Paula: Hello and welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m Paula Thomas, the Founder and CEO of Let’s Talk Loyalty, and also now Loyalty TV. Today’s episode is hosted by Amanda Cromhaut, the Founder of Truth, an international loyalty consultancy, and the author of the book, Blind Loyalty 101 Loyalty Concepts Radically Simplified.
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Amanda: Hi, I’m Amanda Cromhout from Truth and I have the app. Absolutely. Pleasure today of talking to the individuals who have produced one of the most fantastic white papers in the loyalty industry that gets released today. So what Britain’s want from loyalty is released by Mando-Connect with YouGov.
So today’s podcast is an interview with Charlie Hills, the Chief Strategy officer of Mando-Connect and her colleague, James Davies, the Senior Strategist and Analyst at Mando-Connect. We also have Nick Fishbourne, who’s the Group Account Director from YouGov. The three main takeouts from the White Paper are that Britons are using loyalty programmes more, and they’re actively holding more programmemberships and using those memberships in a deeper way. And thirdly, there’s an absolute explosion into the marketplace of partnerships that benefit both, both the consumer and of course the brand itself.
The white paper also investigates key transactional metrics and key emotional metrics. So for a real feast in terms of what Brits want from loyalty, enjoy this podcast on Let’s Talk Loyalty.
So there’s absolutely nothing quite like a little bit of fabulous research coming from Great Britain. And today we have the best people to talk about that. So I’m welcoming three people to talk to today, Charlie Hills and James Davies from Mando-Connect and Nick Fishbourne from YouGov. Welcome to all of you. What an absolute privilege to have you on the show.
James: Hello.
Charlie: Thanks for having us. Delighted to be here.
Amanda: Yeah, I mean, there’s so much I need to ask you, so I’m gonna go straight into it, but I’d be absolutely remiss of me not to get a three, a threesome answer to what’s your favorite loyalty program. So let’s start with ladies first. Charlie, you’re no stranger to the Let’s Talk Loyalty Show. So as a guest rather than a host, what’s your favorite loyalty program?
Charlie: Oh my God, it’s so exciting to be asked this question and anyone who knows me that I change my mind every week because I am a super loyalty nerd. So a program I want to talk about, which I think is so interesting because of positive disruption is Beauty Pie. I think it’s a really interesting proposition. It’s a subscription model. It’s got hybrid promotional overlays. It’s got member pricing. It’s got member referrals. It’s got some fantastic kind of free products and benefits as part of it.
And I think what’s really interesting is in the last sort of 12 months, they’re really, you can see the innovation in the program. You can see them bringing in members’ weeks. You can see them trialing different new things. And then what I love about the program as a loyalty nerd, as well as obviously a huge fan of the products is that every time they do something, you can then see it applied really smartly sort of three or four months later. And then constantly optimizing it. I think that’s one of my favorite things about the program. So yeah, definitely Beauty Pie. If you’re not aware of it, check it out. Three or four years ago we’d have been arguing is it a subscription program or a loyalty program? And I think it’s probably both. So a beauty answer for my lady’s first question.
I’ll hand over to my colleague James. What’s yours?
James: Yeah, I think mine, mine does change kind of weekly as well, depending on what we’re working on. But I think one of the most interesting programs at the moment quite topical is The Paddock by Rebel Racing. Which I know has been a guest previously on, on the show.
But I just really like, I think they do a really good job of dealing with their kind of different audiences that you have in F1 at the moment. You kind of obviously have those kind of die hard fans that want something very different from those people who have maybe watched Try for Survive fairly recently. And literally just being kind of introduced to the sport. So I think they do a really good job of actually kind of tackling those two different audiences in a really kind of brand appropriate way.
Amanda: Beautiful. I love it. God, I’m getting some new ones here. This is great. Nick?
Nick: Well, as someone that sits outside of the industry, I’m afraid I’m not going to niche or left field here. But to give you some context, I mean, I have three small children and a full time job. So my bandwidth for leaning into loyalty programs is somewhat limited. So I have to say my favorite is Tesco’s Clubcard. And that’s primarily because It takes very little resource for me to meet to leverage it.
We do our shopping online. I’m automatically logged in. So I get access to the member pricing. And interestingly, I saw in the white paper when I read it a few weeks back, that Tesco are under investigation at the moment by the CMA for not showing unit breakdowns in their pricing. And interestingly, I had actually noticed that you almost have to just take their word for it that it’s a good deal, you know, or get your calculator out and work out, you know, what the cost per gram or milliliter is. So, yeah, it’d be interesting to see what impact that has across the industry over the next few months.
Amanda: Yes, absolutely. Well, it’s all three of you that what you’ve mentioned, I always do it as part of the show, a quick reference to a hundred favorite loyalty programs in Chapter 100 of Blind Loyalty. And actually any Tesco goes out of your three as I mentioned. So for everyone listening, that’s great. Two new ones for us to add to an even longer list, so that’s super exciting. And yeah, Nick, we’ll be all watching that. I think the whole world will be watching the outcome of that investigation without question. I’ve made many a reference to it. So let’s see what happens. So thanks for that. That’s great. Three programs. That’s one of which I think everyone knows about. The other two do know about now.
