#571: You’re [almost] Half Way There!

Paula: 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 Loyalty TV. If you work in loyalty marketing, you can watch our video interviews every Thursday and Sunday. www. loyalty. tv. And of course, you can listen to our podcasts every Tuesday, every Wednesday and every Thursday to learn the latest ideas from loyalty experts around the world.

Today’s episode is part of the Wiser Loyalty Series. which is hosted by our partners, the wise marketeer group, the wise marketeer group is a media education and advisory services company providing resources for loyalty marketeers through the wise marketeer digital publication and the loyalty Academy program that offers the certified loyalty marketing professional or CLMP designation.

I hope you enjoy this weekly podcast, the wiser loyalty series. Brought to you by Let’s Talk Loyalty and the Wiser Marketeer Group.

Aaron: Hi everyone. Uh, this is an exciting week of the Wiser Loyalty Series podcast, Berlin Stock Loyalty. Uh, our industry experts, which is myself, Aaron Daufny and Bill Hannathan, uh, both of the Wiser Marketeer Group have been providing weekly perspectives on the Loyalty Caddy curriculum for the Certified Loyalty Marketing Professional designation for the past six months.

Uh, each month we select different constructs from a specific course in that certification program, which we provide our own perspectives. Uh, we provide guidance on what you need to have embedded as truths and loyalty markers, you know, quote, unquote. Uh, and then we also wrap up with industry examples that bring our material to life  for our listeners.

So, uh, this week we’re doing a bit of an audible, but we’re going to do a quick top line view on courses that we’ve covered to date, kind of stitch together some of the fundamentals of the multi discipline that we’ve shared so far. Um, and there’s more ahead of us, but we want to just take a moment to pause, take stock of how far we’ve come together.

Uh, and for those who have listened since the onset, we want to make sure that, you know, that you’re, you know, nearly halfway there, learning how to pair some might say, uh, in, but in, in full honesty, uh, making sure that you are on the way to understanding the high level understanding of the CLP curriculum.

As we’ve covered six of the 14 topics that are requirements for the candidates. Who attempt the capstone examination to become a CLP, uh, designate. And for us on this journey, uh, I think this episode will be helpful in terms of guiding you back to the things that we’ve published already. Uh, and for those of you who haven’t been along, there’s some other things that you may want to go back and listen to.

So, you know, for, for me, Bill, um,  I’ll kick this off. We both love the topic of human behavior and, and this instead of like what, what induces, uh, an individual’s ability to. You know, influence, uh, them particularly, like what, what, what says for you to do something differently than what I do. And it all comes down to this idea of our refreshed topic of psychology of loads course one or two.

And so perhaps take us through some of your key points. Cause you were the architect of that particular restructure of that top of that particular course.

Bill: Thanks. Thanks Aaron. It’s good to reflect back on the first half of the year. It is quite amazing that we’ve covered this much territory, but yeah, to, to, to really highlight.

The way I think about the psychology of loyalty and discovery that we’ve made by working in this area, it’s sort of like, um, one of those old movie lines where you say, honey, where have you been all my life? So we’ve, we’ve had this, we’ve had this, uh, way of thinking about loyalty and how we connect with customers.

It’s been about data and it’s been about technology and we have this loyalty dilemma right now. And it did, the story that we told was  about, you know, Morpheus and Neo in the matrix, if you remember that one, At that time, when they sat down at this crucial moment at the beginning of the story and, and Morpheus gave me that choice of taking the red pill or the blue pill.

And I feel like we’re at a similar crossroads. So we can continue as an industry to just amass more and more data and execute just. Better, better technology. I mean, let’s face it. Technology continues to improve and we have AI enabled features and a lot of technology. I mean, it’s probably what we’re used to thinking.

I was a loyalty management system is going to morph a couple of times. And so it’s going to be so incredibly powerful. We’re going to have more and more data. But what does that get us? Like, if we don’t understand people as human beings, and if we don’t understand how they’re motivated as people, um, then we really are missing the boat and, and, and I think what it’s done is it’s taken loyalty from you.

And I quote, grew up in loyalty under certain people and, and, and they were brilliant people that had ideas. And really pioneered a lot of the [00:05:00] great companies and concepts in this business. But they had a little bit of a narrow focus. Why? Because they didn’t know how this would evolve. But, you know, when we think about what loyalty was first supposed to be, it was like, Oh, maybe a two trick pony, not a one trick pony, but I mean, people talked about retention, they talked about growth, But they never talked about acquisition.

