#110: For Love or Money? Australian Loyalty Perspectives 2021 with Adam Posner

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: This episode is brought to you by Epsilon and their award-winning People Cloud Loyalty Solution.

PAULA: Today, I’m delighted to announce that I’m taking part in Epsilon’s Persona Live event this June.

PAULA: Persona Live is a series of online events designed to inspire marketeers with thought leadership, best practices, as well as interactive discussions around identity and personalizing our customers’ experiences.

PAULA: If you’d like to register for this free event and hear from Epsilon clients, such as Marriott, Inspire Brands, GM Financial and FedEx, just go ahead and visit epsilon.com forward slash Let’s Talk Loyalty.

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

PAULA: Today, I’m delighted to have my first guest on the show for a second time.

PAULA: Adam Posner, well known to many listeners as a loyalty specialist based out of Australia and also particularly renowned for the publication of his annual report known as For Love or Money.

PAULA: So today, Adam came on to the show to talk through some of the really fascinating learnings and lessons that came through in the latest research.

PAULA: He, for example, talks about some dramatic changes in activity rates by members of loyalty programs in the Australian market, some fascinating interest in the use of plastic cards by consumers, and well as some exciting insights on what new technologies customers are themselves specifically enjoying using.

PAULA: So without further ado, I’m really excited to talk about For Love or Money 2021 with Adam Posner.

PAULA: So Adam, please do tell me, what is your favorite loyalty statistic in 2021?

ADAM: 2021 has revealed some amazing statistics for me because of the release of our For Love or Money research study this year, but one that just blew me away, Paula, and more surprised than I am delighted is that we every year have been tracking since 2017, what I call member interaction, identification and payment integration with loyalty programs.

ADAM: And of the four elements that we research, we always look at the loyalty card and then paying separately.

ADAM: We look at mobile apps or mobile with payment integration.

ADAM: We look at apps with payment separate.

ADAM: And we also look at just a unique identifier, give me your email or whatever it is.

ADAM: And since 2017, the use of loyalty cards has been declining significantly.

ADAM: It’s from 81% preference down to about 47% in 2020.

ADAM: And then in 2021, I got the results and loyalty card preferences significantly jumped to 55% of members saying they prefer to interact with the program.

ADAM: Wow, that blew me away.

ADAM: What do you think about that statistic?

PAULA: Well, I don’t know what to make of it, I have to say, is the honest answer.

PAULA: We talked about this a little bit before, Adam, and part of me was kind of like going, is it back to the prestige factor?

PAULA: Is it people wanting their silver and their gold cards?

PAULA: Because historically that’s the only reason I’ve ever really enjoyed presenting a card.

PAULA: And I don’t feel it is that, Adam.

PAULA: So I don’t know whether it’s just people prefer certainty, whether there’s something about this Covid mindset where people are kind of going, do you know what, actually?

PAULA: It’s just nice to make sure I get my points and all of that.

PAULA: So, I mean, it’s the original form of identification, as we know, the most reliable.

PAULA: But my experience when I was thinking back, for example, to Ireland, if I would hand over, let’s say my grocery, which would have been the plastic card I used the most, that did require me to hand it to the person, you know, so that they would take it.

PAULA: So this contact, and again, with health in mind, I was kind of thinking, no, actually, I don’t want to have contact or transferring card.

PAULA: So I really don’t know what to make of it, Adam.

PAULA: I mean, it really is a really surprising statistic.

ADAM: Yeah, and surprising too.

ADAM: And I mean, in our research, we don’t ask why, why did you give that preference?

ADAM: And note to myself in 2022, I’m going to ask why, but I did dig a bit deeper into the demographic and generational segments, because we also analyze by gender and we also look at, you know, Gen Z, Gen X, Gen Y and baby boomers.

ADAM: And I noticed that baby boomers have a massive preference.

ADAM: 82% said they prefer the card, whereas Gen Y, I think it was 36% said they prefer other, well, they don’t prefer the card as much.

ADAM: So you got to look deeper into the insights.

ADAM: You know what they’d say about statistics sometimes.

ADAM: You just got to go a little bit deeper and see where the insight is.

ADAM: Yeah.

ADAM: No, I don’t actually have a reason.

ADAM: I mean, I think just a personal point of view in Australia, I think there’s some of the big programs still have many older members.

ADAM: They still love the card.

ADAM: Some programs have been coming into the market and launching with many options.

ADAM: You know, the app, the mobile integration as well as a card to cover all bases.

ADAM: Some of my hypotheses.

ADAM: However, back to your question, that surprised me the most amongst many others.

PAULA: OK, well, it’s a big statistic for sure, Adam.

PAULA: And definitely one, as you said, I really want to get in and understand it and challenge myself and maybe some of my other guests as well.

PAULA: To see if that says something that they’re also seeing, because I think, you know, what I really was thinking about in preparation for this conversation was it’s so important to get the consumer perspective.

PAULA: But actually, what we might also start needing to do is really start to get the B2B perspective and talk to more of our own community just to kind of see if anybody is experiencing it outside, for example, of Australia and New Zealand.

