eCommerce Podcast

Our podcast is raw, honest and damn right insightful, as we chat to some of the best minds in eCommerce

Hosted by Richard Hill

Ep 48:
Paula Thomas:
Maximise Your Business With Customer Loyalty Programmes

This week we’ve got the fantastic Paula Thomas, expert of all things loyalty and the voice behind the Let’s Talk Loyalty podcast!

We love having fellow podcasters on the show and we had a brilliant time talking to Paula on this episode. 

Paula has over 20 years of experience working within Marketing for a variety of big brands, and has spent over half of that focussing building customer loyalty for major brands across the globe. 

If you’re an eCommerce business who wants to maximise sales from your existing customers, then join us as Paula shares her advice for creating loyalty schemes people can’t refuse. 

eCom@One Presents

Paula Thomas

Paula Thomas is the creator and host of the Let’s Talk Loyalty podcast, where she shares her expertise on loyalty programmes, as well as interviewing loyalty marketing experts from all around the world. 

Paula found her passion for loyalty schemes while she was working as a Marketing Manager for a major airline 20 years ago. She was tasked with getting more people to book directly through their website, and her solution? You guessed it. She led the development of their first customer loyalty programme and since then she’s been working on world-leading loyalty schemes for brands including Avios, O2 Ireland, AIB and The Entertainer Group. 

In this episode we talk about the power of loyalty schemes and how they can maximise the business out of your existing customers. Paula discusses several ways businesses can implement loyalty schemes, as well as how to create incentives people can’t refuse, where loyalty schemes are headed for in the future and the best ways to measure your loyalty success. 

Want to find out more about how to get the most out of your existing customers? Time to listen in and find out how to draw people into your brand with offers they can’t resist.  

Topics Covered

00:42 – Finding her passion for loyalty schemes

02:52 – Why should eCom stores invest in loyalty schemes?

04:00 – How to implement a loyalty scheme for your business

06:55 – Creating incentives for your customers

12:51 – Key changes in loyalty schemes over the last 10 years

17:07 – The steps to creating your loyalty scheme

23:01 – Recognition loyalty vs Transactional loyalty

24:56 – How to retain people on your loyalty programme 

29:27 – The future of loyalty schemes

32:21 – Best ways to measure the success of loyalty schemes

34:18 – Her favourite episode of the ‘Let’s Talk Loyalty’ podcast

35:45 – Book recommendations

 

Richard Hill
Hi and welcome to another episode of eCOM@One and today’s guest is Paula Thomas who’s the host of Let’s Talk Loyalty Podcast. How are you doing Paula?

Paula Thomas
I’m extremely well Richard, lovely to be with you today.

Richard Hill
Thank you so much. It’s always great to get a fellow Podcaster on. I always feel I’ve got to be on my game when I’ve got a fellow Podcaster on the Pod so thank you for agreeing.

Paula Thomas
Not at all – no it’s a very interesting format I think, as we talked about before actually, it’s a very different way of communicating with people and I love it. I love listening and I love learning and I love showing up on shows like yours.

Richard Hill
Oh thank you so much. So, Loyalty Schemes, let’s get straight into it. I think it’s something that I’m not that familiar with other than the fact that I’m signed up to a couple myself, but in terms of the commercial side, I’m really looking forward to this episode and diving into things, so how did you find that Loyalty Schemes were your thing, were your passion? I mean, talk us through that.

Paula Thomas
Yeah, it’s actually an interesting story Richard, because my background was much more on the airlines side and I know your business is eCommerce and I do think airlines were probably one of the very first sectors to embrace eCommerce and when I joined Emirates Airline which was, would you believe 21 years ago, we had a very big business challenge and as many of your listeners might remember, at the time travel agencies were the main channel to book travel and yet we as an airline really wanted people to book on-line, we wanted an eCommerce and we wanted to channel shift, so what we realised is, in fact what I realised because I was the one who was given the job, was that the only tool I really had available was the Loyalty Programme. So what I love about loyalty programmes is that they are a very powerful way to drive consumer behaviour because you’ve got their information, you’ve got their data and you can connect with them and go ‘hang on a second, why don’t you try this or try that, we’ll make it worth your while’ you can encourage them to change their behaviour the first time and then obviously once they engage you know, they start behaving in different ways and for me, as I said, in the airline business it was extremely powerful, extremely profitable and I really think that eCommerce and loyalty fit very well together as a result of exactly that experience, so I fell in love with loyalty and here I am 21 years later.

