#221: What We've Learned About Loyalty

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

PAULA: I’m your host, Paula Thomas.

PAULA: And if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.

PAULA: This show is brought to you by the Loyalty and Awards Conference.

PAULA: The leading annual event for loyalty professionals in the travel industry.

PAULA: Make sure to join us this year from the 10th to the 12th of October in Madrid, for the perfect mix of inspiring content and exciting awards.

PAULA: Check out loyaltyandawards.com for more information and to register.

PAULA: Hello, and welcome to today’s episode of Let’s Talk Loyalty, an unusual one, as it’s a guest who also has a loyalty podcast like mine.

PAULA: Iain Pringle is a loyalty expert with a background developing loyalty propositions for brands like Virgin Atlantic, Avios, and Shell.

PAULA: Iain now operates as part of a global network of loyalty consultants called New World Loyalty, who develop loyalty strategies and partnerships focused on adding value to customers and driving business growth.

PAULA: His podcast is quite simply called The Loyalty Podcast, where he enjoys creating debates and discussions about a whole host of loyalty topics.

PAULA: It’s a different style of show to mine, which as you all know, is mainly focused on interviews with the leaders of some of the world’s best loyalty programs themselves.

PAULA: We both hope you enjoy listening to this show and to Iain’s Loyalty Podcast 2.

PAULA: As you’ll hear, we both love talking about loyalty and sharing our industry insights with you, our global audience of loyalty marketing professionals.

PAULA: Thank So, Iain Pringle, joining me today from the UK, welcome to Let’s Talk Loyalty.

PAULA: Oh, it’s super exciting.

PAULA: We’ve been podcasting about loyalty for an equal amount of time, in fact.

PAULA: So I was just reflecting, we have a combined five years of expertise in terms of talking about this subject.

PAULA: So a wonderful opportunity to share that with the audience.

PAULA: So as the opening question, Iain, I always love to ask people, particularly industry professionals like you, what is their favorite loyalty program?

PAULA: So why don’t you kick us off and tell me what is your favorite loyalty program?

IAIN: Well, thanks, Paula.

IAIN: It’s a really, really difficult one, isn’t it?

IAIN: Because I’m often asked, what’s the best loyalty program?

IAIN: And that’s a very different question because every old loyalty program has a different purpose and a different reason to be.

IAIN: And therefore, you have to pick the ones that are most effective.

IAIN: But actually the one that I enjoyed most and was a member of and loved it was my local breweries loyalty program, which my wife gave me a present for my birthday, which was membership of this loyalty program.

IAIN: And I was a bit like, oh, this is a bit of a busman’s holiday.

IAIN: But actually the Dark Star Brewery, which is a local beer manufacturer.

IAIN: And it was basically a subscription program where every month you got a free sample of beer.

IAIN: And once every quarter you had a party at the brewery.

IAIN: Well, when I say a party, they brew different beers and they brought people along.

IAIN: And it was always between six and nine.

IAIN: They didn’t trust us after nine o’clock.

PAULA: Very wise.

PAULA: I love it.

IAIN: And I loved it.

IAIN: And it was all the good things about Loyalty in that it was about community and it was about a common sense of ownership of the brand.

IAIN: And it brought people together and you met the people who actually owned the brewery.

IAIN: And it was all the beautiful things about Loyalty that I enjoyed.

IAIN: But then funny enough, the brewery was then bought out by another company who then bought out that company.

IAIN: So within a space of about six months, they had two changes of ownership.

IAIN: And by the time it got to the second change of ownership, they just closed it down.

IAIN: They didn’t understand it.

IAIN: It’s another real typical story in loyalty.

IAIN: They didn’t understand it.

IAIN: They didn’t know what it did.

IAIN: They didn’t know how it drove value to the brand.

IAIN: And so they shut it down.

IAIN: And it’s funny because I got in touch with them and said, you do know what you’re shutting down.

IAIN: This was, I told them my job and I said, this is the best loyalty program I’ve ever come across.

IAIN: And to no avail, it got closed down to much to my disappointment.

PAULA: Indeed, Iain.

PAULA: And I hope it provides inspiration to another brewery in your region.

IAIN: Exactly.

IAIN: I know it’s a case study, but unfortunately it’s not a case study that has long-term success.

IAIN: But no, I loved it.

IAIN: And I think it’s a really good example of how you can get your customers on your side and feel that they are part of your brand.

IAIN: And no, it was a lovely loyalty program.

IAIN: I really enjoyed being a member of it and taking part in it.

PAULA: But also I think what it does, Iain, is it picks up on, as you’ve already said, the sense of community.

