Paula: Welcome to Let’s Talk Loyalty, an industry podcast for Loyalty Marketing Professionals.
Paula: I’m your host, Paula Thomas, and if you work in Loyalty Marketing, join me every week to learn the latest ideas from Loyalty Specialists around the world.
Paula: So welcome to the latest episode of Let’s Talk Loyalty.
Paula: And in true partnership, I suppose, with our friends in The Wise Marketeer, I am super happy to be bringing you today truly a global voice of loyalty.
Paula: So today I am interviewing Mark Sage, who is currently working as the Chief Operations Officer for a brand new program out of Hong Kong called Yuu Rewards.
Paula: Now, many of you may have seen the headlines.
Paula: I’ve certainly been following Mark myself on LinkedIn for a long time.
Paula: And Yuu Rewards is doing extraordinary work as a coalition program in the Hong Kong market.
Paula: So first and foremost, I’d like to welcome Mark Sage to Let’s Talk Loyalty.
Paula: So listen, you’re in Hong Kong today, and delighted to be talking to you.
Paula: I’ll be very keen to hear how you ended up in that city.
Paula: It’s definitely my favorite city in the world.
Paula: It’s one I’ve been to many times, but I’m not familiar with the loyalty landscape.
Paula: So I know Yuu Rewards is a very young program, so really excited to hear about the whole journey.
Paula: But before we get into talking about the loyalty program itself, Mark, tell me first and foremost, from all of your many years working in loyalty, what is your favorite loyalty statistic?
Mark: Well, I’m going to be greedy and have three, but I think they’re all connected in my view.
Mark: So the stats are 50, 40, 30, and it’s basically 50 percent, which is the essentially maximum interest you’d have in a population for loyalty.
Mark: So if you’re launching a national program, you’re generally only going to get about 50 percent of people that are interested in that program to start off with.
Mark: The 40 percent is pretty much the active population in a loyalty program.
Mark: So when you look at the stats across all loyalty programs, you normally find about 40 percent of the member base are active.
Mark: Of the 50 managed to recruit, only about 40 percent of those will actually be your active members in the program.
Mark: And then the other stat is the 30.
Mark: So the 30 percent is pretty much the average number of people who will join and churn after the first transaction.
Paula: Oh my goodness.
Mark: And so for me, it’s all about focus.
Mark: You don’t really need to worry too much about the 50 percent you can’t interest.
Mark: You can’t make people want to point to the program.
Mark: Yeah.
Mark: But of the people you can interest, it’s a protect and retain.
Mark: For that 40 percent, knowing who they are and protecting and retain them is key.
Mark: And then for your 30 percent, those are the people that you get a lukewarm interest, but won’t stay around for too long.
Mark: That’s really about how do you activate them.
Mark: So how do you focus on those people and get them to come back and do that second, that third transaction.
Mark: So when you’re looking at a loyalty program, when you’re building a loyalty model, that kind of 50, 40, 30 is one of the things I always have a look at.
Paula: I feel so much better educated, Mark.
Paula: And we’ve only gotten started.
Paula: That’s amazing.
Paula: Thank you.
Paula: And actually, I thought it would have been higher because I remember speaking to a grocery program, I’ll say, and I’m sure their targets were about 60%.
Paula: So would you say that within certain categories, you can get much higher engagement levels and that the 50% is just when it’s averaged out across all industries?
Paula: Is that what you’re saying?
Mark: Yeah, it depends on what you’re measuring.
Mark: So if you’re measuring something like basket penetration, then yeah, for grocery, that’d be 60% to 70% penetration.
Mark: But obviously that’s coming from, it’s a standard kind of 80-20 rule.
Mark: So you’ve got 20% of your members typically representing 80% of your revenue.
Mark: It’s not always like that, but typically it’s a 70-30.
Mark: And so in that respect, if you’re seeing basket penetration at 60, 70% of loyalty, that’s coming actually not from 70% of your customers.
Mark: It’s coming from about 30 to 40% of your customers.
Mark: And so that’s really what you’re seeing.
Mark: So it’s just understanding what you’re measuring.
Mark: But in terms of a national program, if you said actually we have a million customers out there that come into our stores every day, you can get about half of those people because some people are a customer, but they don’t come in and out that often.
Mark: So it’s just looking at it as a measure really in terms of what you’re trying to do.
Mark: You’ll never get 100% loyalty or 100% penetration of your customer base, but you should be able to aim for like 60 to 70% penetration depending on the sector of your basket.
Paula: Wonderful, wonderful.
Paula: So 50, 40, 30, that’s brilliant.
Paula: And I’ll be super keen to hear exactly about how ambitious Yuu Rewards is going to be.
