#246: Getting Loyalty Unstuck in 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.

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PAULA: Hello, and welcome to episode 246 of Let’s Talk Loyalty, a discussion all about the current state of loyalty.

PAULA: I’m joined for this super interesting conversation by Phil Rubin, founder and principal of Grey Space Matters, a US-based advisory firm focusing on driving strategic growth.

PAULA: Phil is recognized as an industry thought leader.

PAULA: With more than 25 years’ experience, driving growth for leading global brands.

PAULA: Most recently, he led the Global Insights and Strategic Partnerships team for Bond Brand Loyalty, which he joined after Bond acquired Ordialogue, the leading independent customer loyalty firm that he founded in 2006.

PAULA: Phil’s clients have included Adidas, American Express, Citigroup, Nike, Disney, and Estee Lauder.

PAULA: And he joins me today to share his latest ideas that stakeholder capitalism and profitable business practices can be a force for good.

PAULA: So, Phil, welcome back to Let’s Talk Loyalty.

PHIL: Thanks, Paula.

PHIL: It’s great to be back with you.

PAULA: So much has changed, Phil, but you’re still a very wise soul in the world of loyalty.

PAULA: So it’s fantastic to be talking to you again today.

PHIL: You talk to a lot of people around the world.

PHIL: So I am always grateful to be thought of as having something at least semi-relevant to say.

PAULA: For sure.

PAULA: Great.

PAULA: So listen, we are here today to talk about what I’m calling the state of loyalty, which I know is your latest thought leadership and ideas around a lot of the things that are not working in our industry.

PAULA: And I suppose talking through ways to think them through and hopefully drive the industry forward.

PAULA: So some controversial comments, I will say, in the article that you’re working on, which is always good for conversation.

PAULA: But before we get into the state of loyalty, as you know, I always love to start the show now asking about our favorite loyalty programs.

PAULA: And again, you’ve got an incredible career to date.

PAULA: So what would you say right now in the middle of 2022 is your favorite loyalty program, Phil?

PHIL: It’s always such a good, it’s always such a great question.

PHIL: And often, even for me, difficult to answer.

PHIL: But I will proffer up what is now called Adi Club from Adidas or Adidas, depending on where you are in the world.

PAULA: Sure.

PHIL: Obviously, an iconic global brand with an incredible heritage up against formidable competition from Beaverton, Oregon.

PHIL: I’m talking about Nike.

PHIL: And so it’s the three stripes versus the Nike swoosh at the lead in that, in their category.

PHIL: Adi Club’s taken a different approach than Nike has taken with membership.

PHIL: And they’ve evolved the program.

PHIL: They’re continuing to aggressively evolve the program.

PHIL: They’re doing so many things that I think are really smart.

PHIL: But ultimately, if you look at the corporate page, there’s the Adidas Corporation page has a website, sorry, has a section dedicated to its strategy.

PAULA: Okay.

PHIL: And their strategy is built around the customer.

PHIL: They have a stated goal of realizing 500 million members in AdiClub over the next couple of years, which is a stunning number if you think about how many people that represents globally.

PAULA: Yeah.

PHIL: But interestingly, they’re not taking an overly promotional approach.

PHIL: They use points as a mechanism to qualify for tiers, and the tiers unlock different benefits.

PHIL: They’re starting to add redemption where points are sort of like options or provide access to exclusive product and things like that, which I would expect is the beginning or just a continuation of their evolution.

PHIL: But they’re branding Adi Club so that we just had our hockey playoffs, and you couldn’t see a hockey game without an Adi Club banner along the ice.

PHIL: But what’s really interesting is how they’re using it as a vehicle for integration, for integration from a corporate strategy standpoint, reflective of something that I’m also very bullish on, which is the extension of stakeholder capitalism to stakeholder loyalty.

PHIL: And for Adidas and Adi Club and their products as well, they’ve made a notable commitment to sustainability.