PAULA: And for example, I was talking to somebody this morning in kind of luxury retail, and they’re looking at programs and they’re not interested, thankfully, in something like a points program, just doesn’t fit this market, particularly in their segment.

PAULA: And I was talking about things like community, and it was just really interesting that I don’t think that that’s valued or respected by management a lot of the time, which is what I’m, you know, hearing from your example exactly, the new owners didn’t realize how powerful that was.

IAIN: And it’s so easy to do.

IAIN: And I’ll give you another really good example recently where there was Wales recently qualified, well, they didn’t quite qualify, they still have to beat Scotland to qualify for the World Cup.

IAIN: And Ukraine actually, funny enough.

IAIN: So there was a comedian, a Welsh comedian being interviewed the other day.

IAIN: And he said, at the game, he cried three times.

IAIN: And they said, well, he was being interviewed.

IAIN: And he said, I cried three times, one when they won, obviously.

IAIN: But the other two times he said, it’s because the Welsh Football League have decided that they would sing this song before the game started.

IAIN: Not National Anthem, there was another Welsh national song that they sang before the, and he said, because they asked the Welsh national, the Welsh FA if they could sing it.

IAIN: And the Welsh FA said, yes.

IAIN: And the other thing they said was, they did the National Anthem without any music behind it.

IAIN: So they just did acapella for the whole crowd.

IAIN: And he said, the reason why he cried was because people in the Welsh Football Union listened to the fans and did that, whereas the Welsh RFU, the rugby union, have been asked for years to do it, and they’ve never done it.

IAIN: And he said, you felt that the fans had a say in how that campaign, the whole World Cup campaign is being run.

IAIN: And that has an impact on the people on the pitch, and it has an impact on the people in the crowd.

IAIN: And it’s a beautiful thing.

IAIN: And that’s what Loyalty is trying to do.

IAIN: Loyalty is trying to get an engagement between your customer base and you as a brand.

IAIN: And if you can do that without spending any money, then do that.

PAULA: Totally, totally.

PAULA: That’s a brilliant example.

PAULA: I love it, Iain.

PAULA: And you’ve reminded me actually, because again, for today, I kind of looked back at all of the shows that I’ve done, and it’s very hard to pick a favorite.

PAULA: Of course, it’s like picking a favorite child.

PAULA: But actually, one of the ones that really impressed me the most was also in the sporting arena.

PAULA: And it’s the first Premiership football club in the UK that launched a formal loyalty program beyond the kind of membership and ticketing that I know everybody kind of does, but Arsenal have built My Arsenal Rewards.

PAULA: And part of it is around the data, of course, there’s a lot of intelligence that they’re looking to gather, but also what they’re trying to do again is to support the overall team, the atmosphere in the stadium, incentivize their fans, for example, on every day when the games aren’t being played.

PAULA: So, you know, I don’t know how many days a year Arsenal play a match, let’s say it’s 20, there’s still 345 days of the year where you want to have a connection with them.

PAULA: So if you can find a way, for example, to incentivize them to make sure that somebody’s in the seat at the match, even if it’s a cold Tuesday night rather than a big final game, that was really insightful to me and highly innovative.

PAULA: So yeah, I think loyalty has so many different purposes and that rugby one is a great one.

PAULA: And I really think sports loyalty is a big up and coming sector where there’s a lot more you can do even alongside the existing, I suppose, emotional loyalty that we’ve all, I suppose, taken for granted for many years.

IAIN: No, and it’s a really good way.

IAIN: I mean, Karen Dumbrell, I used to work with her at Virgin, so I knew Karen very well.

IAIN: And I did listen to that podcast, and I really enjoyed it actually.

IAIN: And it was funny because again, it supports what we were just talking about in that each football club or each sporting team has a different challenge.

IAIN: And that again is the beauty of loyalty, because at the same time, I’ve been working with other sporting loyalty brands, also different football brands and sporting brands, and they all have different challenges.

PAULA: Yeah, you’re absolutely right.

IAIN: Loyalty can help on all sorts of different levels, but Arsenal’s loyalty challenge is very different from other Premier League football clubs, because it’s interesting, really interesting.

PAULA: Absolutely.

PAULA: We’ll never get bored talking about loyalty.

PAULA: It’s our jobs.

IAIN: It’s our jobs, Paula.

PAULA: It totally is, Iain.

PAULA: And I think that was your first conclusion when we sat down to say, what have we learned from talking so publicly, I guess, about this industry that we love for two and a half years?

PAULA: So I think you’ve realized that you will never get tired talking about it.

IAIN: And that’s very true.

IAIN: I mean, I do love my job and I love the industry.

