#35: What the Brits Want From Loyalty

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

Paula: I’m your host, Paula Thomas.

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

Paula: And I’m delighted first of all today to have my first return visitor as a guest back on the show in the form of Charlie Hills, who will be well known to many of you from episode number 16, when Charlie came on to talk about British gas rewards just before Christmas.

Paula: Now, recently Charlie’s been doing some fantastic work as part of Mando Connect, which she will reintroduce for us today, but also with YouGov, which is a UK-based market research agency.

Paula: So today I’m joined both by Charlie Hills and also by Joe Flagg, who is a Senior Client Executive at YouGov.

Paula: And we’re going to discuss a white paper, which is literally discussing what do the British want from loyalty programs?

Paula: So first and foremost, welcome to Joe and welcome to Charlie.

Paula: Thank you.

Paula: Great to talk to you both today.

Paula: I know you’re in sunny England, both UK based companies.

Paula: So I think it might be useful actually, first of all, maybe Joe to explain YouGov, because as a brand, I know it’s one I often thought was actually a government organization.

Paula: So you’ll have to forgive me for that, but I know you do amazing market research work.

Paula: So tell us a bit about YouGov before we start.

Joe: Yeah, of course.

Joe: So YouGov, we’re a global market research and data company.

Joe: And our mission is to supply a continuous stream of data, accurate data and insight into what the world thinks.

Joe: So companies, governments and institutions can kind of better serve the people and the communities that sustain them.

Joe: So we operate across 44 different markets internationally.

Joe: We’ve actually got over 9 million panelists worldwide who continuously provide us with their opinions.

Joe: So really we can provide global companies, governments with huge insight into behaviors.

Joe: Loyalty is one area in particular that we’ve got lots of data on.

Joe: And I personally sit within our data products team.

Joe: So we look after two syndicated tools that clients subscribe to.

Joe: So Profiles is like a repository of 300,000 of our most active panelists in the UK and similar numbers in other markets.

Joe: And it essentially collects consumer behavior, media consumption data, which allows companies to understand much more about their audiences.

Joe: And then we also have a brand tracking tool as well, which is a daily brand tracker, again, operating globally across 43 different markets.

Joe: So that allows brands to stay on top of the public perception, basically see whether their campaigns are moving the dial, and see how their kind of sector is changing.

Paula: Wonderful.

Paula: Okay, Joe, thank you.

Paula: It’s a brilliant, very comprehensive introduction to YouGov and your global profile.

Paula: And Charlie, tell us all about Mando Connect.

Charlie: I can’t believe I’m your second.

Charlie: I’m back again.

Charlie: It’s so exciting.

Charlie: Episode 16 seems a long time ago.

Charlie: Glad to be talking about something different today.

Charlie: I head up Mando Connect.

Charlie: We are a loyalty specialist brand partnerships agency.

Charlie: We’re based in the UK, as you said, and we’re privileged enough to work with the brands like Vodafone, TK Max, British Gas, and we do sort of partnerships and partner rewards for them in the UK and then globally as well.

Charlie: So yeah, we’re really excited to be back.

Charlie: We work with YouGov a lot.

Charlie: They’re one of our favorite research companies.

Charlie: Their consumer data is pretty much second to none.

Charlie: It’s a fantastic tool for us.

Charlie: So we’re really excited here to talk to you about our latest research.

Paula: Great, absolutely.

Paula: And I know in fact that YouGov is listed as the most quoted market research source in the UK.

Paula: So we’re adding to that and I’m super happy to be able to.

Paula: So we are here to talk about the white paper, as I mentioned, and I know Charlie, you literally wrote that paper based on the data from YouGov.

Paula: But before we get into the white paper at all, as you know, we always start the show talking about our favorite loyalty statistic.

Paula: So Charlie, why don’t you first of all give us what is your favorite loyalty statistic of the moment?

Charlie: That’s a really hard question to ask a complete loyalty data nerd.

Charlie: I probably had to kind of sit there and scratch my head and think about it.

Charlie: I think I’d be remiss if I didn’t choose one from our current white paper.

Charlie: So what the British want from loyalty programs 2.0, we published it this year.

Charlie: And I think my favorite stat within that paper was that for the British, the most important thing to get right in loyalty is your rewards.

Charlie: 69% of Brits think that getting your rewards and benefits right is really important to them when choosing to join or stay as a member of a loyalty program.

Paula: Well, super compelling.

Paula: There’s nothing unclear about the message coming through, eh?

Charlie: No, not at all.

Charlie: I think for a long time, we’ve seen it in a lot of qual, we’ve seen it in a lot of client-specific quant.

Charlie: But actually the most important thing to get right is what you offer your members and what they take home at the end of the day.

Charlie: The way that you offer it is also important.

Charlie: The way you communicate it is really important, but I think the research very, very clearly told us that the number one thing to get right is the rewards and benefits that you’re offering your members.

Charlie: And hopefully loyalty marketers everywhere, particularly at the moment, will be really looking at what they can offer their members and how they can add real value to them.

Paula: Absolutely, yeah.

Paula: I think it is quite understandable.

Paula: We’re all human beings.

Paula: We all want to know what’s in it for me.

Paula: So given that we’re the ones providing the data, we’re the ones reading the communications, we literally want to know, so what do I get back?

Paula: So brilliant, 69%, fantastic.

Paula: And Joe, you must have a compelling statistic as well after all this hard work.

Paula: So tell us what’s your favorite.

Joe: Yeah, so I also thought I’d stick with the theme and pick a statistic from the white paper, which I found kind of most interesting.

Joe: So one I found quite fascinating was that in the UK, 18 to 24 year olds are the most unengaged when it comes to loyalty.