PHIL: So they’re selling shoe subscriptions that are recycling, that include recycling.

PHIL: They’re selling shoes that are made of recycled products.

PHIL: I just got an offer for a pair of running shoes, and 40% of the material is recycled in these shoes.

PHIL: They just ran a promotion through their running app, formerly called RunTastic, where for every amount of workout logged across certain categories on the app, they were making donations that removed plastic from the oceans.

PHIL: So you were literally running to clean and partnering with Adidas, where their commitment extended to spending money to clean the oceans, which is their recognition of the importance of sustainability, but also really doing that in an integrated way, where it’s not just a marketing campaign, but it’s a marketing campaign tied to actual product, but equally important tied to what Adidas is doing to clean up the plastic from the oceans and make our oceans more sustainable and ultimately our planet more viable long term.

PAULA: Wow, there’s so much in that, Phil.

PAULA: And thank you for bringing a very innovative program to answer that question.

PAULA: Definitely Adidas is one that I’ve admired from afar.

PAULA: We’d love to have them on the show if they’re listening, of course, at any point to talk about Adi Club.

PAULA: It sounds extraordinary.

PAULA: And I suppose I was reflecting as you were talking through the proposition and the kind of sense I’m getting in terms of what they’re aiming for is obviously huge ambition.

PAULA: And so that idea of setting a, I think they call it a big hairy audacious goal is the term for something like a 500 million member program, but also built around integrity.

PAULA: So I love that idea because to me, Phil, there’s so many loyalty programs that are built, particularly with the idea that the business wants the customer to be loyal to them.

PAULA: And that’s fair enough.

PAULA: But I know that you are probably the first person who was talking about this idea that actually the company’s responsibility is to be loyal to their customers in the first instance before we can expect it back in return.

PAULA: Would that be fair to say?

PHIL: Yeah, absolutely.

PHIL: That was the idea of, we originally introduced this back in, I think, 2015, which was recognizing, I mean, we still have a lot of the same challenges in the industry.

PHIL: Which is why my controversial or hopefully at least provocative comments in this latest piece will resonate and be appreciative.

PHIL: And if nothing else, start some good debate.

PHIL: But it’s literally what it was seven plus years ago.

PHIL: We introduced, we recognized that loyalty was stuck.

PHIL: And I think it’s still largely stuck, even though there are leaders like Adidas and others who are doing these great things.

PHIL: But the idea was the model has to flip.

PHIL: Everybody’s doing the same thing.

PHIL: And nobody’s actually being loyal to the customer.

PHIL: And we introduced the idea that if you’re loyal to the customer first, if you as the brand pay it forward to the customer, the customer is going to feel that loyalty.

PHIL: And that is where the emotion and the definition of loyalty comes from.

PHIL: And if we just think about it in very simple terms about the relationships that we have, when people pay attention to us, we feel good and we in turn pay it back to them.

PAULA: Totally.

PAULA: Absolutely.

PHIL: And that’s what makes great relationships and is sort of the virtuous circle of relationships.

PAULA: Yeah.

PAULA: Yeah.

PAULA: And I do think you’re absolutely right, Phil.

PAULA: In very many ways, the industry is stuck.

PAULA: And I know the context is, you know, huge complexity.

PAULA: We don’t need to go into all of the reasons why the world is in such a state of conflict.

PAULA: But, you know, it’s important to recognize that.

PAULA: But I think what struck me is that you’re talking about, you know, in fact, loyalty programs and looking at, you know, customers in general in some ways still looks like the last 40 years, like not a lot has changed or in dramatic enough ways, like the example we just talked about.

PAULA: And almost we’re looking back to the 1970s and seeing the same expectations, the same tired principles.

PAULA: So tell us a bit about why do you think we’re in this current state of loyalty?

PHIL: Well, on one level, loyalty is not fully understood.

PHIL: And there’s still in many, for many people, for many organizations, they don’t understand the difference between loyalty, a loyalty program and loyalty marketing.

