#492: Driving Member Engagement for the Super Retail Group in Australia

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Hello and welcome to today’s episode of Let’s Talk Loyalty and Loyalty TV. And we’re heading to Australia to hear all about driving loyalty with the Super Retail Group. The Super Retail Group is one of Australia and New Zealand’s largest retailers and a public company since 2004, having established leading positions across various lifestyle categories as the proud owner of four iconic brands, Supercheap Auto, Rebel, BCF, and Macpac.

Our guest is Aaron Fuller, General Manager of Member Engagement for the Super Retail Group where he and his colleagues are helping more than 10 million members live out their passions in sport, fashion, automotive, and the great outdoors. Aaron shares their latest, exciting propositions already launched, as well as some fascinating insights on the consumer psychology insights that he believes that we as loyalty professionals need to understand in order to optimize our programs. I really hope you enjoy our conversation.

So Aaron Fuller, welcome to Let’s Talk Loyalty and Loyalty TV. 

Aaron: Thank you. Thanks for having me on the show. 

Paula: It’s wonderful to have you. I know it’s late on a Friday evening, Aaron. So with all of the time differences adds a little bit of complication, but we are thrilled to have you. I know there’s some very exciting work going on there with the Super Retail Group, which is the first time I’m hearing all about it.

So we have a lot to get through today. So let’s kick off straight away with our favorite opening question. As you know, Aaron, we’re always keen to get inside the mind of loyalty professionals around the world. So why don’t you tell our global audience what is your favorite loyalty program? 

Aaron: Thanks, Paula. It’s a great question. It didn’t take me long to think about the answer when you asked me, which was a local supermarket here in Australia called Woolworths. We have two big supermarket chains down here in Australia that dominate Woolworths and Coles, and the Woolworths loyalty program is called Everyday Rewards.

And for me as a loyalty geek, it just ticks every box. The amount that they’ve invested in data science, in personalization, in offers, the ability for them to now fine tune the offers based on the behavior they want to change. So I see it and love it both as a customer and also as someone in the industry looking at what they do time and time again.

Beyond what the sort of obsession I have with what they do and how good they’re at doing it, and the interface and the digital experience. It also got me enough points over the last decade to get me and my wife to Positano in Italy first class on Emirates, which is about 380,000 points. And so I thank them and all their generous offers, which they’d send me over a decade to get me that many points on promotion.

Paula: OMG. Holy lord. That’s an extraordinary achievement, Aaron. So well done you. Well done to Woolworths and their Everyday Rewards. I have no idea. I mean, I’ve certainly never managed to redeem such a long haul flight with a partner on a beautiful carrier like Emirates so well on you. You said it took about a decade to get that many points together for it. Yeah. 

Aaron: Yeah, look, it’s, so, it’s sort of a, well, not an embarrassing story, but effectively they, they have a points program and they give you a point per dollar spend, but obviously they have other line offers and so every other week. When they saw I wasn’t buying nappies or diapers, depending on the language that you use.

And they’ll send me, they’ll send me an offer that says, buy these Huggies nappies. Which normally were 30, say thirty-five dollars. You’d normally earn thirty-five points. And, but if I bought them on a particular day or a particular week, then I’d earn 600 points. So a big, you know, 20 times points multiplier, so obviously nappies don’t go out of date.

And having five kids over the last 10 years, there was no shortage of nappies that we were going through. And so we did the maths. It was about on average about 4,000 points a week I could rack up. Which over, over the months and the years quickly became a big number. And so in the end was enough to and one of the benefits of the program is you can convert those, you can choose between vouchers at the Everyday Rewards at the Woolworth’s store.

Or you can redeem those on Qantas as transfer those points to Qantas points. So I transferred them to Qantas points and then Emirates as a partner of Qantas and so redeemed those fights. So it was a basically a decade of changing nappies got me first class to post.

Paula: Honestly, I hope Woolworth fully appreciate how much loyalty you have demonstrated right there, and you’ve already admitted to being a loyalty geek and you know, you’ve just proven it. So, so congratulations on your very amusing consumer behaviour and yeah. A lesson to all of us to make sure all of our campaigns are optimised to appeal to people like you so that we can behave in ways that are beneficial, I guess, to the business as well as to the consumer. So everybody feels the love. So listen, that’s perhaps one of the best answers that we’ve had on the show. 

And I think I said to you all air, you already have the best loyalty story that I think I’d ever heard purely from a post I saw on your LinkedIn profile. So I’m gonna ask you now just to share the story about the Australian Lawyers Association. Obviously our friends there, and the particular personalized experience you had at the conference this year with them. 

