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Building unwavering customer loyalty: Your blueprint for maximizing value & driving ROI
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In this episode of Let's Talk Loyalty, host Paula Thomas and Epsilon's Paul Davies, Senior Vice President for Epsilon APAC and EMEA discuss how loyalty marketers and brand marketers can work closely together to build customer connection and trust, particularly businesses evolve to reflect changing customer needs in global markets.
Speaker: [Host]
Welcome to Let's Talk Loyalty, an industry podcast for loyalty marketing professionals. I'm your host, Paul Thomas and if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.
This episode is brought to you by Epsilon and their award-winning People Cloud loyalty solution. I am always delighted to have epsilon on board as a sponsor, and particularly right now, as they were just named a leader in the Forrester wave loyalty solutions quarter to 2021 reports with the top score in the current offering category. This report is designed to help you as marketers - find the perfect partner for your loyalty programme. So to download your copy of the report, visit epsilon.com/letstalkloyalty.
Hello, and welcome to Episode 116. of Let's Talk Loyalty.
Today I'm chatting with Paul Davies, Senior Vice President for Epsilon APAC and EMEA based in Singapore. Paul's marketing career began in the UK in the world of analytics and data, but also he spent many years on the more creative and agency side of the marketing worlds. This gives him a unique perspective on the power of leveraging the entire marketing toolkit to ultimately build brand loyalty. In today's show, we discuss some innovative ideas around her loyalty marketers and brand marketers can and ideally should work even more closely together to build customer connection and trust, particularly as we evolve our businesses to reflect changing customer needs in global markets. So Paul, please do tell me what is your favorite loyalty statistic?
Speaker: [Guest]
Hi, Paula. Yes, my favorite loyalty statistic goes back to my education and marketing, which I got taught very early age a number of statistics, but one of them really stopped for me is that 5% of your customers will can help you generate 95% profits. So it's, you know, to answer so very simple math’s we can undertake on a spreadsheet.
Speaker: [Host]
Absolutely, yes. And I'm sure you from lots of spreadsheets in your time, because I know you've an extraordinary background in data and analytics, which we're going to go through. And you know, as we were talking about that I was thinking that's something that we as loyalty marketers, I think we know it so well, that we perhaps forget to remind our colleagues in our companies of exactly how powerful loyalty can be. So I think you're right to bring it back to the simplest stuff. And yeah, if we're able to do it on a spreadsheet and prove the point, I think it's incredible.
Speaker: [Guest]
I think it goes back to these beliefs that I have is that your loyalty just part of marketing, right? marketing communications. And, you know, it's an evidential point to say why it's so essential, a part of the, of your mix that you're actually sort of constructing so yeah, to me, it makes all sense.
Speaker: [Host]
Absolutely. And I definitely think it's getting increasing respect and recognition. And it was looking back at your own career, Paul, and I think you're the only person in 1989 I think it was, who was actually maybe talking about data and analytics. So tell us about your career that some incredible experience there?
Speaker: [Guest]
well I wasn't the only one. There's a lot of us actually, back in the UK in those days. But yeah, I started my first ever project and marketing was to build a deduplication algorithm,
Speaker: [Host]
okay,
Speaker: [Guest]
for business to business. So that's how I started so it was in the sort of technology world, but I, when I came into the agency world in 89, I started I started actually in, in loyalty sort of developing gold running a loyalty programme for British Telecom. bt. Yeah, and yeah, and that wasn't typical loyalty programme. It was didn't have points didn't have tears, but very much the client viewed it as a loyalty programme very much viewed as part of the brand building efforts to generate large customers. every 12 weeks was a communication going out. Educating the customer, the products or services, engaging with them, trying to get some reaction. Yeah.
Speaker: [Host]
Okay, so good old fashioned direct mail. Hey,
Speaker: [Guest]
yes, those days. That's all you can do. Yeah. And then, and then from a loyalty perspective, my next sort of big four A, I did that for a number of years. It Was in Holiday Inn in Hong Kong? I run the loyalty programme from a technology standpoint, so they appointed us. That's how I got to wager actually I came out to run that programme because we run all the loyalty solution for holiday in the priority club, as it's called. Wow, across APAC in 1994.
Speaker: [Host]
My goodness, yeah. So you've been an expert for I think about 35 years,
Speaker: [Guest]
too long. not quite that long. pretty long.
Speaker: [Host]
Okay, for sure. And a lot of us actually on the marketing agency side, Paul as well, which I think is a lovely context in terms of, I suppose understanding a client's requirements, because obviously now the technology side, you know, you obviously have to build and launch and, you know, it's a whole different mindset. But I suppose the whole marketing world is extraordinary. And ironic, as well since that you're back with the publishing scoop, actually, through epsilon. So some incredible work. So do you think it's a useful context and background to have that kind of, I suppose client side perspective, and given you know, I suppose how loyalty is evolving?