PHIL: And if I go back to when I started doing this for an airline, the value of growing our program was that we had more people in our database that we could market to and be very targeted in terms of hitting the right customers with the right message at the right time.

PHIL: Very simple, but in an analog world, where there were fewer advertising options, where digital really was not a thing in 1989.

PHIL: So you didn’t have social media, you didn’t have cookies.

PHIL: You didn’t have websites, and even email, and even then cell phones were a very expensive, not very pervasive device.

PHIL: And of course, there were no such things as text messages.

PHIL: But if you go back to the notion of the loyalty program is really an enabling, an enabler to develop a permission-based relationship with the customer, where you’re saying, look, we want to track you.

PHIL: And in exchange for tracking you, we’re going to do things that are relevant to you, that give you a better customer experience, that give you more value when you interact with our brands.

PHIL: That’s really what loyalty marketing is.

PHIL: So the programs enable loyalty marketing, which back to if the brand’s going to be loyal to the customer, then a simple way to think about what loyalty marketing is, is it’s the brand paying attention to the customer and treating her or him accordingly.

PAULA: Absolutely.

PHIL: Which is the idea of relevance.

PAULA: Totally.

PAULA: And it sounds like what you’re saying, Phil, is that in some ways, technology is getting in the way, and because the focus on the relationships is facilitated through technology, and dare I say it, through social media and everything else, our phones and everything else.

PAULA: So it seems like this level of complexity is not yet quite serving the customers in the way it was originally expected to.

PHIL: I would say for a majority of brands, yes.

PHIL: And that serving of the customer still is too limited to transactional value.

PAULA: Yeah.

PHIL: And if you think about the expense, the investment, the amount of capital and operating expenses that go into standing up a loyalty program, if all you’re going to do is deliver transactional value, it’s a really, really expensive and inefficient way to provide discounts.

PAULA: Sure.

PHIL: And the Bed Bath and Beyond example, which has been in the news the last day because they got rid of their CEO because he couldn’t get them out of the 20% off all the time business, is the antithesis of loyalty.

PHIL: By definition, a loyal customer is willing to pay a premium or go out of their way to do business with you.

PHIL: And so when you pull back a little bit, it’s counterintuitive, and the brands that get it, Adidas is a great example.

PHIL: Their program is very limited, very judicious in terms of discounts or price promotional value, but more focused on integrating the corporate strategy, the brand strategy, and recognizing the activity of members and demonstrating through allowing members to migrate up and down in tiers, that’s a great way to show customers that you’re paying attention to them.

PAULA: Yeah.

PAULA: And sometimes it is that simple, isn’t it?

PAULA: We want to be seen, we want to be noticed.

PAULA: You mentioned exclusivity as well, for example, in the context of Adi Club.

PAULA: Just that piece alone, I mean, certainly every teenager on the planet wants that early access piece and probably every other demographic as well.

PAULA: So that insight about making sure that they know what these people really want to have access to is just an extraordinary way to say, yes, you’re being seen.

PAULA: We’re capturing your data, but actually we’re focused on you as an individual.

PHIL: Absolutely.

PHIL: And I mean, taking to extreme, and this is both an opportunity and a challenge in our social media like and follower driven world.

PAULA: Yeah.

PHIL: I mean, if you really think about if somebody likes your content in social media, that’s not such a large deviation from their making you feel recognized for what you posted.

PHIL: Getting that little bit of dopamine release.

PAULA: Totally.

PHIL: And then you’re creating this focus just on that because that’s the recognition that people are craving.

PAULA: Totally.

PAULA: So do you think loyalty is stuck, Phil, because we’ve become preoccupied with, as you said, the transactional piece, the capturing of data and all of the power that the technology promises us, as distinct from maybe the mentality of loyalty at a more strategic level?

PHIL: It’s really both.

PHIL: There’s no question that this 40-year-old paradigm of earning points and redeeming points for free stuff isn’t going away.