Aaron: Yes. Look, it was a moment of, you know, huge pleasure and also a terrible guilt that when the invite came out as do all these events that we go to, the question came up about dietary requirements.

And for at least decades when that question’s come up, I’ve always put the same answer, which is lobster and Dom as in Dom Perignon. And I’ve never received such a meal on set event despite me putting that as my budget requirements except for the ALA event where I sat down and saw everyone getting the traditional meat and chicken alternatives similar to a wedding. And then there came my lobster and champagne. And at that point, my throat, I just swallowed relatively hard as I looked around and everyone looked at me and I’m like, oh shit. 

Paula: I think it’s brilliant. It’s hilarious. And again, it just proves, you know, I mean. Just for the actual viral value of the fact of us having this conversation alone hopefully makes it worthwhile for the ALA. So well done you for saying something that is amusing to everybody around and giving us the opportunity to hear that story. So again, a loyalty geek Aaron. What can I say? So much interesting. 

Aaron: I haven’t been, I haven’t received a single invite to a single event post that. It was such a matter in the end.

Paula: Oh, okay. Please God, you’ll be allowed back next year. You probably won’t get the same. It’ll be interesting to see how they behave. You’ll have to up the ante. So, totally changing the dynamics, confusing the whole conference organization side, but yeah, but a brilliant story. 

So listen, let’s get into the Super Retail Group, Aaron. A lot of our audiences, you know, are based around the world. World in the US, the UK, of course in Australia as well. But for those people who don’t know SRG, would you mind just giving us an introduction to the business please? 

Aaron: Yeah, sure thing. SRG – Super Retail Group is what we stand for, and we’ve made up of four brands.

The oldest brand in the stable is a brand called Supercheap Auto. It’s been going for almost 50 years, I think. It’s the, they’re coming up to the 50th birthday and it’s a phenomenal business that was started up by a family, and the family’s still involved in that business, and they are effectively in the automotive space. So if you think about its competitors, include Repco, Autobarn, etcetera. Some big global there. And we’re a phenomenal business and continue to grow quite rapidly. As for the last couple of reports have stated, so a fairly successful business really loyal sort of obviously customers and members in that business.

Then we’ve got Rebel Sports. So in the US sort of Dick’s Sporting Goods is another shop, which some of the American sort of people may be aware of. And Rebel Sport is by far the largest Australian sort of retailer. We’ve got over a couple of hundred stores. I think combined four brands have got almost 700 stores, I think is the number that I read which includes Supercheap Auto.

BCF is brand, and BCF used to stand for, it used to stand for boating, camping, fishing. But we don’t refer to that anymore when we, when in our marketing and branding, although some of our long-term customers still come in and still have, you know, boating, camping, fishing shirts. I see those floating around every now and then. And really interesting brand where in Australia, as you know, love, love the outdoors here in Australia. So we spend a lot of time camping, a lot of time fishing, a lot of time forward. And so sort of we’re fortunate that we’ve got such a good sort of vast sort of change in that brand.

And then the, well, the fourth brand is Macpac, which we acquired a couple of years ago as a group. And that was really a quite an amazing story. Macpac makes some phenomenal gear in regards to traditionally hiking. If I remember back in the mid-nineties, you used to, before you used to put your backpack on and go back, backpacking around the world, you sort of view. I used to have a Macpac backpack, and that was my first experience with the product in about 1995, and I’ve still got that backpack. 

Paula: Wow. 

Aaron: So really well made gear. Yeah, and they’ve obviously diversified their range now and we’ve summarized that business, so to speak, in terms of having more just winter gear. So, we’ve got some phenomenal summer range out, in, out in stock. And that’s a great business as well. They’re pro primarily in New Zealand, but there we go a much more established presence traditionally in New Zealand with a huge growth in stores here in Australia as well.

Paula: Amazing. So we’ll be getting into, I suppose, how you think about loyalty across all four of the brands. Just in a minute, I guess. But before we get into all of those different types of propositions and understanding what you do tell us about your career. How did you get to this particular role in SRG?

Aaron: Yeah, it’s interesting when we look back and thought and think to ourselves, how on earth did we get here? So, I guess spent the best part of the late nineties and early 2000s in sort of marketing, pure marketing roles. And moved into data, digital and analytical roles. The early 2000s when sort of internet was becoming more sort of mainstream and we were starting to use computers that work and at home. And then social media, the launch of social media and Facebook, programmatic and paid search and Google. So rode that sort of digital wave and sort of sat between analytics, performance, media, and marketing.