Speaker: [Guest]
Oh, definitely, I think, you know, I was fortunate enough to actually work on the client side before I joined an agency. Yeah, and then I went to the agency side, and then I got into the technology area more than the consulting sort of tech. Okay. And so I've sort of seen a mixture of all three, and I think, you know, it, particularly an agency side, you have to be very close to your clients understand your client's needs. And I think that is invaluable to understanding how to leverage, loyalty and loyalty solutions to maximize their effect. And also what I'm a big believer that is part of the actual mix of marketing communications that a client should use,
Speaker: [Host]
for sure. So given that kind of perspective poll, and I suppose loyalty programmers have been around, while 30-40 years now, how do you think they've evolved over that entire time? And I suppose then we'll look at where we are now in 2021? And what's going on at the moment?
Speaker: [Guest]
Yeah, well, they've moved on tremendously, right, they've gone from points and transactional sort of solution programme or not solutions, to much more engagement and, and surprise and delight, and, you know, much more sort of becoming much more highly personalized as well, in terms of its interaction with a member. So I think, yes, they've changed beyond recognition, to some extent, some of the core fundamentals are still there. Because you can't, you can't walk away from that, and neither should you. But I think Yeah, the ability now to engage with a customer or a member Have you want to praise him is so much more powerful nowadays, the will to do and so easier, more responsive? gives you much more sort of closer, brand building with a client with the actual membrane itself. Yeah,
Speaker: [Host]
yeah. And you're based in Singapore now. So looking after actually a fairly massive region, so APAC, and Mia, and how would you describe because again, a lot of our listeners are on the US, in the UK, and obviously, in Australia, so I suppose very mature markets in many ways. So how is it in Singapore and particularly in Asia? And from your perspective?
Speaker: [Guest]
Well, Singapore, sorry Asia, generally, again, there's some exceptions. So Australia is quite a mature market versus Indonesia or Philippines, which may be less mature. Big, predominately, acquisition focused markets. So demographics in particular, you've got a young population growing, coming off the land, going into cities, growing your wealth, then ultimately, brand marketers, the job has really been to how do I acquire these customers? How do I bring them into my brand? And sort of, and then drive that forward? So, you know, so a lot of marketing in Asia has been acquisition focus? Yeah, clearly, you know, the pandemic, clearly sort of issues around data and importance. Now it's done to change. There has been a mix of clients, obviously, some clients have obviously realized the importance of data and customer loyalty and retention, as well. But generally, that's, that's, that's how they view it. I think. So, you know, I'm not getting a different industry, different perspectives. FMCG, particularly that way, obviously, we got transactional data, then.
Speaker: [Host]
Yes, different? Absolutely. Well, at some point, I definitely want to do a whole show on FMCG loyalty, Paul, so I'll be picking your brains on that. Because certainly, in my mind, that's probably one of the next big trends. And in terms of people recognizing I suppose that relationship building capability, but interesting to hear you talking about acquisition. And I guess if I was in a country with a billion people, you probably, you know, understand, okay, if I can keep filling the pipeline, I guess. And it's a really good strategy to build the business. But I think as you're saying very clearly, and you know, it becomes retention to your point, the favorite statistic at the beginning, if you can retain those people, you can build your profits so much more easily. So, so great to hear you're having those conversations with clients. But given I suppose COVID and the current situation, I suppose, how do you think clients are feeling about the loyalty programme? Like do they see them as a core part of addressing and I suppose that the different behavior changes going on right now.
Speaker: [Guest]
We see more interest in loyalty in the last two years and I think anything else typically. So we're getting definitely more inquiries More often [inaudible 10:00] are being run, you know, a number of things are driving that much. So it's, it's not just a pandemic, and obviously then consumers going to ecommerce, but it's a, it's a data challenges are sort of not recognized with the cookies. And they realize the first byte of data is more important. So it's a number of factors that are driving it. But yeah, you see increasingly see that sort of that trend that I think in last few years, it's just accelerated across all industries. It's not, you know, it's not just a transactional industry, it's going across even some smaller one’s retail. You know, sort of many others. Yep.
Speaker: [Host]
Yeah. Wow. And in terms of how it's positioned in most of those countries, Paul, would you say, you know, in my experience, I've often said on the show that, you know, we always felt like a lower priority, for example, than, let's say, the brand's team, so, so a lot of the big budgets would go to the TV campaign, and everyone was super excited, and they were all off kind of shooting, super sexy stuff. But, you know, for us in loyalty, it really felt like, I suppose much more of a long term customer relationship building piece. And but again, didn't seem to always get the respect that it deserved. So I'd love to get your perspective in terms of how is loyalty positioned in the clients you're working with? Is it seen as central? or is it more the brands teams that tend to lead?