Joe: With only 49% of men of that age group actually being members of a loyalty program, 57% of women of that age group.

Joe: But the thing that was really interesting, which was highlighted in the white paper, was that surprisingly, this age group are actually the most likely to think that loyalty programs are a great way to reward customers.

Joe: So I was kind of thinking about this and what this really means.

Joe: Are these people just eventually going to become members of loyalty programs as they get older?

Joe: Or is it down to actually what loyalty programs are offering?

Joe: We know from the data that this age group are much more interested in accessing stuff through apps and technology.

Joe: And also some of their attitudes are kind of focused around social good and social purpose.

Joe: So I thought that was quite an interesting stat from the white paper.

Paula: Absolutely.

Paula: Yeah, well, that age profile, I know it says it in the report, they are the customers of the future.

Paula: So if we’re not successfully engaging them at this point, well then definitely alarm bells need to be going off.

Paula: So it’s amazing to have that clarified so soon.

Paula: So thank you for that.

Paula: So I think what I’d love to start with actually is probably just around that there’s a whole load of programs and classifications of programs in here.

Paula: Everything from personalized programs and milestones and subscription programs.

Paula: So maybe we should just, Charlie, if you don’t mind just kind of talking us through the types of programs that are available in the UK market.

Paula: Just to kind of illustrate, I suppose, as you know, a lot of my listeners are around the world.

Paula: And I think there’s some very interesting models emerging maybe in the UK that you work on that mightn’t be as popular in other parts of the world.

Paula: So would you talk us through some of that before we get into the detail?

Charlie: Yeah, absolutely.

Charlie: I think, you know, we’re really privileged to work in the UK.

Charlie: It’s probably one of the most diverse loyalty markets in the world.

Charlie: And I think it’s certainly an area where we’ve seen huge amounts of innovation in the last sort of three to five years.

Charlie: We, as part of our research, did an exercise before we actually went to consumers, mapping out the biggest loyalty mechanics that we see in the UK at the moment.

Charlie: And we identified sort of six key models, I think.

Charlie: Had we looked at this sort of five to 10 years ago, we probably would have been at points.

Charlie: Points is the only model.

Charlie: And actually, we’ve seen an explosion of new mechanics across all different sorts of sectors.

Charlie: So the first model that your listeners will be really familiar with is the points model.

Charlie: It’s by far the biggest model in the UK.

Charlie: It’s the most sort of popular and well-known mechanic.

Charlie: We actually asked consumers which mechanics appealed to them.

Charlie: And 81% of Brits said that they found points mechanics very appealing and very engaging to them.

Charlie: And they participate in them.

Charlie: And that’s probably driven in part by sort of our three biggest programs in the UK and our points-based models.

Charlie: So we have Boots Advantage Card, we have Tesco Club Card and we have Nectar as our three big models.

Charlie: And then obviously we have everything in travel and hospitality behind that.

Charlie: So the points is still the dominant mechanic in the UK.

Charlie: But we actually identified sort of five other ones that we think are quite interesting.

Charlie: So 45% of Brits told us that rewards always on as a model was really interesting to them.

Charlie: And rewards always on is something that we’ve seen really grow in the UK.

Charlie: And it’s effectively an engagement mechanic where a brand can say, actually, you are important to me.

Charlie: You are a customer for me.

Charlie: Here is a broad range of rewards and benefits that are always on.

Charlie: They’re always available to you.

Charlie: You don’t have to earn them.

Charlie: There’s no earning criteria.

Charlie: There’s no points.

Charlie: They’re not linked to spend.

Charlie: They are just available.

Charlie: We’re lucky enough to work on two of these programs in the UK that I’d love your listeners to check out.

Charlie: Very Me rewards from Vodafone and British Gas Rewards as well.

Charlie: Two hugely successful programs offering fantastic rewards.

Charlie: In pre-COVID-19 times, some of them are most popular rewards were cinema tickets, free coffees, and experience-based rewards.

Charlie: And then since we’ve seen a dramatic shift in the last couple of months to during Corona times, we’ve now seen a big shift to rewards that you can enjoy at home.

Charlie: So everything from online fitness to subscription models, to cooking classes.

Charlie: So again, it’s a really popular mechanic in the UK.

Charlie: At number three, we see a milestones model.

Charlie: About 40% of Brits told us that the milestone models are really important.

Charlie: And this was really started in our market, though I’d love to know what the global view is, really in the coffee sector.

Charlie: So buy your nine coffees, get your 10th free.

Charlie: We’ve seen the popularity of this mechanic really explode in beauty and care as well.

Charlie: So there’s a lot of salon based models where come on your ninth visit and get your 10th free.

Charlie: McDonald’s has probably got one of the best coffee loyalty programs in the UK, the best value.

Charlie: That’s buy five coffees, get your sixth free.

Charlie: And then very interestingly, I know your readers will be keeping a very close idea on what Shell do, one of the leading loyalty brands in the world.

Charlie: In the UK, Shell have actually trialed dropping in its entirety and they’ve moved to Shell Go Plus, which is a milestone based model with rewards every time you visit.

Charlie: So that’s probably the next sort of big sector for us to take on this model in the UK.

Paula: Yeah.

Charlie: Number four, surprisingly, Surprise and Delight came in as a loyalty model, which is almost a loyalty mechanic without a loyalty mechanic.

Charlie: I agree.

Charlie: So 22% of Brits kind of told us that this was actually the thing that they love most.

Charlie: I suppose driven by spontaneous culture and the importance of instant gratification.

Charlie: But also the empowerment of frontline staff.

Charlie: So our best example of this in the UK is our Pret chain of cafes and restaurants.

Charlie: And what they do is they’re, the baristas are empowered to give away a certain number of pot beverages every day to customers that they want to give them to.