IAIN: And I think there’s three real key things about why I love my job and the industry so much is, first of all, our main job is to make people happy, right?

IAIN: We’re not there to make people unhappy.

IAIN: We’re there to reward people and give them something that they want.

IAIN: And that’s a beautiful thing.

IAIN: But then we have to make money from it too.

IAIN: I often describe it as being monetizing Father Christmas.

IAIN: We give stuff away, but we have to do it economically.

IAIN: And then the third thing is that, and that’s backed up by data, and there’s no right or wrong answer.

IAIN: You know, I’ve never seen anyone prove absolutely categorically exactly what the return on investment is.

IAIN: And if they have got a measure for return on investment, it does vary month to month, week to week, hour to hour.

IAIN: And, you know, and that in itself is an art.

IAIN: And so I love that combination of making people happy, we try to do it in an economic way, and we strive to find the best way of measuring success.

IAIN: And, I mean, I’ve got a very scientific mind, and that really appeals to me, is those three things.

IAIN: And we can strive for success, and that gives endless theory, endless options, endless content to talk about.

IAIN: Because I could talk about this stuff for hours, because it is really challenging.

PAULA: It totally is.

PAULA: And for sure, Iain, when I think about the people I’ve talked to, certainly that is the biggest challenge, that idea and challenge of, can we measure it?

PAULA: Can we attribute it?

PAULA: Causation and correlation are not the same thing.

PAULA: So how do you isolate and attribute your investment in a loyalty program into profitable behavior change?

PAULA: So I definitely think there’s a lot of people listening to this show and of course your show as well, that look to people like us for support, ideas, validation.

PAULA: And for me, I do struggle if I’m being brought in in the past, as you know, I’m not consulting anymore, but brought in to convince people that they should invest in loyalty.

PAULA: I always really struggled with that one, Iain, because I never felt it was appropriate to convince the board that loving your customer was a good idea, and that that would require investment.

PAULA: So I always found it a very difficult challenge.

PAULA: I don’t know if you’ve had the same experience.

IAIN: Oh, I’ve had the same experience all the time.

IAIN: And in fact, in the last, you know, I’ve maybe consulted for maybe 20 different brands in a year.

PAULA: Yeah.

IAIN: In the last two years, I have recommended to two brands not to do loyalty programs at all.

PAULA: Very good.

IAIN: And I’ll give you a really good example of that, is people assume that loyalty programs are there to reward your most loyal customers, which is rubbish, because if you’ve got…

IAIN: I had a brand came to me this year and said, I’ve got this particular group who come to me religiously, they buy from me religiously, they’ve bought from me for several years, they are very high value, they buy almost everything in this category from me, but they feel unrewarded.

IAIN: And my response to that was, so what?

IAIN: So you tell me that they’re giving you loads of money, they stay with you, they love the brand, but they feel unrewarded, but they’re clearly loyal.

IAIN: So if you spent any money on that category, you are literally wasting it because they’re going to stay with you anyway.

IAIN: And so my job with them was to find out where they are losing customers and where customers aren’t happy, and try to plug that gap that way, rather than starting at the end of saying actually, but this is a classic example of saying, in every loyalty strategy, you need to say, what’s the problem you’re trying to solve?

IAIN: And where is the best economic benefit for solving that problem?

IAIN: And then measuring it, as you said, you know, but people often focus on measuring cost, which is simple, you know, it’s just some say, how much are spending on loyalty?

IAIN: How many people in the program?

IAIN: What’s the richness of the reward?

IAIN: And how much is the operating costs?

IAIN: And that’s all easy to measure.

IAIN: What’s difficult is how much am I actually influencing my customers?

IAIN: And how much they actually change their behavior?

IAIN: And how much is that change of behavior actually worth?

IAIN: And that’s the really tricky thing.

IAIN: And you can’t measure that empirically in many cases, you just have to look at proxies.

PAULA: Yeah, absolutely.

PAULA: And you’ve reminded me, Iain, of a conversation with the Kempton Hotels.

PAULA: And they actually, again, I suppose, realized that they simply couldn’t measure everything that they wanted to, but they still felt an extraordinary commitment to recognizing the most loyal customers that they had.

IAIN: No, that’s true.

IAIN: In fact, in this case, the one case I gave you there, where they told not to reward the customers, they actually decided to reward those very valuable customers.

IAIN: But again, my response was, well, don’t try and measure it.

PAULA: Well, there you go.

PAULA: Well, what the Kempton Hotels guys did, Iain, was they got the senior leadership team around the table.

PAULA: They got a speaker phone, and they started and they called some of their top customers.