Richard Hill
Wow that’s a long while isn’t it? It’s a long while in one specific, you know, focusing on one area so in terms of like the knowledge and the experience it’s fantastic. So you sort of go back to those so of, I can still remember booking my holidays on the teletext back in the day.

Paula Thomas
Yes, oh you’re ageing yourself now Richard, oh my goodness!

Richard Hill
I don’t mind, I don’t mind or was it my dad that did that? I can’t remember.

Paula Thomas
Yeah.

Richard Hill
So, when we say about eCommerce for stores specifically then why should they invest in loyalty schemes, what’s the upside for these guys?

Paula Thomas
Well I think first and foremost it gives you an opportunity really as I said to change behaviour, so there’s very few ways where you can directly acknowledge how customers are behaving unless you’ve asked them to give you their data which I think eCommerce businesses obviously already have, but by giving their permission to communicate and to be recognised in terms of their transactions, all of a sudden you can outbound communicate with them. So particularly with privacy regulations you do need to be able to communicate with people so by just having an eCommerce relationship doesn’t mean actually you know what, I can actually do what I want to, so a loyalty programme is an explicit way to say yes we’re in this relationship together, so you want something from our brand, you want a better experience so let’s build this loyalty programme and give you exactly what you want which is going to be much more relevant for your needs.

Richard Hill
Yeah, so as an eCommerce store then, give us some examples specifically as I’m thinking, you know our listeners will be sitting there thinking what could we actually do? We’ve got our eCommerce store, we’re very successful or somewhere on the scale of success, you know whatever that looks like for our listeners, but right okay how or what could we actually .. what would that look like?

Paula Thomas
Well I think that there’s some great examples all over the world Richard and the most famous one will be Amazon Prime and I’m sure all of your clients are very familiar with that model and it is extraordinary you know the sheer revenue that’s coming in and that’s one of the big interesting trends that’s coming through in terms of loyalty where people are paying to have additional benefits, so that’s an extraordinary model, it’s a subscription model and I think that we all know that we actually shop a hell of a lot more when we know that the shipping is taken care of so the fact that people are paying, because I think with eCommerce there is sometimes an expectation of free shipping which is very hard to deliver on again, depending on what sector you are in, but if there is at least maybe a shared cost, so exactly what I believe Amazon Prime is doing, because obviously what Amazon did in the beginning was it gave up all of that shipping revenue which was probably quite a controversial decision. Well what they got instead was a stable recurring revenue and then an increase in the upsell of the cross-sell, so I think that’s where the business case has to be very clearly understood. So I think that’s a very good example and then I think in China for example as well I’m sure everybody’s heard of Ali Baba there’s a programme they have that’s called 88. Well what’s interesting is that they also build a VIP Programme which is also a subscription-based programme. So you can pay to be part of the 88 VIP Programme and they give you even bigger discounts then on all of their stores, so then it’s just an incredible way to go – OK people want to be in this club, what’s driving incredible loyalty and what they’re doing also, Richard, they’re kind of recognising where people are showing up for example in commenting on social media, contributing ideas about how a product has performed, so they’re building a more holistic example of ‘OK the community wants to learn from each other’. So that’s also way beyond transactions I think where you are creating a community and I really think that’s an important thing people can go ‘OK so what is it?’ because what I think eCommerce suffers from by definition is that it is a transactional relationship, so how can I make that something that is more fulfilling and I actually feel that the brand cares about me more than they might have done in the past?

Richard Hill
Yes, I think that’s a great point that community aspect. So if you think about that Ali Baba example 88 Club and Amazon Prime which probably there’s not many people haven’t got Amazon Prime I think, they are sort of paid memberships in effect, is that what we’re saying? So is it that you’ve got paid and non-paid loyalty schemes?