Charlie: And so it’s a lovely mechanic where you don’t know what you’re gonna get, and then you get a surprise as part of that.

Charlie: And I think it’s a mechanic that increasingly we’re seeing programs employ within the UK.

Charlie: You know, that surprising extra connection point, that surprising extra reward moment that they’re using to engage their members.

Charlie: At number five, we saw subscription.

Charlie: So 19% of Brits told us that subscription was a really appealing mechanic.

Charlie: In every market in the world, particularly at the moment, Amazon are really leading the way here.

Charlie: I mean, it’s crazy to talk about a loyalty mechanic without talking about Amazon Prime.

Charlie: We’ve got enormous penetration in the UK, and obviously they’ve got enormous penetration globally.

Charlie: But big new news in loyalty for us this year was the launch of Tesco Club Card Plus.

Charlie: So probably one of the most significant changes that Tesco has ever made to the Club Card program.

Charlie: And that’s a subscription model where you pay a set amount every month and you get 10% off to in-store big shops and a range of kind of Tesco only brands as well.

Charlie: So we’re all waiting with bated breath to see how well that does.

Charlie: We also see in the cinema sector in the UK under sort of the limitless type propositions that Odeon have or the unlimited proposition that Cineworld has.

Charlie: So you pay a monthly membership fee and you can go as many times as you like.

Charlie: Which on the surface looks very similar to the gym subscription model.

Charlie: And then you get into this really interesting thing of what’s a product and service and what’s a loyalty program.

Charlie: But subscription is definitely something we’re seeing growing.

Charlie: And then finally, tiers.

Charlie: 17% of Brits told us that tiers is an appealing mechanic.

Charlie: These are normally in our market, a combination of the Hotels and Airlines program.

Charlie: So we’re normally seeing a combination of points and tiers.

Charlie: But in the UK, we have a really interesting program called Sky VIP, who I know is on your hit list to talk to for the podcast, Paula.

Charlie: That’s probably our only pure tiers model in the UK.

Charlie: And what’s very interesting about Sky VIP is that they tier based on tenure and nothing else.

Charlie: So the longer you’ve been with Sky, the further you progress up the tiers.

Charlie: So again, that’s something really interesting to us.

Charlie: We’ve got a working hypothesis that actually tiers is so unpopular because of the complexity of it within the hotels and airlines kind of industry.

Charlie: So actually what Sky doing is really quite groundbreaking in that they’re just tiering on one criteria and that program’s going from strength to strength.

Charlie: But I’ll let Rob tell you about that on a later podcast.

Paula: Absolutely.

Charlie: Those are the big six.

Paula: They are brilliant, Charlie.

Paula: And often, I’ve talked myself to so many kind of business owners and they’re like, well, what are the options available for loyalty programs?

Paula: Because I think there is a certain amount of feeling jaded with points, much as we know their value in providing a currency that’s trackable.

Paula: But it’s great to have all six laid out so clearly.

Paula: So thank you for doing that.

Paula: And in fact, just the subscription one, I wrote an article myself yesterday about the Nespresso subscription in the UK.

Paula: So that was super interesting to kind of see how that is evolving over time.

Paula: And I’m a fan of Nespresso.

Paula: I think most people are.

Paula: So yeah, subscription, definitely something coming through.

Paula: So, but listen, you guys did loads of research.

Paula: I know it was conducted initially before COVID-19 became even remotely, I suppose, part of our vocabulary.

Paula: So maybe Joe, do you want to tell us how this concept came about?

Paula: I know the paper was done originally two years ago in 2018.

Paula: So tell us about what’s different in this particular set of research and what was done and how it was done.

Joe: Yeah, so originally we collaborated with Mando.

Joe: So Charlie kind of proposed the idea of producing a white paper specifically on loyalty.

Joe: At YouGov, we regularly produce kind of new white papers on different sectors and areas that are gonna be most interesting.

Joe: So the latest white paper is actually a kind of looking at what’s changed in two years.

Joe: So at YouGov, we’ve got some standard data points and we’re constantly collecting more data about our panelists.

Joe: So what we wanted to do was look at the first white paper two years ago and compare that with today and see what’s changed.

Joe: So some of it focused on actually comparing the same data points, seeing whether more people were members of loyalty programs, how that’s differed over age, how kind of attitudes towards loyalty programs has changed as well.

Joe: So from kind of like a technical perspective, Charlie obviously did a lot of delving into the data.

Joe: We then would actually significantly test the data to ensure that any movement or trends we were seeing were kind of statistically robust.

Joe: One difference with this year’s white paper was there were some additional questions that were asked via our panel that were kind of specific to areas that Charlie had identified.

Joe: So I don’t know, Charlie, whether it might be worth you kind of running through those additional questions that we looked into.

Charlie: Yeah, we talked to a lot of publications, actually, and a lot of loyalty program owners to sort of collate where were the areas they were most interested in.

Charlie: So we talked to the guys at The Wise Marketer, we talked to the guys at Loyalty Magazine, we talked to all the brands that we worked with.

Charlie: We are part of the loyalty panel at the IPM in the UK.

Charlie: So from a sort of a broad range, there were some key areas that people really wanted to know the answers to.

Charlie: Mechanics that we already talked about, actually, was one of the main questions.

Charlie: All of us, I think, are often posed by our clients, you know, what mechanic is right for me?

Charlie: So actually, that was a really important new area that we looked at this year.

Charlie: We also wanted to dig more into rewards.

Charlie: I think they’re often the overlooked hero of loyalty programs.

Charlie: I think there’s a huge amount of focus on platform and member experience and communications, but perhaps we don’t know enough about what types of rewards people actually really want.

Charlie: So in this piece of research, we looked at the importance of rewards from yourself.