PAULA: So definitely I think it’s going to provoke something.

PAULA: So I know when we publish this podcast together, we’ll get plenty of commentary.

PAULA: So we’ll certainly enjoy that.

PAULA: So for people who aren’t familiar, Adam, with particularly this report, I know it’s the ninth edition.

PAULA: So it’s called For Love or Money.

PAULA: It’s the 2021 report and obviously reflects the loyalty market from a consumer perspective, both in Australia and I know in New Zealand.

PAULA: So I guess the really important piece for me to understand, thinking about listeners in the US and in the UK, for example, is really, you know, just give us the context for how do you do the report?

PAULA: Why do you do the report?

PAULA: I think I’ve talked about where you do the report and just even when.

PAULA: So we’re chatting here today.

PAULA: Now it’s May.

PAULA: But yeah, just give us a bit of the context of where this whole kind of concept came from.

ADAM: Yeah, thank you for asking that.

ADAM: Well, I’m a loyalty consultant, independent, and always looking to learn.

ADAM: And I woke up one day and in fact, I met a colleague of mine, his name is Pete Noble, you know, eight, nine, 10 years ago.

ADAM: And I said, I just think we need to do some insights about asking consumers what they think about loyalty and loyalty programs.

ADAM: And fast forward to today where I’ve now done 14 studies.

ADAM: The context is really just to keep myself fresh and really inspire the loyalty community.

ADAM: And like you did with your podcast and your content, so this study has now become inspiration for loyalty marketers, for agencies.

ADAM: Even my competitors love the research.

ADAM: Consultants, loyalty technology providers.

ADAM: I guess I’m trying to lift, I’m trying to lift the loyalty industry out of what my mantra is, out of the sea of sameness.

ADAM: So if I can get insights, which just because it’s the Australian market and the New Zealand market doesn’t mean these don’t translate worldwide.

ADAM: And it is a robust study.

ADAM: It’s an independently commissioned.

ADAM: It’s a thousand, a thousand plus consumers.

ADAM: So the sample size is significant.

ADAM: The margin of error is around 3%.

ADAM: So the sentiment is there.

ADAM: So yeah, that’s the background.

ADAM: It’s to try to inspire our industries, our industry to be better.

PAULA: Absolutely, yeah.

PAULA: And definitely that’s something we’ve always shared, Adam.

PAULA: I think we bonded on LinkedIn initially, but there is, we’re both genuinely intrigued.

PAULA: And I’ve started saying in my own conversations, the reason I’m podcasting is because I have more questions than I have answers.

PAULA: So I’m always relieved when I have someone like you, who’s got lots of answers.

PAULA: So it’s always great.

PAULA: And one really important point as well for people listening.

PAULA: I mean, you know, there’s over a hundred shows have gone out.

PAULA: You are my very first returning guest, Adam.

PAULA: So I think that’s first of all, a credit to you.

PAULA: Last year, I remember it was just as Covid was starting to land in terms of the impact on us as professionals, we did a great show based on some research you’d done then, which I think was called 119 Loyalty Ideas to Beat Covid-19.

PAULA: So that was an extraordinary show.

PAULA: And particularly, I know how well respected this report is.

PAULA: So For Love or Money, phenomenal and great to have access to it.

PAULA: So let’s dive in, Adam.

PAULA: There’s, I think, first of all, a really comprehensive executive summary that we know is available to everybody, free of charge around the world.

PAULA: I was obviously reading it in preparation for today, a full 22 pages, so plenty there in the executive summary alone.

PAULA: So I don’t know how many sleepless nights you had, Adam, in pulling it together.

PAULA: But tell me…

PAULA: Well, I’m glad you have some support in terms of the agency behind you doing it, because again, I think market research has to be run again, as we say for loyalty programs, same with market research, has to be done by professionals, so that’s super.

PAULA: But given how much the depth of what you’ve been researching, Adam, what are the key points that you want to highlight?

PAULA: Let’s say even, what’s the first big thing that you noticed in this report For Love or Money 2021?

ADAM: The big thing for me is we’ve been tracking for now eight years, what I call member activity.

PAULA: Okay.

ADAM: So how active are members in programs?

ADAM: And that is a key metric, in fact, is one of my favorite statistics from other conversations you and I have had.

PAULA: Yeah.

ADAM: And that member, loyalty managers around the world have many ways of measuring success.

PAULA: Yeah.

ADAM: And one, and perhaps one of the most important ones, besides revenue and return on investment and a few others, one of the most important is how active are their members.

PAULA: Yeah.

ADAM: However they define them.

PAULA: Yeah.

ADAM: And I’ve seen a steady decline.

ADAM: In fact, the current statistic or measure, Quodita, we studied is sitting at 43% said they were active in all of their programs.

ADAM: And that’s declined over eight years.

ADAM: So it’s a little bit sobering, but it’s also a wake up call.

ADAM: You know, some people listening here will say, well, that’s okay.