So, so before we get into unpacking what I is a lot of unawaited paper, white paper every year. Would it be super useful if you could very briefly just introduce yourselves and the roles you play and a quick synopsis of why, well, Nick’s already admitted he’s not a loyalty nerd and he’s not a loyalty person, but it’s interesting to know why you’re on the show in terms of your knowledge that is relevant for the loyalty industry. So let’s actually start with you, Nick. Quick quick introduction to you as Nick in terms of your career and what brings you here today.
Nick: Yeah, thanks. So, well, for YouGov. We’re a global research data analytics group. I’ve been there for about three years now, three and a bit, but I’ve been working with Charlie and the team at Mando including James for all of that time. And we’ve partnered on a number of white papers. And this is our latest iteration. For anyone not familiar with YouGov, we, so we have millions of panelists worldwide. That’s where we get our data from. I think we have just over 25 million now.
Amanda: It’s incredible.
Nick: But our products and our services, we work with the world’s most recognized brands, agencies, media owners, and we help them to plan, activate, and track their marketing activities, essentially. That’s what it boils down to. Our role here in this white paper is to provide the data that’s fueled much of the insight. That we’ll be hearing about today.
Amanda: Yeah, lovely. I see from the little bit of research I’ve done, excuse the pun, research on research, that you call it living data. I love that. It makes it really light.
Nick: That’s right. Yeah. I mean, as a company, we’ve been around for over 20 years now. So we’ve been collecting data for all of that time. And because we have really high retention rates on the panel, we’re constantly collecting data from the same people, which means we can understand how things change over time, perceptions and attitudes change over time and crucially how consumer behavior changes.
Amanda: Yeah. Fantastic. Great. Thanks, Nick. Thank you. James?
James: Yep. So I’ve been with Mado Connects for the last five years. I kind of started in the partnership team where we were actually kind of delivering loyalty rewards for some of the biggest kind of loyalty programs in the UK. And actually two years ago, I switched into the strategy team to work with Charlie as a Senior Strategist and Analyst. So it’s been fascinating to kind of go from actual delivery through to the thinking behind actually how we design and come initiate some of these new programs for compliance in the UK and abroad.
Amanda: I think that’s the right way around here, James, because you get the practical knowledge and you really kind of get to roll your sleeves up before you sit behind a beautiful big desk describing strategic imperatives. So well done you, because you can actually see the real reality of what you’re strategizing about.
James: Yeah. It’s definitely more fun on the stretcher, you know,
Amanda: Sure. Your college and implementation might fight you on that one. But anyway, and Charlie doesn’t need much of an introduction to the Let’s Talk Loyalty audience for the reasons not just because she’s the host of one of the let’s talk loyalty shows once a month, but also cause you’ve been featured a few times on here, Charlie, but just give us a quick background into your, rise through loyalty and then I’m going to ask you to follow on if you can to give us a bit of a broader overview of Mando-Connect.
Charlie: Yeah, sure. It’s a great question. It’s so awesome being interviewed rather than interviewing. It’s fabulous. It’s lovely. I hope everyone, hello to everyone who’s listening. So I’m Charlie Hills. Hopefully you know me. I co-founded Mando-Connect, which is a loyalty specialist partnerships and rewards agency for WPP back in 2017.
And a huge part of what I have always been passionate about. And I think the thread that runs through my whole career is about smart use of data and insight to make better and more informed decisions. And that really is one of the founding principles of Mando-Connect. We’re really passionate about understanding what people actually want about researching regularly and talking to people on the frontline and talking to people to understand what they want from loyalty programs.
And then critically, applying that insight into action. It’s one of the things I love about Beauty Pie. You know, you can learn as much as you do, but then you do it. You learn from it and you optimize and you innovate it. And since we found it and connect back in 2017, we’ve worked with YouGov as a brilliant research partner.
We all have it on our desktops, we use it daily. The data updates weekly, and it’s a fantastic resource for us. And I, you know, obviously Nick and I have done a lot of papers together and a lot of presentations together, but I cannot recommend them highly enough as a research partner for the adaptability as well, and the flexibility that they bring. And we really get live, live, living data that we can then use. So research is a huge part of what we do at Mando-Connect and then how we apply that is in partnerships and rewards for loyalty programs.
I’m a huge loyalty nerd. I started my career back at Boots Advantage Card, fresh out of Warwick University, doing the Boots graduate program. And I’ve stayed kind of in that vein ever since. I think it’s a fascinating industry and a fascinating sector. And what we’ve seen in the last sort of, well, seven years since we founded Mando-Connect is a huge rise in programs doing interesting things in brand partnerships. And actually using them across the entire loyalty life cycle, but also across those broad range of loyalty metrics and KPIs that are so important.