Charlie: So the brand offering the program versus partner rewards, when you take rewards from another brand and give them to your members.

Charlie: We looked at what are the emotions that drive that reward preference and what do people really want from those brands.

Charlie: And we looked at the characteristics of partner brands that people really wanted as well.

Charlie: So for instance, I’m sure globally, this is a common trend, we know it is, but we’re seeing a rising trend towards people wanting British brands at the moment and wanting to support British businesses, which was in part informed by Brexit.

Charlie: But my hypothesis is it’s probably increased since COVID-19 as well.

Charlie: So we looked at those kind of areas as well.

Charlie: So those were our key things, really digging more into the mechanics and digging more into the rewards that people wanted and why they wanted them this year.

Charlie: We found some really interesting stuff.

Charlie: We identified that the three most important characteristics that we can see in rewards is about value.

Charlie: So 83% of Brits told us that they wanted rewards to save them money.

Charlie: The second most important thing was about treats.

Charlie: So 53% of Brits told us they wanted that the rewards in their loyalty program to be a treat.

Charlie: And we see this in some of the big programs like Boots Advantage Card in the UK, that’s entirely predicated on a treat yourself message, but also some smaller brands like Paper Chase, which is a fantastic sort of stationary provider in the UK, have a great program, really true to that insight called Paper Chase Treat Me, which is a really lovely proposition and well worth a look.

Charlie: And then very interestingly for us, when we conducted this research, purpose came up as number three.

Charlie: It’s something that we’re seeing a lot.

Charlie: There’s a lot written about in terms of the importance of loyalty programs to help good causes and help support the environment.

Charlie: And it was very interesting to us that this year, 28% of Brits told us that they wanted rewards.

Charlie: That was something they could give to help others.

Charlie: So charity or good causes or the environment.

Charlie: And again, we did this research in January.

Charlie: Were we to rerun that question now, I’m confident that those top three variables would be the same.

Charlie: But my hypothesis would be that they would be even higher.

Charlie: So probably 28% of people wanting to help others was the starting blocks.

Charlie: The stuff that we’ve seen, you know, the support for the NHS in the last sort of few months, I’m sure that would be much higher.

Paula: Absolutely.

Paula: And I know as we go through the conversation, there has been some specific research done in terms of COVID-19.

Paula: So an update again, even to the White Paper.

Paula: So a huge amount of work you guys are obviously doing to really get under what’s going on for people.

Paula: What I’d love to ask you about actually, Charlie, again, if you don’t mind, is the particular programs that you mentioned that are targeting the demographic that Joe mentioned that are not engaging or haven’t been engaging.

Paula: And you mentioned some fabulous ones such as Boots X and also a Beauty Pie, I think as another subscription program.

Paula: So I’d love to hear any new programs that you’re seeing coming out in the UK market that again, listeners can go, oh, there’s a new model.

Paula: Why is it new?

Paula: What’s innovative about it?

Paula: So just a couple of guidelines from that so we can go on and do a bit of research on those.

Charlie: Yeah, great.

Charlie: I’m also really happy for anyone who’s listening to follow up with me directly as well.

Charlie: You can easily find me through Paula’s podcast link if you’ve got any sort of specific questions.

Charlie: I think 18 to 24 is such an important age group for loyalty as a whole.

Charlie: I think there’s been a hypothesis that as they get older, they will just join.

Charlie: And actually what we’re seeing is some fundamental differences in attitude and desire in this age group that we think are gonna stay as they get older.

Charlie: And I think it’s really important, Paula, you said these are our members of the future.

Charlie: We’ve got to do some things that engage them.

Charlie: And I think we have to think differently as loyalty marketers about what does engage them.

Charlie: So some of the programs that we’ve looked at in the last sort of six months that have been doing very interesting things are thinking very differently about loyalty.

Charlie: I think the first one I’d want to call out, as you said, is Boots X.

Charlie: So Boots Advantage Card is one of our biggest programs in the UK.

Charlie: It’s one of our most loved retailers.

Charlie: We all grew up with it.

Charlie: And Boots has recently launched a new sort of campaign, a new area within Boots Advantage Card called Boots X.

Charlie: It’s social channels only.

Charlie: It’s beauty only.

Charlie: It has a very, very different tone of voice.

Charlie: It’s unbelievably cool.

Charlie: And it’s all about the kind of latest beauty drops, the latest beauty products and the latest beauty news.

Charlie: It’s very hard to find.

Charlie: You need to be on social channels to find it.

Charlie: So start on Instagram.

Charlie: Don’t Google.

Charlie: If you Google Boots X, you won’t find it.

Charlie: That’s not how 18 to 24s find information.

Charlie: So have a look at it.

Charlie: It’s also on the Boots website, and you can sign up directly under Boots Advantage Card.

Charlie: But again, the communications that are coming out and the brands that they’re focusing on are so different for Boots.

Charlie: And we have really high hopes that’s gonna engage.

Charlie: And it’s right in its infancy.

Charlie: It’s brand new news.

Charlie: So over the next 12 months, we’re really looking forward to seeing some big things.

Charlie: The next one, oh, sorry.

Paula: No, go on.

Paula: No, I was just thinking, Charlie, I might have to join Snapchat now just to check that out.

Paula: I was avoiding that.

Charlie: But the products are awesome.

Charlie: The products are totally awesome.

Charlie: Brilliant.

Charlie: In that same beauty theme, I would really recommend checking out Beauty Pie, which is a really complicated, unbelievably successful new type of subscription model.

Charlie: It’s the only one of its kind, so we didn’t actually research it as a mechanic.

Charlie: But effectively, what you do as a member is you choose your membership level, you pay according to that level, so five pounds a month, 10 pounds a month, 15 pounds a month.