And I spent some time at Qantas launching their breakout businesses in the ventures. So, launched a few of the businesses there and a well-being business where we gave you and still do give Qantas points for things like walking, running, sleeping. It’s so, it’s a whole bunch of really cool things that the we’re building out there to increase the ability for Australians to keep on earning Qantas points.

Paula: Lovely. 

Aaron: And for my sins, spent the last two years of my seven years sinned at Qantas over in the airline away from royalty operations head of customer operations and head of design role at Qantas, right in the smack bang in the middle of Covid which was a phenomenal time. There was no flying and borders. So that was an interesting time to, to be alive. Working for, so we came out of that. We built the the Covid vaccine app with all the other airlines and all the IATA’s of the world. 

And then I I decided it was enough aviation for me, so I went over. And, well, I’ve done banking, I’ve done and spent some time at Red Cross, so it’s been a couple of years at Red Cross, you know, CRM role. I spent 10 years in insurance, all types of insurance, both IAG and also life insurance and pet insurance. 

And so I thought, well, what’s next? I sort of, I’ve find myself in customer data, digital roles. So thought retail was something go and play around in. So we moved moved the family away from Sydney up to the Gold Coast and fortunate to, to work with across their and in strategy and customer team.

Paula: Okay. Incredible. And quite a sizable customer base from what I’ve seen. I looked at the latest annual reports. Of course, I think 10 and a half million members is the latest number. So that’s essentially, I suppose, the customer base that you are taking care of. 

Aaron: Yes.

Paula: So would you mind talking us through the membership model, Aaron? Because I know, again, in different markets and different businesses, of course, there’s differences of paid membership versus just, you know, free membership. So how does SRG think about membership? 

Aaron: Yeah, look it’s a great question and I think if I, you know, whatever answer we discussed today, we ask ourselves in a year and we probably rethink it or, you know, re-prosecute it again. So certainly sort of the, I’m very mindful that these aren’t fixed views, but the views at the moment across our brands is that we’re very much around a membership, which is trying to extract and drive as much value for members as possible. That creates lifetime, long term sticky customers. And traditionally we, as you say, we’ve got about 10 and a half million active members, so that’s have earned, have shopped in the last 12 months. The number is, it’s quite bigger than that if you look at customers who have lapsed or are inactive over the last 12 months, but 10 and a half million active members.

Paula: Brilliant.

Aaron: Apart from the supermarket, there’s not very many other organisations in Australia that have that type of active membership base. And each brand had their own proposition.

Now, it’s interesting, we talk about paid because we’ll start with Supercheap. They’ve got I think the last reported number was sort of high, three millions active members. And again, from a sort of a report perspective, which in terms of, you know, eight outta 10 customers who come in say, say I’m a member, and they’ve only got. So part of that is club pricing. So we don’t have a huge club pricing strategy in Supercheap Auto compared to some of the other brands. But it’s, it certainly is a feature and members always want more yeah, sort of club pricing. 

But up until about two years ago, there was a $5 fee for that membership. And so when we took it away to try and remove a move frequently. And also to try and grow the base. We were hypothesis. What would that do for customers? Would you get sort of members that join because it’s free, but don’t necessarily shop as much or spend as much? And what we’ve seen in the last two years is we’ve seen no difference in that membership between the $5 fee and the non, and the free members, or members signing up for free which has been really pleasing to see. Cause I thought we were expecting some decline. Yeah. Sort of spend, because often when you pay something, it’s a bit like going to the paying for a fitness instructor. You think you better get value out of it. So yeah, we did look at that. 

So that was interesting. So we have hooked at that. We look at subscription models. Amazon Prime is obviously a phenomenal in a Proposition and certainly there’s other players here in Australia that are going down that route as well in regards to you have your free model and then if you pay a bit extra, a bit like Uber. Unlock more value. So, that’s we’re not exploring that. But again, you know, the future is a long, windy road. So who knows what the future holds. 

But in terms of, at the moment, our current thinking is definitely around how we create customer value propositions and program designs for each of the brands that do really I guess three core things, which is we want more members to consider shopping with us because of our large proposition. But I have a belief that, you know, customers, not many customers, maybe there’s a few, but customers typically don’t love your loyalty program. They love your brand, but typically they’ll be typically part of the reason why they stay and why they come back more.

And so with Supercheap Auto, got this great proposition and we’re the only, only brand in the stable at the moment to do this, which is a proposition called Best Price Credit. So how this works, Paula is it’s, and customers absolutely love this, which is if you buy something and it’s say $40 today, let’s say you buy three liters of oil for four $40 and that goes on sales for $20 on a one-day sale. We will automatically, if you’re opted into the program, we’ll automatically give you the check or the proverbial check. We’ll give you $20 credit in your account. And we’ll send you an email and or an SMS to say, great news, Paul of that item you bought in the last 14 days has gone on sale. Here’s the difference. 