PAULA: And they just shared some words of acknowledgement, of thank yous, and really took some time out, which I thought was extraordinary.

PAULA: I really thought it was beautiful in its simplicity.

PAULA: And I think particularly guests of that nature will absolutely feel that this isn’t normal.

PAULA: I’m definitely really appreciated by this hotel brand.

PAULA: So I’m pretty sure the people who got those calls will never stay at any other boutique hotel except Kempton.

PAULA: So yeah, sometimes the simplest ideas work.

IAIN: And in having those calls, the senior management team, if they’re bright, will also know that they’ll learn a lot about their brand because they have, they’re the best brand ambassadors in that they’re in there every day and they will tell you the truth about that brand.

PAULA: A hundred percent, Iain.

PAULA: You’re absolutely right.

PAULA: Exactly.

PAULA: So yeah, I think if I was the CEO of a big company and had that visibility, it would be wonderful to make that time because again, there’s no such thing as having the time, but making the time I think is a great idea.

PAULA: So listen to me.

PAULA: I’d love you to talk us through, I suppose, just a bit about your own show.

PAULA: Iain, I know you tend to say that people love a good argument, so tell us all about it.

IAIN: Yeah, I learned this quite early on in that when we did the first few podcasts, I went out and got feedback.

IAIN: Exactly.

IAIN: We just said feedback from people I knew had listened to it and said, what can we do to improve it?

IAIN: And their response was, you just agree with each other all the time.

IAIN: And it’s very difficult in an industry where you do, where it’s a very lonely industry and that you do your own thing and for your own brand.

IAIN: And then when you speak to others who have similar experience, it’s very difficult not to say, I agree with that and I agree with that and I agree with that.

IAIN: But actually in our podcast, we deliberately try, in fact, I bait my guests at the beginning to disagree with people when they’re having the podcast, because it makes them a much more interesting thing to listen to.

IAIN: So, you know, I try to get people to say, well, actually, if you disagree with what someone says, because that actually then brings out more of the depth of the discussion.

PAULA: Totally.

IAIN: Because I often feel that a debate on a subject is much more valuable than listening to everyone, than a constant agreement with things.

IAIN: And that’s worked very well since, although at the end of the podcast, I always remind my guests how many times they did agree with everyone.

PAULA: It’s hard to make them behave.

PAULA: I know.

PAULA: I know.

PAULA: And when I reflected back on my own, what I realized, particularly when I listened to the early shows, I think I probably did have that, I suppose, inevitable anxiety about making or trying to make the content as compelling as possible.

PAULA: But what I learned is if I’m curious about something, even if it’s not on the plan, then I usually prefer to follow my curiosity and really listen to the guest, because I really feel that there’s, like you’ve just alluded to, there’s probably underlying thinking behind what somebody is sharing with me.

PAULA: And if I don’t really listen to them very carefully, I probably haven’t learned the kind of why behind the watch or whatever they’re presenting.

PAULA: So I definitely think as podcasters, again, two of us doing very different style shows, and of course I hope everybody listening to this will listen to you and vice versa.

PAULA: But yeah, I think healthy debate is definitely something we can always learn from.

IAIN: Well, and you’re right, they’re very different.

IAIN: I think yours brings out a depth of one-to-one discussions, which is really important in understanding a particular brand or a particular individual or a particular approach.

IAIN: I think what we do is cover off broader subjects where we debate that subject.

IAIN: And that’s just two completely different genres and they can perfectly live.

IAIN: I really enjoy your podcast and listen to it often.

IAIN: And they are doing different jobs for the same audience.

PAULA: Exactly, exactly.

PAULA: And I love the fact you’ve, what, 60 years of experience between you all.

IAIN: Well, on a call, we generally tend to have, it depends, if Craig’s listening to that, he has a little bit more experience than that.

IAIN: He’s now tipping into 30 years.

IAIN: So what we generally tend to have is we generally tend to have more than 20 years experience each on a call.

IAIN: And in that, you really get a depth of knowledge in that, you know, this 10,000 hours, I don’t know where they get that from, because that’s six years in loyalty.

IAIN: And if I took what I knew in my six years of loyalty compared to what I know now, it wouldn’t even scratch the surface.

IAIN: And so when we get a group of people disputing a subject, it’s depth of knowledge on that subject that you would get.

IAIN: And that’s what brings out the agreement and often disagreement about certain things, because we’ve had some lovely debates about things like how does redemption impact collection?

IAIN: And these things, every loyalty professional needs to know, what does a redemption in your program drive, the future behaviors?

IAIN: And I’ve seen it drive all sorts of things in different programs, and it really depends on which program you’re talking about.

PAULA: Yeah, yeah.