Paula Thomas
Yes, yes

Richard Hill
So to sign up to a non-paid loyalty scheme what sort of incentives could our eCommerce stores that are listening in give or would you give for a potential customer or somebody to join the community to join a loyalty scheme, you know they haven’t got to pay for it, so what would the incentive be for them to then sign up?

Paula Thomas
I think there should always be an incentive Richard, because what I find interesting is that I think there’s a big misperception between what is the purpose fundamentally of a loyalty programme and I think there was some fascinating research that came out on my own show and we’ve already mentioned that I’ve literally podcast about loyalty programmes and one particular gentleman, and he’s in the UK there like yourself so, Rob Chandlers is his name, and he’s running the Sky VIP Programme and he quoted some research where the majority of consumers believe that the purpose of a loyalty programme is so that the purpose of the brand can demonstrate loyalty to them. But actually by contrast, what the marketing people believe is that it is for the consumer to demonstrate loyalty to the brand, so everybody is expecting the other party to be more loyal, so what I’m, trying to say is I fundamentally believe it’s our job as merchants whether we’re offline or on-line to really have a very clear vision of how we want to take care of our customers. Who do we want to take care of and how do we want to take care of them? Sometimes it’s as simple, Richard, as acknowledging that they’ve joined a programme, saying ‘thank you’ for maybe referring or recommending or commenting on or all of these behaviours and then at appropriate times, like their birthday for example, you can show up and give them a reward.

Richard Hill
Yes, yes

Paula Thomas
My favourite ones Richard, for example I was very lucky quite early in my consulting career, I worked with O2 Priority which is a very famous loyalty programme in the UK and I ran the Irish version of the O2 Priority and what we found in that example, and again that’s pretty much a digital business – and yes, O2 had stores in Ireland and there was a certain amount of business being done offline, but the vast majority of people were just on their phones and kind of you know, doing their contract and buying their credit. Well, what we found was, we did partnerships with retail brands in the real world and that was incredibly powerful. So what we did was, we said ok well let’s just kind of connect with the leading coffee shop brand in Ireland at the time, and when people behaved in particular ways, let’s say they signed up for a 12-month contract or whatever the particular behaviour we identified, we then were able to give them say, a free coffee, and the power of that when it wasn’t just here’s 10 Euros off your next 40 Euro transactional coupon, you know give you a way to spend more, but it was very much coming from a place of integrity it really worked well, and I really do think partnerships are a very good model for doing that so …

Richard Hill
Yes I like that.

Paula Thomas
So there are lots of things that you can do in that kind of space.

Richard Hill
Yes, so I think the guys that are listening in now will be thinking firstly, it’s about that experience isn’t it, making sure that when you do sign up for something, that experience that those first few communications, that sequence or those touch points, what do you stand for, your brand, that sort of community aspect, bringing that in, but also thinking about potential partnerships. You know I was slightly different but I signed up for a coffee subscription/loyalty and I’m paying for it, but I’m getting a .. it’s actually arriving today funnily enough, I got a ping this morning and I though oh! It’s on its way and I know it would have been ground yesterday, not ground, but it would have been .. what’s the word?

Paula Thomas
Packed and packaged and shipped

Richard Hill
Yes, so it would be fresh yesterday and it’s going to arrive today but I know when that comes it’s going to be a really nice experience when it arrives, I mean I’m already getting the experience with the e-mails that are arriving yesterday and today to say it’s on it’s way and you know, I know it’s going to arrive between 11.30 and 12.30 and might even hear the doorbell go in a minute, but when it arrives, you know, it’s an experience of the packaging, the way it’s packaged and the different things that come in there – in the history of the family that have created this particular batch, you know, where it’s from but then also, quite often they are doing the partnership thing where there will be the voucher, the discount, whatever it may be, for one of their partners, so then they’re doing that cross-promotion which is no doubt they are doing a promotion the other way as well, so in terms of

Paula Thomas
Yes, I’m sure …

Richard Hill
As an eCom store you’re then working with a partner, which is absolutely key, you are opening the door to potentially another 100,000 customers or whatever your numbers are, so that’s what great

Paula Thomas
Yes, yes super, Well, I could tell the sense of anticipation Richard of the coffee, you know exactly what hour it’s going to arrive so there’s the loyalty right there so ..