Now that, that, that creates a sense of trust and real sort of surprise in the light because customers can’t game that they don’t know when things are going on sale. So it’s not like you can go and plan for that. And so it’s always a surprise and delight. Weissue, you know, a whole, whole chunk of credit across the year to customers. We obviously plan for that when we know something’s gonna go on sale. We know exactly how much credit, from a provisioning perspective, from a balance sheet perspective, we obviously need to account for how much credit we’re gonna issue when something goes on sale. Yeah, so the in between our merch team, our marketing team, our loyalty team is joined at the hip, because you can’t just go and do a one day sale when you’ve got a proposition like best price credit, realizing that you’re about to go and put a whole bunch of credit in the market.

Now what we’ve seen is for as long as I’ve been here and much longer, is when customers get that the redemption of that credit is really high, which is what we want. And see the incre, the incremental spend on top of that is phenomenal. 

Paula: Wow. 

Aaron: And so we create this virtual loop of customers getting and coming in because of, they were either existing member or they saw a product online and thought, that’s the product that I need or want. And they came into us for either convenience or other reasons or price. Yeah. And then they’ve. Product. And if it does happen to go on sale, they get a message saying, here’s your, here’s the difference in your account. They’ve got 14 days then to use that credit. And then again, so, we see a pretty healthy redemption of that credit.

And for us, from a commercial perspective, we’re trying to drive visitation across all of our brands, the average visitation is somewhere between sort of between three to four visits on average. Across the year, so we’re not a supermarket where customers are coming into us multiple times a week. Now we obviously have customers that do come in weekly. There’s customers depending on what you’re buying and who are you. Obviously we do see some customers coming in a lot frequently, but as an average, you know, three to four shops a year. 

So we are looking at for program design mechanics that go, okay, well this program. And there’s sort of spend and get trials that we’ve run. And there’s camp, there’s birthday credits that will issue ’cause you’ve been with us for a while or it happens to be birthday, which is stock standard for programs. And they behave just credit like that behaves. But when you give credit because they’ve purchased something that’s gone on sale, it behaves very differently to, than if you’re just giving out free birthday credit in terms.

Paula: Of course, yeah.

Aaron: Increment. So that’s that’s a super power that we we’ve recently just launched Supercheap, just relaunched their law to campaign with, some above the line material and we’ve really gone to town with leveraging that proposition ’cause of the members that know about it absolutely love it.

And we probably capture a nice healthy share of wallet for that group of customers. But for lots of customers that aren’t aware of it, whether that’s they bought some either didn’t go on sale or did go on sale, but they didn’t read or yeah, didn’t look at the email or the SMS, then we wanna really sort of, amplify the amount of people in that current base.

We understand that proposition because we think it’s a great defense strategy to our competitors who are really great competitors. And really worthy competitors. So, so for us that’s a great business model. And have just I think it’s almost 4 million members, active members in that and growing. So, really successful. 

So, yes, we retailers, we have a lapse, you know, a relatively sort of significant, perhaps customer because they just don’t need the products of which they’re buying anymore. But in regards to members coming in and then once they’ve been experiencing the brand, and I think it goes into, I know others talk about sort of the joy of loyalty and for me it’s about the dopamine effect. 

And this is really sort of from a science perspective, when you give that customer a redemption opportunity. And when you give that customer some credit of something that they did that they weren’t expecting with the ability to then go and redeem that, it’s a double prize. Because redemption in itself is as old as they where you get your tent coffee free, which you know, works. And it’s why we say lower to our local coffee shops because A, we like the coffee, but B, we’re building our stamps of coffee. It’s the same in aviation where if you fly Sydney Melbourne, you’ll end up after nine times, you’ll end up with enough points to get a free, well, not what we call a free flight, but a redemption flight with points. And that’s whether you fly Virgin or whether you’re flying with Qantas or domestically. It’s sort of the. Ten-for-one model. It’s almost the same as the coffee cart model. 

And so we’ve come to expect that, but it’s also enough why we make those decisions where, you know, one of the things I used to ask all the students when I’m lecturing strategic marketing at UNSW, the question I always ask is, everyone stand up. And, you know, there’s four, four domestic airlines and a Sydney Melbourne trip can range from nine, 9 dollars to call it three nine nine. They all leave at the same time. The flight duration is the same time and the seat dimension is the same. And we question why are certain people making certain decisions at that point?