So partnerships for acquisition, partnerships to re-engage LAPS members, partnerships for promotions, partner rewards, which is a huge part of what we do at Mando-Connect. So I think it’s it’s a really interesting time to be in this industry and every year we do this research. We also use it weekly, but we just do the big, you know, one big show only a year where we talk about the kind of national average.
We also publish now European research, which we also do with YouGov. So I can’t underestimate the importance of it and my passion for sharing it. Hence why I think the Let’s Talk Loyalty podcast is such a great format. So you’re going to hear all about the research today on it, but please do follow up and get in touch questions.
You know, we can look at all this data at a brand level, at a segment level, at a sector level, at a psychographic level, at a demographic level. We can really dig into it. And Nick will talk to you more about what’s available, but it’s here. We want to share it. We want to do better as an industry. And that’s, you know, really what motivates us all.
Amanda: You can definitely tell, Charlie, you’re a data nerd. Your whole excitement went up when you started talking about data.
Charlie: I know! I know, it’s reallyembarrassing to see me winning for graphics.
Amanda: It’s fabulous.
Charlie: It’s probably shameful. I need to get out more.
Amanda: It’s fabulous. Well, I’m actually going to stop you talking about the data and let Nick speak in a moment, but it’s quite interesting. You started your career in Boots and then I ask you on the spot, what’s your favorite program? And it’s still Beauty, so. through Beauty Pie. So that’s cool. It’s obviously stuck in your veins. That’s lovely.
Let’s switch to the real data discussion, not to dismiss Charlie’s data capability. So Nick, I’m also fascinated by research. We do a lot down in our market as well, similar to this, but I don’t know enough about how you approach it, so I think it’d be absolutely awesome if you can share with the Let’s Talk Loyalty listeners your research methodology that makes this so, so much of a solid, I assume longitudinal study as well, because you’ve been doing it over time.
So yeah, can you unpack a little bit of that? Because there’ll be a lot of research and data nerds listening in who you are, you know, really do understand how to do this properly, and it’d be great if you could share that, please.
Nick: Yeah, of course. So, the data comes from one of our flagship syndicated data products called Profiles, YouGov Profiles. The easiest way to get your head around this platform is to think of it as an enormous interactive data bank. So in the UK Profiles platform, it’s made up of data from our most active panelists. So we have data from about 300,000 people in the platform. They’re our most active panelists from the UK panel membership, which is about two and a half million now.
Now, I think, as Charlie mentioned, we’re collecting data all the time, every single day, but we update the profiles platform on a weekly basis. It’s what we call a 12 Month Moving Average of Data. So, each week we take on new data from that week and we drop off the data from 52 weeks ago. So, the data is always up to date, it’s always fresh, it’s always living, as you’ve said.
What data do we have on these people? To give you an idea of the scale or the depth, I should say, of what we have, there’s about 240,000 different data points within the platform. So as I touched on earlier, we have really high retention rates for our panelists, which means over time we can collect really broad, robust data set on each individual.
When people sign up to the panel, obviously, we’re asking them kind of standard demographic questions, but we might also ask things like your media consumption. Where’d you shop? Who do you bank with? What sport do you play? What sport do you follow? Of course, what loyalty programs are you members of?
But the real, one of the real powers of Profiles is that we can recontact people, provide their data for this platform. So if, for example, you’ve got an audience in there of people that are a member of a certain loyalty program that’s just launched, well, we can recontact them and ask them additional questions. You know, why are you a member of it? How much do you engage with it? Would you recommend it? How do you think they could improve it? And that provides really valuable insight for our clients. So predominantly Profiles is an audience analytics platform allows you to profile audiences. But it’s also more than that. It’s interactive, and it can drive a huge amount of insight for clients.
Amanda: Phenomenal. Like I’m very used to data and research, but that’s like, mind blowing. Well done. It’s amazing. I can see why so much focus is placed on this to produce fabulous white papers. So thank you for sharing that.
So, I’m going to switch the conversation to the white paper now. So, Charlie, I know from the past this is definitely not your first gig at something like this. So can you give us a little bit of a history of this white paper? I know it’s expanded as well, and we’re going to be talking shortly in a few weeks around Europe, outside of the British white, British marketplace. But tell us a little bit about the history and how many additions you’ve had and then we’ll get into the insights.
Charlie: Yeah, I mean, thank you for asking the question. It’s really been, it sounds silly, I definitely need to get out more. It’s been a lifelong quest, I think, for proper research and insight in order to make those smart decisions.
And when Joe, Becky and I founded Mando-Connect back in 2017, it was glaringly obvious that at a market level, there wasn’t a bible. So we looked, you know, we looked at fantastic research in South Africa. We looked at fantastic research in America. We looked at what’s happening in Australia. You know, there were lots and lots of reports, but Britain has long been held up as one of the most sophisticated, diverse, complex, you know, loyalty markets in the world.
