Best of the Back Catalogue | How Sky VIP Redefined Customer Loyalty (#780)

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

PAULA: I’m your host, Paula Thomas, and if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.

PAULA: So, welcome to episode 39 of Let’s Talk Loyalty.

PAULA: And listeners will be delighted to know, I’m going back to what I believe is one of the most exciting loyalty markets in the world.

PAULA: So again, having a discussion today about a UK-based loyalty program, and with a company which describes itself as Europe’s leading entertainment company, which is the Sky Group.

PAULA: And today I am talking to Rob Chandler, who is Head of Customer Loyalty at Sky, and he’s joining me like everybody is doing from home during lockdown.

PAULA: And Rob is doing extraordinary work with the Sky VIP program, which I’m super excited to learn all about.

PAULA: So before we get into the discussion, I would first of all like to welcome Rob Chandler to Let’s Talk Loyalty.

ROB CHANDLER: Hi Paula, thank you so much for having me with you.

PAULA: Great, great, great.

PAULA: And so first and foremost, Rob, how are things in the UK?

PAULA: I know Sky is having an extremely busy time with a lot of product changes at the moment.

PAULA: So are you coping okay?

ROB CHANDLER: Yeah, I think much like anyone in lockdown, I’m very, very lucky.

ROB CHANDLER: I’ve got a pretty beautiful place to work in.

ROB CHANDLER: But I’m having all of those same challenges everyone else is, you know, how to deal with Skype and Zoom and Teams and all the different ways of contacting each other and dealing with good things and difficult conversations through screens, all of that stuff.

ROB CHANDLER: We’re all having that time, but it’s a crazy but very interesting time for us all, I think.

PAULA: Absolutely.

PAULA: And I know we talked to our fair Rob about how fantastically well Sky has dealt with COVID-19 and particularly taking care of you guys.

PAULA: So I think that’s fantastic, and I know that’s coming through in your loyalty as well.

PAULA: Before we get into talking about Sky VIP, I’d love to just ask you my standard opening question, literally about loyalty and what it is that you find, I suppose, most interesting in terms of a loyalty statistic.

ROB CHANDLER: Yeah, you sent me that question in advance, and I was really racking my brains.

ROB CHANDLER: I’m super passionate about the broader spectrum of loyalty and what makes us loyal to anything, not just to organizations, but actually why we are loyal to our friends, how deep does loyalty go?

ROB CHANDLER: And I suppose that’s the thing that really drives me and makes the world very interesting to me.

ROB CHANDLER: From a perspective of loyalty programs, I guess the biggest statistic or the most interesting statistic I find is that 73% of customers believe that a loyalty program should be about brands being loyal to them, and 66% of marketers believe exactly the reverse.

ROB CHANDLER: And I think that is one of the biggest challenges to us, in our industry and our world, really.

PAULA: Wow, it’s a brilliant one, Rob.

PAULA: And actually, I think it’s one I’m going to have to memorize and make sure I take it into a lot more board meetings, in fact, because you’re right.

PAULA: I think so many times, particularly, I get brought into conversations, brands are thinking about having a loyalty program in order to change their customer’s behavior.

PAULA: And it doesn’t always have that level of integrity around how can we be loyal to our customers, which is clearly what you’re doing in Sky.

PAULA: So I’m super excited to hear about the VIP program.

PAULA: But before we get into the program itself, Rob, tell me about your own kind of career background.

PAULA: I don’t think you’re in loyalty before your Sky days, am I right?

ROB CHANDLER: Well, I have been all the way through, but in a mongrel strategist kind of a context.

PAULA: Okay.

ROB CHANDLER: So I came into, I’m sorry, it’s quite windy and I’m in the garden, so apologies for getting some sound back.

PAULA: Well, love it.

PAULA: I’m in the wardrobe, as I said to you.

PAULA: So you know what?

PAULA: Lockdown days.

ROB CHANDLER: So my background is a bit of a mongrel strategist.

ROB CHANDLER: I actually started my career at Direct Response magazine.

ROB CHANDLER: That was one of the founding magazines of the industry.

ROB CHANDLER: This was back in the early 90s.

PAULA: Okay.

ROB CHANDLER: And I was at a time when it was becoming very, very exciting in terms of our ability to start to target individual customers.

ROB CHANDLER: I think there’s a great book called All Customers Aren’t Created Equal that was coming out at that time.

ROB CHANDLER: And a lot of the data providers were starting to interrogate this idea of talking to customers on a one-to-one basis and what motivates us.

ROB CHANDLER: And I guess I’ve then gone from that environment into communications agencies.

ROB CHANDLER: I started off in media, data buying.

ROB CHANDLER: Then moved into CRM and segmentation.

ROB CHANDLER: I then moved into big advertising agencies doing similar work.

ROB CHANDLER: But all of it in terms of developing deeper relationships with customers and how to use data in order to drive that.

ROB CHANDLER: I then moved to Australia.

ROB CHANDLER: I did a similar thing in Australia for a number of agencies and had a lot of fabulous success there.

ROB CHANDLER: I was very lucky.

ROB CHANDLER: I was working on brands, everything from Commonwealth Bank, the biggest bank in Australia, 11th biggest in the world, to some of the biggest beer brands in the world.