ADAM: My member engagement or active is at 70%.

ADAM: Well, good luck and give me a call afterwards and tell me what you’re doing.

PAULA: Yeah.

ADAM: But that is, so that to me is one of those benchmarks that every loyalty marketer should think about.

ADAM: And that keeps me honest and keeps everyone else.

ADAM: The other trend that I’ve been tracking and it’s more about this concept of loyalty versus loyalty program.

PAULA: Yes.

ADAM: Now, I’m a big believer in that loyalty is not a program.

PAULA: Yeah, yeah.

ADAM: And loyalty is an outcome.

ADAM: And I’ve been studying for the last five years in the study about what I call the 11 dimensions of loyalty.

ADAM: So I call them, the two dimensions, I call them behavior and belief.

ADAM: And there’s a lot of what I call layers underneath that.

ADAM: So transactional loyalty, emotionality, but I call them behavior and belief.

ADAM: And I’ve heard many of your podcasts, people talk about this, but we’ve been studying these 11 dimensions to see how they’ve been tracking and moving.

ADAM: And in 2021, I’m seeing a little bit of a move away from what I call behavioral loyalty, which is the transaction, more into the emotional connections and dimensions.

ADAM: Now, transactional is still number one and two, that hasn’t moved, but it is slowly, it’s slowly dissipating into what I call the belief loyalty.

PAULA: Yeah.

ADAM: So that I think is another thing for the wider loyalty community to always ask themselves, loyalty versus loyalty program.

ADAM: And I’m a true believer that they are different.

PAULA: You’re totally right, Adam.

PAULA: And I’ve often made the point on the show that the reason that this podcast is not called Let’s Talk Loyalty Programs is exactly that.

PAULA: So this is about what I would say is the emotion of loyalty, what you describe as the outcome of loyalty.

PAULA: And to me, surprisingly, for example, one of my most listened to shows has nothing got to do with points or prizes or any of our mechanics.

PAULA: It’s actually about the concept of simplicity.

PAULA: So I’m sure you have plenty of views about that as well.

PAULA: But again, if there’s a way to drive loyalty from customers, actually, well, just make it easy.

PAULA: It’s something that I’ve learned along the way.

PAULA: It shouldn’t be complicated.

ADAM: And then, you’re right, I do study some of the mechanics of programs.

ADAM: And my little mantra there is what I call SPD, Simple, Personal, Valuable.

PAULA: Simple, Personal and Valuable.

ADAM: I also study that and ask members how they rate the experience around simplicity, personalization or being personal and how valuable the program.

ADAM: Now, again, I’m not surprised to see that value comes through.

ADAM: Simplicity will be for members as it is for interns.

ADAM: So, I agree with what you’re saying there.

PAULA: Yeah.

PAULA: And there’s lots of different ways that simplicity can come through, Adam.

PAULA: But just because you mentioned program structures, that was one of my favorite parts of reading the Executive Summary for the report, because it reflects some of the work I’ve done in the past.

PAULA: So maybe it’s just my ego.

PAULA: But it’s always good validation, because again, there’s an eternal debate, I think, in our industry about the value of points, the value of gamification, the value of partnerships.

PAULA: So I’d love maybe just to talk about any conclusions around that whole area of program structure.

PAULA: And again, I know it’s predominantly Australian consumer research, but again, I think it will give food for thought to listeners in all markets around the world.

ADAM: Yeah.

ADAM: Now, when we talk about, thank you for asking that one, when we talk about program structure, as you say, we’ve got to look at a whole range of elements.

ADAM: And in every research we do, we do look at things like tiering versus no tiering, subscription versus free.

ADAM: We look at immediate rewards for saving up for the future.

ADAM: We look at gamification as a structural element.

ADAM: This year, we looked at adding partnerships into the ecosystem of a program.

PAULA: Yeah.

ADAM: Do members want to be rewarded outside of the program or only from within the ecosystem of the brand?

ADAM: So we look at a myriad of different program structures.

ADAM: I don’t know which one of those you want to pick on, but…

PAULA: So many.

ADAM: There are so many.

ADAM: And structures of programs, there are many.

ADAM: I was particularly interested to understand where partnerships are going with programs.

ADAM: That seems to be the hardest area at the moment, everyone saying, let’s add value to our members.

ADAM: Let’s bring in partners from outside and add more to the life of a member.

ADAM: So I asked this leader in the research, do you prefer to be rewarded from only within the brand’s products and services and offerings?

ADAM: Or do you prefer, would you like to see offers from external?

ADAM: And I try to keep an open mind.

ADAM: I knew I had a feeling what would happen, but I was neither surprised nor I was delighted, but not that surprised to see that they want partnerships.

ADAM: So they want added value.

ADAM: Members want that extra outside of a brand.

PAULA: And that is exactly the conclusions that I always had, again, Adam, with kind of blind research talking to people because we were doing programs entirely based on partnerships.