Paula: So as I mentioned, it’s a very young program.
Paula: I think you launched at the end of July in Hong Kong.
Paula: Am I right?
Mark: Yeah, I launched on the 30th of July.
Mark: So yeah, it’s been, I can’t count the weeks now.
Mark: It’s probably been 13, 14 weeks, something like that.
Paula: My goodness.
Paula: So you’re definitely the youngest program I’ve had on the show.
Paula: And you mentioned to me before that you got a million members in your first week.
Paula: And I know you also crossed the 2 million member mark.
Paula: So how is that compared to your expectations before you launched?
Mark: Yeah, it was amazing to be fair.
Mark: I mean, our 2 million we were aiming for by the end of the year, really, as a milestone and we hit it in the first month.
Mark: So, as you can imagine, in the three months in, that number is still growing well.
Mark: So yeah, it’s above expectation and it’s above the growth rate in the sense of the velocity that we were looking for.
Mark: So that’s all really good.
Mark: And actually, the active rates are fantastic as well.
Mark: So, it’s landed well.
Mark: I think if you obviously you’re not in market, but anybody that is in market won’t miss the program.
Mark: I mean, we’ve got 97% brand awareness.
Mark: So we are literally everywhere.
Mark: And it just means that we’ve managed to hit the market really well and get that kind of penetration that you need upfront to kind of build that momentum of the program.
Paula: Absolutely.
Paula: And I’d love to get a sense of, I suppose, first and foremost, where you got involved, Mark, because I know in terms of your career, you came from the technology side.
Paula: You have over 20 years with Carlson Marketing and then obviously through to AMIA.
Paula: So when did you get involved with the concept for Yuu Rewards?
Paula: And tell us a bit about it because it’s very exciting to have a coalition program to talk about.
Paula: So I’d love to get a sense of the story.
Mark: Yeah, so like you said, my background originally is technology.
Mark: I’ve been probably out of actual tech in the sense of I used to be in software development and product development.
Mark: But for the last 10 years, I’ve really been on the strategy and business development side.
Mark: So when I was at AMIA, we were looking at coalitions globally and worked in a number of markets to set up new coalitions.
Mark: So my background, I migrated from the more proprietary coalition world, doing a lot of kind of credit card loyalty and retail loyalty for individual brands into the coalition world.
Mark: And obviously, you know, AMIA, at that time owned Nectar, Air Miles and Aeroplanes.
Mark: So, you know, it’s a lot of coalition experience within the company.
Mark: And then this opportunity came up.
Mark: So essentially, I was approached for the opportunity probably 18 months ago now.
Mark: And yeah, it was just one of those exciting opportunities that I think from pretty much the conversation to getting on a plane was less than a month.
Mark: And I moved straight over here.
Mark: So it was, like you say, there aren’t that many coalitions that get rolled out nationally.
Mark: So when one comes up, it’s as interesting as Yuu Rewards.
Mark: You kind of have to grasp it.
Paula: And had you even been to Hong Kong before, Mark?
Mark: Yeah, so I was doing, at the time I was working for Eagle Eye, so I was down in Australia, because they were expanding in that market.
Mark: So I was down in Australia quite a lot.
Mark: So I was coming through Hong Kong and Singapore.
Mark: So we’re doing kind of business development back and forth at that level.
Mark: And previously when I was at AMIA, we had operations over in Asia as well, so I was through Hong Kong there.
Mark: So I knew the market, but only from a business traveler point of view, a couple of days here and there.
Mark: Moving here is a whole different experience, but it is an amazing place.
Paula: Absolutely.
Paula: And I’d love to get a sense then really of the overall proposition, because coalition has many different forms.
Paula: And I think you’re actually in a very privileged position, because as I understand it, the Yuu Rewards program is a coalition that’s owned and operated by one massive conglomerate of retailers.
Paula: Is that right, my understanding?
Mark: So Dairy Farm as a company has a number of banners underneath it.
Mark: So some of them quite well known globally in terms of brands.
Mark: So things like 7-Eleven, people would know.
Mark: But our grocery brand, Welcome, and Manning’s, which is our pharmacy brand, are all very, very large brands over here.
Mark: We’ve got about 2,000 retail outlets overall.
Mark: So it’s one of the biggest retailers and retail groups within the Hong Kong market.
Mark: So as you say, typically when you’re setting up a coalition, you’re looking to get good coverage of everyday spend.
Mark: So if you can get grocery and pharmacy in one program, that’s phenomenal.
Mark: But you’ve also got convenience with 7-Eleven.
Mark: And then we’re owned by Jardim, which is a very, very old company in Hong Kong.