ROB CHANDLER: So the most extreme thing I’ve done for loyalty so far in my career is by an island off the Barrier Reef, exclusively for Forex drinkers.

PAULA: Oh my goodness.

ROB CHANDLER: At the other end of the spectrum, working with the likes of Quantus, Virgin Atlantic on very traditional loyalty, points-based programs.

ROB CHANDLER: So a bit of an eclectic mix.

ROB CHANDLER: I then came back to UK and now it’s Sky.

ROB CHANDLER: It’s been fabulous.

PAULA: That’s incredible.

PAULA: And a couple of things that I noticed, I saw on your LinkedIn profile, and we’ll obviously link to that, Rob, lots of awards that you and the companies you worked for won.

PAULA: I think particularly in your days in Australia.

PAULA: And if buying an island is the prerequisite for award-winning strategy, I mean, who am I to argue?

PAULA: So that’s incredible.

PAULA: And I think actually a lot of, sorry, loyalty people do share that love of direct response, actually.

PAULA: And I think it’s a very good background because it is about at the end of the day, incentivizing preferred behaviors and using the right data.

PAULA: So a very strong loyalty background, even if it wasn’t labeled as such at the time.

PAULA: And I know you also were an independent marketing consultant before Sky.

PAULA: So what tempted you to go back to corporate?

PAULA: The dark side, it was, well, it is the dark side in my mind.

ROB CHANDLER: It’s really interesting.

ROB CHANDLER: And as I say, I’m a bit of a mongrel, so I love grabbing new thinking, new ideas from different spaces, setting up as an independent was definitely right for me at the time.

ROB CHANDLER: But the truth is, I found it very lonely.

PAULA: Interesting.

ROB CHANDLER: I spark off others.

ROB CHANDLER: My thinking is ignited by bouncing off other people.

ROB CHANDLER: And doing that when you’re just on your own.

ROB CHANDLER: Although I had some great clients and Virgin Atlantic was one of those.

ROB CHANDLER: It’s just that sense of needing to be close to a team.

ROB CHANDLER: So I actually started with Accenture for a period of time, and that’s how I met Sky and started working with them, both on the implementation of the Adobe platform, but also I was asked to do a whole load of work around the development of the loyalty program at that time.

ROB CHANDLER: And then an opportunity came up and they asked.

ROB CHANDLER: I’d never been client side.

ROB CHANDLER: I’ve always told people what the best thing is to do.

ROB CHANDLER: I now realize just how hard it is to do the right thing.

PAULA: You’re absolutely right.

ROB CHANDLER: In a very different world.

ROB CHANDLER: It’s very exciting, mom.

PAULA: It totally is.

PAULA: And Sky is a company, actually, I really admire Rob.

PAULA: I’ve a lot of friends in Ireland working in Sky as well.

PAULA: So it’s a hugely impressive company.

PAULA: And even actually when I was doing my research, going to prepare for today, some of the numbers that impressed me, I know the company is in five European countries, 22 and a half million customers and 12.9 billion pounds in revenue.

PAULA: So just particularly, I suppose, for listeners, maybe I have a lot of listeners say in the US, for example, mightn’t appreciate just how big the Sky brand is.

PAULA: I think it’s fabulous to see.

PAULA: And also actually that it goes back, it was founded in 1990, so 29 years ago.

PAULA: So well done, Sky.

ROB CHANDLER: Yeah, absolutely.

ROB CHANDLER: We’re now part of Comcast as well.

ROB CHANDLER: So for the US listeners, we’re very much aligned with the Comcast group and NBC Universal and such like.

PAULA: Gotcha, gotcha.

PAULA: Great stuff.

PAULA: And I know particularly as well, there’s massive investment in exclusive rights to things like the Premier League, lots of the Hollywood titles.

PAULA: When they get to the UK, come to Sky first and foremost.

PAULA: So to me, I suppose I was sitting there thinking, this is a very brave company, both in terms of just the level of investment and I guess just visionary as well, in terms of the kind of content that you guys have bought the rights to.

PAULA: So I’d love to explore, where did loyalty come from, from a Sky perspective?

PAULA: What was the business driver?

PAULA: Was it purely the amount of competition?

PAULA: Obviously, the UK is supremely competitive, but tell us about where did the concept come to actually create a loyalty program?

PAULA: What happens to loyalty when the customer never visits your loyalty program?

PAULA: Today, customers are using AI to discover brands, evaluate options, and make purchase decisions, changing the traditional path to engagement.

PAULA: Faden is leading the discussion on what this shift means for loyalty leaders, where brands risk becoming invisible, and how organizations can prepare for a future where AI sits between the customer and the brand.

PAULA: Reserve your spot at loyaltyinsiders.com.

PAULA: That’s loyaltyinsiders.com.

ROB CHANDLER: Okay, that’s a really good question.

ROB CHANDLER: I think the point of transition for Sky was really back in about 2016.

ROB CHANDLER: A huge amount of analysis had been done that was looking at the success of retaining customers.

ROB CHANDLER: And for those that didn’t know Sky back then, we were becoming quite known as a business that was trading quite heavily.

ROB CHANDLER: And we were focusing on very much achieving a large customer number, if you like.

ROB CHANDLER: Now, what we saw, the impact of some of those trading decisions, they were absolutely right at the time.