PAULA: When it came to rewarding, certainly our members, we found that there was sometimes this perception that if you reward people just with your own core product, and it was in the telecoms industry in this example, they sometimes felt that that was a little bit lazy, that, you know, okay, you know, that’s fine.

PAULA: That’s kind of expected.

PAULA: And I know you’re a big fan of joy in terms of the creating moment.

PAULA: So we’ll definitely need to talk about that.

PAULA: But the research that we had, for example, and again, it was one company at one moment in time, but there was a triple benefit, as in it was three times more impressive to a member if they had, if they saw a member, sorry, a partner reward versus our own core.

PAULA: We used to call them core rewards versus third party rewards.

PAULA: So I definitely think that that’s something that’s coming in through in your research.

PAULA: And before we talk about joy, we can’t skip over the subscription versus free Adam, because that’s a that’s a hot topic.

PAULA: I was speaking at an event myself this morning and it’s, you know, they said, what’s the next big mega trend?

PAULA: And because it was a non-loyalty audience, I exactly said paid loyalty, certainly in mature markets is exploding.

PAULA: Giving the example in my experience of Panera Bread and the big coffee chain and cafes in the US.

PAULA: So what did Australian customers say about paid loyalty versus free loyalty programs?

ADAM: Yeah, so you’ve got to contextualize this very carefully, because in a research study, you don’t prove the value.

ADAM: So you don’t, you know what I mean, with paid or subscription, the value has to be there.

ADAM: No question.

ADAM: And you’ve got to prove the value.

ADAM: So if you’re asking somebody to part with money for a range of benefits or ongoing, you know, savings, you got to prove that value.

ADAM: It’s got to be overt.

ADAM: And so in a study like this, we don’t have the pleasure of saying, you know, pay $17 a month.

PAULA: Here’s an example.

ADAM: So we just asked very straightforward question, which is, you know, do you prefer a program that has free membership with access to a limited range of benefits and savings versus a program with a subscription membership that provides access to a extended range of benefits and savings?

ADAM: We’ve got to give context to the results.

ADAM: Because the result is overwhelmingly that members want a free program.

PAULA: Yeah.

PAULA: But you’re right.

PAULA: In that context.

ADAM: Absolutely.

ADAM: Because there’s no value proven by the proposition, yeah?

PAULA: Yes.

ADAM: Perfect.

PAULA: Yeah.

ADAM: So what this says though is subscription programs and pay programs are a huge benefit for business.

PAULA: Yeah.

PAULA: Yeah.

ADAM: For a whole range of reasons.

PAULA: Yes.

ADAM: Benefit for members has to be proven.

ADAM: And as I’ve said, keep showing the value.

ADAM: And in fact, we’ve just seen a big launch of Uber, of an Uber paid program in Australia now.

ADAM: Where I think it’s around $14.

ADAM: In fact, my son, who’s a big Uber user, was, he said, Dad, do I use Uber enough and Uber eats enough to pay them $14 a month in order to get enough savings back?

ADAM: Because I think it was 10% back on rides.

ADAM: And look, I don’t know all the details, so anyone can go online and check them out.

PAULA: Yeah.

ADAM: So we had to do a quick calculation to say, if you pay $14 a month, are you spending enough with Uber and Uber eats to override the $14?

PAULA: To justify the spend?

PAULA: Yes.

PAULA: Yeah.

PAULA: And I mean, what better way than to go to your dad, who’s a loyalty expert and say, Dad, can you do the spreadsheet, please?

PAULA: So what was your conclusion?

PAULA: Even better.

ADAM: I just said, you go do the numbers.

ADAM: But I said to him, you’ve got to make sure you spend enough to do it regularly enough, which I know he does, unfortunately, I’m paying for it.

ADAM: But they’re in line with exactly the point about paid or subscription programs.

PAULA: I think it’s a very, very well made point, Adam.

PAULA: And I know there is no such thing as a magic wand.

PAULA: What I would say is, I recently wrote an article from the consumer perspective about the benefits of subscription.

PAULA: Now, clearly, I’m biased because I like innovation and I think it’s kind of cool and sexy.

PAULA: But genuinely, I think human psychology, particularly at a time like now, is that people want certainty and they want consistency.

PAULA: So when you talk about, again, the one I’m familiar with Panera Bread, $8.99, excuse me, for unlimited coffee throughout a month is an extraordinary level of certainty and consistency for a customer.

PAULA: But to your point about the business, and again, I was just looking at all the numbers this morning, 70% of those subscribers increased their spend on food.

PAULA: So there is an incredible business case, again, in that example.

PAULA: So I’ll have to try and get Uber on the show.

PAULA: So thank you for exploring the whole point about subscription or paid loyalty programs.

PAULA: And the other one that I definitely saw that you had some interesting conclusions, and I want to get your, you know, I suppose your expert perspective, whether it compares or contrasts with what your actual members said or your respondents said.

PAULA: And that’s around gamification, because I do find gamification, again, a fascinating strategy, definitely not one that fits everyone.

PAULA: But what I saw coming through in the report was that consumers sound underwhelmed by this as a strategy.