Because it’s the same if you, the rational mind would say It’s the same hour, it’s the same seat. You know, so, you know, when we get into it, it’s actually The points and the status credits that I get, makes me make is a certain decision and it’s what program I end up in and all the affiliate partnerships that those programs have.

And so that they make I like to say they make rational people do irrational things. When loyalty’s designed well, you know, we would all probably consider ourselves rational. But my story earlier around nappies and Positano, I would wait and, you know, and hunt around until they’re gonna send me a nappy offer. And so a rational person waiting for a nappy offer is probably an irrational behaviour on the surface. But when you get addicted into that program then for me that’s really great. 

So Supercheap have got a phenomenal project sorry, program. Rebel, we’ve just launched after I think 16 years, Rebel Active has been around for, which is the loyalty program, a revamped program where we give you a point for every dollar that you spend above the line.

So you walk in, say you buy a pair of Asics for $250 prior to October. The benefit you got from buying that was basically not very much for Rebel. There was unless something was club price. Then there was nothing on the table. Now when you buy that shoe, and it’s one of the biggest selling shoes in terms of the Asics we now give you $12 50 worth of points. So you get 250 points for that $250 pair of shoe. And you think about other things we sell in Rebel, we sell a thousand dollars treadmills to $2,000 rowing machines to greater.

You imagine that pre-October customers who are asked when they’re buying that product, are you a member? They’ll say, no. Would you like to be? They’ll say, no. And I’ve witnessed that counter over the last couple of weeks, that same question and where the members sort of says no. And then the sort of the staff say, well, you know, you’re doing two 50 points today, that’s $12.50. Subversion kicks in and unless you really hate rebel, unless you really hate, and all these loyalty programs of which there’s something out there. Of course, yes. The answer to that question is now yes. 

And we’re only just begun. So we’ve intentionally launched with a base program. We’re now starting to do what Woolies and the great Lawerty programs do, which is send individuals below the line, offers SMS and email saying if you buy, you know, coffee this weekend because with our personalization engine has worked out, you are the type of person that has drinks, coffee, but we haven’t seen you for a while. And so we’re trying to, you know, get that behavior back in. Then we’ll give you, and then we’ll get you to sort of activate that offer and you come in you and double or triple points on those particular products. 

And we’ve got thousands and thousands of skews. And so if you imagine rebel, whether you’re an AFL supporter or an NL supporter, NFL supporter, whatever sport you’re into. Depending on what’s on is if you buy, you know, if you buy tennis, what else can you buy? If you buy swimmers, do you buy the goggles? So how do we think about points over the next 12 to twenty-four months in ways to change the behavior from you just coming in, buying a pair of shoes to going? Well, if we bundle a bunch of complimentary products around that sped from our personalization engine, we can send you an offer that says if you bundle A, B and C, we will only A, we’ve given you the product selection that’s relevant to you. And B will give you an, that actually makes you do that.  Where at the moment you may choosing others tools to do that. And we see that big share of wallet game changers. 

So really the trick for Rebel Sport was to say, how do we get you why sometimes, you know, Nike for example, is a great partner of ours is Adi and Puma and Asics. We’ve got some great trade partners in that business. That they lot have their own stores in the same shopping centers where we are now, sometimes we differentiate on range. But why would our Rebel members prior to launch, you know, travel five floors of Westfields to buy the shoe that they can buy and potentially 20 other stores.

So for us, yeah, that was a really important launch into the market where we said we needed a device and a mechanism that gets you to make that decision that says, you know what, I’m a Rebel active member. I know they sell that. They now have points on the product and we give you points on every dollar you spend, and then you get six months to redeem those points.

And again, we look at the average shop of our customer. It’s sort of every, you know, three or four times a year. So the, we’ve make sure we’ve designed it where you’re not sort of upsetting customers by expiring their points before the shop comes in. And of course, you know, points expires part of any loyalty program to drive the incremental. Because if you are about the 250 points and we haven’t seen you for a few months, we wanna make sure that we as a marketer, you know, we always think marketers think breakage is bad, you know? So it’s always the the marketing versus the finance view in terms of how we look at breakage.

But of course, if you believe breakage as bad as marketers do, ’cause you know you want to keep the customer happy for a longer time. Then you wanna make sure that they don’t break and you wanna make sure that you communicate to them value of the points they’ve got. You wanna make sure that that loss aversion kicks in where customers go. Again, if you say that my $12.50 is about to expire and I earned that, that’s very different than just giving me $12.50 for free on my birthday. Where I’m like, whoa didn’t earn it. And it’s really interesting from a psychology perspective, how different they behave.