Richard Hill
Do you know what, there’s no way I’m cancelling that coffee!

Paula Thomas
Exactly! Yeah it’s a great business to be in huh?

Richard Hill
Yes I have to admit I’ve been looking at subscription – my businesses are subscription businesses, but I’m looking at another one at the moment that I've got my eyes on which is eCommerce, and about that again, about that experience that we can make that brand and experience around it so people re-buy. Okay obviously, you said 21 years you've been doing this, it's a long time. So that's actually very similar to me, that’s 21ish years, I think as well, on what I've been doing, so yeah. So, in terms of like, the changes you've seen say the last 10 years, I guess there's been a lot of changes, and a lot of things happening, so what would you say were the key sort of take-aways there in the last 10 years?

Paula Thomas
Yeah, yeah, it's a great point Richard and I should say, in that 21 years, I also went sideways into digital and, you know, so and I came in and out of loyalty, but it has been certainly the last 12 years, just non-stop, purely focused on loyalty so absolutely that's the way. So, to answer your question, I think the biggest shift has been away from transactional and very much into emotional. So I think that that's super important, because I think everybody was feeling a bit jaded, particularly even by the word ‘points’ or ‘stamps’, you know? So I think we all remember when our coffee was a stamp on a card and then it became a digital stamp, okay fantastic, but literally that just felt like okay, you know, it just first of all, it's subject to fraud, but also it just didn't feel particularly rewarding. So, actually, Starbucks in China to go back to you know, the East. I always love to see what's going on there, I feel they're very advanced.

So I know there's a campaign, for example, with Starbucks, where they have this concept called Say it with Starbucks. It sits within the Starbucks rewards programme, and you can gift somebody a coffee from within the loyalty platform. So I've seen McDonalds, actually even in the United States, doing a whole campaign which is not within a structured loyalty programme, but it is a campaign where they literally gave out 500 gift cards which had unlimited McCafé vouchers, and I thought it was a beautiful idea because first of all, it made all of the news headlines. I think the US media clearly needs more exciting new to write about. But they're writing about this concept of 500 gift cards that a brand like McDonald's is giving out. So now McDonald's in the United States is literally on the cusp of launching its own loyalty programme, so McDonald's rewards is up and coming. That will be very interesting to see, obviously a digital programme, but I just think it's phenomenal that you know, big footprint brands like McDonald's are very clear, first of all, on the importance of digitalisation, the importance of the ability to skip the line for example, which I think again creates an emotional loyalty. So against Starbucks rewards in the United States, I think that's probably the biggest benefit. So yes, I get my rewards and I get my free Starbucks, you know, as and when I when I earn it. Actually that's probably another point while it's on my mind, Richard, they have certainly made their rewards much more accessible. So in the past, I think you probably had to spend, I think, was about $120 before you actually got that say, a free medium latte. Whereas now they're kind of going okay, well, actually, let's just give the option of a much more accessible reward of a free vanilla shot, for example. So I think there has been a much bigger move towards that, making it accessible so people get into the habit of redeeming.

Richard Hill
Yeah, that’s a great point, isn't it? Rather than these big targets potentially or big spend criteria making it more accessible, so then you're more likely to re buy, stick as a customer, more likely to stick around or consistency with your freebie or your coms and that gifting thing. I think that gifting thing is a great thing for now as well, when everyone is pretty much at home or, you know, they're not connecting as maybe, definitely not in the same way as we used to. You know, obviously it’s very different at the moment living on Zoom and you know. I mean, we’re looking after our team and our team's wellbeing. You know, we're always sending them things in this that and the other, trying to keep morale going and things like that. But just that, you know that’s good, I think not just for the eCommerce stores, but for their customers, for their teams as well, for their own staff and it's a great idea. So if you’re an eCom store and you're looking at, you know I would say this is newer territory for a lot of our listeners, you know, and they're thinking right do you know what, that's a great idea, but where the heck do I start? You know where I think where, what I would do? What would be that, you know, really sort of advice from the coal face. In terms of what exactly? So six weeks from now, I want a loyalty scheme in place. What have you got to do? What other steps?