Mark: It means like 100 plus years old, 150 years old.
Mark: So Jardim also own JRG, which is the Jardim restaurant group.
Mark: And in there we’ve got KFC and Pizza Hut.
Mark: So we managed to bring those into the program as well.
Mark: And then again, within the dairy farm brands, we also own the IKEA franchise.
Mark: So we’ve got IKEA quite uniquely actually in the program as a loyalty partner.
Mark: So our ability to cover homewares and grocery and pharmacy, but also dining options as well is quite a unique group of brands that you can bring together and quite a strong proposition from an overall household spend coverage.
Paula: Yeah, absolutely.
Paula: Well, it is, as I said, it’s the sweet spot and the holy grail of consumers want those multiple earning opportunities.
Paula: And obviously you want to avoid the complexity of multi-partner negotiation.
Paula: So at least everything’s within the same group.
Paula: So it sounds like it might have been simpler.
Paula: I’m not saying you probably didn’t have stressful times along the way with such a huge launch.
Paula: And I will congratulate you just on the extraordinary outdoor campaign.
Paula: I’ve been following it.
Paula: And again, just in preparation for today’s call, seen an extraordinary amount of above the line activity, which is probably particularly exciting, I suppose.
Paula: You mentioned to me it’s your first real client side project to run, am I right?
Mark: Yeah, so I’ve been on the agency side for a very long time.
Mark: So as you say, Carlson Marketing, AMIA, Eagle Eye as well, I guess, are all agencies in one form or another.
Mark: And obviously, Carlson and AMIA were essentially marketing agencies.
Mark: So yeah, this is the first client side role in Loyalty that I’ve done.
Mark: And it’s nice to almost jump the fence.
Mark: Like you say, I’ve launched a lot of programs to launch it and then ultimately be accountable for it on the other side.
Mark: It’s quite special.
Mark: But yeah, I mean, it has been super exciting.
Mark: As you say, the marketing guys have done a phenomenal job in terms of the launch they’ve done in market.
Mark: And, you know, one of the things I think, I mean, the outdoor is fantastic, but they also had essentially a launch sound here with two guys, George and Alex.
Mark: And George is very well known in the Hong Kong market.
Mark: He’s been described to me as like the Cliff Richard of Hong Kong.
Mark: So he’s that kind of local talent, I guess, in that sense.
Mark: So that’s landed very well because obviously the song that we’ve used is a repurpose of an older song.
Mark: So people know it, they know the tune.
Mark: And it’s just worked very well, I think, in terms of creating some good conversation around the program and something that people can talk about.
Mark: And it also obviously creates some great key visuals in terms of people that are well known faces and well loved faces of Hong Kong.
Mark: So it’s worked very well.
Mark: I think the guys have done a great job.
Mark: And it also talks to the fact that when you’re launching a loyalty program, which is ultimately about retention, you can’t forget the fact that it’s actually an acquisition play to start off with and we have to acquire.
Mark: So the acquisition, how you do that is super, super important.
Paula: And how long would you say, Mark, I suppose, just to give a sense of, you know, from the concept of, you know, building this massive coalition program.
Paula: And I know it’s literally the biggest loyalty program that’s ever happened in the Hong Kong market.
Paula: How long would you say that total process was?
Paula: Did you come in at the beginning?
Paula: Was it like a year and a half or was it already well underway?
Paula: Because just from my perspective, you know, people often say, you know, how soon can we have a program in market, you know, which is just a really difficult question to answer.
Paula: And I love to give examples of, you know, well, it actually took, you know, two years to build this or a year and a half or what would you say it took to build something of the scale that you’re operating there?
Mark: So I think when I joined, the conversations have been going on for about a year.
Mark: conversations are really about the, I guess more on the modeling side and the business case side.
Mark: To get to the point where it’s like, yes, we want to do this, we want to push the button on it.
Mark: So when I came in, we were kind of just starting out on the requirements phase.
Mark: So what is it that we want to do and how do we want to make it work?
Mark: From that point, we went pretty rapidly.
Mark: So it’s probably, I guess it was about nine months we were ready to go.
Mark: We chose to not go straight away because of just situations on the ground around COVID and stuff.
Mark: So we had time when we launched at that level.
Mark: But ultimately, probably about nine months end to end to get it up and running.
Mark: And that’s a reasonable time scale when you’re building a new application from scratch and obviously integrating a lot of systems.
Mark: And we had over 50 systems to integrate a lot of legacy parts across various banners and e-commerce.
Mark: And so it’s just a lot of work to bring all that together.
Mark: So that was still quite a pacey timing.
Mark: I mean, my background in launching programs for clients where you’ve got all the systems and everything is a good six months.