They never talked about true engagement and making emotional connections. And how do you get people to really draw into your brand and make the sort of connections with people that go way beyond whether or not you even have points or not. So what we’ve discovered in the, in our study of psychology and loyalty came with behavior theory and how that impacts the way brands can connect with customers.

Is to learn that if you do certain things, and if you’re very thoughtful about how you connect with people, you can forge the kind of connections that really are durable, they’re lasting, and they’re powerful. And that, that’s the biggest takeaway for me. And so. You know, my recommendation to everyone out there is, um, find a  behavioral psychologist and put them on your team soon, or else go find somebody who can advise you in those areas.

Cause I think it’s really important in terms of strategy development.

Aaron: That’s a great example of, of kind of taking the archetype of previous thinking and bringing it into the new age. And the, the, you know, we covered in one of our courses that as we moved into a later month, uh, after we launched in February, uh, around the idea of, of business models.

Right. And, and in right, sponsored this kind of two from structure, as we started to refresh our thinking at the multi academy, we went from an idea and an ideology that was very, very fairly traditional, I would say. Uh, and so to redescribe our argument point of view around proprietary versus partnership, uh, and being the two leading categories, a definition of what types of business models exist as, as a multi marketers today, but with under that, we then read reorganize and read this, re describe some sub elements.

And, and, you know, the first touch of, of the context that we, we did this  under was in the old, um, ideology. It was really around the currency and who owned the program, who had control, right? Control was a defining factor on the business model versus our new way of thinking is really around what’s the consumer’s choice around how they can interact with the brand.

And there’s a secondary consideration for the business structure of control. And that lends to these two kind of legal defining, um, sub or party groupings, which is proprietary and in partnership and under proprietary. There’s some sub elements. There’s the single branded proprietary that we all know, but now there’s also this multi branded proprietary.

The gravity of a private coalition or conglomerate, like there’s a bunch of synonyms that are out there, but the point is an individual organization owning all of the, uh, um, brand within and offer a similar, uh, value structure to their consumer set that, that then benefits in much like a coalition construct.

Right. And so that’s why private coalition or conglomerate come to top of mind, but it’s still owned by one organization that fits under a proprietary model. But then the secondary is like, well, Hey, I can’t do it alone. Partnership style. So getting into this ecosystem kind of construct and there’s the player model where like I use someone else’s currency because I just won’t, don’t want to build my own infrastructure, but I’m really willing to ride along.

Or there’s a multi branded partnership where it’s like, Hey, you and I can partner together and the three of us and four of us, five of us, whatever that works out in terms of the web structure. And it’s kind of going to work for the consumer to make a choice about where they put their points. Um, but then also coalition traditionally, like, you know, we, uh, I think the tradition of coalition model still lives in certain regions of the world, but it’s evolved and, and, and the fact of a third party building together certain brands and, and owning that and operating that is fine, but it really comes down to what the consumer’s choice is around how they interact and, and the, the, uh, capacity that they have.

Uh, when they interact with certain brands. So, I mean, that’s, that’s kind of my 104 summary, but Bill, let’s keep this like a hop into  key success factors, which we did with source 112. You

Bill: know, I think a lot of what we did in these, in these first few months is respectfully look at what we’ve called OG kind of viewpoints on the business and just challenge them.

And we did it respectfully because we said a lot of this is still very valid. And so when we looked at KPIs and key success factors, we said there’s fundamental design principles. And certain best practices, it should be adhered to objectives always stand at the top, right? Like make sure your objectives are very clear, engage a solid financial planning process.

Make sure you have your KPIs and your dashboard and everything built before you even launch. So, you know, what, like a year from now. Even if you had a new CMO or a new stakeholder in the C suite, you’d say, well, this is what we said success would look like before we launched. And here’s our dashboard, which people approved.

And so here’s what we’ve done. And so now it’s like, not, not starting from a blank sheet, but it’s working from a solid foundation. So we know those things are still consistent. They [00:10:00] still apply. They’re really good. But when we look down the list of KPIs. Um, that, that have been sort of persevering over the last decade or two decades or something like that.

I mean, we, we see a lot of things that are important like tracking enrollment and, um, you know, watching your funding rate and your earning velocity and, um, maybe deciding whether or not you use tiers and how you use program partners. You know, all those sorts of things. So there’s a consistent group, but there’s definitely a new set of factors that you have to think about.