PHIL: And I’m not saying it should go away, but that’s the means, not the end.

PHIL: And it’s got to be more multidimensional than that.

PHIL: That’s partly…

PHIL: So the legacy program structures and a lot of the legacy technology is built around that legacy paradigm.

PHIL: So it’s going to continue unless or until, and this gets into the ethos of it.

PHIL: It’s ultimately about people and humanity.

PHIL: And the people part really starts with company leadership, which then sets the priorities and says, okay, the customer is a priority for the business, which the corollary to that today is as well as other stakeholders, especially employees.

PAULA: Yeah.

PHIL: We’ve seen the great resignation.

PHIL: We saw the great resignation of customers during COVID.

PHIL: So there was the customer resignation during the onset of COVID, where we saw this velocity of customer defection and customer brand switching because they had reason to.

PHIL: We’ve also seen that behavior revert to what it was before COVID.

PHIL: But the people part of this equation is really what will drive getting things unstuck.

PHIL: It’s leadership from a strategy level.

PHIL: It’s making sure that people are focused on customers versus prospects.

PHIL: And maybe with the demise of cookies and some of the challenges with digital advertising and social media, some of that emphasis is going to shift from acquisition to customer management, customer development, customer retention.

PHIL: But it was Peter Drucker who said years ago, I use this quote all the time, but there isn’t a better one.

PHIL: Drucker said the purpose of a corporation is to create a customer.

PHIL: Well, if the purpose is to create a customer, then obviously, the purpose extends to retaining that customer and sustaining the relationship with that customer.

PHIL: And yes, of course, this was long ago proven that it’s 10 times more expensive to acquire a customer versus retain a customer.

PHIL: And everybody talks about that, but that’s not where CMOs prioritize their spend.

PHIL: So now you’ve got the rise of a chief customer officer who essentially is looking after the customer.

PHIL: And then you’ve got companies switching from a chief marketing officer to a chief customer officer, and then wins change and they get rid of the chief customer officer.

PHIL: But ultimately, somebody’s got to lead the charge.

PHIL: I mean, in my mind, the CEO should be the chief customer officer.

PAULA: Totally.

PHIL: I don’t know that that’s always the case, but it’s certainly the case, or at least the chief stakeholder officer, which includes customers, which includes employees.

PHIL: And I think there are people like that in the corporate leadership world at a CEO level.

PHIL: I think Mark Benioff is a great example of that.

PHIL: And he’s a big advocate for stakeholder capitalism.

PHIL: And yeah, I traded emails with him not too long ago.

PHIL: When it was leaked, when the Roe vs Wade decision was leaked.

PAULA: Okay.

PHIL: Which, of course, now is a reality that that was reversed.

PHIL: And I’m sure the world knows that’s basically changing legal precedent that was established law that basically takes away women’s rights, women’s reproductive rights, and relegates it to the state.

PHIL: And Mark had, I asked him about this relative to stakeholder capitalism.

PHIL: And he wrote, and I have his permission to use the quote.

PHIL: He said, the way I look at it is that one of my primary stakeholders is my employees, and I’ll do anything to help them, and I’ll always have their back.

PHIL: Which is, that’s the definition of him and Salesforce being loyal to its stakeholders.

PAULA: Totally.

PAULA: And it’s very powerful, Phil, when you read out that particular quote, because I think that’s what we all want to follow.

PAULA: Like, I want to follow a leader that’s got my back.

PAULA: I think we’ve all worked in the corporate world, which we know becomes obsessed with pure profitability at the expense of so many other stakeholders.

PAULA: So it’s often the employees may be underpaid, and there’s so many examples of this, or the product quality diminishes over time, or one that I’m particularly passionate about, as you know, where new customers are given better deals than existing customers.

PAULA: So all of these short-term tactics, which are maybe intended to drive quarterly revenue results, for example, to me are the antithesis of creating a sense of loyalty, either as an employee or as a customer.