PAULA: But what’s your view, is that your conclusion and what’s your, again, professional conclusion on gamification?

ADAM: Again, another topic within the whole context of increasing engagement within a program.

ADAM: You know, the purpose, we’ve got to go back to the strategy and the purpose of why put gamification within the context of a program.

ADAM: And they can prove to be massively successful and it depends on how successfully put together the program.

ADAM: I mean, the gamification is and the psychology of them and because gaming is in our DNA.

ADAM: It’s in loyalty, isn’t it?

ADAM: And gamification just lifts it higher.

ADAM: There’s certainly a place for it.

ADAM: It’s just got to be put into context of who the customer is, remembering the audience and what it does to engage with the program.

ADAM: But you’re right, the results weren’t overwhelmingly positive in terms of them playing, include gamification in programs.

ADAM: I think only 34% said they were interested, so that leaves the rest either not interested or neutral.

ADAM: So, let’s pretend we go to a business brand and they say, oh, we want to do gamification.

ADAM: And I say, well, look, potentially only a third of your members, based on my research, don’t know how you do your own, would be interested.

ADAM: So, now do the numbers.

PAULA: Exactly.

PAULA: And I guess, yeah, it also comes to what third?

PAULA: Is it my Pareto third?

PAULA: Are these the VIP customers that actually love it?

PAULA: Or is it the Gen Z who are maybe saying, no, that they’re totally cynical?

PAULA: So you’re absolutely right.

ADAM: And just to add on to that, in this case, in our study, the Gen Z and Gen Y were more significantly into it.

ADAM: So to close off the loop on this one, those two generations were significantly more interested than the general.

ADAM: So back to who’s your audience and understanding where you’ll get the engagement from.

PAULA: Love it.

PAULA: Love it.

PAULA: No, again, another point very well made.

PAULA: So definitely appeals to people who I’m going to say perhaps have been educated over time, you know, with them, you know, just with life and digital life and being digital native.

PAULA: So you’re right.

PAULA: The psychology of gaming is certainly not new, but experiencing it and seeing a benefit from it and a reason to engage with it.

PAULA: That’s definitely a different conversation.

PAULA: The other really big thing, which I know is super exciting for us as industry professionals, Adam, is the leaderboard.

PAULA: So, you know, which are seen as the best loyalty programs from, again, your research consumer perspective in Australia.

PAULA: And there are two programs that absolutely lead the field.

PAULA: But there’s dramatic change happening there as well, Adam.

PAULA: So tell us exactly what came through.

ADAM: Yeah, this part of the research is for different reasons, very interesting.

ADAM: I mean, you know, the brands do like to know, you know, a perspective on what consumers say.

ADAM: And by definition, in our study, we say, who do you think is doing a very good job?

ADAM: So we don’t go into what that actually means.

ADAM: We don’t be dimenssed of what a very good job means.

ADAM: We just look for an unprompted answer to that.

ADAM: And yes, look, the two very big programs, Flybuys and Woolworth’s Everyday Rewards, have been in a tight tussle for a number of years.

ADAM: But this year, Woolworth’s Everyday Rewards jumped dramatically, in fact, significantly.

ADAM: Still came second, but just.

ADAM: So I feel as if there’s this whole what’s happening in the market, what are they doing differently?

ADAM: I don’t know specifically.

ADAM: I mean, I’ve got a focus group of one, my wife went to Woolworth the other day.

ADAM: She came rushing in.

ADAM: They just gave me a thousand bonus points.

ADAM: And I said, well, that’s because you’re married to me.

ADAM: They didn’t know that.

ADAM: I don’t think they have a flag on her to know that she said that I’m the husband of the author of the report.

ADAM: So, no, genuinely, I literally do.

ADAM: And I know this is not a video, but I’ve literally got the receipt and it says a thousand bonus points back to you.

ADAM: And we can hypothesize why, but I’m just giving you one example.

ADAM: What happens with everyday rewards.

ADAM: Now, it could be happening with flyer buys as well.

ADAM: I have no case in point.

ADAM: But there is one little data point to say, maybe they are doing something differently to lift up their program.

ADAM: Amongst others, other programs coming in every year, we’ve got new entrants, programs, this year, I’ve just got to remember, I think it’s Make a Beauty Loop, that’s right.

ADAM: Make it come in.

PAULA: Yes, yes, I can see that.

PAULA: Yes.

ADAM: Yep.

PAULA: Okay, so new entrants.

ADAM: It’s always interesting for me to see which brands are coming in.

ADAM: Ultimately, I just had a chat with another brand that didn’t feature this year and phoned me and said, well, why?

ADAM: And I said, well, I don’t ask why, you should do your own research.

PAULA: What category would that be in, Adam?

PAULA: Can you say the category that that’s?

ADAM: No, I think it will be too obvious if I say so.

PAULA: Tell me off-line.

ADAM: The point I’m making is, that’s just one part of the whole study and it creates a lot of interest naturally.