Speaker: [Guest]
It's not. So, in terms of loyalty, it is used, typically owned by a separate division, or department or team. And they be typically separate from the brand teams or separate from the big one teams. And again, there's different structures within every organization. What you've start to see, I think, though, is because now the importance of first party data, the importance of recognition, or for how to bring loyalty to customers, and brand building is only one, you know, loyalty is one part of that component. That's what you're trying to do, really at a brand level. So I think they're increasingly coming together. But ultimately, how you do that the organizational design you need to work is still in evolution. So if you look at our clients around the region, that's definitely happening. They've recognized the importance of putting more money behind those programme. Okay. But, you know, obviously, it's all evolving, I would argue, at least in Asia, I think you're maybe behind the curve, maybe this was a while maybe, potentially more, I don't know, in the US, or something like that. So yeah.
Speaker: [Host]
Yeah, no, it's definitely something I'm hearing more and more about. So, you know, I think, as you alluded to earlier, and, you know, originally, I suppose we all started with promotional programme, direct mail, and all of that kind of stuff, then we all evolved through a considerably built all of our points, and whether it's gamification or whatever else, but increasingly, I think a lot of the conversations about emotional loyalty mean that, you know, brand really needs to be involved. So, so I think what I'm hoping is to see more loyalty, marketers having bigger conversations about, uh, you know, where they sit in the marketing structure, and it's definitely not something that's going to shift overnight. But I think what we've seen, certainly, you know, even a couple of shows that I did in the last year or so, you know, loyalty programme, first of all, are being seen as a strategic asset. And I think we've seen that most clearly in the airline business, and where, you know, certainly the bring us to, to raise debt and, and to finance through the pandemic. Put increasingly, again, with this feedback from customers, I do think, you know, really what we want is to be more connected with our brands. And, and I think Loyalty is obviously the only kind of infrastructure that facilitates that. So again, in Asia, do you see that opportunity? Do you think you have that potential?
Speaker: [Guest]
No, absolutely. Definitely. I mean, because consumer's a consumer, right, so how do you build a brand with the consumer, okay. In part, obviously, you've got the recollections of what that brand means to you in your history, or you got the images they create or the smells or colors. But ultimately, it's engagement. You know, if you go into a shop and you haven't engaged with that particular brand, or an experience, and technology can facilitate that much easier. You mentioned, gamification, you now create much more interactive, immersive experience with a particular member. So you know, you're seeing activities like that and been coming in predominance. And I think it will go into for retail clients, particularly how they use their retail shops, me more virtual reality, augmented reality, leveraging their customer data to drive customers in particularly the high value customers, to give them that experience, which will then drive the sort of brand preference and brand loyalty going forward. So I think definitely, yeah.
Speaker: [Host]
yeah. And do you see your clients and again, I suppose epsilon around the world has some extraordinary, you know, build capabilities. And, and also, what I'm seeing, I suppose, is the example of gamification. Obviously, as Dell we did a fantastic show about Dell. And I wrote an article recently as well about Wood greens because I can see again, particularly again, maybe in mature markets, where there is this potential to build almost a separate profit center around the loyalty as an asset. And so I think that's an extraordinary capability. And I did a full show about it actually, as well. But, you know, Wood greens have developed this entire advertising group, which again, I'm not saying is absolutely right for every single brand. But I think what I'm hearing coming through Paul is that loyalty doesn't just have the reliance on points and prizes and the transactional stuff we've talked about before. You alluded to the experiences, and there's so much more, but I think the whole, you know, loyalty is a profit center is a super exciting idea.
Speaker: [Guest]
Yeah, and, I mean, a number of companies have gone that way. And, and even separated companies out, I mean, you know, there are, even as we know, like, Mars, for example, is always been a separate, yeah, what his own company and makes his own, on margins and profits. And a number of, particularly the companies that have large scale transactional data has that advantage to do that. We leverage the programming in a big way. So, you know, but obviously, that requires good design of your programme. How do you do that? Well, yeah, but also how then therefore, because it's become such high profile. So take Singapore Airlines, it really becomes representative of your brands, we go back to that brand discussion about how does it support? How does it work? How does it sort of align and build value across each one of them? But, yeah, going back to that sort of, you know, the actual sort of financial sort of opportunity that law provides? Yeah, I think the other thing that, as new clients coming to space is the risk reward balance that you have to have. Obviously, with every programme, there's always some sort of element of risk as well as significant reward otherwise, you know, totally. There's no risk. Everybody just be doing it anyway. Right. So. So yeah, yeah. So. So I think that's the equation that I think newer brands are entering this is to say, well, not only does it work with my brand, but also how do I make sure it's actually sustainable, provides real value, generates customer lifetime value for me. Yeah, over the longer term.
