It’s 30-odd pages.

ADAM: But it’s a decent size insights.

PAULA: Okay, super, super interesting.

PAULA: So listen, my other favorite one then, again, just out of the top 10, is this whole subscriptions, hot or not?

PAULA: And you know, I’m passionate about subscription.

PAULA: And yes, it’s been around in various formats for many, many years.

PAULA: But I definitely think it’s evolving, probably the most dramatically of any other format, maybe that we’re talking about at the moment.

PAULA: So I’d love you just to talk us through what you’ve learned in terms of the receptiveness to subscription style programs in Australia.

PAULA: And of course, the big insight which you highlighted about the subscription guilt as being a big issue that loyalty marketeers need to understand.

ADAM: Yeah, I think subscriptions are, and have been talked about a lot in your show.

ADAM: I know you’ve had some great guests and real specialists in that area.

ADAM: And it’s very topical because, you know, they absolutely boomed through the pandemic and all the streaming services, the food delivery services, the, you know, even QSRs.

ADAM: You know, I remember one of your Nera Bread, I think it was, on your show.

PAULA: Yeah.

ADAM: And a few of the, you know, they’re all been, so subscriptions are, and whether it’s gyms and other categories, they’re out there and they’re always out there, right?

ADAM: We all join them.

PAULA: Sure.

ADAM: So what I identified a few years ago was something what in my mind was, you know, do we feel guilty for having a subscription that we don’t actually use?

ADAM: So I was tapping into an emotional insight that I thought, you know, that I was feeling, I’m not using Netflix or I’m not using Amazon Prime and I’m paying this stuff, I feel guilty.

ADAM: Should I cancel?

ADAM: Shouldn’t I cancel?

ADAM: Should I use it?

ADAM: Shouldn’t I use it?

ADAM: And I thought, well, let me try and put a statistic, an insight against subscription guilt.

PAULA: Yeah.

ADAM: And I asked exactly that, you know, do you feel guilty for not using some or all of the benefits that you pay for in a subscription?

PAULA: Yeah.

ADAM: And in 2019, so I did it in 2019, 30% of the members who responded to that question said, yes, I actually do.

ADAM: And I thought, wow, that’s quite high, a third who have got this feeling.

PAULA: Yeah.

ADAM: So I answered again in 2022, and it’s gone up, you know, 20%, it’s 36% have now said they feel guilty.

ADAM: So it’s a really interesting strategy or insight show, it’s an insight for strategy for subscription managers, people.

ADAM: Do you really know if your customers, your members of your subscription program feel guilty about being there because they’re not using it?

ADAM: And do you care?

ADAM: This is a big question.

ADAM: Do you want to ignore those who aren’t using the service?

ADAM: Or do you want to in some way keep identifying the value that they can get?

PAULA: Yes, yes, yeah.

PAULA: And you’ve reminded me, Adam, because when I did one of the episodes that you referred to there about subscription, one of my guests did share that Netflix, for example, had decided, now this was a few years ago, and I think they’re struggling a lot more now, so I’m not sure if this still applies.

PAULA: But their decision at the time was they were identifying what they call zombie accounts, which is exactly this idea that people subscribed and maybe forgot or fully disengaged.

PAULA: And again, those definitions, I’m sure, vary from time to time, but they were taking the decision to actually stop charging those people so that they were actually going to remove them.

PAULA: And I think it was a tiny percentage.

PAULA: Again, I think Netflix has traditionally probably had very high usage, I would say, probably through the pandemic as well and maybe before it became so competitive as an industry.

PAULA: But I do think if you’ve got zombie customers, you need to make a decision as to what you intend to do about that.

PAULA: And I’ve certainly seen some great work, for example, where subscription loyalty programs really spend an awful lot of time researching and looking at early activity levels to make sure that they’re constantly reminding those subscribers how much more they can get.

PAULA: So I think there’s a window of opportunity to alleviate the guilt or prevent it, let’s say.

PAULA: The prevent it, I love that.

ADAM: And I think that’s the insight that I, again, back to research, looking for insights to help program managers take an action, like you’ve just said.

ADAM: So another one of those that are hot or not and how topical it is, I thought subscription guilt would be worth talking about and it was a good one again.

PAULA: Exactly, exactly.

PAULA: And there’s a program I subscribe to here, which is a well-known program, for one, on restaurants and you buy this.

PAULA: It’s quite expensive, actually.

PAULA: It’s about 100 euros to buy for the year.

PAULA: But I do have that then as my benchmark to say I have to save 100 euro on some nice meals before I feel like I’m winning.

ADAM: Exactly.

ADAM: No, it’s a great personal example.

ADAM: That’s exactly the point.

PAULA: Yeah, exactly.

PAULA: So what else did you learn then just about subscription specifically, Adam?