PAULA: And what I think that does is, Iain, it not only equips the loyalty marketer who’s listening to our shows with something to reflect on themselves, but I also think it does is it prepares them for when the conversation comes up at a more senior level.

PAULA: So I do think it’s important to provoke our thinking.

PAULA: So I think as a community, we share this love of the customer we talked about, this intention to take care of them in a way that’s profitable to the business.

PAULA: But also, for me, innovation is extremely important because I really feel there’s a lot of very boring stuff out there.

PAULA: If anybody else asks me to sign up for a points program and can’t articulate the benefit of the proposition, I’m actually a very difficult customer, particularly in a retail environment.

PAULA: And I’ve often said on my show as well, Iain, that I’m often professionally disappointed when it comes to my birthday every year because I’m paying attention to who’s asked for my date of birth.

PAULA: And I know they have internal reasons for doing that, but as a member of that program, I then expect something on my birthday, probably because I’ve built so many birthday propositions again in my consulting career along the way.

PAULA: But I don’t know, do you have that same experience that things like data are underutilized and people are kind of doing it maybe for one reason and forgetting all the other reasons to do it?

IAIN: Yeah, I agree with that 100 percent, but at the same time, I…

PAULA: You’re just arguing with me now.

IAIN: No, but I really do think that because it really depends what the loyalty program is there for.

IAIN: So if you take, for example, Pets at Home in the UK, that program has virtually nothing for the customer.

IAIN: It does give charity donations to pet charities.

IAIN: But for the individual, other than getting your personalized rewards, which customers don’t really value, if you ask customers what do they want, and you see many surveys about what they’re looking for, they don’t really value targeted offers particularly.

IAIN: But that program is entirely built on that because what they’re trying to do is get a critical mass of their customers’ data.

IAIN: But if they can do that without rewarding them, fair enough.

IAIN: And because that is not what they’re looking for in that program is an understanding of their customers, I guess.

IAIN: I’ve not consulted for them.

IAIN: But at the same time, I think the program and the way they do it is very effective at doing that.

IAIN: And if they can do that at no cost, then happy days.

IAIN: And at the same time, in our theories for the year, what we were hoping to see from the year, I think Stuart Mellon said he hopes to see an end to useless birthday promotions.

IAIN: And I’m sorry if that bursts your bubble, but birthday promotions often annoy me from the opposite side because I see them and I think what possible commercial benefit are they getting from giving a birthday reward which has no bearing on the company’s profit?

IAIN: It’s just a random date to you.

IAIN: It’s a very important date to you, but for the company, it’s a random date.

IAIN: So why are they, I often think, why are they rewarding that commercially?

IAIN: I think I don’t understand.

PAULA: Well, to me, that’s the single most important thing that I want as a consumer.

IAIN: Perfect.

PAULA: So perfectly disagreeing with you.

PAULA: And I’ll tell you my thinking, what I don’t like on my birthday is when I’m sent a discount offer because I don’t want to be sold to on this one special day of the year.

PAULA: And again, one of the things I’ve learned, I suppose, I did an interview with Bond Brand Loyalty, which I’m sure many people have kind of downloaded their wonderful piece of research every year, but they were talking about flipping the construct and that there is a fundamental misunderstanding between the purpose of a loyalty program in that marketers, apparently, I think it was 66% of marketers, think that the purpose of a loyalty program is for the customer to be more loyal to them, to spend more on all of that, and that is perfectly valid.

PAULA: But actually, what they said is the opposite is true from the member’s perspective.

PAULA: Members believe that the purpose of a loyalty program is for the brand to be loyal to me.

PAULA: So how on earth can we reconcile these two objectives?

PAULA: We have to, as you alluded to earlier, because all of the stakeholders have to feel that this investment is worthwhile, whether I’m investing my time, my data, any of these things, or the actual cost, obviously, from the brand’s perspective.

PAULA: But I do love when they say, it’s your special day, Paula, here’s a cup of coffee and a cake.

PAULA: For example, there was a program did that here recently in the UAE.

PAULA: I used to do a lot of it when I was running O2 Priority.

PAULA: And it was a wonderful opportunity to be seen to be generous, to take the opportunity purely without a commercial agenda and say, Iain, thank you for being a customer of O2 or whoever the brand might be, and here’s something from us to you.

PAULA: So there you go.

IAIN: It’s also a way of managing your liability, again, from the technical side, obviously.

IAIN: Because Surprise and Delight works for lots of programs as long as you can afford it and as long as that surprise is genuinely a surprise because then you don’t have to set aside a liability and you can measure the impact.

IAIN: So happy days.

IAIN: Exactly.