Speaker: [Host]
okay. And would you be included in that I suppose, and strategic planning pieces’ piece in general, in terms of understanding exactly, you know, at the very early stages, what your potential clients, I suppose, are looking to create, like, what they what they bring you into to help design and structure it?
Speaker: [Guest]
Yes, I mean, I got example, as a Telco in the region that we're doing the programme design, so it's always good. It's called programme design. So what was a point worth? If you're using points? How do partners play a role? And how do you use them to maximize and generate value? and leverage them? Yeah, how do you use T as if you're going to use T is how do? you know, what is experienced You want to create at the front ends. So your whole programme design is actually very broad and very sort of immersive in terms of what you have to include. So yeah, good, good, something, we're pretty much we're doing.
Speaker: [Host]
Okay. Yeah, I'm happy to hear that, because sometimes they hear that, you know, that a lot of companies, I suppose, may be under estimating the element of complexity. And so they might come in with them an idea about what the value proposition might be, but might not include you know, their technology partners, like you guys in you know, is it going to work? leveraging your learning as well, I think that's a really big opportunity. And I love that you reference Singapore airline as well, because I actually think that's a that's a brilliant example of where the brands are extraordinary. And again, their loyalty programme supported absolutely beautifully. And I know, we talked before, Paul about, you know, there are risks, as we know, and I think there's one that we had that we share in terms of a memory of a loyalty programme that went very badly wrong, and very early in both of our careers. And I don't ever, like talking about you know, making anybody look bad. But I think we have to just, you know, as a caution, perhaps for maybe younger listeners, who wouldn't have been around like you and I back in the UK and Ireland when Hoover launched their famous and let's call it promotional programme, it wasn't exactly a loyalty programme, but I know you witnessed it as well as me. Yeah.
Speaker: [Guest]
Yes, we did talk about this earlier. But so yeah, no, it's, it's a great example, because it's so long ago is in the early 90s. Right? Because the brand no longer exists, I guess we're not damaging anybody's reputations or smearing them, not something it happen to anybody. There's, there's good examples of Miles having issues. Many other major brands so it's not actually just one or two brands you can Yeah, again, because it's [inaudible 19:38] use typically these problems are very large scale involved in and therefore if you do a promotion or any activity, you can have big upsides but you if you get the calculations wrong, of downsides. It's important that you go back to that data analytics phase- is a central part of the consideration whether you're doing a campaign or you're doing the programme design. It's got to be all the way through the process.
Speaker: [Host]
for sure. Yeah, and I'm not the analytic side as well. So Paul, I always kind of really do kind of need somebody who's totally geeking out on that stuff. So I can go and get creative. Because I do believe Loyalty can be super creative. And but yeah, the Hoover example, do you want to just tell listeners Exactly, and I suppose how it was intended to work and how it unfolded?
Speaker: [Guest]
Yeah. So Hoover, for people who don't know, is a vacuum cleaner manufacturer back in. In the UK, I think the US base as well, I think, I'm not sure exactly what countries are in. So they manufactured Hoovers or vacuum cleaners, and they basically, we're struggling at the time of the 80s, I had a poor sort of period of sales and performance. And they came up with a promotional idea with a travel agent to offer to if you bought free vacuum, you could get two free flights to the US. Wow. And I know this way you want to dive in because you've actually went to Bolton, Hoover, I think so to do that. And the problem is they got such a big response. Yes, which they couldn't cope with. And overestimated that they couldn't fulfil it. They also tried little tricks and treats to sort of not tricks, treats, but little tricks to get away with it, which also backfired on them from a customer service perspective. Wow. So yeah, it was a disaster.
Speaker: [Host]
Yeah, yeah. And in this day and age, obviously, you know, everything can be magnified if you do get this wrong, because obviously social media does amplify everything. But you're absolutely right. The proposition was extraordinary. And again, as loyalty professionals, I think what we typically focus on is, you know, first of all, you know, can we drive engagement? you know, the concern about, you know, under redemption, but equally I suppose there needs to be absolute peace of mind in terms of the risk of over redemption. So, clearly, that's what Hoover got wrong. And yes, I will say I actually went out and I bought two Hoover's, I didn't just buy. And I clearly didn't need two Hoover's in one household so it is an amusing example. Hmm.