Paula Thomas
Yeah, well, there are quite a lot of steps involved, as you can imagine, I always think actually, that the first obvious thing to do (or maybe it's just obvious to me) you really need to be crystal clear about who you want to be loyal to, so my point earlier about, you know, rather than just going and building this programme and everybody's gonna be super loyal. No, first of all, your job is to show up and take care of your customers. So I think that the importance of a loyalty mindset cannot be overstated. So I think be crystal clear on understanding who is it that I want to recognise and reward? So one example actually, that comes to mind Richard, and it's not an eCommerce one, but just you mentioned something earlier that reminded me I had a birthday a couple of weeks ago, not a major one, but just a birthday, and one of the restaurant chains that I'm a member of it, is actually, Leon. It's a UK brand. So again, so it's a super brand, very well respected, very innovative and they very much have a you know, a profile of me as a lunch customer. So for my birthday, what they did was they said, okay, well obviously Paula, you know is somebody we want to drive her behaviour, so let's send her a breakfast as a free birthday reward, and I thought that was absolutely genius. So now their targeting might not be brilliant because I don't live in Ireland anymore Richard so something fell down in terms of the first step that I'm saying, okay, we care about who you want to target, so maybe they didn't quite get that right or maybe I should have updated them. But once you have that crystal clear, then I think you need to build that entire life cycle of what is the customer's journey with your business and how can I recognise their behaviours along the way? Understand you know, what is a relevant way to connect in with them and start to build in both the communications and the rewards.

So, for example, we've already talked about you know, the idea of instant gratification, for example. So I do believe that if you're going to show up, first as a brand, the first thing to do is if you're going to say, Richard, will you come and join our loyalty programme? The first thing you do is give me a reason to do that and I always consider myself quite a difficult customer and you know, particularly when I go into a retail store and you know, somebody says “are you a member of our loyalty programme?” and this is at the point of transaction and I will nearly always say no, and partly to be provocative, to see if they will give me a reason to join.

Unfortunately, certainly where I live here in Dubai, it doesn't seem that there may be not well enough trained to articulate a reason for me to be in the loyalty programme. So I think you need to be very clear as a brand going, okay, this is the customers that we want to recognise and reward. This is their typical lifecycle. This is how we can start to recognise them and also identify things like my you know, lunch/breakfast example, what behaviour am I here to change? So I think you need to be laser focused on this as a commercial tool at the end of the day. You know, we're not just here to give free breakfast for the sake of it. We are here to say yes, we genuinely care and yet at the same time, what is it that we want them to do long-term? So it's to build a balanced programme that has a contribution to your customers from a generous place and on also ways that you can make it profitable for your business over the long term.

Richard Hill
Yes, I can’t stop thinking about Leon.

Paula Thomas
Yes, sorry about that. They'll be happy they got a free plug on your show.

Richard Hill
Oh, yeah. So obviously I just love that example of obviously they know you're a lunchtime customer and they're you know, on your birthday they’re giving you that voucher. It’s as simple as that. That is a simple example, but implementing something like that in your business, no matter what you sell, your customers are for or show interest in X, well, yeah at the right time leading towards another area of your business that, you know they're gonna like it to a degree they’re just maybe not aware or you know, that it wasn't right for them when they made that initial purchase or they signed up for the loyalty scheme, that you well you didn't know oh a free breakfast? I can’t wait.

Paula Thomas
Absolutely and then, of course, like again as loyalty marketeers, what we would do is go okay, so if Richard does become a breakfast customer, let's say you come once a week then what is the projected lifetime value? So you can then start to calculate the return on the investment of your birthday campaign of a free breakfast. Yeah, well, hang on a second now, Richard’s probably going to spend a couple of 100 quid with us now in the next year or two, you know? So it works for everybody, and yet you also have a beautiful experience because you’ve had something for free, found something that you like because the brand’s already trusted and everybody wins and you know, to your point about how I kind of got into loyalty. Like, I do really find that there's a real opportunity to delight people if you have a loyalty programme that you don't have if you're literally a transactional eCommerce store particularly, so it gives you an opportunity for that whole surprise and delight way of doing marketing that I think is probably undervalued sometimes.