Charlie: And what that enables you to do is to access different levels of spend.

Charlie: So if you pay five pounds a month, you can pay a certain amount, you can get a certain amount of spend that you can spend every month.

Charlie: If you pay 10 pounds, you get a higher level of spend and extra benefits as you move up the chain.

Charlie: And what you can then spend your money on is fantastic premium beauty products at factory prices.

Charlie: So the retinol range is awesome.

Charlie: I use that personally.

Charlie: I’m not assuming that any 18 to 24 does, but the skincare range is a fantastic, the fragrances are fantastic, and they’re all around the sort of seven to 15 pound mark for products that are worth kind of 80 to 100 pounds mark.

Charlie: So it’s a really interesting program.

Charlie: And I think what I particularly like about it is we all have this working hypothesis that simplicity is really key to engage this audience.

Charlie: They’re all about instant gratification.

Charlie: They’re all about simplicity, and you can only hold their attention for sort of a couple of seconds.

Charlie: And I think programs like Beauty Pie show that actually that just isn’t true.

Charlie: Like if you get the proposition right, you engage them and you interest them, then actually they are willing to put in some real legwork and some real thought and some real kind of money into actually getting kind of programs to work for them.

Charlie: We see a lot with Secret Cinema in the UK as well, which is on a similar sort of trend, again, hugely popular with 18 to 24s.

Charlie: It’s not a loyalty program, but it’s where they create immersive live cinema experiences for movies and the amount of legwork that they see from 18 to 24, not only to get tickets, but at the events and the preparation that goes into it is really quite extraordinary.

Charlie: So I think they’re quite great because they bust the myths that it has to be instant gratification and it has to be simple.

Paula: Yeah, fascinating.

Paula: Have you another one there, Charlie?

Paula: Do I hear you have?

Charlie: I got one more that I check out and then I’ll stop talking.

Charlie: There’s one called VoxieDrop.

Paula: Okay.

Charlie: So Voxie is a really super cool telco network aimed at 18 to 24s.

Charlie: And what VoxieDrop does is basically break every single rule in loyalty.

Charlie: Everything you think you know, you no longer do.

Charlie: So it’s spontaneous drops, weird and wonderful, exciting rewards, all backed up by incredible kind of social media campaigns.

Charlie: You never know what’s coming.

Charlie: You never know what you have to do to get it.

Charlie: And again, kind of a hugely successful program.

Charlie: So that’s at the opposite end of the spectrum.

Charlie: Well worth looking up.

Paula: Fantastic.

Paula: And it’s rare that a telco can really be described as sexy and exciting.

Paula: So.

Paula: That’s amazing.

Charlie: Well done Voxie, yeah.

Paula: And I have to say what was going through my mind when you talked about BeautyPie as well.

Paula: As I said, I’m really watching subscription at the moment to see that mechanic evolving.

Paula: And I’d love to know the P&L behind factory pricing, for example, if it’s being supported by partners, which I know we’re going to talk about in terms of rewards or really that whole business model around, are they justifying it on the lifetime value of the customer or is it literally just to get that initial hype?

Paula: I don’t know, but there’s certainly, as you said, a lot of creative thinking going into that model.

Charlie: Yeah, definitely.

Charlie: It’s definitely one to watch.

Paula: So what surprised you most, Charlie?

Paula: I know you wrote this white paper, and again, Joe did all the legwork behind, I think, on the data, but what surprised you most in terms of the conclusions two years on from the original report on what Brits, I think, what was the original title?

Paula: Sorry, Charlie, I know you changed the title from V1 to V2.

Charlie: The V1 was what the British think of loyalty programs.

Paula: Okay.

Charlie: And then V2 was what the British want from loyalty programs, 2.0.

Charlie: And I think that was because we had so much desire from loyalty program marketers in the UK to understand more about the mechanics and the rewards.

Charlie: We actually realized that the focus of this report was really about key insights that mean that we can get programs into a fit shape that people will really want to engage in them.

Charlie: Whereas in the first one, we were just kind of wanting to see what people thought of them and if they wanted to engage.

Charlie: So, yeah, that was the kind of the subtle shift this year.

Paula: Great.

Charlie: In terms of my most surprising insight, it’s one Joe and I have laughed about quite a lot, and I promise that YouGov checked it, because obviously I am the managing director of a loyalty specialist partnerships agency.

Paula: Yes.

Charlie: But the thing that I think startled us the most was how much more appealing partner rewards are than offering rewards from the program yourself.

Charlie: So in the UK, partner rewards are 19% more appealing than if you offer them from the program yourself when you’re talking to people who are members of loyalty programs.

Charlie: So this is an audience that are engaging in programs.

Charlie: They know loyalty programs well.

Charlie: So 43% of them wanted partner rewards, and only 36% of them wanted the brand offering the program to give the rewards.

Charlie: I think that startled us so much.

Charlie: We’re actually going to commission some new research to find out why.

Charlie: People keep asking me why, and they ask Joe why as well.

Charlie: And we both sort of go, we don’t know.

Charlie: We’ve got lots of hypotheses, but we need to commission some more research to find out what it is.

Charlie: But we think it’s relevance, appeal, variety, added value, and then the excitement and new news component.

Charlie: But yeah, we’re going to look into it properly.

Paula: And you know what, Charlie, I mean, my own background is very similar to yours in that I was contracting partner awards for originally O2 priority in Ireland back in 2010.

Paula: But we had exactly the same research conclusions.

Paula: And my own underlying assumption and interpretation was it was the perception of the effort that the brand was going to.

Paula: So they all know, OK, great, if I buy this much data, I get another 10% on top.

Paula: You know, so that kind of felt like, OK, that’s a nice to do.