And, um, and so it’s much more about, I think things that happen before a purchase transaction even takes place. Um, measuring engagement. Maybe measuring even, um, you know, um, earned brand value recognition in the marketplace, things like that, because loyalty can do so much more for you than just simply give you a lift on sales.

There’s, there’s a lot of other benefits. So we learned that there’s some, some new KPIs that we ought to be tracking. And so we’re going to keep an eye on those and keep going forward. So, um, you know, I, I think the other piece of this, which you’ve done a lot of work in is, um, The rewards, it’s another area that seems like it just needs to be drastically revamped.

You know, it’s rewards are not what rewards were a few years ago, even.

Aaron: Yeah, I think that’s a fair comment to say that they were what they were before. Um, and that’s a function of the way that, um, we’ve understood our, I guess I’ll take a pause there and say, uh, we better, in my opinion, have a strong understanding of the way in which, uh, people make decisions about how they redeem for things.

Uh, uh, we think that we understand, but we, we really are just scratching the surface on the rewards that, uh, in the redemption analytics piece of this. And so, and I get really excited about this because I, I think to myself, now the technology has caught up with our ability to computate, um, the emotional components as well as the transactional components around a redemption behavior that should be able to suggest or predict exactly.

Uh, a bit more of a curated reward structure for me. And, and, and so that’s really my call to action for the industry is like, Hey, start to look and focus on redemption analytics, because we want people to redeem and, and I’ll get on my high horse and be a purist of saying every single point that is issued should always go back to the consumer and then a utopian type of view.

And I recognize that’s not the reality of the world that we live in. Um, but for the most part, like if brands strive to have that positive engagement, even on their long tail, to try to find a way to get them to, you know, uh, redeem their points in some fashion to some degree. Uh, and I go and financial people are just like rolling at me as they say this right now, but from a consumer perspective, taking that side of the equation, saying like, this is somewhat.

Won’t you be a decision for me of like, Hey, I can let these go and they expired. And there’s no hope for me to re engage with that brand or having an outlet of some sorts when in the long tail to be able to redeem in some capacity, no matter what it is, like just even soft giving to like a social cause as an example.

Then I’m going to do that. And that still might have an inkling of hope for me to re engage with that particular brand when all things, uh, you know, ties ties and all things are equal. I’m going to decide that brand might come to, come to par and say, Hey, they, they didn’t leave me hanging. They allowed me to at least get some benefit in some capacity where I had some emotive component.

And, and, and the other part of me for like rewards right now is, is this focus on emotional or experiential rewards. A hundred percent think they’re important. I think that’s moving beyond just the transactional relationship is, is the savvy thing to do, like that’s the higher order level of a relationship in and of itself, but our focus is, you know, as marketers is sometimes we swing to those shiny balls too quickly to say we need to move our whole rewards spectrum or whole rewards catalog.

To just being about experiential, no, no, no, understand, ask your own consumers what it is that they want out of this and, and, and start to get into those analytics to say, we need the bevy of these, we need to focus on these. And it’s not just all about experiential. Uh, you’re not going to be differentiated if you just give the most experiential element.

That’s going to go to a small segment of your populace in your rewards for, or in your, um, customer file. And, and the rest are going to be left hanging, going like, Hey, that’s not even attainable. Now I’m missing out. And so you get this classic element structure that comes into place. And so for me, I’m off by a bit of a high force on, on rewards.

I’ll push it back to you a little bit in terms of a synopsis around. Uh, something that you’re really strong at is financial modeling and multi economics. Like talk to me about what people should think about

Bill: it. So that’s, that’s an interesting transition, Aaron, because you and I both know that the rewards budget is probably 80 percent of the, of the loyalty budget.

So when you talk about modeling, you have to be thinking about rewards and it’s so important, but you know, one of the first questions that we pose in the course and that we talked about was. You’re in a conversation, you maybe as the, the VP of loyalty or, or the chief customer officer even or something, and you’re in a conversation with your CMO, your CFO, and the question comes to you, are we gonna make money with this loyalty program?

Right. And said, you know what? You really, it’s okay to rephrase it back to them and say, you know, I think what you really want is you wanna know if I can create a, a better customer experience and deliver more value to our customers to create these enduring relationships. But, you know, while we’re encouraging this profitable behavior change, can we do it in a financially sustainable and responsible way to the business that you guys or you girls can live with?