PAULA: I know there’s a lot.

ADAM: I mean, I was trying to get a gauge on who’s a member of, by definition, subscription programs.

ADAM: There was no big statistical differential to jump out at me.

ADAM: So that it was really just getting us.

ADAM: There was actually one on a generational level.

ADAM: So I’ll ask a very general question.

ADAM: And you’ve got to be careful in research about framing up a subscription-based question because it’s all about the value and the brand that it has to be expressed in order to get a gauge on appeal or take up.

ADAM: Yeah.

ADAM: You can’t talk generically.

ADAM: You’ve got to really sell the value for them.

ADAM: So my research is generic.

ADAM: And therefore, I’m very careful about asking, would you join a program that has lots of value and extended benefits for a fee versus join a program which is free?

PAULA: Yeah.

ADAM: Very generic statements because you don’t know what I mean by lots of value and extended benefits.

PAULA: Yeah, that’s true.

ADAM: So that my question is very generic.

ADAM: And that’s why I’m just following that generally.

ADAM: But I didn’t notice that, again, Gen Z are far more likely versus the population to join a subscription program, which has a greater value and extended benefits.

ADAM: But I just want to say with a big call out that I’m not expressing what they are.

ADAM: I’m just watching specifically what’s happening with the various generations around three versus three.

PAULA: Yeah.

PAULA: And they’re trends.

PAULA: So again, Adam, you know, we’ll never we’ll never know specifically what that individual was thinking.

PAULA: But at the same time, we have to make assumptions that this report versus last year’s report, there will be similar assumptions being made in the reader’s mind.

PAULA: So, yeah, so your job is to draw out the parallels.

PAULA: So at least we can see directionally where are things doing that we need to be thinking about.

ADAM: And the inside then is to program, sorry, on that one, people who want to build a subscription program is to use the research as a basis to say, okay, that’s interesting.

ADAM: So 25% of Gen Z will join a subscription program.

ADAM: So we can use that potentially in the beginning of our modeling.

ADAM: So we can then say, if we’ve got next number of members joining and they this generation, then 25% will pay.

ADAM: So they can start using that.

ADAM: They can validate it with their own audience, but they can start using the benchmarks to build the models.

PAULA: Yeah, no, very good point.

PAULA: The other one that came out in this section as well, Adam, is one that to me is always a huge concern when talking about planning a program.

PAULA: And it’s this whole idea of benefits connected to a cause or a charity, because I do think that it always sounds like such a wonderful idea.

PAULA: Members and research, they always do very much say, oh, yeah, that’s something that we want as an option in terms of the benefits of our program.

PAULA: But you’ve called this, there’s an issue within this that loyalty marketers need to understand, and you’ve called it the say-do gap, which I think again is a very succinct way to understand what actually happens when brands do decide to go that direction.

PAULA: So will you explain that for the audience, please, Adam?

ADAM: Yeah, it’s a common in research where you’ve got to be careful about, and obviously I’m providing research, but you’ve always got to remember that in reality in business, you’re going to use data, you’re going to use research, and you’re going to use reality, as in you’re going to test and learn, you’re going to go to market.

ADAM: So you can ask your customers, so would you donate your points or your benefits to a cause or charity that you care about or that we provide?

ADAM: And you find a high proportion and say, yes, I will.

PAULA: Yes.

ADAM: And then when you actually in reality give them that opportunity, what the percentage that said, yes, they will, it’s far less in reality.

ADAM: So they say they will, but they don’t actually, they do get.

ADAM: So that’s what I’ve seen in reality.

ADAM: In my research, I did it a little differently this year.

ADAM: So I first asked how appealing, how appealing is it for you to earn rewards through a program that you can donate to a cause or charity?

ADAM: I think it was, and I’m just reminding myself, 40% said, yeah, it’s appealing or fairly appealing for me for that proposition, yeah?

ADAM: Of donating.

ADAM: I then took it a bit further and I then asked the question about, so if you do have an option to earn rewards through a program that you can donate, how are you likely to respond?

ADAM: Will you donate some of your rewards, none of your rewards, or all of your rewards?

ADAM: I did the some, none or all.

PAULA: Yeah.

ADAM: And well, 53% said, unlikely to donate any.

PAULA: Yes, see?

PAULA: It’s extraordinary.

PAULA: Yeah.

ADAM: And again, so again, it’s just, and that’s just in research, right?

ADAM: Not in reality.

PAULA: Yes.

ADAM: So, but I did, I did, just as a little nugget here, again, another one of those under the rock was, there’s a small proportion, and Gen Z jump out, it’s amazing.

ADAM: But there’s 6%, 6% said, I’ll actually donate all of it.

ADAM: That’s what they said in my research.