Speaker: [Guest]
that’s right. quite amusing. Yeah, there's actually I was reading a little bit before this call. And there's a good example of a guy in northern England he bought a Hoover, and to get the free flights. Fortunately, Hoover broke down. So he got to service engineers come out, repair it. And the guy was saying, Well, why have you bought his Hoover? He said, hope is not for free flights, because you'll never get them. So he decided then to say, Okay, well, I'll make sure you don't get home very well. So he stole his van from him.
Speaker: [Host]
Oh, my God.
Speaker: [Guest]
So anyway, little anecdote.
Speaker: [Host]
Aside yet, yeah, I thought you were going to say he returned to the Hoover and golf. I got a refund as well as the free flight. Yeah, yeah.
Speaker: [Guest]
Because the customer service guy payback for him. So good.
Speaker: [Host]
Yeah. But on the I suppose again, back to the positive side of the of the brand story, Paul, and one, I suppose I think is probably my favorite example. And I don't know if you're familiar with this programme at all, actually. But um, it's called Vitality by a company called discovery in South Africa. And I'm dying to get them on the show. So if anybody's listening from discovery, please do contact me because I'm dying to do a full show on it. And I have talked about it before. But I think the most extraordinary example because first of all, I don't always think South Africa gets the recognition it deserves in terms of how mature it is, as a loyalty market. But I think what Vitality did was really start with this whole, I suppose it was a business model as well as a loyalty model, I would say. So I think it's this opportunity to say, Look, how can we build the business to be loyal to our customers. So with I suppose the whole mindset of loyalty, but then, you know, just expands into everything. And what I particularly love about that one poll, and again, just for listeners, essentially, I suppose it's a shared value model. So again, I'm sure you do love of this kind of stuff, poll, and we'll advise all your clients about it. But the whole idea that if I'm healthier, for example, let's say I go for walks that go for runs, then my health insurance premiums should be lower, my claims long term should be lower. And but really, I think, in addition to the transactional piece of you know, the typical, you know, earn this kind of loyalty, I think the discovery brand has just exploded in terms of how it's perceived by customers, because they feel that integrity coming through, to the extent and I don't know if you saw it, but I think it was about two years ago, they now launched a bank on the back of the health insurance company, the car insurance company, so I just think it's a great example of what you're saying in terms of building the brand.
Speaker: [Guest]
And I've actually seen Vitality advertise. So obviously, they're carrying through that whole strategy into their advertising approach. So I didn't know about the bank. I didn't know some aspects of it, but I'd certainly seen it. And yeah, I haven't actually been quiet about it, but sort of seen this strategy, what they're trying to do, and it was all about that of, you know, be healthier, and then you get benefits in terms of services and the products. So yeah, it's interesting, go back to that brand building. They're leveraging the loyalty aspects that will help build a brand.
Speaker: [Host]
Absolutely, yeah. So what kind of things I suppose a you can have talking to clients about now, Paul, so, you know, we've talked about changing customer behavior, I'm sure there's a massive amount of market research going on from every brand left, right and center at the moment to see what customers do value. And but I suppose from an epsilon perspective, you know, you've done extraordinary work. And I know recently, obviously, you got the top score in the current offering category. And in the latest Forrester Wave Loyalty Solutions Reports just in quarter two, and 2021. So congratulations, actually, you must be thrilled with that coming out again.
Speaker: [Guest]
it's fantastic news. I mean, yeah, we we've got the highest scores possible in 17 over 28 sectors. So Wow, it really is evidence of our real strength in this area at the moment. But in fact, we've actually won this award. sorry not won this award but been in the actual sort of wave leader area for I think, I think the last six years, so it's not sort of just a one off. It's a consistent focus and dedication to loyalty and that went Yeah, yeah, but now very, very pleasing. And I also supplement all the other awards that we have in the Forrester wave on email. and database and other things. So it's Yes.
Speaker: [Host]
What is your view on email? Actually, Paul? Because what I'm hearing is it's still the most powerful communications tool available. And, and, you know, just a couple of days ago, obviously, I was speaking with Persona Leas. So your colleagues in the US about lots of different things that I'm hearing coming through from, from having conversations like this, so is that the same in Asia, that email is still you know, the default and the most powerful tool that clients need to be focused on?
Speaker: [Guest]
No, it’s different by markets. So email is not the maybe the only channel. In all markets. Obviously, there are some real outliers like China, it's all WeChat. So you look at Marriott, which is a customer of ours, envoys a loyalty programme, it's a great programme. If you go into China, you'll find it all on WeChat. It's all within the HR ecosystem, your points, your booking your hotels, etc. You go to somewhere like Thailand, and you'll find programme online. The line is the app, the social messaging app, and you'll find the programme embedded within the so what we're seeing is a lot of social messaging, sort of tools and capability are being used by consumers across the region. Okay, email is certainly part of the mix, but it's not the only part of the mix.