Paula: But the wow factor of, oh, you’ve gone out and gotten me something from the cinema or, you know, this gorgeous bar chocolate or box of chocolates.

Paula: I think it was the perception that this brand has gone above and beyond.

Paula: So, you know, maybe just put that into to your to your mix.

Paula: I know there’s lots of possible explanations, but I have seen that feedback coming through extensively as well.

Paula: So, yeah, I’m not surprised to hear it at all.

Paula: And I’m delighted for you.

Paula: It came out that way.

Charlie: Yeah, we were really thrilled.

Charlie: And, you know, we looked at it sector by sector as well, which I think was really interesting.

Charlie: I think one of the hypotheses I had is if I’m a brand owner with a program in a somewhat boring sector.

Charlie: So let’s say energy or, you know, the O2 priority example is a great one, Telco, then, you know, how exciting are the rewards that I can get?

Charlie: But, you know, we see it across everything, you know, in grocery, partner rewards are 20% more appealing.

Charlie: In beauty salons, you know, where people have got great products to offer themselves, they’re 7% more appealing.

Charlie: We really see it in every single sector in the UK.

Charlie: So we pushed ourselves really hard on this one.

Charlie: And, yeah, I think that’s a really interesting insight as well, the sort of the perception of the effort that you’re making in getting those types of rewards is definitely something we should add in.

Charlie: Take notes, Joe, we need to add that in.

Paula: And I’m coming to you now, Joe.

Paula: So please reassure us, you validated all of this.

Paula: What did you find coming through and what did you find surprising, I guess, with all of this research two years on?

Joe: Yeah, I think, like, much of it was interesting to see that, obviously loyalty was still relevant and still really important.

Joe: I think that was one of the key kind of takeouts initially.

Joe: And yeah, I think when we look into the sectors, it was also interesting.

Joe: So I know that from a trend basis, actually airlines, for instance, there was a significantly higher number of people that were now subscribing to airline reward schemes.

Joe: Personally, I thought it was quite interesting, given now obviously the impacts of COVID on those airlines and how that’s going to change and how people go about redeeming those rewards.

Joe: I know within the UK, for instance, looking at our data, there’s been a lot of kind of negativity around airlines.

Joe: Whereas when I looked at the US data, for instance, actually there was still quite a lot of positive buzz around the airline sector.

Joe: So that was quite an interesting one in terms of looking at specific sectors and that there had been significant growth in that area.

Joe: But yeah, I mean, obviously, my number one stat earlier was around the 18 to 24s, which I do think is an interesting area.

Joe: And also, I think as well as a bit of a summary of why rewards are so important and what they help brands do.

Joe: Again, we saw that it was the same in 2018 and in 2020 that they really help build that emotional connection with a brand.

Joe: And I think that’s kind of important, more important now than ever before, given the situation we’re all in with COVID-19.

Joe: And particularly if we look at supermarkets, there’s been kind of a natural emotional connection built with supermarkets, given their kind of effort and operation during this challenging time.

Joe: So I think that’s interesting as well, kind of fast forwarding three months around that building of emotional connection.

Paula: Absolutely.

Paula: Yeah.

Paula: And I know, as I mentioned already, you did go back and do some work literally in the last three or four weeks, I think, Joe, around what has changed overall.

Paula: And I know it’s not just from a loyalty perspective, because that’s just one of the various things that your panel were asked about.

Paula: But what else did you see coming through in terms of how the Brits are feeling in the current times?

Joe: Yeah, so it’s interesting.

Joe: So we’ve actually been conducting a weekly tracker focused around COVID-19.

Joe: And that covers things like fear of contracting the disease, but also looking at things like media consumption and entertainment.

Joe: And then likewise, we have our daily brand tracker.

Joe: So from our daily brand tracker, we’ve really seen supermarkets and home entertainments and Netflix, Disney Plus, for example, really being elevated into the top 10 brands across the UK.

Joe: And they’ve really improved their position as a sector.

Joe: And then in terms of COVID-19 specifically, we’ve had some other nice case studies.

Joe: So for example, BrewDog, which is a craft beer company within the UK.

Joe: Obviously, all pubs are shut, and no one can enjoy a pint at the moment in a pub.

Joe: But what they’ve been doing to really help engage their customers and loyalty is they’ve opened, created a virtual pub experience where they’re having Q&As and customers can sign up.

Paula: I like that.

Joe: They’ve also been offering free beer vouchers for once things get to normal, so customers can sign up to that already.

Joe: And they’ve been using their facilities to produce free sanitizer.

Joe: And those activities from a brand, we’re seeing clear increases in their positive buzz, their reputation and their impression among the public.

Joe: So yeah, that’s quite an interesting case study.

Joe: And we’ve seen similar trends with the supermarkets, really.

Paula: Yeah.

Paula: Well, honestly, I mean, the virtual pub, first of all, I think is totally inspired.

Paula: You know, we’re all spending so much time on Zoom, and it gets a little bit exhausting after a while, but who doesn’t want to go to the pub?

Paula: So, you know, what a stroke of genius.

Paula: So I’ll definitely be checking BrewDog out.

Paula: And again, I mean, it probably is the most obvious loyalty strategy in the world, but free beer, I mean, that’s just super simple and super clever.

Paula: So that’s super.

Paula: The next part of the white paper I wanted to ask, and it’s back to you, Charlie, you already alluded to it, and it’s around the emotional piece, which I know Joe just touched on as well, but what did you find, you know, the members or consumers coming through saying, what do they want in terms of how they’re going to feel with these rewards?

Paula: I think there was some interesting insights in terms of how that was being described.

Charlie: Yeah, I think, you know, we’ve had a long-held belief that emotional connection is a huge part of the reward experience.