And, you know, almost on day one, it was like, right, well, what’s out there? And the answer was, a big fat, nothing. There were client specific reports, segment specific reports, but there was nothing that actually said what’s happening in the British market. And so we were looking for insight providers. We obviously looked at everybody that was available and sort of fell in love with YouGov for the breadth and depth of the information.
So as Nick has talked about, you know, there’s nothing like it’s live, it’s weekly, it’s a huge sample. We use it for partnerships. You know, we can look at, you know, what brand, what their relationship is, the brand that we’re working on behalf of. But also what other brands do they like and love? And what do they like to do in life? And then we use that to make those decisions robust. So if we’re doing a grocery partnership for a loyalty program, we use that data to inform which grocery should be and why. And we’re looking at, you know, who shops where, what do they think of them? What’s their value perception of them? Do they like them? And it’s robust. By any means, limit the creativity. It just gives you the creativity and the innovation in the right space. So that was where we started.
And then in 2017, I basically had a crazy idea, which was, I’d really like to write a report on loyalty for the nation. And I was lucky enough to have a very supportive CEO and I went over and I, well, coffees for the head of data products that you go, it was, you know, it’s very exciting page and sort of drag and send it and said, look, this is what I think we could do with the white paper. This is the impact. I think it would have on the industry. This is the impact. It would help for me founding an agency, you know, famous fame and fortune and all the glories that go with. And this is what we think it could do for YouGov in a very kind of partnership space. It could open up a new avenue for YouGov. And I was lucky. I’d love to say it was a big strategic move. It was the right idea at the right moment in time. And since then we’ve gone from strength to strength. So we did what the British want from loyalty programs in year one in 2018, we published it. We’ve then alternated between loyalty and promotions.
Since then, so this is actually the fourth edition of what the British Modern Royalty Paper. And every year we sit down with our clients, with industry thought leaders and ask them what are the hot topics. So we have some core data points that run throughout all of them, membership, appeal, impact, the role of loyalty, the types of mechanics, you know, the number of programs people are a member of. But every year we look at, you know, what are the hot topics this year and what do people need to know? And we don’t limit it. We don’t limit it to our clients. We share it freely with everybody. We share it across WPP. We share it on formats like today because we genuinely believe that actually we can all do better.
And as we see as the industry does better, every program does better. So this year we’ve added in topics more on promotions. We’ve added in more on brand partnerships, which has been a hot theme across every conference that we’ve all been to as brands are struggling, you know, programs are struggling to achieve more for less.
We’ve looked at sustainability, we’ve looked at our popularity context, we’ve looked at what kind of bonds, you know, drive people into loyalty programs. So that’s the history of the research. And then as we said in 2023, we looked up and went, it’s actually really important that we look up what else is going on across the world. My big ambition is to do a big global report. But for now we’re looking at Europe as a really natural compliment to the fantastic truth research, the Australian research, the American research, and all those other views.
Amanda: Yeah. Yeah. Fantastic. Well, the fourth edition, I know what it takes to pull one of these together and working with a partner like you have with YouGov, I know how important that is. So well done.
Charlie: Thank you.
Amanda: I mean, it’s, I’m sure the marketplace is extremely grateful. So let’s get into what are those key insights? If you were to try and explain briefly on a podcast to the global worlds of loyalty, what would you say are those key insights?
Charlie: Oh, please. download and read the paper. It’s available on the Mando website and we’ll obviously put all the links in the bio because what I was trying to think about what are the most interesting things in the paper and I could talk about this for hours but I promise I won’t.
So I think the big things that I’ve picked out to share this year is firstly how extraordinary the step change in loyalty has been in the last two years in the British market. So what we saw during the pandemic was a drop off in loyalty and actually we’ve come back to more than pre pandemic levels and I think that’s been driven by a number of factors.
We’ve seen consumer demand significantly increase. We’re seeing a significant cost of living crisis in the British market, a recession and some real challenges on people’s household budgets. And what that’s done is we’ve seen huge shifts in the data to propensity to engage in loyalty programs, claim rewards, active rates are up. People are genuinely using loyalty programs and the benefits that they get to make their lives better. You know, if they can’t afford to go to the cinema with their kids in the way that they would have done before, they’re turning to their loyalty program to get those kinds of free benefits and rewards. So consumer demands peaked.
The technology is finally catching up with all the promises that it had around personalization, and relevance and gamification. We’ve seen a huge demand from businesses and brands as they’ve suddenly realized that what loyalty programs do best, they really need, you know to keep their existing customers is so important to offer high value, you know, reward and recognition to those bases is so important.
And of course, first and 0 party data is as that world is changing as well. And then we’ve also seen, and I hope this is partly. We’ve helped contribute towards this, a real rise in loyalty programs going on the agenda. So, whereas 10, 20 years ago, you know, loyalty was a small department in, you know, the second office over to the left.
