#412: Building Your Program's Profitability - Loyalty's Hidden Potential.

Paula: Welcome to Let’s Talk Loyalty, an Industry podcast for loyalty marketing professionals. I’m Paula Thomas, the founder of Let’s Talk Loyalty. Today’s episode is hosted by Tom Peace, Managing Director of The Loyalty People, a strategic consultancy with a laser focus on loyalty, CRM and customer engagement.

The Loyalty People also runs a free global community for anyone working in the loyalty industry. If you are working in loyalty marketing, make sure to join Let’s Talk Loyalty every Tuesday, Wednesday, and Thursday to hear the latest ideas from loyalty experts around the world.

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Tom: Hi, I’m Tom Peace, Managing Director of The Loyalty People and Presenter of Let’s Talk A Little Loyalty. Welcome to this week’s short summary show. In this week’s episode of Let’s Talk A Little Loyalty, I’ll be summarizing the key learnings from Paula’s original interview with Jonathan Hopkins and Angus Frazer, co-founders of Sonder Media.

For those of you unaware, Sonder Media is a consulting firm that specializes in identifying value and optimizing the media value of loyalty programs. The original podcast showcases the power and potential profitability of using this unique asset permissions and insights from your loyalty program as a media business.

This is not a new idea, and some very big brands have been doing this for some time, but it is becoming more and more prevalent, so this is a very interesting theme to discuss. This was actually a really interesting podcast to review as I also run a consultancy that helps brands to unlock the value of their loyalty strategies. It’s great to hear from other experts and compare notes.

Jonathan and Angus discuss how many brands are looking at how they can use their membership communities and the associated media with partners to create a revenue stream from offers and communication between the partner and the member. Essentially charging the partner to engage through the loyalty scheme directly with the end consumer. This strategy is most prevalent in the grocery sector where the grocers enable manufacturers to reach consumers in a highly targeted way based on their previous purchases. This is a technique that I used to great success during my six years at Nectar in the UK, providing targeted offers and media solutions to consumer brands within Sainsbury’s, utilizing the next data to create highly relevant offers. As the guys from Sonder Media explain, you’re really looking for a win win-win between the loyalty brand, the partner and the member. Many program managers may be nervous about this, and Jonathan says the risk is if you don’t want to tattoo the baby, which is a term I have not heard before, but I totally get it.

Some loyalty brands may be worried about commercializing the customer and the potential damage this can do to the relationship, and therefore the customer’s loyalty. However, when offers are personalized, accurate, and highly relevant, this enhances the customer experience. So the advice here is pretty simple, creating advertising revenue from your loyalty media is possible and can be a great success for all parties as long as it’s done well with precision targeting, strong creative, and a little restraint in terms of the number of offers that a consumer gets. This strategy does require two key technology solutions.

Firstly, you’ll need a CRM suite capable of managing multiple media and prioritizing many offers. Secondly, you’ll need a CDP and an analytic solution that can cope with a huge amount of data and be able to react in real time. It’s not for the faint-hearted, but the benefits can be incredible for all parties in the value chain.

I really enjoyed reviewing this podcast as it took me right back to my time at Nectar who really are experts in this field. I had highly recommend listening to the main show, which can be found at www.letstalkloyalty.com, and first aired on the 2nd of June, 2022. Episode number 231. Thanks for listening, I hope you enjoyed my summary show all the best, and speak to you soon. Tom.

Paula: This show is sponsored by The Wise Marketer. The world’s most popular source of loyalty marketing news, insights, and research. The Wise Marketer also offers loyalty marketing training through its Loyalty Academy, which is already certified, over 500 executives in 38 countries, as certified loyalty marketing professionals.

For more information, check out thewisemarketer.com and loyaltyacademy.org.

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