Paula: Yeah, my goodness. I’m almost I dunno where to start, Aaron, with all of those those wonderful insights, the first piece that I really like is, you know, at the point of sale, you know, so many of us are invited or asked, of course, by the staff member about, you know, whether or not we’re a member and certainly in this part of the world, I’ve often said actually that. You know, there just doesn’t seem to be the level of training needed for the staff member to give me a good reason to join. They go through the script and they just kind of say, if you’re not a member, okay, fine. And they’ll just let you away with it almost. 

But it sounds like you really have your staff engaged and understanding the actual value. So, you know, the actual reward rate, I think I saw it’s a 5% reward rate. So, so if they can calculate that on the particular product and have that specific compelling reason for this customer. So if you are standing in front of me to be able to say it’s your $12.50, do you, are you having that consistently coming through with your staff or is that something that you’re still working on? Where would you say in terms of, you know, consistently having that message at the point of sale?

Aaron: Absolutely. So, it’s, for us, the change management process that we put around the launch of that product was so important that 6,000 members that we’ve got across the Rebel stores as well as the online experience if you go onto the website. One of the things that we launched very quickly after launch listening to some customer feedback was, you’re looking at a pair of shoes or a tennis racket or very quickly is put a widget on the website that’s irrespective of what you’re looking at. It will tell you what points are available, and that’s obviously great from if you are comparing if you are, whether you’re a rebel customer or whether you are new to Rebel or considering joining Rebel and you’re looking at a product on Google that you’ve seen on multiple shops, and they’re all within dollars and cents of each other. All of a sudden we say, by the way, we’re competitive on price, but we’ve also got a points proposition, which is real dollars for you to use on your next purchase. 

Paula: Amazing. Okay. Yeah. Useful. Again, you know, keep it simple. Remove the friction. Yeah, take away the mental gymnastics and just give them the answer, which is, here’s an extra reason. So I guess that’s the ultimate purpose of loyalty when all else is equal, here’s a way to, to stand out head and shoulders above that. So, so that’s brilliant. So certainly I know we’re recording, obviously now at the end of 2023, I think we’re gonna be releasing this episode so people will be listening in early 2024. So I think as time goes on, of course, hopefully it’ll keep us up to date on all of the amazing insights. As the program starts to mature and you do start to to publish some of those results. 

The other piece I wanted to just pick up on, I suppose is I know your personalization piece you’ve emphasized is absolutely the single biggest, I think, compelling difference with this program relaunch. And I want to say a quick thank you to our friends Epsilon for introducing us first and foremost. I know they’re supporting you with that program and launch. So how would you say you’re doing on that journey of personalization? Because what I tend to hear, Aaron, is absolutely the holy grail is, as you said, you know, send Aaron the nappy’s offer. We know he’s good for it. So really to have the data insights and use it. 

But I think in many cases, you know, it just takes a lot of time and it’s quite a complex experience to try and master using the data. So how do you think the Rebel active program is doing at this early stage in terms of your personalisation?

Aaron: Yeah, absolutely. So, just on Epsilon, so we made the decision around two years ago to build our loyalty CRM platform we put with Epsilon. So I think we’re one of the, one of the first, if not the first sort of large retailer here in Australia with Epsilon owned by Publicis. So a phenomenal partnership. I joined pretty much as we start kicking off the project, and I really mean agile team with global, with global expertise and everything that we want to do. So I think from a partnership perspective, we’ve all worked with big tech before. 

And sometimes, you know, the appeal of what you’re buying quickly gets sort of a bit disappointed when you actually get into delivery where you realize that the salespeople sold you a sold a beautiful dream. I certainly think personally that. Not sort of pumping up the ties too much that I think that they’ve got the mix right between technology, a really accessible team, and so then I like that. Where we want to get to is how do we think about personalization where Woolies are at today with using your personalization capability to fine-tune, almost customize the offer one-to-one. Beyond just the product recommendation one-to-one. 

So we have, on any given day, we have over a hundred thousand variations of a personalization at play for BCF and for Supercheap who are the two brands that we’re currently running on personalization. And it’s sometimes it’s up to half a million variations on a particular day, on the different ways of which the machine has said that this email might send too million emails out on Tuesday. But there’s actually, as I said, between 100 to 500,000 different variants of that email based on what the algorithms and the scoring of that article is getting out to a member. So almost you could say no, there’s no two same emails going out from Supercheap and from BCF. Cause they’re live at play at the moment for Personalisation. When we bring these fours together in February, March around personalisation capability as well as Lorty, then I think we, we unlock something pretty special. And as I said, Woolies have been doing this for a while. Other brands are playing in this space at the moment. I’ll be interested to understand whether Mecca, I know Mecca we’re sort of friends with Mecca and I think we’re, I think they’re on a similar journey to try and work out how we stitch these things together.