ADAM: As a strategy person, I think there’s so much more outside of that.

ADAM: But yeah, I thought that story back to the surprise of the life.

PAULA: Well, you know what?

PAULA: I think it’s good for both brands as well, Adam, because flybys have been on the program.

PAULA: It’s an extraordinary program, hugely well-respected.

PAULA: And so I’m just looking at your numbers, in fact.

PAULA: So last year, 30.8% of people said, you know, that that was the program doing a very good job.

PAULA: And Woolworths Rewards was 19.4.

PAULA: So kind of good 10 percentage points behind.

PAULA: And as you said, then first of all, clearly Woolworths Rewards was rebranded.

PAULA: So it’s now, I believe, called Everyday Rewards.

PAULA: But the margin is so tight now.

PAULA: So flybys is showing 29.7%.

PAULA: And the Woolworths Everyday Rewards program, literally just behind, as you said, 28.9%.

PAULA: So clearly they’re doing something right.

ADAM: Yeah.

ADAM: And I went back to my analyst and I said, please check the numbers.

ADAM: And he came back and said, nothing’s changed, Adam.

ADAM: The numbers are the numbers.

PAULA: Okay, good.

PAULA: Yes.

PAULA: Well, I mean, it proves that it’s all there to be done, Adam.

PAULA: And I think, to your point, we are strategists.

PAULA: It also means now that Woolworths Rewards is on my prospect list for, please come and be a guest on the show so we can explore and see.

PAULA: And maybe it is a case where, you know, they’re going with surprise and delight.

PAULA: And your wife might be one of, you know, a lot of lucky people who are getting a thousand bonus points and quite delighted, obviously, to have that experience.

PAULA: And actually, the other one that I know you use the terms kind of surprised and delight, but I think I was probably most disappointed, let’s say, because at the bottom of that league table, I think there was 11% said that nobody does a really good job of loyalty.

ADAM: I love somebody who actually notices the negatives, not the positives.

ADAM: In every bit of the data, there’s always the other side of it.

ADAM: Yes, that’s absolutely true.

ADAM: So again, that keeps us all honest, that programs need to continuously improve.

ADAM: And that’s where the rest of the insights in the study.

ADAM: And in fact, talking about is a great question, Paula, because we can segue straight into, you know, our loyalty programs actually improving.

PAULA: Yeah.

ADAM: And we do ask that and we have been asking that over the years, and that’s tracking upwards.

ADAM: So they are improving.

ADAM: And the three areas that are improving according to members are number one, the earn rate seems to be getting better.

ADAM: It’s the same program, the earn rate is getting a bit better.

ADAM: Number two, this is general.

ADAM: Number two, they say simplicity.

PAULA: Wow, back to the, great news.

PAULA: Yes.

ADAM: Are they improving?

ADAM: The third area of improving in the use of technology.

PAULA: Ooh.

ADAM: So that’s great.

ADAM: And program managers are doing a good job in improving the value, the earn rate.

PAULA: Yeah.

ADAM: They’re doing a good job in simplifying their programs because we’re all tired of being of mental gymnastics.

ADAM: And the third is, and they are getting into technology and everything else.

ADAM: So those are all, that’s all good news.

PAULA: Yes.

ADAM: Then we asked, and I think this is also important for managers or programs around the world.

ADAM: We then said, well, where do you think programs need to improve in the future?

PAULA: Of course.

ADAM: So the same sort of contextualized options were given and the three that come up as where they need to be improving in the future.

ADAM: Number one, which I’m not surprised is earn rates.

ADAM: So keep giving me more value.

PAULA: Yeah, I’m greedy.

PAULA: So that’s inevitable.

PAULA: Number one, more value.

ADAM: Number two was more surprise and delight or joy.

ADAM: So seeing that one come up is more surprise and delight.

ADAM: And then third was more non-financial rewards.

ADAM: So that’s a great call out to loyalty program managers to start adding more non-financial ways of rewarding and recognizing their members.

ADAM: What’s surprising is, it’s been said so many times, it still works so powerful.

ADAM: My favorite term out of that is joyalty.

PAULA: Yeah, tell us.

ADAM: You heard me talk about joyalty.

PAULA: I have had them.

ADAM: It’s not my word.

ADAM: I got it from a book I read on Amazon.

ADAM: The book was called Brand Currency.

ADAM: But I gave it its own definition.

ADAM: So I’ve borrowed the word, but I’ve created my own definition of joyalty in loyalty program land.

ADAM: And it’s your customer’s feeling of maximum joy and delight from one or a series of moments of magic delivered by your brand.

PAULA: Beautiful.

ADAM: So that’s my little definition.

ADAM: People can rewind the back and listen to it.

ADAM: The more moments of magic that we put into our programs, the emotional connection drives goes up and all the other benefits come out of it.

ADAM: So I was pleased to see the depth into how programs could improve in the future.

PAULA: Yeah, great.

PAULA: And again, it’s probably, in some way a reflection of the mindset of the current scenario of life can feel a little bit difficult and challenging a lot of anxiety around.