ROB CHANDLER: But the impact of those decisions on the customer base was that we were seeing a softening in terms of customers that had been with us for a long time, in fact, eight plus years, were starting to become less stable.

ROB CHANDLER: Now, that was due to a number of factors.

ROB CHANDLER: It was due to the external factors.

ROB CHANDLER: Clearly, a lot more competition from over the top, operations and the Netflix and such like of the world.

ROB CHANDLER: That was definitely having an impact at that time.

ROB CHANDLER: But also, just in terms of where we were at, we pretty much taught our customers to game us in terms of our offers and our pricing and such like.

ROB CHANDLER: So with this softening, we saw that among the top five reasons for people leaving, was very much the case of, it was down to the sense that they weren’t being recognized.

ROB CHANDLER: So it was actually being called out by customers that were leaving us.

ROB CHANDLER: We’d already launched a program in Italy that had been incredibly successful, which is called Extra in Italy.

ROB CHANDLER: So we had a framework and a success level from that.

ROB CHANDLER: And the business was very much making the transition from looking at gross customer numbers to customer lifetime value, and in a mature market, making sure that we were looking after customers in the longer term.

ROB CHANDLER: The prerequisite for all of this was a massively ambitious and brave decision from Sky, which was really to make sure that all current customers on a subscription organization could get exactly the same deals as new customers.

ROB CHANDLER: If you look at all subscription businesses around the world, that was a huge decision and marked really a step change from the organization that our focus would be fundamentally different moving forward.

ROB CHANDLER: And I guess the loyalty program then became, right, what can we do on top and how can we address this issue of not recognizing customers?

ROB CHANDLER: So our platform, I guess, became very much driven by that statistic I quoted to you.

ROB CHANDLER: That 73% of customers think that loyalty program should be about businesses and brands demonstrating their loyalty towards the customer.

ROB CHANDLER: And that really, really stuck with us and sticks with us very much today.

ROB CHANDLER: How can we recognize and look after customers in a more significant way and definitely bring them more emotionally connected to the brand?

PAULA: I love that, actually, because there’s a real clear vision there.

PAULA: There’s a very definite why.

PAULA: I think there must have been an awful lot of soul searching done, first of all, to get that trading decision, as you said.

PAULA: And as you know, I mean, certainly from my life in Ireland, you’re absolutely right.

PAULA: We learned how to follow the systems and the opportunities to threaten to leave big companies like Sky in order to try and get better deals.

PAULA: That’s just the way the business had been structured.

PAULA: And I think fundamentally that time has come and gone.

PAULA: So you’re absolutely right.

PAULA: But to actually say and commit to not doing that is a real example of thought leadership.

PAULA: So I’m so super impressed with that.

ROB CHANDLER: Yeah.

ROB CHANDLER: And that was very much what attracted me towards Sky.

ROB CHANDLER: I think that those decisions, I’d love to say I was a part of them.

ROB CHANDLER: They weren’t, they were made before my time and they were made at a very, very senior level from CEO downwards.

ROB CHANDLER: Wow.

ROB CHANDLER: And I think that that commitment really said that this is an organization that has reached a level of maturity with its customer base, that really now sees that development and that growth, and that connection with customers being absolutely core to everything it does.

PAULA: Absolutely.

ROB CHANDLER: And that’s really, really exciting.

ROB CHANDLER: And now we’re just on the journey of change, if you like.

ROB CHANDLER: The hard work, that attitude shift from the top is really what drives change.

ROB CHANDLER: Brilliant.

ROB CHANDLER: And that’s what’s so impressive, I suppose, or what I find so impressive about the organization.

PAULA: Absolutely.

PAULA: And it’s very clear on your website as well, Rob.

PAULA: So I’ll ask you maybe to talk us through the program mechanics and the value proposition now in a minute.

PAULA: But I love the fact that it says the longer you stay, the better it gets.

PAULA: So clearly launched as the first tenure based program, I know, back in 2017.

PAULA: And even now, it’s based on that exact premise of the longer you stay, the better it gets.

PAULA: So tell us exactly what is it you do for your program members and the tiers and tell us exactly how it’s structured.

ROB CHANDLER: Absolutely.

ROB CHANDLER: So we structure ourselves into four tiers, which are purely based on tenure.

ROB CHANDLER: The design of the program is all about thanking customers for the time that they’ve been with us.

ROB CHANDLER: So within that, you’re not finding us trying to, in terms of our loyalty structure, we’re not trying to incentivize the next step.

ROB CHANDLER: We’re not rewarding people for spending more and more.

ROB CHANDLER: We’re actually purely rewarding them for the time they’ve been with us and structuring the program in that fashion.

ROB CHANDLER: So for customers that are new to the program, it does start from the minute you sign up and join Sky.

ROB CHANDLER: For those customers, first of all, they get a free gift of a Buying Keep movie on us, which is a nice starting point.

ROB CHANDLER: Then opportunity to get to one of millions of experiences that we actually deliver for our customers in any given year.

ROB CHANDLER: So the premise being that we want to get customers closer to the things that they really love.

ROB CHANDLER: And within our world, we’re gifted in the fact that we have access to some incredible things that all of us would find incredible.

ROB CHANDLER: And actually, you can become a bit oblivious to within Sky, but the opportunity to meet Tom Cruise, to meet Anthony Joshua, to meet Will Smith, to attend a football match, to see a preview cinema screening, to walk the red carpet, to drive a Ferrari, to spend time down at Le Mans, to go to the Formula One.