Charlie: I think you have to think about what you’re giving and who you’re giving it from and how you make that experience emotional, not functional.

Charlie: I think it’s probably one of my criticisms, I guess, of the sort of the more old-fashioned points approach, in that that can become very transactional.

Charlie: You’re almost rewarding your loyalty programs with maths.

Charlie: Now, I say that as a mathematician and a complete data nerd.

Charlie: I love maths, but if you try and reward me with maths, then I’m not that thrilled about it.

Charlie: Pavel Los of Shell did a really interesting speech at the loyalty surgery, actually, in the UK last year, where he talked about, you know, actually, we need to make it simple.

Charlie: We, you know, points are dead on the basis that people don’t want to do complex mathematical equations to work out what rewards are doing.

Charlie: So emotion is kind of ever more important in that.

Charlie: And I think we identified some dominant emotions that we were seeing back in January.

Charlie: So savviness very much linked to value.

Charlie: We see a real deal hunting mentality in Britain.

Charlie: 83% of Brits want rewards to save them money, and 68% of Brits are also making sure they always use all the sales coupons and deals available when they shop.

Charlie: So we are a nation of deal hunters.

Charlie: We are really savvy, and value is really important to us.

Charlie: So savviness is really key in that reward experience.

Charlie: But the flip side of that is spoiling.

Charlie: I think spoiling is really important.

Charlie: We see a lot of the dominant gatekeeper to the household owning the loyalty kind of program membership for the household.

Charlie: So in sectors like grocery, pharmacy, retail, we quite often see that the matriarch of the household, the mum, doing everything.

Charlie: And actually we see a very common behavior in all the qual that we run with our clients, which is where effectively the points and then the loyalty equity, however it is, is earned on the household spend.

Charlie: And then it’s spent on treats and things that are either fantastic treats for the family, so days out, cinema trips, or at the moment, treat meals and takeaways are one of the dominant loyalty rewards we see in the UK at the moment.

Charlie: And also kind of beauty treats.

Charlie: So spoiling is really important, I think, and programs need to have that balance of offering value and then offering that really nice treat experience.

Charlie: Next is purpose and altruism.

Charlie: I know you’ve had Crispin from Four Good Causes on here as well, and I think this is something we work a lot with Crispin and the team.

Charlie: It’s a really interesting thing to see.

Charlie: 28% of Brits, they really want to be altruistic.

Charlie: I think we all have seen this in Coal over the last sort of 10 to 15 years.

Charlie: We’ve all sat there and had research where members have told us that they want to give their rewards away to charity.

Charlie: But then what we’ve actually seen reflected in the analytics is that they don’t do that.

Charlie: So they actually take the rewards for themselves.

Charlie: And I hope that we’re at quite a key cultural moment.

Charlie: I think we’ve certainly seen in the last sort of six to eight weeks a huge rise in altruism of loyalty programs.

Charlie: I think nearly every program in the UK is now enabling people to donate their points and to donate their rewards.

Charlie: BP have just announced that all their points can be donated to charities.

Charlie: And then the programs that we have in the UK that really have this at their heart anyway are going from strength to strength.

Charlie: So the Cooperative is a charity based program.

Charlie: They have always offered the ability to give away to charities and we’ve seen that kind of on the increase.

Charlie: Marks and Spencer’s Sparks is another program.

Charlie: They’ve actually added in three new charities to their existing charity portfolio, which are all around the NHS and helping those people in need.

Charlie: So 28% of people are really seeing purpose and altruism as really important driving emotions.

Charlie: We then see excitement.

Charlie: So 26% are then after kind of exciting things.

Charlie: And actually, what does excitement mean?

Charlie: That’s a really hard thing to quantify.

Charlie: For some people, that’s rocketing off on a roller coaster.

Charlie: And for other people, that is unwrapping a new ice scraper for their car that they’ve received as a partner awards from Halfords.

Charlie: But excitement is a really key emotion to tap into.

Charlie: And then we see fun coming through.

Charlie: You probably would have seen a lot of this in O2 Priority, but fun is a big part of it.

Charlie: I think the way we’re trying to develop this is in the types of rewards that we’re giving away, but also the experience of getting the rewards, so huge rise of gamification kind of across the piece in terms of, you know, play this game to win this prize.

Charlie: We did the first use of augmented reality in loyalty last year with British Gas.

Charlie: We’re hoping to win some awards for it.

Charlie: You know how it is.

Charlie: You kind of do it one year, and then hopefully get some awards for it the following year.

Charlie: But we took, you know, one of Britain’s favorite things to do, the Easter egg hunt, and we created this really cool augmented reality experience with the British Gas brand icon who’s a very cute penguin called Wilbur, and we sent him on an augmented reality Easter egg hunt.

Charlie: So no matter where you were in the world, you could flip it up.

Charlie: It was all mobile web, and Wilbur could be, you know, running around in your garden or your office or your house kind of collecting his eggs.

Charlie: So yeah, that’s a great way of bringing fun in.

Charlie: And then we found some of the things that clients always ask us about and always come up in propositions and make sense to us as marketeers that should be driving emotions for rewards, but actually really aren’t.

Charlie: So help me improve myself in some way.

Charlie: Only 16% of Brits think that’s an interesting reward motivator, despite it being in a lot of client briefs.

Charlie: Help me relax, also not necessary as a reward, only 13% of Brits want that.

Charlie: And then again, kind of quite interesting in the loyalty space, help me connect to other people.

Charlie: For example, the rewards are shareable or enabling me to do activities with others.

Charlie: Even before Corona times, only 8% of Brits wanted that.

Charlie: So they don’t really want to be part of community.

Charlie: We saw that in the 2018 paper as well.

Charlie: They just want great rewards to enjoy in their own life.