PAULA: So what can we do as brands and businesses to counteract that?

PAULA: And again, a point I often repeat about being loyal to your customers.

PAULA: I think if you do build in the surprise and delight strategy, it does come back.

PAULA: Again, it takes patience, it takes time.

PAULA: And in my experience, it’s hard to build an entire proposition around surprise and delight, because then you can’t promise anything.

PAULA: So yeah, it kind of, it’s almost like the cream on top of something that can be enjoyed and looked forward to and everything.

PAULA: So definitely, loyalty will definitely endorse that one.

PAULA: I thought it was your word by the way.

PAULA: So well done.

ADAM: I just wanted to make sure I want to give reference where it comes from.

ADAM: I’ve defined it differently.

PAULA: OK, OK, that makes sense.

PAULA: The other one I love, actually, and you touched on it, I suppose, just as one of the areas of improvement, Adam, the use of technology, which I often think is lost and there’s often not a consumer benefit to better technology or an understanding.

PAULA: But my favorite or one of my favorite technologies is the whole piece around card linking.

PAULA: So I can see there’s been incredible.

PAULA: And what I might ask you to do, Adam, actually, just before you comment on it, is just to explain card linking as it’s, you know, executed, let’s say, in the Australian market.

PAULA: Because I was thinking about card linking versus co-brand cards and my different experiences with how they compare and contrast.

PAULA: And, you know, because ultimately, again, we all want the maximum value.

PAULA: And so I get, you know, I have a co-brand card, so I kind of get points on everything.

PAULA: But yet card linking is super important.

PAULA: And I love the simplicity of that.

PAULA: So would you, I’d love you just to explain the card linking as it came through in the research and exactly what came through.

ADAM: So card linking is not the word we use in the research because consumers wouldn’t understand that.

ADAM: That’s a strategy, technology, loyalty people speak, yeah.

ADAM: But what we explain it as the integration of payment into a mobile app with rewards.

ADAM: So it’s an all in one experience is you tap, you get your rewards and you pay at the same time in whatever form or function that is.

ADAM: We call it card linking.

ADAM: They see payment integrations.

ADAM: That’s how we explain it.

ADAM: Nice and to me has jumped 400% in preference since we started asking that same question five years ago.

ADAM: Wow.

ADAM: So by definition, as I’ve explained, that has become a huge preference for members.

ADAM: Although it’s still aligned second to the loyalty card.

ADAM: Remember our earlier conversation?

ADAM: Because it’s all in the same repertoire.

ADAM: It’s growing dramatically and in fact, it reminds me of a quote that Kevin Kelly, who’s a co-founder of WIDE magazine, he says something to the effect of the future happens very slowly and then all at once.

PAULA: Yes, yes, yes.

PAULA: My goodness.

PAULA: Yeah, Kevin is a phenomenal mind.

PAULA: Yes, it is.

PAULA: It’s extraordinary.

PAULA: You know, and again, I’m not even sure all industry professionals are using the same kind of terminology around Cardlink Loyalty, but I think what we all know is that, you know, there has to be an identifier, as you mentioned earlier, and why not make that the payment card?

PAULA: You know, why make it anything else?

PAULA: You know, that the only guaranteed piece of, you know, transaction that’s going to happen is you’re going to get paid.

PAULA: So let’s make that the single point of truth.

PAULA: So I am a huge fan of that.

PAULA: So great to see it coming through in the research.

PAULA: I think maybe last or maybe second to last, Adam, I wanted to ask about the Covid piece because we can’t not discuss, you know, any implications on Covid-19 to how Australian consumers say they’re feeling in terms of their loyalty to brands.

PAULA: What kind of came through?

PAULA: I know you did some explicit questioning around this.

ADAM: Yeah, we needed to do that only because in 2020 when we did the study, Covid hadn’t hit.

ADAM: And in fact, I was in a little bit of a challenge in early 2020 when the results came out.

ADAM: And I said to my researcher, this is pre-Covid.

ADAM: And she said, don’t worry, Adam, be patient.

ADAM: Let’s do it next year, 2021, and see if there’s any changes or anything like that.

ADAM: So that’s sort of the background to it.

ADAM: But specifically, I did look at the influence of what I call loyalty programs while Covid-19 prevails.

ADAM: And so it’s still around.

ADAM: And so we’re asking members, you know, did being a member of a program actually influence you through this period and your brand loyalty?

ADAM: So does the program actually have an influence?

ADAM: You know, you know the brand, you know the program, the certain things like you said, the certainty and so on.

ADAM: And yes, we did find that while Covid-19 does prevail, 48% of the members in our study said that they tend to stay loyal to a brand whose program they’re a member of.

ADAM: So the influence of a program whilst the situation is around us, the program does have an influence.

ADAM: And that does jump up dramatically.

ADAM: I was so surprised that Generation Z, I think 63, I call them now the loyal, the Loyalty Generation.

PAULA: Oh, cool.

ADAM: A little word.