ROB CHANDLER: All of these things are absolutely incredible and we have access to these things.

ROB CHANDLER: So the premise, I guess, from the outset is getting those customers closer to the things that they love.

ROB CHANDLER: And we reward over a million customers a year in terms of the number of experiences we actually deliver.

ROB CHANDLER: As you go through the tenure bans, so we start at silver, we don’t do bronze, we start at silver, we move to gold, we move to platinum and then to diamond.

ROB CHANDLER: Essentially, what we’ve done is we’ve broken the reward types out based on a lot of analytics and research of what customers really are looking for.

ROB CHANDLER: So those customers that have been with us for the longest periods of time, their points of dissatisfaction are, why can’t I get to the queue quicker, or get through the queue when I need you quicker?

ROB CHANDLER: Why can’t I upgrade to the best possible product from Sky?

ROB CHANDLER: It gets to the front of the queue for that as well.

ROB CHANDLER: So a lot of those aspects in the higher tenure bands are about service.

ROB CHANDLER: And then the mid-pro tenure bands, where customers are looking at exploring other services from us.

ROB CHANDLER: If they’ve come and bought their TV from us, then they’re actually interested in broadband.

ROB CHANDLER: And how do we ensure that they get the best possible deal on that?

ROB CHANDLER: And ensure that we’re looking after them.

ROB CHANDLER: So any way of upgrading their service, they should always get a really good deal on it.

ROB CHANDLER: But it’s not just about the deal they get, it’s the way that that’s serviced as well and how we look after our customers and prioritize those over others.

ROB CHANDLER: So that’s really the structure.

ROB CHANDLER: It’s quite simplistic, but that’s kind of its beauty.

ROB CHANDLER: And one of the challenges to us will be, as we evolve, we’re only two and a half years old now, but as we evolve as a program, how do we ensure that we keep that simplicity of messaging?

ROB CHANDLER: It’s all about thanks.

ROB CHANDLER: It’s all about the length of time people have been with us.

PAULA: Yeah, absolutely.

PAULA: And I find it fascinating that, particularly in the UK, it does seem that there are fewer and fewer points-based programs.

PAULA: So certainly ones that are launched in the last three or four years that I’ve talked to just in the last few weeks, it is much less about points, and it is much more about simplicity, as you’ve already pointed out for the program, and just giving things back to people.

PAULA: So I think there’s a lot to be learned for other countries about that.

ROB CHANDLER: I think it’s really interesting, the points program and where things are evolving.

ROB CHANDLER: I actually love a points-based program, depending on what it is you’re trying to do for your customers.

ROB CHANDLER: Now, for us, there are two things.

ROB CHANDLER: We call it the value equation or the loyalty equation.

ROB CHANDLER: So essentially, loyalty equals the value for money you get from a brand.

ROB CHANDLER: Plus or multiplied by the sense of feeling valued.

PAULA: Okay.

ROB CHANDLER: Divided by the overall price.

ROB CHANDLER: So if you like, value for money multiplied by feeling valued, you’ve got to sense you’re getting value for money.

ROB CHANDLER: Otherwise, it doesn’t matter how valued you feel.

ROB CHANDLER: If you don’t feel you’re getting value for money, it doesn’t make any effect on you.

ROB CHANDLER: And that value equation of what your sense of value for money is, is always about how much you’re willing to pay for something.

ROB CHANDLER: If you like, loyalty programs that are based on points, I think, are very, very good at increasing the perception of value for money.

ROB CHANDLER: So it’s a different way of serving a discount to a customer.

ROB CHANDLER: It’s a different framework of doing it.

ROB CHANDLER: But all the time, that has almost become a quite transactional relationship between the brand and the customer.

ROB CHANDLER: And that says, look, I get it, I’m going to spend money with you, but you’re going to give me a bit back and that makes me feel better, and I can get access to things via that route.

ROB CHANDLER: It’s great.

ROB CHANDLER: For us, our problem wasn’t about value for money.

ROB CHANDLER: Actually, Sky, we’re in a very, very lucky position of, people love the tech, they love the kit, they feel that the on-screen experience is the best in the marketplace.

ROB CHANDLER: In the broadest sense, the content is fantastic.

ROB CHANDLER: You can’t access that much content through any other platform.

ROB CHANDLER: So that sense of value for money was always there.

ROB CHANDLER: The issue that we had is whether or not emotionally they felt like we really cared about them.

ROB CHANDLER: And we do, but we just weren’t expressing it.

ROB CHANDLER: We were so busy doing the right thing in developing the products, that we weren’t necessarily doing a lot of the softer stuff around the sides, or letting customers feel that.

ROB CHANDLER: And that’s why I suppose the program became about that recognition.

ROB CHANDLER: And that’s why our focus really became about how do we help develop that deeper, more emotional connection and let them see the emotional side of us as an organization, which Sky is incredible in its way of being.

ROB CHANDLER: It’s so innovative, it’s creative, it’s passionate, it’s fun, it’s a little bit eccentric at times.

ROB CHANDLER: It’s fantastic, but we’re not necessarily known for that from our customers.

ROB CHANDLER: We’re known for being very good, fast, quick, you know, functional, very, very good.