Mark: So to do a coalition in pretty much nine months is good going.
Paula: Absolutely.
Paula: And compared to, I suppose, your expectations going in, were there things that surprised you either about the Hong Kong market or just the overall complexity of the client side piece?
Mark: No, I think the expectations in terms of the launch itself were, I kind of knew what I was coming for having done this a number of times on the agency side.
Mark: The actual launch itself, I think, was fine.
Mark: I think the market, though, is very different.
Mark: I have a phrase here, Jetso, which is really around promotions and a lot of promotions.
Mark: And this market really does love promotions.
Mark: And you see people out on the street queuing outside restaurants waiting for, in essence, the hour when the price drops.
Mark: You see people queuing, waiting for the news and the free newspaper because it will have offers and vouchers and stuff like that in there.
Mark: So it’s a very promotionally savvy market.
Mark: And that’s one of the things that we’ve tried to tap into in the program is to make sure that we’ve got good, fresh offers and content coming through to provide for that, for the market.
Mark: But we see it having gone live.
Mark: One of the surprises is what people will phone us up for in terms of points.
Mark: You know, when somebody’s missed a promotion or something of that nature, you know, they will call us for what is essentially a relatively small value in those terms, at a points level.
Mark: But they’re on it.
Mark: They’re monitoring it.
Mark: They’re tracking it.
Mark: And they’re very, you know, promotion sensitive, which is great.
Mark: And that’s what we’re kind of working for is to provide that value to the customers.
Mark: But it’s very different to what I guess would have seen in some of the UK programs where collection can be quite passive sometimes in terms of how people participate in the programs.
Paula: Yes.
Paula: And I guess that means they’re truly responsive.
Paula: So I guess it gives you a sense of the power to drive behavior then when you know that they’re watching, they’re waiting.
Paula: You can do your communications and people will respond.
Paula: So I guess your response rates must be super fascinating to be watching.
Mark: Yeah.
Mark: And I think the other thing is because of the nature of the program, because it’s a digital first program, and most of what we’re doing, in fact, pretty much the program operates through the mobile app.
Mark: That’s our main way of working with the program.
Mark: So if you want the full capabilities, you have to have the app installed.
Mark: So we’ve got real-time visibility of when an offer is put up there, when are people opening, when are they clicking on things.
Mark: If you go and shop in store and scan your loyalty ID as part of the purchase, within a second, your phone will beep and tell you how many points you’ve earned.
Mark: So we’ve really kind of tapped into that real-time nature.
Mark: And it does snowball because it creates a customer expectation of real-time.
Mark: So if any part of our program isn’t operating in real-time, we’ve had phone calls around it.
Mark: We have a credit card partner on our program.
Mark: And just the nature of credit cards is they don’t tend to be real-time.
Mark: They tend to take two or three days for settlement and stuff to come through.
Mark: That’s one of the areas that we’re looking at, because it’s two to three days, people are saying, well, where’s my points?
Mark: Because they’re getting used to operating in a real-time environment.
Mark: And so in a sense, that is great in terms of what we can work with, but it also sets the bar high for us.
Mark: So we’ve actually had to change functionality we were planning to bring in.
Mark: We’ve had to change it to make it real-time, because we just knew that when we looked at it, it said we couldn’t launch that kind of capability unless it was a real-time capability.
Mark: So it’s great in that sense, and it does tap into what consumers are looking for in terms of as soon as you’re on that, they can come in and see what’s happening.
Mark: But it does mean that we have to stay ahead of the curve, essentially, and make sure that we meet that demand.
Paula: Creating it and then, as you said, living up to it, because I can only imagine 50 systems, 2000 stores, 10 brands, and, as you said, coming to market in a relatively short time frame and in the middle of a pandemic, that’s a pretty extraordinary achievement.
Paula: So, again, the 2 million members and even for listeners who may not be familiar, I did check before we came on to chat today, there are about 7.5 million residents in Hong Kong.
Paula: So, to have 2 million of those already registered on your program is extraordinary penetration for something that’s literally just three months old.
Mark: Yeah, exactly.
Mark: As you say, I mean, it’s really good.
Mark: And obviously, you know, we’re aiming for a slightly higher penetration than that, and we will get there.
Mark: But yeah, that 2 million initially is phenomenal for the size of the population.
Paula: It sure is.
Paula: And tell us a bit about the decision to go plastic free, because, you know, again, my distant understanding of the Hong Kong market is that it is very digitally savvy.
Paula: But I know there’s plenty of retailers that are nervous when, you know, we go in and say, OK, you don’t need a plastic card.
Paula: It can all be done on app.
Paula: Was that a difficult decision for the Hong Kong market, or would you say that that was just the only way to go?