Speaker: [Host]
Okay, okay. Um, clients, then like Marriott Bonvoy, I mean, if I literally had a magic wand, Paul, I'd love to ask whoever had the marketing budget to launch that programme. It was just extraordinary. And I mean, global dominance from what I saw incredible to have a client like that. I happened to be in Hong Kong at the time, I think when the rebrand happened. And again, here in Dubai, over in Hong Kong, everywhere I went, I saw Marriott Bonvoy. So that's absolutely extraordinary. And so yeah, I'm really kind of excited about the power of them. And I suppose tailoring by market, which, again, as loyalty professionals, I suppose we don't need to be told to do that. And but amazing amount of variety that you're having to execute on, in order to keep a global programme to some level of consistency.
Speaker: [Guest]
yeah, I mean, that's, that's the way the world proliferation of journals now and is really part of the mix. And it's a challenge for marketers, because obviously increases cost to serve these customers. So they all want to have their own preferences and choices. And so yeah, so yeah, it's just, I think just one of these things you need, you now need to cope with and manage. Obviously, you know, that's where you can use analytics, or you can use AI, for example. So embedded in our tool is a AI model, which says, Okay for email, when do you send that email, it's automatically sort of runs at the background, and then helps you determine that sort of sequence of events. I think that's a sort of what will happen start to happen across orchestration across all channels, which channel does that particular consumer sort of prefer to use? When should you send it? How do you best do it? I think that's where technology will start to play a bigger part.
Speaker: [Host]
Yeah. And you're right, absolutely. Paul, I think this whole piece around, you know, the global nature and reflecting exactly the way of the world to use your, your term. And there's a retailer I spoke to recently, I can't name them, but they are restructuring. And instead of Loyalty, being headquartered in Europe, they're taking an opportunity to, to locate this in China, and for global. So that was really interesting. So I think geographically, you're in a really good place. And, and, you know, I guess digital transformation is essential. But would you agree with us?
Speaker: [Guest]
No.
Speaker: [Host]
Why, tell me Okay.
Speaker: [Guest]
Well because your ecosystem in China is very different from a technology standpoint. What that team is going in to do and what their role is, but I know a number of major clients including, when I was on the agency side for this client of IBM, they tried to relocate the whole regional team into China after a year and a half, they realize it was too difficult. Now, that was quite a few years ago, it's changed- a lot has changed since then. I think China's is such a big and unique market in its own right. Okay, I think you can start to dominate your sort of your team ultimately, because there's so much opportunity or pressures. Well, I think if you're in if you're in Singapore or some of the other markets, to some extent, it's you know, you wouldn't focus on the local market as much you don't get dragged into all of that sort of challenges. Okay, I think I think yeah
Speaker: [Host]
okay be careful. that's obviously what I'm hearing. Yeah.
Speaker: [Guest]
this is what my experience says is, it will be a challenge.
Speaker: [Host]
But I do follow a lot of people in loyalty, obviously. But, you know, particularly when I see stuff coming through from the Chinese market, a lot of the kind of messaging from people who are executing stuff there is around, you know, it's, it's totally underestimated in terms of the complexity needed to be ready for that market. So, so again, if you're going to build a brand on WeChat, build a loyalty lead brand on WeChat, obviously, you need local expertise, but again, the rest of the world doesn't have WeChat, so we have to go back to our loyalty mechanics and, you know, all of our you know, various tools in the toolbox in the in the epsilon toolbox to be able to build that. so yeah, so as supposed to, you know, what's coming next to loyalty, Paul, and we hear a lot of the buzzwords around AI, machine learning. You've talked there about predictive algorithms in terms of, you know, knowing my, you know, preferred channels of communication, for example, which I think everybody's getting better at, well, what are you thinking are the next big things that we need to be either hand holding listeners through or brands through in terms of making sure that we get these kind of returns that we need?
Speaker: [Guest]
So I think, again, it'll be different, I think, by markets and by industries, to some extent, annual maturity. So you know, when we look at totally new clients coming into us, is the latest gamification, the latest engagement, how you engage the consumer, how you bring that brand component into the engagement process, and build a brand loyalty. In some other areas, it's more about personalization. So it's real time, personalization, creating that sort of Agile Content writing ability to, you know, provide the latest offer of example or product to them. So again, it's a little differently, each one, so they all have sort of the requirements and changes. I don't think there’s little, I think, big bank or sort of new, I think it's all sort of, to a client's needs or challenges or where they are in the majority of loyalty.