And ultimately for me it’s two sides of the same coin. When I think about loyalty and personalization, what we really do is build a relevance machine. No customer has ever said in the history that I’m aware of that stopped being so relevant to me, and I think that’s the game we’re all playing. And so sometimes if you can, I, I remember reading this statement once, and I can’t remember who wrote it, but it was if a customer can explain easily your loyalty program, then you probably haven’t got it right.

At the same time, if they can’t explain it, you probably haven’t got it right either. If you over, if you can’t make it simple enough to understand and you’ll lost customers. And we’re guilty. Lots of us are in the industry, are of complex, tiered, structured programs sometimes of which we think customers will love, but they just don’t fathom it.

And the flip side of that is if it doesn’t create a feeling beyond the transaction, you also haven’t got it right. Which is, to my point around customers shouldn’t be able to, it should be able to understand it, but not explain it necessarily how it makes it feel. And back to that sort of concept is it needs to be part of the brand and the brand experience. It can’t be an adjunct to the rest of the business. Can’t be seen as the guys over there doing offers on emails. If that’s where your loyalty program’s at, then you’re gonna find it hard to win. 

Paula: For sure. For sure. Well, listen, I can hear that you are on a very exciting journey, as you’ve said. You’ve got Rebel Active launched and and ramping up in a pretty dramatic way. By all accounts, I know you’ve got some of your other brands rolling out, I think later this year, or in the coming years. So I think it’s important from my side to, to obviously make sure that you feel excited and welcome to come back on Loyalty TV to share the story with this on a regular basis because I feel like the learnings like in 12 months are gonna be like off the charts. So I really hope that you’re happy to continue sharing these insights with us because there’s an awful lot of knowledge there. 

My final, I suppose question at this stage is just around that love of science and psychology that you’re talking about so passionately, Aaron. You know, you’ve talked about the dopamine hit and I remember when I first joined a loyalty program at, you know, twenty-five years of age, or, you know, got my first credit card with points on it. I felt like a junkie and like. And I was very conscious and I described my behavior in that way. You know, even kind of knowing that wasn’t a great word to be to be using for myself, but I knew I was doing something different and that I had a reason to do that.

But you’ve talked about things like, as well, the nudge and striving incentives. Where would you suggest people kind of look to, you know, I’m thinking of this audience, Aaron. So in terms of learning about the science and the psychology, where do you get those insights from? Where can we get more understanding of tapping into, you know, whether it’s FOMO or, you know, striving or whatever. Like, I just think that knowledge is still one that’s perhaps missing in our industry. 

Aaron: You know what, that’s a great question because it’s easy to say you learn on the job. That’s genuinely how you learn or how I learn. Certainly was sort of you, you learn by doing. And you know, I certainly don’t remember, CRM is certainly a subject taught at most universities here in Australia.

Law sometimes can be a bit of a subject, but not something that you can go off and get a PhD. And I think that a lot of the science that I’ve looked at and studied is partly around psychology and consumer behaviour. And I think around that the, we should be reading books around influence and agents of change as marketers, as businesses. We’re trying to change behaviour and then we’re trying to retain that behaviour.

And I, so for me I’m obsessed about reading anything that has to do with psychology, consumer psychology, and then human psych. Human-centered design has come a long way in the last sort of 10, 20 years as well, which has sort of, you know, become a mainstay for a lot of organizations.

But I think if you cross psychology with even things such as addiction and there’s been loads and the, you can look at the famous rat test where they get the rat addicted to the drug and the, it taps the, yes, it taps. And so I think there’s a lot of similarities between that sort of dopamine hit that you get when you are addicted to something where that, you know, be something that’s not good for you or something that’s not too bad for you, such as addicted to loyalty programs, which is probably a healthy addiction.

And you, we, not that we’d ever say it publicly, anyway this is public. You know, we, there’s sort of, there are generally terminologies of which we call points junkies and I’m a hands up points junkie, you know? First day, my name’s Aaron and I’m a points junkie and obsessive about looking for value. I think for me so there’s that, and I think you can definitely go and study psychology is a great thing. I think, again, reading lots of books around change and influence is really important. I think there’s great, the great classics around strategy and blue ocean strategy in regards to how do you create a position that is differentiated that is almost hard to replicate.

So you sort of then need to jump from how we behave and how we think to how you then create value. You need to mix that with your agile approach to how do you build stuff quickly, deploy it quickly, learn quickly, work out how, what the feedback is. . And organize, and how do you think about loyalty as a product of which you can iterate and release on regularly, as opposed to, here’s our rigid approach, we’re not changing it. We hope you like it. 