PAULA: Yeah.

ROB CHANDLER: And a lot of those things, those getting to see beneath the bonnet a little bit is really what we’re about within the program.

PAULA: Brilliant.

PAULA: Yeah.

PAULA: And I’ve made the point many times, Rob, and I’m glad to hear it coming through from you as well.

PAULA: Just the importance of overtly saying thank you.

PAULA: It might be implied in the investment in Premiership League or implied in any other way, but actually it has to be more than implied.

PAULA: It has to be explicitly expressed.

PAULA: So that’s fantastic.

PAULA: And the other piece I love, Rob, is the differentiation of service and speed of service for higher tiers.

PAULA: Long before I worked in Loyalty, in fact, I worked in British Airways, and I’m going to say it was probably back in the year 1999 or something.

PAULA: But I specifically remember again, it was one of the top two things I remember our executive club members saying that they really valued.

PAULA: So there was two things.

PAULA: They loved the gold cards that they had on the briefcase at the airport, so they felt like the VIP.

PAULA: And so there was a sense of prestige.

PAULA: The other thing was when they called the call center, they wanted to skip the queue.

PAULA: And to be told, okay, yeah, you’re going to get service straight away.

PAULA: There’s not many other brands that I have seen focus on that as a loyalty benefit.

PAULA: So I was super impressed to see that Sky’s doing that as well.

ROB CHANDLER: We can do a lot, lot more on it.

ROB CHANDLER: And I think it’s so good that you touched on those points.

ROB CHANDLER: There’s a fantastic book by a guy called Gabe Zickerman, who’s a US guy.

ROB CHANDLER: She’s called The Gamification of Loyalty, I think.

ROB CHANDLER: It’s quite old now, but he comes out with a model which he calls SAPS, S-A-P-S.

PAULA: Okay.

ROB CHANDLER: And what he was saying was essentially S is for status, A is for access, P is for power, and S is for stuff.

ROB CHANDLER: Now what he was saying in his book, his book is that essentially stuff costs us all a lot of money, right?

ROB CHANDLER: Giving stuff away costs us all a lot of money.

ROB CHANDLER: And is actually the least impactful on people’s loyalty.

ROB CHANDLER: It’s actually the status recognition and access points that are far more powerful.

ROB CHANDLER: And your point about loyalty programs with airlines, how many people do you see strutting through the airport with their baggage tag on that says gold tier?

ROB CHANDLER: They want to be recognized.

ROB CHANDLER: They want that status recognition, and that’s so important.

ROB CHANDLER: And it’s important to us as people as well.

ROB CHANDLER: In our friendship groups, we want status recognition.

ROB CHANDLER: There are friends on Facebook that we acknowledge through a like.

ROB CHANDLER: There are friends that if we only liked their stuff on Facebook and never spoke to them and acknowledge them and spend time with them, we lose them straight away.

ROB CHANDLER: And we structure brands in a similar way.

ROB CHANDLER: There are brands we want to be close to, and there’s brands that we hold at arm’s length.

ROB CHANDLER: There’s brands that we dip in and out of.

ROB CHANDLER: There’s brands that we live with every single day.

ROB CHANDLER: And I think we’ve got to recognize our place in that.

ROB CHANDLER: And then make sure that we’re adapting our relationship appropriately.

ROB CHANDLER: So that access to things that other people can’t get hold of is the airline lounge.

ROB CHANDLER: And what can we do to give people access to things that no one else can?

ROB CHANDLER: It makes them feel cared for.

ROB CHANDLER: It makes them feel like they’re important.

ROB CHANDLER: And then the third one, I guess, is the power, the power to influence the brand that you feel passionately about.

ROB CHANDLER: And that’s a really key one that I think is really hard.

ROB CHANDLER: The top three are hard to do, but generally lower cost.

ROB CHANDLER: The last one is easier to do, but higher cost.

ROB CHANDLER: And generally in businesses, we’ve got more money than we have time and energy to be functional in our change.

ROB CHANDLER: And that’s one of the critical pieces for us.

PAULA: Love it, love it.

PAULA: And I’ll make sure to dig out that book, actually.

PAULA: I hadn’t heard it before, Rob, so it sounds like one I need to read.

ROB CHANDLER: Old one, but it’s a good piece.

ROB CHANDLER: It’s quite good.

ROB CHANDLER: It’s a bit like the old Peppers and Rogers, the ones I want.

ROB CHANDLER: It’s kind of like one of those foundation pieces.

ROB CHANDLER: It’s good.

PAULA: Gotcha, yeah, yeah.

PAULA: And part of my intention for the show, actually, if any of the authors are listening, is to get them on the show.

PAULA: Because it’s genuinely, they’re the thought leaders, so we’re here as practitioners, but there’s a lot of people who have sat down.

PAULA: And I do have an author coming up in a couple of weeks, but thank you for that extra one.

PAULA: And I’ll make sure again that the show notes link to that particular book.

PAULA: The next thing I wanted to ask you about, Rob, given all of the amazing stuff, I can see all the thinking that’s going into the VIP program.

PAULA: How do you measure your success for the program?

PAULA: What kind of KPIs are you looking at?

ROB CHANDLER: So our critical KPI in the business one is our impact on churn.

ROB CHANDLER: So that’s the commercial case.