Speaker: [Host]
Okay. And would you hear a lot about them saying that we expect this loyalty programme to build our brand? And or were, you know, diverting brand resources? Or do you still hear the more traditional kind of, you know, this is a, you know, an earn and burn, we need to drive behavior change? Where would you say the balances in terms of the people you're speaking to,
Speaker: [Guest]
I said, this is moving out of the transactional more into this sort of recognizing it's more of a brand programme, but it's still it's a journey. What we are seeing as well as clients were appropriately assigned to realization before one brand, but doing across group brands. So they're doing it more group level, as opposed to a sort of single Yeah. And then you've got that, again, you've got more variety for that customer, you got abilities of mobility to cross sell, as well as an upsell. So, you know, that also makes sense. But it's more complex and managing certainly, more potentially politics, because you got your brand manager, here's. his brand, and you know, somebody over there and they lose the data.
Speaker: [Host]
yeah, but you're right, consumers love it like that breath of potential where I can, you know, reward my everyday behavior, for example, across everything I'm doing. I'm definitely seeing huge amount of that. I know, I did a show about a group wide programme in Mauritius, for example, recently, and also in Hong Kong. So definitely a big kind of global trend. And again, here where I live, you know, there's plenty of them, you know, I suppose big conglomerates that the Masterbrand might be known, but they certainly are kind of creating programme and running them, you know, across multiple categories.
Speaker: [Guest]
Yeah. And we've seen that as well, in the Middle East. It's a trend of the Middle East sort of enrollments coming in looking to bring the individual portfolios together. Yeah, definitely. And leverage rally from it. Yeah.
Speaker: [Host]
And the other part I'm also fascinated about Paul is, you mentioned social messaging earlier. So you know, whether brands are interested and comfortable, I suppose with incentivizing non transactional behavior. So things like, you know, if somebody is posting nice stuff on Twitter, or Facebook or whatever else, and you know, is it worth rewarding? Are they comfortable investing in that, again, given the focus away from, you know, budgets have been spent on acquisition, and now hopefully, moving back into the loyalty space? So, so do you see that kind of behavior coming through as well as programme revolving?
Speaker: [Guest]
Yes, no, I mean, in building our platform is the ability to, you know, you give points to somebody who's shared something or tweeted something or whatever. So they get value from doing that, which is a two-way sort of benefit. So yeah, so it's definitely seeing that sort of coming into it. I wouldn't say it's been the primary focus, but definitely, it's an area that sort of evolving more and more, and I think it's social channels increase, you know, become not just a messaging channel. But if you take line, for example, it's you know, started off purely as a messaging channel. Now you can do a lot more in line a bit like WeChat, we can actually have many programme and other things, that that also means you need to engage in those channels more interactively, rather than just message. It's not about pushing your message out; it's about using the channel effectively in that way. I think that will be a big area to, to marketers to understand how they use that, you know, I'm pretty sure things like Tick tock, for example, will also understand how to use that particular channel, which is, yeah, that's growth.
Speaker: [Host]
Yeah, you're absolutely right. I hadn't thought about Tick Tock. So now I have another potential podcast, to figure out how to how to do. But again, actually, to the conversation earlier, I think what that does, again, illustrates the importance of, you know, the loyalty team intersecting with the brand's team to decide how are we going to message or communicate or connect, and to use the simplest term and in new emerging channels, because clearly Tick Tock is one of the big news stories, but certainly not going to be the last one. So hopefully, there'll be more of that going on.
Speaker: [Guest]
And it's all video, right? So obviously, therefore, you have a more immersive experience, you have much more emotional pole potentially, in your communications. And that's where it becomes a brand message, or is it a loyalty message? And I know, we all sort of become, you know, sort of merged together to some extent or totally agree.
Speaker: [Host]
Yeah, I hope they're at least starting to measure that. So again, I must kind of ask more of my guests coming up on the brand side, whether, you know, I know, obviously, things like NPS and the KPIs and all of that kind of stuff is being measured. But and certainly when I worked, let's say without to priority, as you know, I also started in Telco’s. And when we did our brand research, and the loyalty programme was a part of that. And in terms of its influence on the overall brand, so hopefully, that's something that's starting to come through as well, and the clients you're working with.
Speaker: [Guest]
Yeah, I've brand research I've seen is certainly see Loyalty, as Are you a member of it? And how do you how do you experience it, as opposed to saying, how's it contributing to the brand? So I wouldn't say I mean, I'm not saying I'm sure the clients are doing it, I have not seen that experience of really seeking as part of the brand component yet. Yeah, that will definitely come through, because I think it is an integral part.