Mark: I think it was a…
Mark: I wouldn’t say a hard decision, but it was something that had to be thought around.
Mark: And I think we had some nervousness from some of our partners in terms of whether some of the older customers would miss out on the program.
Mark: And there was an element, I guess, of a leap of faith in some areas to say whether we could do that.
Mark: Ultimately, it’s actually worked very well.
Mark: So we have super, super high penetration from a mobile app point of view.
Mark: We do actually have an offline channel.
Mark: So in the Hong Kong market, there is a transit card called Octopus, which is a bit like Oyster in the UK.
Mark: But the difference is that that’s about 98% penetration or something.
Mark: So pretty much everybody in Hong Kong has an Octopus card.
Mark: And so we do use that as an offline identity.
Mark: For a small number of customers, you can actually sign up in a 7-Eleven using an Octopus card.
Mark: But it’s not a channel that we promote publicly, really.
Mark: And we haven’t had that many go through that channel.
Mark: But it’s kind of the fallback channel for the older population or somebody who doesn’t really want to engage on the mobile app.
Mark: But I should be found that it exceeded my expectation.
Mark: In fairness, I was expecting a lower penetration number just because of what I’d seen in previous markets and programs.
Mark: But it is phenomenal.
Mark: Pretty much the whole of our base is on the mobile app.
Mark: And it spans all age groups.
Mark: And I think we underestimate, I think sometimes, what people use.
Mark: My parents who are edging towards us are on there.
Mark: They’ve got Facebook.
Mark: They’ve got WhatsApp.
Mark: They’re using their mobile phones all the time.
Mark: They’ve got the devices.
Mark: You just need to help them get the app onto that device.
Mark: And so one of the things that we did very strongly was to make sure that the QR code for download and the messages about download were literally everywhere.
Mark: And it was one of the key messages from the Above the Line campaign was basically download the app.
Mark: And you have to promote it at that level.
Mark: You have to have it at every touch point to get people to download it so they can’t miss it.
Mark: Every single piece of post material, all the hanging banners, etc.
Mark: Even the trams that we wrapped in blue.
Mark: They’ve all got a QR code on them.
Mark: And you have to make it that easy.
Mark: But it works.
Mark: You can get it out there.
Mark: And I think it’s difficult if you’ve got a legacy population of plastic cards.
Mark: But if you are launching a program now, certainly from our experience, I would say just buy the bullet and go that route.
Mark: Because it’s very difficult if you make it easy for somebody to go plastic.
Mark: Very difficult to convert them to a mobile app because there’s no reason for them to do so.
Mark: But if you just don’t put that route in there, they’ve got no choice.
Mark: They will sign up.
Paula: Absolutely.
Paula: Yeah.
Paula: And it’s almost like just taking the pain early on because if you are going to have to go through a conversion further down, then you might as well just, I think, take the pain now.
Paula: Particularly again, we’re in 2020.
Paula: And again, I think Hong Kong seems to be a very savvy country.
Paula: I’m sure mobile penetration, as you said, is extremely high.
Paula: I know you also have abilities to join using WeChat and other platforms like that.
Paula: So have they worked easily for you as well?
Mark: Yeah, so we have essentially iOS and Android as the main apps, and then we use WeChat as well.
Mark: WeChat is really aimed more at the mainland Chinese audience.
Mark: So in the Hong Kong market, when we don’t have challenges of COVID and the borders are all open, then you get a lot of mainland traffic come through, people coming over the border to do shopping and stuff.
Paula: Of course.
Mark: So WeChat is one of the main mediums over there to interact.
Mark: So we’ve got pretty much all the same functionality in WeChat as well.
Mark: But yeah, that was fine to do.
Mark: I think to stand at the WeChat mini program was actually quite easy and quite quick, probably in comparison to building an app.
Mark: So it’s been really good to have those kind of three formats.
Mark: What we haven’t really done is providing the full capabilities on the website.
Mark: So we’ve kind of leapfrogged the web completely.
Mark: We do have a website and it will tell you about the program and it will tell you how to download the app.
Mark: But what it doesn’t do is give you much more than some basic account servicing.
Mark: So you can enroll and you can see your transaction history and things like that and FAQ.
Mark: But if you actually want to use offers and redeem, you need to download the app because we wanted to make sure that the app is essentially the whole way of interacting with the program.
Mark: And again, it just drives that traffic towards there.
Mark: So we’ve purposely put some friction in the process to make some processes harder for the consumer to keep the app as being the easiest, the smoothest route to participate on the program.
Paula: Absolutely.
Paula: And tell me about just language actually as one point, Mark.