IAIN: And thank yous often work better than, do this, get that offers.

PAULA: Totally.

IAIN: They often perform better, that’s for sure.

PAULA: So we actually agree with each other, yeah?

IAIN: Absolutely.

IAIN: We can occasionally.

IAIN: It just makes a boring radio.

IAIN: Oh, my goodness.

PAULA: No, I think it’s wonderful.

PAULA: It’s wonderful.

PAULA: Great.

PAULA: Is there anything that you would say surprised you, Iain, along the way, I suppose, as a podcaster?

PAULA: And I’m going to give you one example, which I don’t think I mentioned to you before, but it really blew my mind.

PAULA: And it was an interview I did with a beauty brand in Australia called Adore Beauty.

PAULA: And they only launched their loyalty proposition quite recently from memory maybe about 18 months ago now.

PAULA: One of these classic, you know, start up in the kitchen, selling a bit of skin cream and, you know, it’s now a publicly quoted company.

PAULA: So loyalty aside, and this is what blew my mind, Adore Beauty has two podcasts talking about skincare and makeup.

PAULA: And they have had over 2 million downloads.

PAULA: And when I think about the idea of loyalty as an emotion, and as a, you know, literally a way to, to stay engaged with my customer, without the actual, as I said, very separate loyalty program, I found the podcast idea to be utterly extraordinary, particularly, I suppose, because the beauty industry to me is entirely visual.

PAULA: It’s a YouTube proposition if you’re going to invest in content.

PAULA: But there you go, they had a podcast, and, you know, literally 2 million downloads, people listening to them talking about beauty.

IAIN: Well, I think, again, that really surprises.

IAIN: We set out at the very beginning, I guess, because we were all consultants, we set out a strategy at the beginning and said, this is what we wanted to achieve, and this is what it was for, and this is who we’re designing it for, and this is what we, this is what the response we want to get.

IAIN: And we laid it all out, and within 2 months, we’d hit those targets.

IAIN: And it amazes me how many people listen to the podcast, enjoy the podcast, and get value from the podcast.

IAIN: Totally, yeah.

IAIN: And what’s the really strange thing is when, I’m sure you’ve had this experience, when you meet people who listen to the podcast, often you have not met.

IAIN: So you go to a conference and you’re in the coffee, and people come over and they say hello, and they start to talk to you.

IAIN: But they talk to you in a way that’s more familiar than you’re expecting, because they’ve listened to you for hours, and yet you’ve never met them before.

IAIN: And it’s a slightly bizarre feeling.

PAULA: I was highly perturbed the first time I had coffee with a listener, and she’s a great girl, and I love her, and she has started her own podcast, and I probably never admitted it to her, but I was so taken aback that she felt like my friend.

PAULA: And again, I was meeting somebody for the first time and in a professional way.

PAULA: So yeah, there’s a very strange dynamic.

PAULA: And I think I’ve alluded to this before, actually maybe yesterday when we were chatting.

PAULA: To me, there is just an intimacy about the human voice.

PAULA: And I think that’s why it resonates with the listeners, why they feel comfortable coming up and literally talking to us as if we’re their friend, and as if it’s literally reciprocal.

PAULA: So absolutely, it’s very flattering.

PAULA: It’s wonderful, great for the ego.

PAULA: I was at the Loyalty and Awards Conference actually here in Dubai last October.

PAULA: And I think everybody came up to me and said, yes, I listened to your show.

PAULA: And I was kind of blown away because I really, really hadn’t expected that.

PAULA: And I wasn’t there in a speaking capacity.

PAULA: So yeah, there’s a wonderful connection.

PAULA: And yeah, I’m super proud of what we both do.

PAULA: So yeah, just we have to learn to live with our little bit of fame, huh?

IAIN: Tiny little bit.

IAIN: And then going back to what you said though about are you surprised?

IAIN: I am surprised every week in my industry because things come up.

IAIN: And it’s the same in marketing anyway.

IAIN: You’ve got to constantly, and again, maybe this is the sort of scientific training in me, you’ve got to constantly be looking out to be surprised.

IAIN: And for your theories and to be debunked, you’ve got to do it.

IAIN: And again, in fact, we had a podcast on blowing on the myths of loyalty and debunking myths of loyalty.

IAIN: Because there are so many out there, and you’ve got to test these things all the time and have your eyes open and your ears open to be told that what you believe is not right.

PAULA: Totally, totally, yeah.

PAULA: And I think we all need to be big enough to invite that level of challenge into the work that we do.

PAULA: So I fully support that.

PAULA: And one of the ones, I suppose, the final thing I wanted to mention was I did some really fascinating interviews with Wharton University.