And so I think that, yeah, a combination deep consumer understanding in terms of psychology research, whether it be customer experience, research, focusing a lot on sort of understanding that the problem and the opportunity. Then how do you go and change that? And then all you’re doing, I mean if you look at Wikipedia under the term growth hacking, the definition of growth hacking is rapid experimentation, or at least for the last time to Wikipedia was the definition growth hacking. 

And so I think we, you and I, in all of our experience and everyone who’s sort of, you know, watching today and all of our collective experience what we did got us here, but it won’t get you there. And I think that the Ray Dalio, in his book Principles talk about this phenomenal thing, which is you’ve gotta learn to unlearn everything you’ve learned to get you to the next stage. It’s really hard for us as humans to be open-minded to the fact that we’re radically open-minded to the fact that we’re wrong most of the time to, you know, again. And his, but more importantly is how to unlearn everything that you’ve learned as opposed to this program worked when I was at that role, and that’s what we’re doing.

And so you’ve gotta, you’ve gotta go into it with an open mind, but the only way you can ever. Truly understand what’s working is to work out what’s the fastest part to the whole of how we can stand up rapid experimentation to learn is then you’ve got a data station of which, irrespective of what your view, or my view, or the CFO or the CEO’s view is, you still may choose to ignore the data, but you’ve got data that’s been driven by experiments.

Experiments that’s been prioritized based on potential value, and then your ability to executing on those experiments. And there’s very few organizations certainly in Australia, but globally that would say that they’re where they want to be and when it comes to the amount of experiments that they’re running, ourselves included. So I think for me that’s the game because you can have all the theory and you can have the experience, but if you’re not able to test all these things and retest them, then I dunno how. 

Paula: Amazing. And just as a recommendation from my side, I literally watched a video this week, which is a TED Talk and there’s not too many TED Talks that are necessarily relevant for loyalty professionals, but I think you’d like it and I’m sure our audience will as well. So I will make sure to link to that. 

And it was Duolingo and it was them sharing their insights around consumer psychology and for sure, like I’m a Duolingo, you know, 281 day streak in terms of my behavior. So definitely, you know, these insights really work at a very human level, very simple level in a way that I think more loyalty programs could benefit from studying. So, thank you for sharing those insights. 

Listen, Aaron I think we’re coming up to the end of our time. So, before we wrap up, was there anything else that you wanted to mention for our audience today? 

Aaron: I look Paula, I just to, for anyone to, to reach out. I think we’re all better together when we share ideas in a way that’s not constrained by competitor conflict, and I think I was saying this to Epsilon in the session we had in Dubai earlier this year, which is, this seems to be a, you know, a, an amazing opportunity for someone probably yourself in your position, Paula, in regards to how do you sort of build a community of people that, you know, share, you can sort of, you know, buddy up with someone that can be facing their face with similar or similar issues that are maybe not in the Australian market or the American market.

Certainly around whether that’s first party data, whether that’s the use of, you know, media offers, personalization, like in terms of the themes of stuff that we do, we could almost say, look, if you wanna know or ideas on X, Y, and Z, hit me up more than happy to share. So, I’m, I guess, saying there’s in the sense of said community or at least one that I’m not part of anyway. And more than happy to for anyone to reach out to me and happy to share my views and you can ignore them or use them at will. 

Paula: Fantastic Aaron. Well listen certainly from our perspective, watch this space. There is definitely a hunger for more community and connection for loyalty professionals. So for sure we are keen to, to be a part of that. So, we will talk offline about that some more. 

And I think I said to you before we started that I’m really looking forward to coming down to Australia for the first time in my life for the big conference in, I think it’s August this year. I’m not sure if it’s officially being confirmed in terms of the dates, but look forward to meeting with you in person and everyone in the Australian loyalty community. 

So it’s been a really interesting conversation. Really excited. So I will literally say Aaron Fuller, General Manager of Member Engagement with Super Retail Group. Thank you so much from Let’s Talk Loyalty and Loyalty TV.

Aaron: Thank you so much, Paula. Take care.

Paula: This show is sponsored by Wise Marketer Group, publisher of The Wise Marketer, the premier digital customer loyalty marketing resource for industry relevant news, insights, and research. Wise Marketer Group also offers loyalty, education and training globally through its Loyalty Academy which has certified nearly 900 marketers and executives in forty-nine countries as certified loyalty marketing professionals.

For global coverage of customer engagement and loyalty, check out thewisemarketer.com and become a wiser marketer or subscriber. Learn more about global loyalty education for individuals or corporate training programs at loyaltyacademy.org.

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