Paula: How many languages do you have to deliver the program in the Hong Kong market?
Mark: So we have three languages.
Mark: So we have simplified Chinese and traditional Chinese.
Mark: So simplified is more for the mainland audience.
Mark: And traditional is essentially the local market, which is probably about 90% plus of our membership base will be on traditional Chinese.
Mark: And then we obviously will be somewhere in the region of kind of 6 to 8% of our base will be English.
Mark: And the English actually spans quite a few people.
Mark: So you’ve got clearly the kind of expat audience of Europeans and Americans, etc.
Mark: over here.
Mark: There’s also quite a large audience of helpers, Filipinos and Indonesian.
Mark: So it’s, you know, it works for a lot of different people that are in the market from Hong Kong point of view.
Paula: Absolutely.
Paula: And a bit of trivia, because I love even from my own research, Mark, in preparing for this, Hong Kong, I believe, has the second highest number of billionaires of any city on the planet.
Paula: I don’t know if you knew that already, did you?
Paula: Random trivia.
Mark: I didn’t, but I can believe it.
Paula: Yeah, yeah.
Paula: And also a densely populated place.
Paula: So again, just because we are, you know, keen to help people understand the type of market you’re operating in, the whole city, I believe, is only 426 square miles for those seven and a half million people.
Paula: So spaces that are previewed by all accounts.
Mark: Yeah, it is.
Mark: Although it’s interesting, a very green city.
Mark: So I think a lot of people only see Hong Kong from the pictures that you see at the harbour.
Mark: But actually, you know, it’s a very small amount of land that actually has housing on it.
Mark: It’s a huge amount of land that is green and a lot of it’s hilly, but the hiking in Hong Kong is amazing.
Mark: So if you come over, make sure you go hiking up the mountains.
Mark: It’s a very good experience.
Paula: Oh my goodness.
Paula: That sounds amazing.
Paula: And tell me, you’ve mentioned the challenges of COVID and the pandemic, Mark.
Paula: How has that been?
Paula: Well, how is it in Hong Kong at the moment?
Paula: You know, what’s the kind of infection rates or behavior?
Paula: Or is it something that’s still a massive problem or where is it at?
Mark: Yes, Hong Kong is interesting.
Mark: I mean, I was recently in the UK, so it was interesting to see the comparison between Hong Kong and the UK.
Mark: So pretty much as soon as there was a kind of a whiff of an issue or a pandemic, all the masks came on.
Mark: Hong Kong had previously been through SARS, so they were kind of used to this type of issue.
Mark: And everybody just wears a mask.
Mark: And it has been mandated, but it almost didn’t need to be mandated because everyone wears one by choice.
Mark: And in that sense, we have very, very low infection rates here.
Mark: I mean, it’s typically single digit infection rates.
Mark: And so life is relatively normal here.
Mark: So they’ve had some restrictions on bars being open, but that’s pretty much gone.
Mark: They had some restrictions on groups meeting together.
Mark: So it was around group four.
Mark: That’s now gone up a little bit.
Mark: So there’s no mass groups.
Mark: There’s no mass events and that kind of thing going on.
Mark: But day to day life, restaurants, bars and that kind of thing are open.
Mark: It’s fairly normal, except for the fact you can’t travel.
Mark: Obviously, everyone’s got the same challenge there.
Mark: But life goes on at that level.
Mark: I guess the only things that really have been hit here would be tourism.
Mark: So clearly, if you’re in the hotels or airline industry, you’re going to feel the impact because there’s just no traffic, nobody flying in at that level.
Mark: But the day to day retail is generally okay.
Mark: People are still spending and still coming out.
Mark: Obviously, for a business like ours where we’re selling food and things of that nature, it’s still relatively healthy.
Mark: In the big scheme of things, I think we’re doing a lot better than other markets.
Mark: Obviously, I’ve got family and stuff in the UK.
Mark: I can see what’s happening over there.
Mark: It’s a much tougher situation sometimes.
Paula: Yeah, well I’m certainly an advocate of the mask, Mark.
Paula: As listeners will know, it is a requirement here in Dubai.
Paula: I’ve probably talked about it before.
Paula: And I was actually in Hong Kong when SARS broke out.
Paula: I’ve had a bit of a scare myself just in terms of seeing it.
Paula: So it is amazing, I think, in Asian cultures that it’s just, there’s so much more prepared.
Paula: And I’ve heard the same about Africa, for example.
Paula: I believe in Rwanda because they’re used to keeping Ebola out.
Paula: That again, their screening and their protocols are much better developed.
Paula: So anyway, slightly off-topic apologies for loyalty, but it is genuinely fascinating, I think, for everyone.