PAULA: So Professor Pete Fader is the professor of marketing actually there.

PAULA: And he’s doing some incredible modeling work.

PAULA: He’s a maths major, ex-MIT graduate.

PAULA: And he’s developed this whole framework, which is called customer-based corporate valuation.

PAULA: And it’s leading edge thinking, certainly above my pay grade, I would say.

PAULA: But I think for us, I suppose, advising the industry to have this understanding that investors are increasingly looking for loyalty metrics and evidence of how customers are likely to behave long term, those kind of future expectations, even beyond the customer lifetime value, I suppose, that we’re all so familiar with.

PAULA: This idea of valuing a company based on their consumer behavior, to me, is extraordinary.

PAULA: So I love the fact that academics are exploring our industry.

PAULA: The private sector, as we know, is doing extraordinary, I suppose, test and learn.

PAULA: And then, of course, there’s people like us who love to go around and discuss and talk and learn on an ongoing basis about the whole thing.

IAIN: I mean, another great example of that.

IAIN: I only know this from what was written in the press, was the Pret a Monge recent example, which I’m sure you’ve covered, where, as I understand it, as they went into lockdown, and as people exited from the cities, they were finding it difficult to borrow money from the banks.

IAIN: And so they launched Loyalty Proposition, which was based on a subscription, which then they could say to their banks, look, these customers believe we’re still in business.

IAIN: These customers believe that it’s still something valuable to be had, and therefore we can borrow against that.

IAIN: And it’s not a case study I’ve worked on, it’s just what I’ve read in the press, but I think it’s a fascinating case study of saying exactly where the value is.

IAIN: And I think going back to your question about what you’ve learnt from the podcast as well is, there are some things that have been covered over time that now I use as mantras in my job, certain things that I’ve learnt.

IAIN: And one of those was Pavel Los.

IAIN: He says, execution is the only strategy customers see.

IAIN: And he’s so true about that.

IAIN: Every loyalty program has a strategy, and every loyalty program has a form that they’ve got, a head office, a presentation that they’ve given to the MD.

IAIN: But actually, execution, what happens on the ground is your loyalty program.

IAIN: And he’s absolutely right about that.

IAIN: And I think that loyalty practitioners should obsess with that, and probably spend less time looking at that than they perhaps should.

IAIN: And I use that now, since Pavel said that, I use that as a mantra in everything I do, when we go back to the end of the thing as saying, right, what’s the execution?

IAIN: What are customers actually going to see?

IAIN: Because that’s going to be their experience of the thing.

PAULA: That’s very wise words, Iain, because I do believe every loyalty practitioner goes out with a very well-intentioned concept to build something that’s extremely compelling.

PAULA: And sometimes what gets to market after it’s been through finance, been through legal, been through who knows what, is very often a diluted version of what the intention and the original vision was.

PAULA: So you’re absolutely right.

PAULA: That clarity of what is experienced by the customer is actually all that matters.

PAULA: And fundamentally, that will dictate exactly the business case, whether it will perform according to what you said it was going to do.

PAULA: So I love Pavel Los.

PAULA: He’s a great, brilliant loyalty mind.

PAULA: He’s been on Let’s Talk Loyalty as well.

PAULA: And please God will be again.

PAULA: And I suppose my final one, I suppose words that I have remembered, and it’s Tim Tyler down in Ellipsis in Australia.

PAULA: And it was the utter simplicity, Iain, and literally what he said is, customers are your only source of revenue.

PAULA: And I thought, brilliant.

IAIN: That’s very true.

PAULA: Super simple.

PAULA: So all of these arguments about why would we spend this money and why I’m just like going, look, guys, you’re only source of revenue.

PAULA: You’ve got to do everything in your power for them.

PAULA: And I know that doesn’t always mean a loyalty program, and we can agree on that for sure.

PAULA: But yeah, I love the insights.

IAIN: But the other one I’d say to you about slightly challenging, again, being slightly challenging what you said before about the science.

IAIN: So again, it’s Alan Lyons, and we did a podcast on is it science or loyalty?

IAIN: Is it science or art?

IAIN: Is getting it right science or art?

IAIN: And I think it’s got to be a combination of both.

IAIN: And his words were, anyone can do the science.

IAIN: And it’s true.

IAIN: It’s perhaps disingenuous, because of course you have people that can do the science better than others, and you have access to more data than others.

IAIN: But in fact, getting loyalty right is about the art and the creativity of getting the proposition that really resonates with your customer.

IAIN: And I think that’s again a sort of theme that’s been running through this conversation, is that to really resonate with your customers, you have to understand them, but then come up with something where they go, that’s brilliant, I love that.