PAULA: And I really feel it’s important that we do have these conversations about stakeholder loyalty and stakeholder capitalism, so we can actually start to make sure that the C-suite is paying attention, and it’s not just the loyalty world that we’re part of, you know?

PHIL: Well, there’s so many threads that connect those ideas, starting with the fact that they both require a long-term view.

PHIL: We’re not going to solve all these problems in a quarter, by the end of the quarter, much less by the end of the year.

PAULA: Yeah.

PHIL: So that’s absolutely…

PHIL: It’s important.

PHIL: You also have this erosion of trust, which is a global challenge.

PHIL: And trust has been eroded for a lot of good reasons, largely with who our leaders have been and who they are, and all those without delving too far into politics.

PHIL: But the erosion of trust in public institutions has been countered by the rise in trust in the private sector.

PHIL: So if people are tending to believe that the private sector is who to look to and trust, then that puts an incredible both responsibility, and a huge opportunity on the private sector leadership.

PHIL: And that’s where people like Mark Benioff and plenty of other corporate leaders, you’re seeing just this week Procter & Gamble, Target, doing all these things to mitigate what the federal government, at least in the US, is doing and saying, we’ve got your back if you’re part of our tribe, part of one of our employees.

PHIL: And those are bold moves.

PHIL: We saw this, some of this was happening pre-COVID.

PHIL: It got extended during COVID with some of the racial violence that we saw.

PHIL: Sadly, all these things, none of these things are getting better.

PHIL: But people, if people are looking to corporate leaders, and then the extension, and this is the stakeholder capitalism and stakeholder loyalty idea, if I’m going to have the back of our customers and the back of our employees and our communities, then we can actually solve some of these problems or help address them or at a minimum mitigate the harm that would otherwise be done.

PAULA: Absolutely.

PAULA: And what I’m hearing as well, Phil, is it’s at least to have that balanced view that it’s not all about the investors and shareholder returns anymore, that that actually has to be balanced against.

PAULA: We have to take care of absolutely the customers, the employees, and of course the shareholders as well, in order to survive and thrive in the context of what customers expect from the places they’re doing business with.

PHIL: And when you say it like that, and you think about the value of taking care of customers and employees, you’re solving for customer retention.

PHIL: And especially given the costs of acquiring and recruiting talent, you’re solving against the great resignation, which is still continuing.

PHIL: So this is what people fail to appreciate under this banner of stakeholder capitalism or my take stakeholder loyalty, is this is a simultaneous equation.

PHIL: And there are tangible economic penalties when you lose employees and lose customers.

PHIL: Not by choice.

PAULA: Absolutely.

PHIL: I’m not talking about firing customers or firing employees.

PHIL: There’s times to do that.

PHIL: But the customers employees you want to keep, all the data now suggest that the priorities, especially for employees, are mental health.

PHIL: And are those companies aligned?

PHIL: And funding, specifically, the research says, it’s not just being aligned with the values and the causes that matter to the employees.

PHIL: They expect those companies to actually fund those things, which is why you see opportunities around charitable giving and reinvesting in communities.

PHIL: And now we’re seeing, in the US at least, a lot of competition for retaining actual companies in cities.

PAULA: You’ve reminded me as well, Phil, of a wonderful blog article I read from Seth Godin, one of my favorite kind of marketeers.

PAULA: And he was talking about the fact that we’re coming to the end of the alphabet when we talk about our demographic groups.

PAULA: We’ve had Gen Z now, and the assumption is that we’ll go back to Gen A.

PAULA: But actually what Seth Godin was saying is it probably should be Gen C.

PAULA: C for carbon, C for COVID, C for climate, and overall C for connection.

PAULA: So when you talk about stakeholder loyalty, to me that’s exactly the kind of perspective that’s needed to understand that these are the issues that are occupying our staff and our customers’ minds.

PAULA: Above all, I do believe connection is probably the most powerful within that.