Paula: So the last area I wanted to ask you, I’ll just recap, I suppose, the brands.
Paula: I think you said you have 10 brands.
Paula: So Welcome is the grocery brand for supermarket loyalty.
Paula: Then Mannings, I know you mentioned to me your pharmacy brand already had a loyalty program.
Paula: So how did you find, I suppose, convincing members of the Mannings program to move over to Yuu Rewards?
Mark: So we had a specific program put in place to migrate those members across.
Mark: There was a lot of information that we provided to them in terms of what was happening to the program.
Mark: As much as we could, because clearly the launch of the program itself was quite confidential.
Mark: But they knew the program was changing and changing into something new.
Mark: But really from the Mannings point of view, the ManCard program has been replaced by something that’s essentially richer and broader.
Mark: So you get more value for your shop at Mannings now in Yuu Rewards.
Mark: And you can also earn across more banners from that point of view.
Mark: So the migration has gone very, very well in terms of the percentage of people that have moved into the program is pretty much the whole program across.
Mark: And the members are transacting well and they’re getting better value overall than they were getting in the original program.
Mark: So I think in that sense, it’s been a great success.
Mark: And to be fair, we had other programs as well running some of our other banners.
Mark: All of them have migrated well and all of them are running at levels higher than they were as individual programs.
Mark: And I think that kind of speaks to the strength of the Coalition program model.
Mark: I think there’s been a lot of chatter in the press in recent years when you see what’s happened with things like Aeroplan and Nectar and MRs.
Mark: There’s been a lot of chatter around the Easter Coalition model dead.
Mark: I think what we’re showing is actually, no, it can work very, very well if you get the strength of the brands behind it and you promote it well.
Mark: And there’s genuine customer value in there.
Mark: Then it works very, very well and it’s a great asset in that sense.
Paula: And I am a huge fan of the model, Mark.
Paula: I think that most of the challenges come from the internal stakeholders.
Paula: So it is the brands that complicate things because everybody obviously there’s so many vested interests.
Paula: But I think from a consumer perspective, we all want that kind of cumulative, you know, cross lifestyle effect.
Paula: So I think you’re doing amazing work with it.
Paula: The other one I wanted to specifically ask is a partner, Mark, with 7-Eleven.
Paula: I’m fascinated and do a lot of work in convenience retail, as you know.
Paula: So how has it gone?
Paula: Did you replace a program for 7-Eleven in Hong Kong?
Paula: Or is it a new idea to have loyalty in convenience retail?
Mark: So 7-Eleven, I think, originally had a program called 7Fans, which was a slightly smaller scale, but was one of their ways of interacting with the consumers.
Mark: As you say, I mean, convenience is a difficult sector, I think, to do loyalty in because of the nature of the kind of spend levels that people have.
Mark: Even when I was working on things like Nectar in the UK, you saw less penetration within the smaller format stores.
Mark: And so, you know, I think what Yuu Rewards has brought to 7-Eleven is a much more energized base who are seeking to essentially earn value wherever they can.
Mark: And so the penetration levels are higher in the sense of what they would have seen before.
Mark: And like anything with convenience, we’re going to have to, I think, work harder to get those penetration levels higher because it’s just the nature of the beast when it comes to convenience retail.
Mark: So it’s about what else can we do to essentially incent the behavior of showing your loyalty ID and removing friction out of the process.
Mark: But one of the things that we’ve done there is, you know, with the Octopus card, because a lot of payments going through 7-11 are on Octopus because it’s a low-value transaction, you can link your Octopus card to the app, and then you can essentially single tap.
Mark: So when you pay with your Octopus card, if you’ve linked your Octopus to the app, it will automatically just give you loyalty points.
Mark: So we’ve done some things to try and streamline that process and tap onto the back of the payments process with inconvenience.
Mark: We have some other things in the pipeline to come down, but yeah, I think it’s working well for them, and it gives a really good kind of example of why Coalition works well for different sectors, because where you have got a sector which is in that sense high frequency but low spend, it’s sometimes not as attractive to have a loyalty card for the majority of customers, whereas Coalition allows us to reach wider and deeper.
Paula: And I’m glad you mentioned the card linking there, Mark, as well, because for me, it’s really the single biggest opportunity, and there are plenty of obviously fantastic tech companies that are building that type of solution.
Paula: But I do think it’s particularly useful in convenience retail if they don’t have to do that double tap or double identification piece.
Paula: So that’s super clever, and the Octopus card sounds like the perfect vehicle.
Paula: So yeah, I can hear a real focus on simplicity coming through, which again, I think really makes consumers’ life easier as well as obviously the merchants.