Actually, loyalty is really at the top table now. We’ve got some really smart programs. We’ve got some really brilliant people working in those senior roles. They’ve got some great insight. And I think all of that has contributed. So loyalty going a bit nuts, if I’m completely honest, and the British public have gone a bit Taylor Swift about their loyalty program. So to check out a couple of stats, because I know that’s what everybody wants. We’ve seen an extraordinary 79 percent of the British adult population and our members have at least one program that’s up from 70%. My favorite stat is that 97 percent of the British adult population are fans of at least one loyalty program up from 86 percent two years ago.
Amanda: 97, wow.
Charlie: 97, right. I think that’s extraordinary. That’s almost complete saturation of I like loyalty programs in the market. When you think how different that would look in other markets, it’s extraordinary. We’ve got nearly three quarters, so 74 percent thinking that loyalty programs are a great way for brands and businesses to reward their customers, up from 70 percent two years ago. And 54 percent of our British adult population actually think that every single brand should have a loyalty program.
And I think that’s, you know, more than half the people are saying, I want one. I want one. I want one. That for me is an indicator of saturation. I think if we start to see drops off in that, then actually we need to start getting a bit worried. But we’ve seen a whole array of new programs launched in the last two years from, you know, massive brands in the British market, you know, McDonald’s, ASDA, Robert Dias, you know, kind of stalwarts of the high street prep and all launching different kinds of programs. And people are still saying, I want more, you know, I want more. I want more. The Brits have gone nuts for loyalty programs in the last two years. And that’s brilliant to see personally, because obviously we work in the right industry. So that was my number one.
My number two was about what that membership looks like. I often get asked about, you know, is a loyalty program the right thing for us? And Amanda, I know you face that question with a lot of brands that you work from, you know, actually, you know, who’s doing it really well. And I think what’s so interesting in the British market is we’ve got a savvy consumer base who are active members of programs. So the average Brit is now a member of six loyalty programs. And that’s what they’re asked in research. So the reality is they’ve probably joined a few more over the years, but the average is six and that’s up from four or two years ago.
What we introduced this year, which was James’s brilliant idea was we were trying to find a way of measuring active rates and actually defining what an active rate would look like. And so we’ve asked the British public and they’ve told us that they’re active in three programs. And how we defined active rate was any form of activity, because there’s so much variation from, you know, grocery to telco, to media, to cinema, to entertainment. So any form of activity in the program, three, they’re active in. And so we’ve got an average active rate in the British market of 51%, which I think is extraordinary. When you think about actually, you know, what loyalty programs are set up to do. So 51 percent is an average active rate. So that was my second one. So people are doing a lot.
I then struggled to pick up my number three because there are so many interesting things in the paper, and I do encourage you to check it out, you know, impacts of cost of living crisis. We’ve got a brilliant popularity index. You know, Nick is right. Tesco Clubcard is the most popular program in Britain points still dominates from a mechanics point of view. Savviness is still really important. So 59.7 percent of Brits are saying, give me rewards that get me money. Partner rewards are still hugely popular. You know, almost a third of the British public will join a program just to get partner rewards, so 30%.
And then we continue to look at really important things like sustainability. So 71 percent of people are saying it’s really important that loyalty programs help people live more sustainably and support the environment. We’ve seen a big rise in promotions. So nearly three quarters of people who are members of loyalty programs take part in promotions, which is significantly more than people who aren’t.
But my third one and my kind of key point, and I know we’re going to talk about impact later is about the rise of partnerships. And I was saying, Amanda, this does feel slightly self serving because obviously I run a partnerships and rewards agency, but I promise it’s a hot topic from thought leaders across the industry. All the conferences now, and what we’ve seen is a rise in breadth and depth and smartness of partnerships and loyalties.
Ten years ago, partnerships and loyalty meant coalition. And now it doesn’t, you know, we’ve identified in this research eight different types of ways that loyalty programs are using from partnerships. So retention and partner rewards, promotions, coalitions. But coalitions big and small, you know, those big formal coalitions. But actually we’re now seeing smaller coalitions as well. Corporate social responsibility, partnerships for acquisition to bring in new members and obviously re engage LAPS members, revenue generation, innovation and sponsorship. So we’ve seen, you know, a huge rise in the sophistication of partnerships.
And then within that some really interesting things about what types of brand partners, you know, the British public want at the moment. So 54 percent of them want loyalty programs to be doing partnerships with really big brands that they know really well. There’s a real confidence deficit in the British market at the moment.
And big brands, I know well, is more important than ever. We’ve also gone a bit British. So 30 percent are saying they only want partnerships with British brands, which genuinely quite surprisingly.
Amanda: That’s interesting. Yeah.
Charlie: I tend to think, you know, actually that breadth and depth is really key, but again, it’s about brands. I know brands I feel comfortable with.
And actually what again was quite surprising is that then we see value. So in a lot of the other metrics, my value is right up at the top because of the cost of living prices, but in your choice of brand partner value is that so 26% want partnerships with brands that are offering really good value. And again, that’s a huge shift for us in the British market. You know, we might’ve been a bit snooty before we might’ve only wanted the premium round partnerships, but actually the public are kind of gone. No, what I want is big brands. I trust British brands and then value brands. And I think that’s quite a shakeup in the industry. That’s a big change from sort of five years ago.