ROB CHANDLER: And with the subscription model, that’s got to be our number one KPI.

ROB CHANDLER: Essentially, what we’ve done is a huge amount of work.

ROB CHANDLER: So if we’re a program that’s really about working with the emotions and how do we develop deeper emotional connection, the next step for us was really connecting those metrics to emotion, which is really hard.

ROB CHANDLER: So it’s almost looking at a hybrid, I guess, of the traditional metrics of loyalty, some quite hard business ones, into sort of the brand metrics and emotional metrics, if you like.

ROB CHANDLER: So we have a metric called ITS, which is intention to stay operates in a similar way to something like an MPS score as an overall score.

ROB CHANDLER: That metric we can connect back to recognizes loyalty and how much recognizing loyalty contributes towards that overall intention to stay.

ROB CHANDLER: Recognizing loyalty, we can then link back program satisfaction.

ROB CHANDLER: And our program satisfaction, we can link back to a number of metrics that we look at, which involves people connecting in with the program overall, their customer experience of the program, what we offer in terms of the overall proposition, the marketing, and all that sort of stuff.

ROB CHANDLER: We then got a new set of metrics, so there’s also Halo if you like.

ROB CHANDLER: So doing amazing things for your customers.

ROB CHANDLER: It’s interesting, I often relate it.

ROB CHANDLER: It’s a bit like our attraction to brands is a bit like our attraction to people.

ROB CHANDLER: If you walked into a bar, and at one end of the bar, you see someone that is super hot, stood alone, nose in their mobile phone.

ROB CHANDLER: You’re very much less likely to walk up to that person than you are towards someone that’s holding court with a group of people having fun.

ROB CHANDLER: Everyone’s looking, smiling, engaged, connected.

ROB CHANDLER: Now, they might be far less hot, but that conversation looks far more fun.

PAULA: Yeah.

ROB CHANDLER: And what we’re finding is that by recognizing and looking after our customers, it also makes us more attractive as a brand overall.

ROB CHANDLER: So we’re actually seeing quite a lot of benefit in the brands.

ROB CHANDLER: And I think O2 Priority is probably the one program that has done this incredibly.

ROB CHANDLER: I think there was a point when I was looking at research on this quite a few years back now, there was a point that O2 Priority was working far harder as an attractor for the brand for new customers than it ever was for retaining customers.

ROB CHANDLER: And this is the new world of loyalty.

ROB CHANDLER: If you just look at it as the pure focus metric of one thing, you’re missing out on so many other things that you can start to engage your customers on.

PAULA: Yeah, brilliant.

PAULA: That’s incredible to see.

PAULA: A lot of listeners will know I worked on O2 Priority in the Irish market for about 7 years, but always on the agency side.

PAULA: So I didn’t get to see the internal business casing and all of those amazing insights that you’ve just picked up there.

PAULA: So very interesting to see something that is experience led, becoming an acquisition tool.

PAULA: So that’s super interesting.

ROB CHANDLER: I think it’s about everything that a brand does that makes a brand more attractive and how you look after the people, your staff.

ROB CHANDLER: And we’re going to see a lot of this as a post COVID-19.

ROB CHANDLER: How brands have looked after their staff will have a dramatic effect on their customers.

ROB CHANDLER: How businesses look after their customers during this time will also have a dramatic effect.

ROB CHANDLER: And I think in all of your behaviors as an organization that really affects how attractive the organization becomes.

PAULA: Absolutely.

PAULA: Yes.

PAULA: And I do remember seeing some loyalty research, which actually said the number one thing that drives brand loyalty is actually transparency and trust.

PAULA: So it doesn’t matter how many points or prizes or experiences you give them.

PAULA: So I think yes, as we’re all growing up and I think COVID is driving that, as you said, so much for all of us.

PAULA: And I’d love to hear actually, what are you doing, Rob, in terms of managing COVID for members of the VIP program for Sky?

ROB CHANDLER: So COVID is a real challenge for all of us, I think.

ROB CHANDLER: And one of the big debates as we moved very quickly ahead of lockdown was really what should we be doing within the program for our customers and what should we be doing as a brand that is at the forefront of everything in the UK, news, content, and everything else.

ROB CHANDLER: So entertainment, home connectivity.

ROB CHANDLER: What should we be doing from a master brand perspective?

ROB CHANDLER: And we very quickly made the decision as an organization that anything that we did to help individual customers cope with the current situation, by this, I mean things like furlough or people losing their jobs or inability to pay, right?

ROB CHANDLER: All of that stuff needed to be really something that the brand did, not the loyalty program.

ROB CHANDLER: And likewise, a huge amount of effort went into the content that we brought to the TV.

ROB CHANDLER: We actually brought a huge amount of extra entertainment content, educational content for kids, health content.

ROB CHANDLER: We were very, very quick.

ROB CHANDLER: In fact, the quickest to put sport on hold, rather than having to cancel your sport.

ROB CHANDLER: As we lost sport from the TV, we very quickly changed our systems to enable people to hold their subscription to our sport offering, which basically meant that they were things that the business had to do.

ROB CHANDLER: And the business was incredible at its speed.

ROB CHANDLER: They said, look, the number one focus is our people and the safety.

ROB CHANDLER: The number two focus is that of our customers and ensuring they remain connected.