ADAM: Loyalty Generation, you know, 63% of them said, yes, I stay loyal to a brand during this period whose program I’m a member of.

ADAM: Now, again, I didn’t dig deeper into the why and all of that.

ADAM: It’s just more a benchmark to say that programs have an influence.

ADAM: So, you know, do them well, loyalty program managers.

PAULA: Yes, yes, for sure, for sure.

PAULA: And you did make exactly that point.

PAULA: I’m not sure if it was the same section, Adam, but I just have a note that 62 percent of your respondents said, yes, a brand does need a loyalty program to keep its customer loyal.

PAULA: And so and I know that’s always debated as well.

PAULA: And I’ll challenge you with it because it’s the one that we’re always defending, I would say, in boardroom meetings.

PAULA: The classic example of the opposite perspective is, well, what about Apple?

PAULA: I’m loyal to my phone and whatever.

PAULA: So when they don’t have a loyalty program, I can’t imagine a scenario in which Apple points is a thing.

ADAM: A little bit biased, you know, I’m going to say straight away.

ADAM: But I also create a bit of a balanced point of view because that question has been asked since 2015.

ADAM: So for a period of time, and it has grown over that period of time.

ADAM: But there are people who say, no, brands don’t need a program.

ADAM: Just be brilliant at the basics.

ADAM: Great service, great product, great pricing.

ADAM: You don’t need a program.

ADAM: So even as an independent consultant who loves loyalty and loyalty programs, the difference is that not everybody needs a program.

PAULA: Yeah, you’re right.

PAULA: And again, it’s up to us to have our kind of, you know, jewel hat on to, you know, the point you made earlier around loyalty is the outcome.

PAULA: So how can we help people achieve that?

PAULA: And whether it is around something like helping them simplify or whatever, there’s lots of ways that might not mean that we’re building points or games or whatever else that we talked about earlier.

PAULA: Well, I think, Adam, we’ve been through certainly for me, all of the extraordinary highlights of the report.

PAULA: I’m pretty sure we could do at least another hour on it.

PAULA: But what I’m most keen to do is make sure that people know where to find the report.

PAULA: What I’ll do is I’ll ask you maybe just to mention that, and then I want to summarize, I suppose, maybe the couple of key points that I picked up, Adam, and then we’ll make sure people know where to find you.

ADAM: Yeah, great.

ADAM: Well, look, I really want to thank you.

ADAM: You’re doing a tremendous job for the community.

ADAM: The more we talk about it, find ways, challenge each other, the better we can all be collectively.

ADAM: So just a shout out to you to say thanks.

ADAM: The report is available at my website, thepointofloyalty.com.au.

ADAM: And as you said, you know, this year, I’ve got the Australian version, New Zealand version.

ADAM: I’m about to put up on to my site, I think, early next week.

ADAM: Yeah, well, it’ll be out.

ADAM: Is the combination, the comparison reports as well.

ADAM: And that is a complimentary executive summary.

ADAM: And then if they want to part with some dollars, $370 Australian dollars for the report, the full report, the 80 odd pages.

ADAM: And then I’ll also come along.

ADAM: One of the things that I offer some brands that have taken it up is I do a present, what I call a personal presentation of the report.

ADAM: It’s also got a value on it.

ADAM: And they can find that on the website where I go to a boardroom and sit with marketers for a period of time and go through the whole report, similar to what we’ve done now and discuss it.

PAULA: Well, certainly from my perspective, Adam, that’s probably the best 370 Australian dollars or any dollars, in fact, that any loyalty professional could spend.

PAULA: So I highly recommend people do go and get the detailed report.

PAULA: So certainly we’ll make sure that in the newsletter for this show and again on all of the website links that we have links to you and to the report to make sure it’s accessible.

PAULA: I always like, you know, when I read research to kind of say, well, what did I learn?

PAULA: So I was scribbling notes there as you were and giving us your website address, Adam.

PAULA: So for me, you know, the plastic cards on the rise, we can’t get away from the shock factor that certainly in Australia, there seems to be a renewed interest.

PAULA: So we’ll be dying to see next year whether that continues.

PAULA: And I think the watch out is the fact that activity levels are the lowest they’ve been, as you said, in eight years.

PAULA: So I think that’s our caution not to get complacent.

PAULA: And my favorite really is the whole piece around card linking.

PAULA: So again, it’s something that I preach whenever I’m asked for, you know, what can we do?

PAULA: I definitely think it’s a really, really powerful strategy.

PAULA: And consumers are obviously loving it.

PAULA: So is there anything else, Adam, that you wanted to mention before we wrap up?

PAULA: I think we’ve done it all.

ADAM: I think you’ve done a brilliant job in questioning me, challenging it, discussing it.

ADAM: There is so much, you know, people shouldn’t enjoy it.

ADAM: It’s a good read if I’m biased.

ADAM: Thank you very much once again.

PAULA: Wonderful.

PAULA: So Adam Posner, Chief Executive Officer and founder of The Point of Loyalty.

PAULA: Thank you so much 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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