Charlie: But discovery, relaxation and connection to others are not really driving forces.

Charlie: And then somewhere in between that is help me try something new, which is at 19%.

Charlie: Again, a lot of programs try to deliver rewards that are about, you know, try something new today or learn a new skill.

Charlie: But again, just not quite so much.

Charlie: I mean, again, it’d be interesting to see the impacts of COVID-19 on that data.

Charlie: We’ve seen a huge rise in the popularity of learner language as a reward experience.

Charlie: I’m assuming that is largely because people are at home and they want to improve themselves and actually learning a new language is a bit less physically stressful than, you know, hitting your fitness target and doing a Joe Wicks PE lesson every morning.

Charlie: But again, it’ll be interesting to see how that changes.

Charlie: But those are not as motivating as altruism, fun, excitement, value.

Paula: Yeah, fantastic.

Paula: A lovely range of things.

Paula: And I suppose it would be remiss if we didn’t immediately tell people where they can go and read all of that, because there’s a huge amount of information there.

Paula: So is it on the Mando Connect website that the white paper is best found?

Paula: It’s probably on the YouGov website as well, is it?

Charlie: Yeah, it’s on both.

Charlie: You can get it from either.

Charlie: We can pop it in the documents for the podcast as well and the link to it.

Charlie: And then, yeah, the white paper is downloadable.

Charlie: And the white paper looks really at all of the UK population, so it’s a broad research piece.

Charlie: But all of the data that’s in it, we can get at a sector-specific level and a brand-specific level as well.

Paula: Wonderful.

Paula: And one I want to pick up on actually just because you talked about, we know, as you said, in qualitative research for years, our members have been saying, yes, I want to give my points to charity.

Paula: And I think what we were missing was the piece that Crispin Rogers has built, which is, you know, they want to give them to a charity that they care about, not just a charity, like, you know, if I care about, I think he mentioned Hedgehogs, which I was surprised to hear was a thing.

Paula: But do you know what I mean?

Paula: Like, you know, we all have something that really matters to us.

Paula: So if I want to give them to charity, I want to give them to the right charity.

Paula: So you’re right.

Paula: And that’s always been there.

Paula: But the facilities and the platforms weren’t in place.

Paula: So well done to Crispin on that one.

Charlie: Definitely.

Charlie: Yeah.

Paula: And you had a great, I suppose, summary quote, Charlie, as well, in the white paper, which basically said, points aren’t dead, but they are no longer alone.

Charlie: Yes, exactly.

Paula: You captured it really well.

Paula: Great stuff.

Charlie: We debated that one with YouGov quite a lot.

Charlie: I was like, oh, they aren’t dominant.

Charlie: And Joe was like, 81% is dominant, Charlie.

Charlie: 81% is still dominant.

Charlie: You can’t say they’re not dominant, but they’re definitely not dead.

Paula: They’re definitely not dead.

Paula: Well, listen, guys, I have learned so much from all of your incredible work.

Paula: Is there anything else either of you wanted to add before we wrap up?

Joe: All I would say is kind of if people are interested in the COVID-19 related data, we’ve got a big push on to make as much data publicly available and for public good as possible.

Joe: So anyone can come to our website and find tracking data across all of the markets we’re covering.

Joe: There’s also loads of articles around how the public are wanting to be more charitable, for instance.

Joe: Also, we recently published an article about subscription services and actually that they’re pretty popular among people that are currently working from home and there’s been an increase in kind of purchase intent around those types of services.

Joe: So I’ll just say, as well as checking out the white paper, check out the YouGov website because there’s loads of free market research and interesting COVID insight at the moment as well.

Paula: Brilliant.

Paula: Great.

Paula: And thanks for that, Joe.

Paula: And I know you did mention that you are doing that research in multiple markets.

Paula: So it isn’t just UK specific.

Paula: People can go on and find that COVID data, particularly for global.

Paula: So thanks a million.

Paula: That’s brilliant.

Paula: And Charlie, any kind of final closing thoughts from your side?

Charlie: No, not really.

Charlie: I mean, we love this podcast.

Charlie: I think it’s a fantastic format.

Charlie: So thank you so much.

Charlie: It’s just a brilliant experience.

Charlie: If there’s anyone listening here who’s thinking I’d like to work with Paula and do a podcast or get involved with Let’s Talk Loyalty, drop her a note.

Charlie: It’s a brilliant process.

Charlie: And I’d also really recommend YouGov as a research partner.

Charlie: We are a fairly small agency, and I think what we’ve been able to achieve with the help, support and guidance has been a really fantastic exercise.

Charlie: And I think we should all be looking at loyalty, and we should all be looking at what we give our members.

Charlie: And probably my lasting thought would be put partner rewards in.

Charlie: If you don’t have partner rewards in your programme, figure out what the appropriate partner rewards should be, and see how they can add value to your membership, particularly at the moment.

Paula: Wonderful.

Paula: Well, listen, I want to thank you both for the enormous amount of work.

Paula: I know what goes into creating a white paper of this depth.

Paula: It’s a huge amount of work, and definitely has put both of you on the global stage, because I’m only aware of your work, in fact, since your first white paper in 2018.

Paula: So literally just want to say to Joe Flagg from yougov.co.uk and Charlie Hills from mandoconnect.co.uk.

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

Paula: This show is sponsored by The Wise Marketeer, the world’s most popular source of loyalty marketing news, insights and research.

Paula: The Wise Marketeer also offers loyalty marketing training, both online and in workshops around the world through its loyalty academy, which has already certified over 150 executives in 18 countries as certified loyalty marketing professionals.

Paula: For more information, check out www.thewisemarketeer.com and www.loyaltyacademy.org.

Paula: Thanks so much for listening to this episode of Let’s Talk Loyalty.

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