ROB CHANDLER: We then did a huge amount of prioritization within who could get access and making sure that people that were in the most vulnerable positions were being looked after the most, if their broadband went down for health workers, all of those sorts of things across the organization.

ROB CHANDLER: So there are things that maybe some loyalty programs would have done, that we actively made the decision that’s not the role of our loyalty program.

ROB CHANDLER: Our loyalty program is about thanking customers, not helping them cope with the situation.

ROB CHANDLER: Within the loyalty program, that was a challenge, I won’t lie.

ROB CHANDLER: Our program and our advertising campaign, which you may have seen is 100% based on the experiences that we deliver for our customers.

PAULA: Of course.

ROB CHANDLER: Within a week, we were running about 37,000 customers a week, that were attending experiences with us.

PAULA: Holy Lord.

ROB CHANDLER: We had to cut down about 150,000 customers from being able to attend those as we went into lockdown.

PAULA: Wow.

ROB CHANDLER: So our first mission was, how do you cancel a whole load of things for people without causing upset and distress?

ROB CHANDLER: We did that incredibly quickly.

ROB CHANDLER: The next thing was, what can we do with them?

ROB CHANDLER: And how do we make sure that we maintain that fact of delivering these unique experiences which is so core to our offering?

ROB CHANDLER: And very quickly, we pivoted from doing real life experiences into doing virtual experiences.

ROB CHANDLER: So the first thing we released was a Sky VIP at home proposition.

ROB CHANDLER: The same day that the UK went into actual lockdown, we released a whole load of colouring in activities, puzzles, games, a whole other stuff.

ROB CHANDLER: Any of our customers could download there and then, it’s free to everyone, they could access it, they could share it with friends and family.

ROB CHANDLER: Something really nice, quite simple.

ROB CHANDLER: We then evolved and actually we were working with Dynamo, the magician at the time, and we were just about to do a unique experience with him, and he was incredible.

ROB CHANDLER: And very quickly said, let’s all do this virtually, we can do some tricks and have an audience.

ROB CHANDLER: So we had about 500 people that were actually going to go to this event.

ROB CHANDLER: And we actually managed to go back to more than that.

ROB CHANDLER: We actually went back to the 20,000 people that entered the competition and said, look, we can now do this online.

ROB CHANDLER: And Dynamo did an amazing online experience for us.

ROB CHANDLER: This is about two weeks into lockdown, so it’s very early on.

ROB CHANDLER: The team were incredible.

ROB CHANDLER: My team are absolutely amazing, but to find a virtual platform that we could make work, to produce it, to direct it, to make sure it all connected up with people’s varying broadband capabilities was incredible.

ROB CHANDLER: But essentially, we created an interactive virtual experience.

ROB CHANDLER: About 1,000 customers actually attended it live, and about 10,000 ultimately ended up downloading or watching back the content.

ROB CHANDLER: Dynamo did some great tricks.

ROB CHANDLER: A couple of customers got to ask their own questions.

ROB CHANDLER: And this fundamentally became our model.

ROB CHANDLER: So we made a very swift pivot into virtual experiences.

ROB CHANDLER: And the wondrous thing is that, I suppose, one of the benefits for us right at the moment is whilst we all can’t get out, nor can talent.

ROB CHANDLER: So a lot of them have got a little bit more time on their hands.

PAULA: For sure.

PAULA: To be talented.

ROB CHANDLER: Absolutely.

ROB CHANDLER: So we’ve been very lucky in the fact the likes of Jamie Carragher did a fantastic session for our sports fans.

ROB CHANDLER: We had the cast of Brassic, which is, for those that wouldn’t know, it’s a show, it’s a Sky original show on our channels, which was fantastic.

ROB CHANDLER: So we’ve done these incredible experiences with anything from some have been for 10 people, some have been for thousands, but giving people the real opportunity to engage with talent in such a unique way.

ROB CHANDLER: And seeing in their houses is kind of unique, even that sort of thing.

ROB CHANDLER: So it’s been quite an experience.

ROB CHANDLER: But for the team that I work with, they’ve done an incredible job.

ROB CHANDLER: One flip the events around and produce those, but the marketing, the getting that news out to the customers, so, so incredible.

PAULA: My goodness.

PAULA: I can only imagine the logistics, Rob, of that.

PAULA: And when you said you’re rewarding a million people a year at the start, I hadn’t really absorbed the sheer scale of what you’re doing in terms of physical events and managing a million people and everything that goes around it.

PAULA: But it’s certainly what it sounds like is this could become part of your overall thank you experiences long-term as a solution to maybe even scale the amount of experiences you can give to your customers.

ROB CHANDLER: Without doubt, adversity is the mother of invention, isn’t it?

ROB CHANDLER: And we found that with all of these experiences getting people, your reach geographically is always going to be challenging.

ROB CHANDLER: If you’ve got talent that are flying in for 24 hours from the US, trying to get them to different parts of the country is impossible.

ROB CHANDLER: But through the virtual platform, without a doubt, we can reach a lot of the customers that traditionally we can’t reach quite as easily.

ROB CHANDLER: We do a lot of work to try and ensure our geographical representation across the A&R and Ireland.

ROB CHANDLER: But it’s always a challenge.

ROB CHANDLER: So yeah, I think virtual experiences will stay with us.