I love it. And that’s that to me, that’s got to be, you know, it’s like, what was that a, a two thousands thing where people talked about that CMOs needed to learn how to speak the CFO language and to survive. Well, I think that loyalty marketers, everybody in our industry needs to say, you know what, this is not a binary game.

This is us figuring out how to talk the CFO language. And so, yeah, be really firm about your objectives, understand your assumptions. And I think we talked about this, like have all the hard conversations as early as possible. Once you’ve done your hard work and you’ve got your assumptions set. You’ve done a draft of a model and you’ve got some potential outcomes.

Circulate that with your team.  Talk, talk about it in, in maybe a steering committee setting where you’ve got, um, different business unit heads together and let, let everybody just tear into it and have that tough discussion because what comes out of that. Is agreement and consensus. And people are saying now I get it.

And so then finally, ultimately, when you come and you make a budget request and you say, here’s, here’s the projection, the business model, and here’s what we need, they understand how you got to that point because they were part of the process. And I think. That’s probably one of the biggest process changes that I think needs to be made.

It’s still, I see it sometimes happening and other times not so much, but anyway, I think that there’s, you can have a different take on financial modeling these days, if you really strive to speak the language of the CFO and, and not be afraid to have those conversations early on. So yeah, I know we’re, um, we’re trying to do six months in just a few minutes.

So we’re getting To the end of it, do you have any comments on the, that last one, the customer value proposition?

Aaron: Yeah, I think that’s familiar with us for the last few weeks. We just, we just let me cover them. I think we don’t need to hop into those. I know that not in this series, but in certainly conversations that we’ve had at different conferences and, and out in the marketplace, we’ve had the commentary around the, the getting to the view of the CEO.

So you’ve talked about the view to the CFO. Uh, we also have other, you know, insights into like how do you get to the mindset of the CEO and, and transitioning there. Um, so that’s kind of the, the, I think the, the real takeaway is like, you need to bring these conversations to a higher order that the organize really is embedded with this idea of customer centricity as being fundamental and truly being aligned towards that.

Um, otherwise it’s easy to falter away and slip and, and multi just becomes this, you know, side, side function, as opposed to the material part of the growth. Yeah. Um, you know, that’s kind of the last comment I, I guess I’d make as we kind of transition to wrap this up a little bit, because you’re right.

We’re doing like six months in 10, 12 minutes. And, uh, for those who have followed along, we, we talked about the fact that we would. Then a hop right into a different topic next month that we decided that, you know, we, we thought we’d take a pause and, and, and make, take a moment to say, Hey, for those of you who’ve been along in this journey with us, first of all, thank you.

But hey, you’ve come a long way. You’re, you’re, you’re almost halfway there in terms of topics that you have with our CLMP course curriculum. And so keep with us. We hope, and then maybe transition and trial and attempt to take the CLMP course. Uh, that’d be wonderful, but that’s not a necessity, necessity, pardon me, but it’s certainly something we strive for.

And then for those of you who are just tuning in for the first time, like there’s a whole archives of information that is available for us on this particular topic as the Wiser Loyalty Series. Uh, but we’re not the first series of let’s talk quality. Like we’re, we’re one of the more junior, junior series in the bevy of information that exists with let’s talk quality.

So, um, turn to the archives, take a search on our website. We have, we hold a  good body of information. Um, from LTL, uh, but go to the LTL site yourself as well, too, and search for the things that you’re looking for, uh, because there’s an impressive amount of detail for you as an individual who wants to become savvier, smarter around loyalty marketing at, at both of our, uh, both of our operating sites.

And so, and, um, and with that, I would put some of the transition actually into, uh, what is coming up next. And for us, it’s, um, it’s a new course. I’m excited about this. Uh, we are next week, we will fully kick into a refresh course on the multi academy, and that’s very, thanks to our good friend, indeed, truly a leading woman in multi, which, you know, we support women in multi in a hundred percent in our, our women in multi series.

Um, and then we’ve got a very fresh and pragmatic perspective on the introduction to Rosie operations. So, um, Please stick with us and we look forward to having you join us next week. And without that, I’ll say, uh, thanks Bill for your thoughts and in summary and, uh, wish everyone, uh, for us in  Canada, happy long weekend and the rest of regular weekend as it, as we head into it.

Bill: Right. So, yep, everyone stick with us. We’re halfway there, but there’s a lot more to come. So we’re looking forward to having some more of these conversations. Thanks.

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.

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