IAIN: And going back to that Dark Star Brewery example, I think that personal touch was actually what made the difference there.

PAULA: Exactly, yeah.

PAULA: A relationship, you used the word community, I think certainly post-COVID, the connection.

PAULA: And actually, just to pick up on your case study about Pret a Monge, Iain, I also haven’t worked on it.

PAULA: I haven’t yet had them on the podcast, but I’ve written quite a number of articles about them.

PAULA: And my, I suppose, learnings through that was, first of all, they’re part of a huge holding company called Jab Holdings.

PAULA: So their sister company is Panera Bread in the United States, who had launched a subscription proposition pre-COVID.

PAULA: But I actually think subscription is the perfect COVID response, because my understanding is in times of crisis, people look for certainty.

PAULA: So if you can give them something that is as compelling as unlimited coffee for, I think it’s 15 pounds with pret a manger, the fit is perfect, you know?

PAULA: So they had internal learnings from Panera Bread, who have been on the show, extraordinary to invent an F&B physical goods proposition on a subscription basis, I think it’s extraordinary.

PAULA: And it’s been leveraged across some of their European companies as well.

PAULA: So I’m quite sure they went to the banks afterwards with that to kind of help with the cash flow.

PAULA: But I do believe it was much more around just getting the customers in the door with a response to the whole lockdown thing and hopefully getting people out of their homes at least once a day to go and enjoy something.

PAULA: So yeah, I do feel that loyalty is countercyclical.

PAULA: I got into it after the big recession, 2008.

PAULA: So I do feel we’re, I guess, in the right place at the right time, hopefully, to help all of our listeners to learn lots more and do lots more with the loyalty propositions.

IAIN: And subscriptions are a funny one, isn’t it?

IAIN: It’s like the tide coming in and out.

IAIN: There was a trend in subscriptions many years ago.

IAIN: When I first went into loyalty, there was many, many subscription propositions, particularly through the banks.

IAIN: And then they waned, and now they’re back again.

IAIN: And it’s a bit like flared trousers.

IAIN: And I go back to the, what’s the fundamental reason for them?

IAIN: Well, if you can have a subscription that actually then drives your share of wallet, then happy days.

IAIN: But if it doesn’t start driving share of wallet, then you need to consider why you have it and whether it’s a, if other free options are having more traction with customers, then you need to, the tide needs to go back out again.

IAIN: But we’ll see.

IAIN: I think I’ve recommended several subscription programs over the last few years, and I think they are the right thing to do for many brands.

IAIN: But again, it depends what you’re trying to do and why.

PAULA: Well, on those parting words, Iain, I have no more kind of questions or, you know, big ideas that I wanted to explore today.

PAULA: Was there anything else you wanted to mention before we wrap up?

IAIN: No, I think it’s great to be in the podcast because I think we do similar things.

IAIN: I think we both have the shared love for Loyalty, which I always think is a good podcast when you could go on for hours, and I think we could have gone for hours.

IAIN: I think also there’s lots to come.

IAIN: You know, I think that certainly I don’t think we’re…

IAIN: I’m done in podcasting.

IAIN: I think there’s lots more.

IAIN: You know, we’ve got one coming out soon where we’ve done, on my side, about learning about loyalty, which I’m really glad you came on that one for about.

IAIN: We’ve also got ones like Open Banking.

IAIN: I’m sure you’ve covered Open Banking.

IAIN: We’re going to cover that off in the future.

IAIN: Is it really the future of loyalty?

IAIN: Who knows?

IAIN: We’re going to be talking about loyalty fraud.

IAIN: I think you’ve done a thing on fraud before.

PAULA: Yeah, a little bit.

IAIN: Measuring ROI is always a classic topic.

IAIN: You know, how do you measure loyalty?

IAIN: And things like FMCG, CPG, loyalty, you know, all that sort of thing, which is really non-traditional.

IAIN: So there’s loads to come.

IAIN: And I’m really looking forward to these conversations, you know, having more chat about it.

PAULA: Indeed, we will keep the doors wide open.

PAULA: I’m sure we’ll be coming back together to share lots more learnings.

PAULA: So with that said, Iain Pringle, managing partner of New World Loyalty and host of The Loyalty Podcast.

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

PAULA: This show is brought to you by the Australian Loyalty Association, the leading organisation for loyalty networking and education in Asia Pacific.

PAULA: Their International Virtual Loyalty Conference will take place on the 25th of August 2022.

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PAULA: There will be fantastic networking opportunities, questions and answers, gamification and great prizes to be won.

PAULA: Visit australianloyaltyassociation.com to find out more.

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