So those are my big three memberships gone nuts. Actually, breadth of membership is really key. And then partnerships is really important and interesting kind of insight into what types of brands they want.
Amanda: Well, thank you. I want to touch on partnerships in a moment with James, so I’ll come back to that.
But what I really loved also, and selfishly just thinking about what happens in the South African market as a comparison, because it’s a totally different market and yet there’s so many of the stats are comparable, but Nick is probably like cursing me here because it’s not comparable because it’s not the same research.
But like, I see, you know, you make reference to the youth being less engaged than the general population. But I do see in some of the data that you’ve got differences across gender that we don’t see in South Africa. We see male and females acting the same. So the South African male seems to be more, you know, more aligned to the South African female in terms of their loyalty usage.
And so, and usage stats are different in South Africa. There’s a higher usage stat than what you see in the UK, but I think you’ve got a more aggressive market, more choice and so forth. So that would make absolute sense. But today isn’t about a comparison, but there’s just the key things when you were talking really hit me. Yeah. Yeah. Yeah. Yeah.
Charlie: So I think those comparisons are fascinating because then you can try and look at and explore, well, why is it different in that market? And critically, what can we learn from that? Traditionally, if we talk about gender, we’ve really struggled in the British market to engage a male audience.
The theory was always that because the biggest sectors were supermarkets, Boots, Advantage Card, and Co-op, that actually maybe that had a factor. Who knows? Nobody really knew why. But then what we’ve seen in the last two years is massive increase. So we’ve got 74 percent of our male adult population in the British market are now members of at least one program, you know, that’s significantly increased and we’ve seen big increases in youth as well.
My personal theory on it is that actually programs are starting to think smarter. So they’re actually trying to understand what those audiences want, what’s different about them and tailor their props to it. I also think there’s a natural rise in demand in a cost of living crisis, but yeah, it’s interesting. I’d love to, but we’ll get into that on another podcast. I’m sure there’s a lot we can learn from each other’s research and markets.
Amanda: Absolutely. So James, I really do want to understand the, you know, as Charlie says has been an absolute explosion of brand partnerships and in the paper, you unpack all those different types of partnerships, which I think is absolutely beautifully spelled out. So can you talk us through a little bit of that, you know, the rise of the partnerships that you’ve seen in the British market?
James: Yeah, so as Charlie said, it’s been such a significant change that we thought we wanted to really devote a good chunk of the white paper this year, specifically to kind of brand or brand partnerships within loyalty.
And we’ve added a few extra questions in from previous years, and I think the really nice thing is that we’ve seen this lovely kind of dual benefits from, for both consumers who say actually they really enjoy it when loyalty programs offer partner rewards. Actually we saw in the research this year that 63 percent said that they wanted to see kind of partner rewards as part of that overall mix.
So the majority of the Brits want to see those rewards within programs. And they also told us why they like to see those kind of brand partners. The three kind of top things which came back were the fact that actually utilizing those kind of partnerships increased the variety for consumers.
It increased the ability to kind of treat them and offered kind of greater value. And I think especially within the kind of the cost of living crisis, those kind of value and treats the partners can offer has been such a valuable thing. That’s programs have been able to kind of leverage. So it’s a really nice kind of consumer benefit.
But on the flip side, actually program owners really, really enjoy using punches as well. They offer kind of great value. We’ve kind of highlighted some of the big benefits that we’ve seen just the ability to actually offer consumers more for less. Whether that’s kind of combining resource or just kind of generally returning a bit more of a higher ROI versus kind of traditional marketing channels. The ability to kind of tap into kind of more customers. So actually finding new ideal customers through brand partnerships leveraging brand affinity. And then also that points around actually just being able to use the partner brand to kind of increase appeal, relevancy and variety. Yeah, it’s a lovely kind of dual benefit on the consumer side and the program side as well.
Amanda: So we always, I always talk about like a tripartite benefit actually, because you’ve got, it’s got to be a win for the brand, a win for the partners, whoever they are, and a win for the customer, you know, because if it’s a win just for the brands and the partners aren’t benefiting, it’s not going to have longevity. And if it’s a win for the customer, but not the brand, that’s not going to make sense in the longterm either. So absolutely.
It’s and I, we speak to so many. program operators who are, who have partnerships and they all say exactly the same thing. I think there’s an old quote from, um, Brian Pearson around in his Loyalty Leap book from many years ago, where he says, we’ve got to teach the elephants to dance.
So the big brands aren’t the bullies in the room and they appreciate the partnerships with the smaller players. They’re prepared to dance with the smaller players. So there’s a lot of history in this. It’s like, it’s not like this is new, right? As Charlie says, all the conferences are talking about it, but what’s coming through in your day, coming through in this white paper is Yeah, it’s not new, but wow, is it important for A, the brands and B, the consumers.