Richard Hill
Yeah, totally, totally. So we've talked about sort of recognition loyalty, transactional loyalty and they’ve both got their place there you know, so that when somebody's new, potentially spending X amount, hit a threshold, they trigger a campaign or something like that. Recognition loyalty, what would you say? You know, is there anything else you would say on those two? One versus the other? Have they both got their place?

Paula Thomas
Oh, they definitely both have their place Richard. I think we you know, we have two sides to the human brain, and so I think it would be remiss if we didn't understand the psychology of consumer behaviour. So I think there is a segment of the world that does kind of okay, give me a reason to sign up, which is where the instant gratification transactional piece comes in and then the emotional piece and, you know, to go back to my airline experience I suppose you know, one of the amazing things that used to come through in terms of, say, the executive club with British Airways, where I worked was the power off the little piece of gold plastic on the briefcase could not be underestimated. My goodness, you know, it wasn't obviously the fact that it was, you know, just a gold card. It was the fact that they were walking through the airport and other people would know that they were, you know, in an exclusive club and the inherent and, I suppose, experiences of lounge access and they again are quite functional benefits but they do drive that feeling of you know what? Actually, yes. British Airways is taking care of me and I love that kind of emotional piece. So I definitely think they both have a place and I think as the world gets more competitive, you know, even things like, I suppose and the value of a brand, you know, kind of showing customers what you mean creates loyalty in a different way as well, which is very different to a structured loyalty programme. But actually people like to know who you are as a brand and I think that can't be lost either In the overall marketing mix.

Richard Hill
I think that's great, that's great. So okay, we've created our loyalty programme, we've got people signing up left, right and centre and people are modelled and our business growing and we can identify that people are sticking and that their average order values are going up or their lifetime or their lifetime order values I think of it is a key. What other tips would you give to keep retaining them on that loyalty programme? What will keep retaining them was a customer, you know? So it's okay. Get him to sign up, stick for a month or three, but three, four five months I think that’s like a sweet spot in most loyalty programmes where they sort of tail off potentially. Then it’s off to hat next shiny loyalty programme with the Starbucks stamps or whatever it may be. What sort of tips would you give to the listeners about trying to retain some of those some of those points.

Paula Thomas
Yeah, yeah, well, you make a very good point, Richard. Every business is different and there is the whole philosophy of test and learn which I'm sure as an eCommerce expert, you don't need to be convinced of that. So it is very much a case of, you know, let's pay very, very close attention to exactly what stages in the life cycle people are maybe feeling jaded or not engaging with our loyalty programme and again, we should have all of that data very much to hand. I think for me, one of the key things is always like don't capture data unless you plan to use it. I think there is a temptation with loyalty programmes when somebody is signing up and maybe you are giving them a reward to do that, where even things as simple as the date of birth might not be used by many loyalty programmes. So, to me, that's actually pretty shocking. You know, it's like you wasted my time, so it's almost disloyalty. You're now just being a greedy brand that just wants to know who I am and know my demographics and you're not using it for me. So I think in terms of retention, it is a case of again, I suppose that two way part of kind of going okay, how can I be generous and loyal to my member as well as that the commercial part of expecting them to be loyal to me. So retention is not a, you know, one hit wonder. Loyalty is a long term strategy. There's absolutely no magic wand. So to me, there has to be a balance between the consistent, always-on benefits, which I learn over time and I understand and also tactical campaigns, whether it's with a partner to your point earlier or something that is relevant to me for my birthday. But to keep it fresh and energetic and, you know, again these ideas about connecting with family and friends. So how can you evolve the programme so that people feel part of a community? I remember one of my own guests as well, Richard, talking about I think, you know maybe for example, that the fuel business it's always kind of seen as a difficult one to drive loyalty because the margins are so tight and people really resent paying for fuel like that, kind of really, you know, they're paying a lot of tax and all of that kind of stuff. But if there was a way to connect people like, if you're standing in a fuel store, everybody in front and behind is probably in the same loyalty programme and yet you have no connection with them, and I think there's a lot of brands are starting to go okay, so our loyalty community and actually IKEA is a brilliant example I'm thinking of now. I interviewed the Global President of Loyalty for IKEA, and again that's a particular business where actually, what they're realising is they don't have all the expertise as the brand in terms of even building their own furniture, but there are plenty of people in their community that will advise each other. So I think that's an extraordinary way to go okay, let's build loyalty within our community. So again, it's just not us kind of selling stuff or doing the offer's doing the coupons or even just doing the email campaigns. You know that there's just lots of other ways if you think with the customer, you know?