Paula: The final piece I wanted to ask you about, Mark, today was just, I suppose, jumping back on to some of the fantastic work you did actually in AMIA.
Paula: And that might not be relevant as yet or at all, in fact, for Yuu Rewards.
Paula: But just interested to get your perspective really on this idea of rewards for interaction.
Paula: I saw some fantastic presentations that you gave quite a few years ago now.
Paula: I think Dubai 2013 was the last one, because as you’ve said, you’ve been consulting and doing different things.
Paula: But where do you think that’s at in terms of the loyalty, the world of loyalty, either just in general as an industry observer or even for Yuu Rewards?
Paula: Is there something around rewarding social interaction that you’ve seen or are seeing at the moment?
Mark: So I think it’s a difficult one to do from a pure play rewards point of view.
Mark: So to give people for things that aren’t directly tied to value.
Mark: So, you know, if you start giving people points for back in the day for liking you on Facebook or any of that, I think those kind of things don’t particularly work well because you’ll have some people who will try and game the system and earn value for nothing.
Mark: And actually genuine customers who are genuinely collecting points aren’t interested in getting paid very small amounts of money.
Mark: They will interact because they want to interact.
Mark: And so I think the interactions actually is more important in terms of tracking behavior and using it to inform how you personalize the program.
Mark: So we do a lot of tagging of our assets.
Mark: So our app is tagged.
Mark: We use that data within things like Google Analytics, et cetera.
Mark: So we know we can see behaviors.
Mark: We know what people are doing in terms of interacting with the app and interacting with offers and that kind of information, which are all essentially interactions.
Mark: And obviously somebody goes into social media and clicks on one of our advertisements.
Mark: You know, like everybody, we know the advertisements have been clicked on.
Mark: So that type of interaction information is an idea of what interests our members.
Mark: And that is that information that feeds into our ability to target great promotions to the members to give them great value.
Mark: So, you know, the purchase basket is great in knowing what you buy, but also just knowing what you’re interested in and what kind of promotions you like and what kind of in essence, what kind of ads you like, what would you like to see, so we can serve you more of that kind of stuff and less of the stuff you don’t want to see.
Mark: So I think it’s for me, it’s kind of moved on a little bit, but it’s not so much about rewarding interactions in the direct sense.
Mark: It’s more about being able to capture interactions for personalization.
Mark: And to make sure that that personalization then builds through.
Mark: So one of the big things for us on a roadmap perspective is just really dialing up that personalization.
Mark: And that does need to take account of just simple things like when do you open the app?
Mark: What time of day do you open the app?
Mark: So that we serve you the right content at the right time.
Mark: Very, very simple things.
Mark: But learning the kind of behaviors that work well for you as a member means that we can take friction out of that relationship and just make it easier for you to interact with us.
Mark: So that ultimately you earn value through our balance by making purchases.
Mark: That’s kind of a win-win for both then.
Paula: Wonderful.
Paula: I have one final question for you, and you might not want to answer it, Mark, but it just occurred to me.
Paula: Do you think at some point there’s an opportunity for non-group companies to become members of your coalition?
Paula: Is that something that you can comment on at this stage?
Mark: So I would say we are a coalition program.
Mark: So I think we’re looking to provide value to our members.
Mark: We already have non-group companies in the program in the sense of we have Hayes, which is a bank in Hong Kong.
Mark: And they’re in Joy Card.
Mark: It’s a great way of earning points.
Mark: So we’ve got a really strong points multiplier.
Mark: You get essentially one point if you’re spending within our banners per dollar, per Hong Kong dollar.
Mark: If you use your Hayes card, that gets doubled to two points within our banners.
Mark: And then if you’re using your Hayes card in our food and beverage outlets, that gets tripled to three points.
Mark: So we’ve already got a partner in the program who’s essentially a non-dairy farmer, non-Jardine partner.
Mark: And I think certainly the intention will be to bring value to our members wherever that sits.
Mark: So certainly there will be, I suspect, additional verticals that we will be looking at.
Paula: Wonderful.
Paula: So watch this space, eh?
Mark: Yes, exactly.
Paula: Wonderful stuff.
Paula: Well, that’s it from my side, Mark.
Paula: Was there anything else you wanted to mention from your side before we wrap up?
Mark: No, I think that’s all good, Paula.
Paula: Wonderful, wonderful.
Paula: So listen, Mark Sage, Chief Operating Officer at Yuu Rewards in Hong Kong, 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 through its Loyalty Academy, which has already certified over 170 executives in 20 countries as certified loyalty marketing professionals.
Paula: For more information, check out thewisemarketeer.com and loyaltyacademy.org.
Paula: Thanks so much for listening to this episode of Let’s Talk Loyalty.
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