So, James, can you give us a couple of case studies that will bring this to life? I know you do feature some really fantastic brands in here, so talk us through those, please.
James: Yes, we’ve included four examples within the white paper each kind of looking at four of big benefits. And again, the interesting thing is, when you look at those kind of case studies, it’s not always just one of the benefits that you see, it’s often kind of 1, 2 or 3 of those kind of key benefits that actually are kind of highlighted within the case study.
I mean, we’ve included a few, for example, Waitrose and Caffe Nero that was a really lovely one from MyWaitrose that we we’ve looked at obviously that the history of offering kind of free coffees and papers is, it was always one of those really loved kind of consumer benefits and it caused a bit of a stir when they decided to remove it during the pandemic.
So one of the examples that we’ve come, we’ve given for that more for less benefit was just how Waitrose and MyWaitrose used that relationship with Caffe Nero to not only bring back their free coffee reward, but in a much more kind of sustainable collaborative way. So not only did they bring in the actual kind of Caffe Nero coffee into the stores to actually give their customers a kind of better, more premium coffee to drink. But they also leveraged the loyalty program together. So actually you could combine your MyWaitrose and your Caffe Nero app for additional benefits on both sides. And through that as well, Caffe Nero launched their range of at home coffee options.
So things like pods and things that were completely new products for them. They managed to launch with Waitrose and generated a whole bunch more of kind of PR and interest through that partnership. That would have cost them a lot more if they were kind of going through those kind of traditional marketing channels for that launch.
Amanda: Absolutely, love it. It is fascinating how I think often you, what I’m seeing more of as well, and what you’ve just described is there’s the loyalty bilateral relationship. So, you know, the coffee with the Waitrose program. But then there’s a traditional relationship with distribution, right? So, you know, the coffee brand needs to distribute through a retailer and have that partner.
And for the customer, they don’t see these pillars that we operate in. You know, we operate with buyers and sellers and procurement and loyalty program managers, but the customer, it’s just a couple of brands that they wanna interact with. And to be able to get that cohesive offering across the board, across multichannel is so important. So it’s really nice to hear you describe that. Thank you very much.
So, so, I mean, Charlie, you’ve described, like, the impact of this stats and so on, but what is the real, like, the real impact? Like, what’s the take home value of this? Like why are we even talking about this stuff?
Charlie: Yeah, and we always round out the white papers with looking at what are the national benchmarks for impact and loyalty. I think it’s really important as a loyalty program owner that we take these with a pinch of salt, because obviously the impact varies by your sector, by your customer base, by your brand, by your business case.
But actually, when we started doing the white papers, we were like, why is nobody talking about the impacts of loyalty programs? You know, I’m privileged. I sit with a lot of our clients and I know what the return on investment is on a loyalty program across multiple sectors. And we know how you know, huge that is, but of course, nobody wants to share that information. So we thought it would be really useful to provide them the British people and British people working in loyalty with some sort of benchmark stats.
So we split them into six core metrics. So we look at functional impact and emotional impact and in our functional impact stores. We see a 58.6% increase in frequency as a consequence of being a member of a loyalty program. So I will shop more often. A 47.6%. I am more loyal when I’m a member of your loyalty program and 43.2% of the British public, even in a cost of living crisis saying I spend more with a brand when I’m a member of its loyalty program. Now those are huge and some really easy to calculate contributors to a business case kind of behavioral hard, hard metrics.
However, we adhere to the Forrester principles. We think about emotional loyalty and we actually know and recognize how important that emotional loyalty is for the longer term relationship as well. You know, this isn’t a transactional loyalty market. We have moved on. So we also look at three emotional metrics. So 48.2 percent of British adults will say, I find a brown more appealing when I’m a member of its loyalty program. 38.9 percent will recommend that brown more when they’re a member of its loyalty program and 31.6 percent say they feel more emotionally connected to a brown when they’re a member of its loyalty program. And the value there versus what you’d be looking at in other marketing disciplines is enormous. You know, and I promise that all the data we have is fully validated and fully robust. So a really strong impact on behavioral loyalty, a really strong impact on emotional loyalty.
This year, we had a lot of debate about, should we be thinking about other KPIs for loyalty? Should we be thinking about corporate social responsibility KPI? Should we be thinking about sustainability KPIs? But we have as yet to see programs demonstrating those KPIs in the market. So for now we focus very much on the transactional and the emotional, but I’m really hoping that by 2026, when we run this research again, we will actually be looking at, you know, what impact are those loyalty programs having on people, society, and the planet. I think that’s something really important for us all to be thinking about, but for now, very strong impact on behavior, very strong impact on emotion.
Amanda: I love the emotional metrics because I mean the transactional metrics are either, you know, that, as you say, you feel like the markets moved into a more emotional state and transaction is so easy. It’s easy to measure once it’s in place.