Richard Hill
I was just thinking, I bet when it's your birthday, it's quite exciting because I can imagine you're signed up to so many. Like let’s try it, see who's doing what. That's a good idea, like I am with my eCommerce and a lot of eCom sites are that's great. Well, you can imagine that the run up to your birthday is quite exciting. You’re getting offers left, right and centre.

Paula Thomas
Totally, and I'm also being very judgmental, Richard, because I could never name the brands that do it badly, but I'm just kind of going They didn't use my data the way I would have expected. You know, my standards are higher than that, so yeah.

Richard Hill
Okay, so there have been some amazing insights, you know, so far in this episode. I think, you know, a lot of value there where a lot of eCom stores will be thinking, you know, what can we do? What can we do? And I think you know, you got some good start points there and some good sort of. yeah, that year, two years in to try and retain. But let's say you see if we were going five years in the future or even three to five years in the future. What do you see? You know, some of the real sort of pushing the boundaries? What are some of the things that are coming up potentially in loyalty schemes, loyalty products if you like, you see on the horizon?

Paula Thomas
Yeah, yeah. I mean, some of the most simple ones you've already mentioned. For example, in terms of subscription and that works very well in eCommerce, but there's much more of that happening even in the physical retail stores. So Pret-a-Manger, I'm sure you've seen their coffee subscription programme now, you pay £15 for unlimited coffee. So I definitely think there's more of that and we referenced it already. For me I think actually, because I'm a podcaster actually Richard, as well what I feel like is the ability to communicate with people will very much change. So I think, for example, e-mail is a very powerful but perhaps a little bit you know, underwhelming, I would say as a communications tool. So I did an interview last week, for example, with a programme in Colombia where they're starting to connect with their consumers on WhatsApp and I think there's a phenomenal opportunity with messaging platforms to basically go, okay great, so I can probably do customer service on WhatsApp, I can probably do and transactional information on WhatsApp. But again to me because I have learned the power of voice communication and video communication, I think more and more loyalty programmes will start to go well, how can we use voice and video as tools to make an impact? You know, I haven't seen anyone really doing it. So you heard it here first Richard.

Richard Hill
I think that's a really smart. Yeah, yeah, I think I really heard it here first. I think I’m going to remember this conversation.

Paula Thomas
There you go. Yeah, yeah and I bet you somebody will do it before I do and I’ll be gutted, and I'm like, oh, they nailed it, that that was my idea! But it has to happen, like again, we all love to be on the e-mail newsletters, but we all know the open rates and we all know, as I said, when we’re sometimes underwhelmed because for any brand it’s super hard to keep that channel engagement, so the variety is important and you will appreciate this, I have really learned that the human voice is the most natural form of communication and if you want to create loyalty, then you speak to somebody, you pick up the phone or you call the call centre, you really feel it's a better connection. So, as I said, you heard it here first.

Richard Hill
That's great, thank you Paula. So I think you know, we are in our agencies and on the podcast, we very much were very big on sort off KPIs and measuring, you know, a lot of a lot of noise out there in the industry, and I think when all is said and done, you know, we've gotta be able to have some sort of measure of what’s working and what isn't, you know? So what are the best ways to measure success of loyalty programmes?