ADAM: And 11% for the Gen Z, so I’m just finding the more and more I dig deeper in research, you find new insights, it helps, because I’m getting approached in consulting land, about building programs that help cause a greater purpose.

ADAM: And I believe in it.

PAULA: Totally.

ADAM: Just got to realize the reality as well.

PAULA: Yes, it’s definitely about managing expectations.

PAULA: And what I think is, as human beings, we like to think of ourselves as being very generous.

PAULA: So, you know, it makes us feel good about ourselves.

PAULA: But then if you’re in the choice, and there’s literally an option of option A, you know, free flight home to Ireland for Paula, versus option B, donate to a charity, you know, that’s a much bigger decision.

PAULA: And how do I make that decision at that point in time?

PAULA: So you’re absolutely right.

PAULA: Yeah, so just to manage the expectations at the outset.

PAULA: Perfect.

PAULA: And will you quickly just mention the whole piece around card linking, Adam, because I think that’s a really big trend, I suppose, as well from the technology side.

PAULA: And I know it was a new question within this section for you this year, a couple of concerns that came out in your research.

PAULA: But for me, card linking is still quite immature.

PAULA: So that seems to be, I think, what you’re concluding as well.

PAULA: But I definitely feel, you know, when we have this conversation this time next year, I’m pretty sure you’ll be telling me this one is jumping up again, I’m hoping.

ADAM: Yeah, again, this has come out of my real life experience with consulting that I’ve been helping certain clients with this element of card linking.

ADAM: And we all know what that is, which is when you actually give over your credit card, your debit card into your membership so that every time you use that card, you earn the points and benefits.

ADAM: So you are handing over a piece of, you know, quite sensitive payment.

ADAM: So we did some research with the client, and we got a feedback from their customer base.

ADAM: So I thought I’d put it into the wider population to see, you know, is there a preference for certain people to actually, how do they feel about it?

ADAM: And you’re right, from reading through the results, that it’s still relatively unappealing.

ADAM: As in, I think it was well over 60% said, no, they wouldn’t want to connect their credit or debit card into a membership directly through card linking, whereas, you know, there’s a whole range of other people who will.

ADAM: And again, when you look at the generations, there are another, you know, some are far more comfortable.

ADAM: You know, I trust the brand, there’s my credit card, you know, no worries, I’m earning the points you’ve told me, the benefits, no problem.

ADAM: But it’s another sort of card linking payments area within the whole technology and loyalty space that I’m just watching and measuring.

PAULA: Wonderful, wonderful.

PAULA: So listen, that’s all of the sections I want to explore today, Adam.

PAULA: What else did you want to highlight for listeners before we finish up?

ADAM: Yeah, look, I’ll finish up with the last section, which we shouldn’t forget about, which is the data section.

ADAM: The data privacy, and I track that around a whole range of questions.

ADAM: I’ve got something called the Net Data Trust Score, which is a program, members are trusting the data, but I asked a brand new question there, which is a call out for those people who are looking at first party and zero party data strategies as cookies become more of an issue.

ADAM: So, you know, everyone’s rushing to loyalty programs to solve their party problems, as I call it.

ADAM: And I just, it’s a big call out to say that if you’re asking for data, you got to use it.

ADAM: Use it with compliance and sensitivity, because members, I’ve asked it in the research, expect you to.

ADAM: And they have high expectations, so don’t just ask for it.

ADAM: Use it, use it sensitively, use it wisely, use it relevantly.

ADAM: And now I’ve got a statistic and an insight about higher expectations around that.

ADAM: So it’s just another new one that I wanted to call out for your audience amongst all the others.

ADAM: So, wow, we’ve been through some of the good ones.

ADAM: There’s so much more.

PAULA: Totally.

PAULA: Tell everybody where they can find your report, Adam.

ADAM: Yeah, thanks, Paula.

ADAM: It’s available through my website.

ADAM: The website is thepointofloyalty.com.au.

ADAM: So the point of loyalty is all one word,.

ADAM: com.au.

ADAM: And it’s very clearly up in likes.

ADAM: It says For Love or Money™ and you’ll go there and you’ll see the Australian.

ADAM: As I said, there’s a free executive summary.

ADAM: You can pay for the full report or there’s an option for me to personally present it as well, which has a paid element.

ADAM: So, you know, I will reveal insights here and there, but it’s there for those who are keen and interested.

PAULA: Well, listen, on that note, I want to again thank you for all of the work for coming to share this with our global audience.

PAULA: Super interesting to have this research coming through every year or so.

PAULA: Adam Posner, CEO of The Point of Loyalty and of course the author of For Love or Money.

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

ADAM: I really appreciate it.

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 245 executives in 27 countries as certified loyalty marketing professionals.

PAULA: For more information, check out thewisemarketeer.com and loyaltyacademy.org.

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

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