But I was on a webinar recently where we were trying to rack our brains over the most robust way of measuring emotional loyalty and other than the stated behaviour, stated emotional state, and Nick, sure that’s, I saw you nodding very much so when Charlie was talking through this. I think this is probably the most sound way of measuring it, right? I mean, otherwise, how do we measure that? So it’s great that you’ve put those stats in there.
We also ask a number of emotional type questions, like we call them the Loyalty Motivators in the South Africa paper, and it actually gives you an insight that no no business case can give you at the end of the day, but the very few boardrooms maybe sign off on the CapEx investment based on some of those emotional statements, so.
Charlie: But then I think what’s so interesting, you know, we, I know you’re a similarly huge fan of Rory Sutherland as I am, and the behavioral science approach and what we can learn in loyalty marketing from behavior. And that’s one of the things I find so fascinating in this research is actually, you know, research is a compliment to psychology.
And actually, if you think about us as humans and individuals, actually, what drives us is emotion and is the positive experience. And actually, I think the two inevitably have to work together. And sometimes I think that maybe we’ve just relied on those transactional metrics because they’re easier to measure.
And actually, maybe we should all be thinking about that or impact on brand I love, you know, brand that suits my lifestyle. I wonder if the true value is there. So, yeah, I think it’s such an interesting area. I think we need both. But I wonder if in the longterm, as we get smarter and we get smarter kind of methodologies, actually, we will drive more to the emotional ones.
Nick: I think there’s also a degree of that system one, system two thinking at play, quite often, you know, the system one thinking is that, oh, you know, it’s going to give me more value. We’re going to save a bit of money, but actually that’s quite short term. That’s our initial response, but actually the longer term system to thinking.
So, you know, I have a really strong affinity with this brand. I agree with their voice brand, what they’re saying, what they stand for their yes, G impact. So yeah, like Charlie, I find the psychology behind consumer behavior absolutely fascinating.
Amanda: Yeah, absolutely. Absolutely. Well, keep measuring it. And I’m sure within the YouGov data, there’s all sorts of other exciting pieces of data that doesn’t even make this white paper that could back up a lot of that thinking. So I think we’re going to definitely have to save that for another day because we’re running out of time and I could genuinely sit here and just ask you questions all day long.
So my final question to anyone who’d like to answer it is, the audience of Let’s Talk Loyalty is beyond Great Britain and there’s a global audience. So what would you say is the most transportable insight for non Brits who are listening to this show? Because it’s, I know that it’s worth downloading even though I’m not based in the UK. I’m hoping that other white papers around the world are worth downloading because of the insights that also come through.
Charlie: I think that’s a great question. And I think it’s actually a mindset rather than a piece of data. I think is the most interesting thing that a global audience can take from this white paper, you know, be curious, look at what’s going in the other markets as much to learn from who’s doing it well, as to learn from the core proportion retail. I think it’s just as interesting to learn and look at what’s working and what isn’t working. And I would encourage everybody to look at the British paper and then challenge it from your own markets or your own sector’s point of view.
You know, actually, what can I take from this? What makes me do better? And actually, what don’t I like? And what do I want to do differently? So I think that curious mindset is really key. And that’s certainly what we do at Mando-Connect, you know, we look at all the research and we look at all of it and we see what we can apply both to make our own research better, but to make our own work better. There’s I think there’s a lot we can learn from each other. So yeah, be curious would be my key take out.
Amanda: Yeah, lovely. Thank you. Thank you. Okay, before I wrap up any other points from any of you that you’d like to leave the audience with anything we’ve missed. I know we’ve thoroughly talked this through, but anything else before I wrap up?
So the joy for me is this gig isn’t over either because I get to talk to you all maybe not James, but your colleague who is looking after European paper in a month’s time. So from everyone listening, Let’s Talk Loyalty. There’s the European version of Mando-Connect with YouGov and the insights that across, I think, Charlie, 29 countries, you said, is that correct?
Charlie: Almost 24, 24 markets.
Amanda: Okay, well, we can round it up almost.
Charlie: Yeah, I think that’s fine.
Amanda: But many European markets. So that’s I can’t wait for that discussion. And that makes my role is so much more exciting because I get to talk about this over and over again. So from Let’s Talk Loyalty to the three of you, thank you so much. Congratulations on a phenomenal piece of work. I certainly can’t wait. Well, I’m actually lucky enough because I got a pre read so I could do this interview. So I can’t wait to actually read it properly now with a bit more time on my hands. And honestly, from the world of loyalty, thank you. The industry is very grateful for the work you do. Well done.
James: Thanks for your time.
Nick: Thanks for having us.
Charlie: Thank you.
Paula: Thank you so much for listening to this episode of Let’s Talk Loyalty. If you’d like us to send you the latest shows each week, simply sign up for the Let’s Talk Loyalty newsletter on letstalkloyalty.com, and we’ll send our best episodes straight to your inbox. And don’t forget that you can follow Let’s Talk Loyalty on any of your favorite podcast platforms. And of course, we’d love for you to share your feedback and reviews. Thanks again for supporting the show.
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