Paula Thomas
Yes. Yeah well, you're absolutely right, and we referenced already that the two types of approach to loyalty, I suppose, and again, we need KPIs on both sides. So we need the transactional KPI. So we need to look at the changes in behaviour and as you said, is the basket spend increasing? Have we driven some cross-sell? You know, what's our share of wallet? I think that's a really interesting one that you know, depending what business you're in may or may not always be available but I think that's extremely important on the transactional side. On the emotional side, my favourite KPI is one called net promoter score. Is that one you're familiar with? Yeah, so I think that's for me what I think is really clever about net promotion score is it eliminates the kind of, let's say, lazy loyalty.

I think that's actually a great name. I never used it before, but lazy loyalty is when you know it's the only flight that's going there, or it's the only you know it's a habit, you know, rather than an intentional loyalty. So what net promoter score does, as you well know is it asks people if they would recommend your brand. So if somebody's reputation is on the line, then they have a very different perspective. So to me, the NPS is one that I think we should all be watching very closely and if your net promoter score’s not where it needs to be, I think then there's just a big risk, then disruption. Somebody else will serve your customer better than you.

Richard HIll
Yeah, that's great. So obviously, as a fellow podcaster, let's talk loyalty. We can't do this episode without touching on a bit deeper on our own podcast. So if you guys they're listening in then, they want to find out, you know, really go to town on the loyalty side. What would be some good episodes on your own podcast to have a listen to?

Paula Thomas
Yes, yes, well, thank you for that. It's very hard to pick a favourite. I suppose, because my background is in airlines as I mentioned, the episode I literally released today, which is Episode 82. It's with an airline loyalty expert and to me, that's just probably being the most illuminating, because again, the airline loyalty industry has been dramatically impacted by the pandemic. So there's incredible insights coming through and one of my favourite things I learnt on this show when I interviewed Evert de Boer, is the guest’s name, the top 10 airline loyalty programmes in the world, most of them American, but the combined value of those loyalty programmes, Richard, is over $111 billion. So I just was my mind was blown in terms of I think what has happened actually with the pandemic is that you know, the transparency of loyalty programmes has become quite separate to the airlines that operate them. So I think that podcast particularly made that case very, very well. Yeah?

Richard Hill
Episode 82 right? Well guys go and listen to Episode 82. Let's talk loyalty. So, it's gone so quick, we're almost at the end. We do like to finish every episode with a book recommendation. If you were to recommend one book, Paula doesn't have to be on loyalty, it could be anything it could be you would recommend for our listeners have a read of.

Paula Thomas
Okay, well, let me give you three quick ones then and the first one, I'll be a little facetious and say my book is called Driving Loyalty and Convenience Retail. Okay, so we did that have to give it a plug! And so Secondly, I think in terms of book. If you only read the cover, it's genius and it's my favourite book title of all time, and it's an eCommerce book. So you might remember it or you might not. If you haven't, you definitely have to go and get it. Richard, it's called Don't Make me Think. Have you heard of that one? So to me, that is the principle that underlies all commerce. So if you can make life easy, actually for consumers, they will definitely thank you. My final recommendation, more in the personal space, I love the whole field of Personal Development is a book called The Power of the Subconscious Mind by Joseph Murray.

So if you want to get into, you know, building you know your vision for the future and just seeing what's possible in life, then that's my favourite book.

Richard Hill
Wow, that's a whole spectrum there from eCom to personal development. I love it, yeah, I love it. That’s definitely some great recommendations there. That's a couple of Amazon Prime deliveries coming tomorrow.

Paula Thomas
There you go. Absolutely, Richard.

Richard Hill
If the guys there listening in want to find out more about yourself, what's the best place to reach out?

Paula Thomas
Okay. Well, thank you so much. Well, my website is letstalkloyalty.com and I am obviously on LinkedIn. So, Paula Thomas, you can find me easily and yes, please feel free to reach out.

Richard Hill
Well thank you so much Paula. I’ll look forward to catching up with you again.

Paula Thomas
Look forward. Thanks, Richard.

Richard Hill
Thank you. Bye bye.

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