PAULA: But I think with all of these discussions, Phil, there’s an opportunity for loyalty to move dramatically forward.

PAULA: And I know that’s what you’re keen to do in terms of getting us all unstuck.

PAULA: So what, I suppose, would you like to be thinking about or asking our audience to start focusing on in terms of moving their organizations forward, and sharing in mind that, again, most people are loyalty directors or loyalty managers and do have a C-suite, which may be still in the older way of thinking, the stuck way of thinking that you’re talking about?

PHIL: How many hours do we have to answer that question?

PAULA: Sorry, it’s so huge.

PHIL: No, it’s a great question.

PHIL: I think Seth Godin’s got it right.

PHIL: This idea of connection is so multifaceted.

PHIL: Here’s another C to add to that.

PHIL: It’s complex.

PAULA: Totally.

PHIL: This isn’t something that’s very simple, but it’s solvable.

PHIL: I think it goes back to leadership.

PHIL: It goes back to education.

PHIL: I think one of the things, one of the challenges that we have as loyalty marketing grows, by definition, more and more people come into doing this kind of work and aren’t educated in it.

PHIL: So organizations like the Loyalty Academy and a lot of there’s some great work being done at universities around the world, both academically and in an applied science type of way, are hugely important, which brings back to education and leadership.

PHIL: One of my favorite quotes was from actually a law school professor who was doing work on corporate governance.

PHIL: But the quote is, you manage what you measure.

PHIL: So connections, all these, these are measurable.

PHIL: These are all measurable, and they’re all measurable in terms of revenue, profit and expense.

PAULA: Yeah.

PHIL: And that’s like Peter Fader and Dan McCarthy are doing amazing work in terms of customer-based corporate valuation and looking at where companies are actually increasingly publishing, especially public companies, publishing lifetime.

PHIL: They’re all TV metrics, their acquisition cost metrics, and having a level of transparency, which ought to show an investor that these companies are focused on the right levers to grow their business.

PHIL: Because at the end of the day, that’s all we’re trying to do, right, is how do you create growth that’s productive, sustainable, and profitable?

PHIL: And ultimately, going back to the sea, it’s connected to things like climate.

PAULA: Yeah, exactly.

PAULA: Yeah, all huge topics.

PAULA: Yeah, important to acknowledge the complexity, but the solvability.

PAULA: So I’m glad we have that balance of perspectives.

PAULA: And I’m glad you talked about customer-based corporate valuation as well.

PAULA: The other one that also stuck with me as well recently, Phil, is just the whole idea that acquisition is something that I think a lot of marketing officers have been obsessed with, dare I say it, over the years.

PAULA: I’m hearing it changing.

PAULA: Fred Reichelt, I’m sure you know, was on the show recently as well, the inventor of Net Promoter Score.

PAULA: He talked about his new metric, which is what he calls the earned growth rate, which is essentially, to your exact point, Phil, the idea that you can measure when people do refer a friend, essentially.

PAULA: So you don’t have to go and spend money on acquisition.

PAULA: If Phil is delighted with his Adidas products, you’re going to go and tell your family and friends all about that.

PAULA: So I love this idea that increasingly leadership is hearing these messages from all sides, that the focus on the customer and retaining the customer is the only path to long term profitability.

PHIL: When you think about the earned growth metric that Rykel talked about, and I loved that number one that you had him on, and I’ve been a huge fan of his since he wrote The Loyalty Effect, which I still think is the best loyalty marketing book written.

PHIL: Think about acquisition through existing customers.

PHIL: My first thought is, I would rather pay to acquire, I would rather pay a customer to bring me a customer than pay Mark Zuckerberg and Metta to acquire that customer.

PHIL: I mean, some of that’s philosophical, but it really is grounded in, if you’re going to invest, invest in the customer.

PHIL: Clearly, I’m totally bought into Seth Godin’s Gen-C, we’re all Gen-C.

PHIL: Because, by the way, if we think about sort of our future and having, like I can think about, like, my kids are young adults, they’re working.