ROB CHANDLER: We’ve got quite a lot in the pipeline, I think, already, which is really, really exciting.

PAULA: Oh my goodness, sounds amazing.

PAULA: Yes, I think a lot of people probably have seen even this whole idea about who was responsible for your digital transformation.

PAULA: The way people have been talking about it for so many years, but now it’s actually, it was COVID.

PAULA: None of us can say it was the CIO or the CEO.

PAULA: We’ve had to pivot, so that’s amazing.

PAULA: I’m just coming up to the end of it now, Rob, conscious of them.

PAULA: We’ve been through so much already.

PAULA: The last couple of things I’d love to just ask you about is, I suppose, what have you learnt?

PAULA: Maybe being client side for the first time, as you said, I’m sure you’ve learnt an awful lot.

PAULA: I think you already acknowledged, first of all, how hard it is to get things done.

PAULA: But what would you say to people listening, running loyalty programs around the world?

PAULA: What have you learnt from your time with Sky?

ROB CHANDLER: I guess there’s three key things I’ve learnt.

ROB CHANDLER: One thing is that if I ever went to the consultancy side again, when it’s your budget, your spending, it’s a very different thing.

ROB CHANDLER: It’s very easy to be right and lecture a client on what they should be doing.

ROB CHANDLER: It’s very, very hard to make sure it happens.

ROB CHANDLER: I have a new found respect for it, and for businesses making that decision, and getting people’s buy-in.

ROB CHANDLER: I think I have so much respect for anybody working in the loyalty world or any organization, I think it’s very powerful.

PAULA: Yeah.

ROB CHANDLER: So that’s the first thing.

ROB CHANDLER: I think the second thing is mistakes happen.

ROB CHANDLER: And mistakes are really good because you learn from them, and falling forwards is so, so important.

ROB CHANDLER: We’ve made lots of mistakes within the program, not major ones, thank God, but we have had a few.

ROB CHANDLER: And you learn so much from that, and you get it right the next time, and everything gets better and better.

ROB CHANDLER: So you’ve got to make mistakes in order to progress.

ROB CHANDLER: And then I guess the third thing is, it’s very easy to lose perspective.

ROB CHANDLER: As we hone down on our metrics or we create focus, it’s very, very easy to lose sight of really what your overall agenda is.

ROB CHANDLER: I think what we often do is we start to focus on what we can measure rather than what’s the right thing.

ROB CHANDLER: And for me, focusing on doing the right thing and then working out how to measure its impact has been the success of the program.

ROB CHANDLER: We didn’t know whether or not an emotional connection with the brand would drive the churn benefit that we needed to drive right at the beginning.

ROB CHANDLER: It took a lot of leaps of faith from a lot of people and a commitment from the exec, a huge commitment, which we’re hugely thankful for, from the exec to hold true and wait to see the answers.

ROB CHANDLER: And actually, we proved out that that is very, very powerful.

ROB CHANDLER: An emotional connection with a brand is very beneficial and it does deliver the shareholder value that you need it to.

PAULA: Yeah.

ROB CHANDLER: So staying committed, keeping people aligned and keeping perspective, I think, is really critical for any of us, especially as we traverse through some quite uncharted waters going forward, I think.

PAULA: Absolutely.

ROB CHANDLER: I brought my three big learnings.

PAULA: Well, there are three huge ones, I have to say, Rob.

PAULA: And again, just before, you know, we were coming on, I was looking at the latest, you know, news about Sky as a company.

PAULA: And what really was coming through for me, I guess, was a commitment to excellence.

PAULA: So I know there’s been what was a 25 BAFTA nominations just announced for the content.

PAULA: So the core business is obviously doing extremely well.

PAULA: But I can hear that same commitment to excellence coming through in terms of what you and your team are doing to look after people with that whole integrity about driving and being loyal to your customers and finding a way to measure the emotional return and reduction in turn.

PAULA: So well done.

PAULA: I think you’re doing amazing work, Rob.

PAULA: And that’s all I really wanted to cover all from my side.

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

ROB CHANDLER: No, I don’t think so.

ROB CHANDLER: Thank you so much for having me on.

ROB CHANDLER: I’m here just representing a group of people.

ROB CHANDLER: They’re absolutely incredible.

ROB CHANDLER: My team are amazing.

ROB CHANDLER: I think we’ve always said that the last thing we ever want to be is a loyalty program stuffed on the side of a business, giving everyone an excuse to behave in the wrong way.

ROB CHANDLER: And our whole model is designed to change the way that the business thinks about its customers.

ROB CHANDLER: And that success is only made by having a fantastic exec that buy into it, but also the 30,000 people that work with Sky to really want to do that and drive it through.

ROB CHANDLER: And I think every single one of those people has contributed in some way towards VIP success so far.

ROB CHANDLER: As I say, look, we’re still only two and a half years young.

ROB CHANDLER: We’ve still got a long way to go and lots of opportunities, so it’s exciting times for us.

PAULA: Wonderful.

PAULA: Well, listen, Rob, as I said, it’s been an extraordinary conversation, huge amount of respect for what you’ve done.

PAULA: I can see there’s a brilliant future ahead for the VIP program.

PAULA: So just want to say from Let’s Talk Loyalty, thank you so much to Rob Chandler from Sky UK.

ROB CHANDLER: Thank you so much.

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