PHIL: And the problem with, and this goes back to millennials and Gen-X and Gen-Y and Gen-Z, everybody wants to think of those in terms of just demographics, but they’re really attitudinal and they’re increasingly attitudinal.

PHIL: And I think that’s where Godin and the Gen-C fit.

PHIL: And the Gen-C thing is so smart because it transcends demographics.

PAULA: Exactly, exactly.

PAULA: So we’re all here to get on stock, Phil.

PAULA: What does the future hold?

PAULA: We know there’s going to be like no more cookies.

PAULA: So there’s going to be so many more challenges.

PAULA: Technology will continue to increase in its complexity.

PAULA: But what do you think is important, you know, for this future view, the ideal vision for having loyal customers as businesses?

PAULA: What do you think is the best area of focus or the way to be thinking about the future of loyalty?

PHIL: Well, I think if I reflect a little bit on just a simple idea, which is humanity, ultimately we’re talking about people being loyal.

PHIL: And when you think about people being loyal to a brand, to a corporation, it’s the people behind the corporation that drive that loyalty and instill that loyalty in the customer back to them.

PHIL: And they instill that by looking after those customers, by looking after all the other Cs, all those other connections to those customers.

PHIL: And doing that in a demonstrable way.

PHIL: And so much of what loyalty marketing is, is merchandising things that companies are doing today and sort of packaging it up into a loyalty proposition.

PHIL: As companies, especially going back to Adidas, they’re not just sending out press releases to the media or to the investment community.

PHIL: They’re merchandising their sustainability efforts into their product, into their customer experiences, into all their communications.

PHIL: And the more that a brand can do that, the more human it becomes.

PHIL: And that’s increasingly possible with advances in technology and using data to have the right kind of insights that are sort of developed around how to…

PHIL: I’ll switch from Adidas to Nike for a moment.

PHIL: Nike talks…

PHIL: They don’t use the word loyalty.

PHIL: They talk about the idea of no to serve, which is just another way of saying, you know, we need to pay attention to our stakeholders and treat them accordingly and communicate to them accordingly.

PHIL: Those are really…

PHIL: That’s the simple answer to the question.

PHIL: The complexity is in how do you do that?

PHIL: How do you get it unstuck?

PHIL: And increasingly important…

PHIL: I mean, it’s always been important, but there’s tension.

PHIL: There’s tension at all levels, and people are conflicted either in not knowing what the path is or how to get there or maybe they see the path and they don’t know how to navigate the path.

PHIL: There’s a quote I have on my website, but it was really inspired by something my father told me, and he’s a psychiatrist, which will explain a lot to a lot of people about me.

PAULA: No comment.

PHIL: Exactly.

PHIL: He said, there’s no such thing as growth without conflict.

PHIL: And it takes that, you know, how does an oyster create a pearl, right?

PHIL: Little sand gets into the oyster and it becomes a pearl.

PHIL: That’s conflict, right?

PHIL: Because that, you know, without getting into the biology of how pearls are created, that’s every bit is true for people.

PHIL: And it’s like, you’ve got to work towards resolving those conflicts with an underlying bed of trust and a common objective in order to make progress.

PHIL: And that’s, it’s not an easy thing to do, and it takes sort of the right mindset, but ultimately it takes the right leadership.

PAULA: For sure.

PAULA: I love that.

PAULA: And you’ve reminded me of another C, would you believe the word community is what I’m hearing coming through, Phil?

PAULA: Can we add that to the list?

PHIL: Absolutely.

PHIL: I’m all in on the Gen C topic.

PAULA: Brilliant.

PAULA: Brilliant.

PAULA: Yeah.

PAULA: No, there are so many ways forward.

PAULA: And again, some of these topics have come up here before.

PAULA: Certainly the likes of community has before.

PAULA: But I do think, you know, for me, what stands out is this simple idea of back to humanity.

PAULA: And I think you’ve articulated it beautifully in the fact that, you know, we’ve been through such a crazy time.

PAULA: And unfortunately, currently, tensions are probably at an all time high.

PAULA: So I do think it’s time to step back and reflect.

PAULA: And I’m really grateful that you’re taking the time to do that.

PAULA: I think there’s a lot of food for thought here, Phil.

PAULA: I’m sure we’ll be talking through a lot more of these ideas.

PAULA: What else do you think, I suppose, as we start to wrap up, we need to be reflecting on in terms of making sure we get our loyalty industry on stock?

PHIL: Well, the other C word that comes to mind is civility, but that’s not necessary.

PHIL: I don’t think there’s a lack of civility in our industry, so I’m not suggesting that.

PHIL: I was thinking about that as you were describing it.

PHIL: People need to get fired up about innovation again.

PHIL: And I think taking a broader view, and it goes back to innovation comes from understanding.

PHIL: It comes from, again, this sort of common prioritization around customers or stakeholders and learning how to think differently, being willing to take risks, albeit managed risks, and to deal with the consequences of the conflict that arises.

PHIL: And maybe this is where civility comes in.

PHIL: The commitment to resolving those conflicts in a way that you may not agree, but you’re willing to stand behind because of the trust, because of the communication, because you’re part of the same community, whether it’s inside a company or in that company’s ecosystem.

PHIL: To me, that’s a really significant opportunity.

PHIL: I used to work for a guy who was a very big risk taker and very innovative and really smart, creative person.

PHIL: He used to say the Safeway is a grocery store.

PAULA: Yeah.

PHIL: Which of course it is.

PHIL: But the implication obviously being, you got to be willing to take some risk, which goes back to the tie back to businesses, the rule of finance.

PHIL: There’s no such thing as reward without risk.

PAULA: To me, that actually goes directly back to your quote from Mark Benioff as well, Phil, because if I’m in a company and there’s an opportunity to innovate, the only safe way to do that is when you know the company’s got your back.

PAULA: And when you know that all stakeholders’ interests and needs are being considered carefully and balanced alongside each other, that you’ve got that safe place to be brave and to be innovative.

PAULA: And it’s a core value of mine as well, Phil.

PAULA: You know, it’s one of the reasons I started podcasting, you know, rather than writing a blog because I had been writing already, but I wanted to do something that was a little bit different and added to the conversation and gave me these kinds of opportunities to explore things that I find fascinating.

PAULA: So, yes, so I think there is a lot to reflect on.

PAULA: I want to thank you for all of your thoughts.

PAULA: Is there anything else that you wanted to mention today before we wrap up, Phil?

PHIL: I’ll mention one thing because I’m admittedly not a huge fan of business books.

PHIL: OK, but I was working with the client and leading an offsite planning session for their leadership team, trying to ignite growth for for that for their business.

PHIL: And they have all their employees, all their leaders read this book called The Five Dysfunction of Dysfunctions of a Team.

PHIL: OK, and I’ve heard of the book and I’ve never read it.

PHIL: But given that I was facilitating this this offsite with them, I read the book.

PHIL: It’s a fabulous, fabulous book that I cannot recommend enough because it gets into issues like conflict and trust and shared accountability.

PHIL: And the fact that we all have all the we’re all sort of wired for things that make that more difficult.

PHIL: So that’s my part.

PHIL: That’s my parting thought.

PHIL: It keeps keeps echoing in my mind as we’re having this conversation and others.

PHIL: OK, so for what it’s worth, the five dysfunctions of the team.

PAULA: OK, well, I’m going to make sure that we link to that in the show notes and add it to my very long list of reading material.

PAULA: But yeah, definitely.

PAULA: I love things that do provoke ideas like this.

PAULA: So with that said, Phil Rubin, founder and principal of Grey Space Matters, thank you so much from Let’s Talk Loyalty.

PHIL: Thank you, Paul.

PHIL: It’s always fun to talk with you.

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.

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