Speaker: [Host]
It is an integral part. And it feels to me, Paul, and I don't know if I'm overstating it, but it feels like it's maybe the next big opportunity. Because as we've said, before, you know, you can have all the technology in the world. And again, you have an extraordinary platform, and you're very proud of it and winning awards and getting recognition for it from the foresters of the world. But I think the shift in customer expectations is I don't think they'd ever used the word emotional loyalty, for example, as a consumer, but I think that's what they're expecting to feel coming through. So I think brands have to show up, have to be there. And I think it's that critical intersection. And I've talked about it in I'd say, broader terms Paul, where I would have called it maybe customer experience, but certainly what I'm starting to feel like now is no, the TV budgets and those other kind of brands teams are probably people that we can get closer to.
Speaker: [Guest]
Yeah, I mean, if we look at what's happened, I mean, particularly in the last 12-18 months, with a pandemic, you know, all the research you saying people are looking for a deeper, deeper, more meaningful connections. Yeah, brands are starting to look more for purpose or authenticity, too, and you want to describe it, but its purpose driven brands. And, and therefore, ultimately, I think you've got to bring those things in and loyalty can help sort of demonstrate some of that and become more purposeful and authentic, it certainly can drive more meaningful conversations and experiences with those consumers, because obviously, you have the data on them. So I think, you know, this this sort of consumer need, with this ability to sort of bring loyalty into costs, the brand will actually serve both parties.
Speaker: [Host]
Yeah, you're right. Yeah, I think as consumers, we feel it, I think as brands, we see that consumers need it, and a case of just kind of Yeah, coming together to leverage things in a way that is, you know, a fair value exchange and really kind of driving the overall business, but feels a bit better and feels less transactional. And as you said, grows the overall value over the long term.
Speaker: [Guest]
Yep. Correct. That's right. I think it's going, yeah.
Speaker: [Host]
yeah, So I think that's, that's a really interesting conversation, Paul. And as I said, I really I get excited about any loyalty conversation that has, you know, I suppose a commercial focus, but also the integrity of the emotional piece coming into it as well. So I love the fact as you said that you were working back in analytics in 1989. And all the way through to, to building extraordinary programme and running them like Marriott Bonvoy. So are there any other kind of key topics that you're seeing coming through that we should, you know, just kind of chat about in terms of what the listeners around the world might learn from?
Speaker: [Guest]
I think I think this whole of loyalty and brand coming together. back to, when I started in my industries is recognizing that you have left and right sided brains in marketing, right, the creative and the rational. Yeah. And I think how you bring those together, I think is really important. So you've got to have the creative side of you got to have that emotional side of it. Yeah. But you got to have this rationality about the value of the programme. And sometimes those twos don't always connect. And I think also from a marketing standpoint, how do you recruit people that has those skills and bring them getting to work together? Okay, because it requires, right do you go to your analytics person, which is usually much more rational? Yeah, yeah, by numbers perspective, he got somebody who's much more about experience or engagement, you know, yeah. But ultimately, now, engagement can be uncertainty informed by the data, right. So you've got to now start to bring these two together to work together. And I think agencies have been able to do this for a while because they've had analytics built into the business marketers not so much, possibly, yet, and don't tend to have usually out and out creatives as well, in marketers, I mean, obviously, it has changed within housing. But there's an interesting dilemma there for those senior marketers, how they bring that sort of skills, and understanding. And as you're trying to bring your loyalty programme into your brand programme, and have the two district sides work in tandem in harmony.
Speaker: [Host]
I like that idea, Paul. Because I've often said, I feel like I missed a bit in my career, and in various things, I would have loved to have worked in prior, and I would have loved to work in a creative marketing agency. And because I really do think you get permission almost to come at business objectives, like loyalty, actually, and come up with a totally different perspective. And you've reminded me of another good example, actually a show I did over a year ago. Now, Paul, but it was British Gas rewards. And again, in the UK, I'd like both of us in the utility sector. But what I really loved about that, again, particularly was they were struggling on the brand side. So the whole energy sector, I think, particularly the British media give it a really tough time, you know, energy prices rise. And you know, the service providers are almost blamed for that. But British Gas rewards, then gave them almost a new tool, a new whole set of messaging, to, to give back and have that overall experience for the customer where they could connect, I think in them in a different way, they have a lovely character called I think, Wilbur where, you know, you can just kind of make it friendly, maybe make it family focused. And actually people then kind of see it not just as a utility and as an energy company, but they start to like the brand a lot more.
Speaker: [Guest]
Yeah, although maybe not even see it as a programme they now see as a figure, you know, representation of the programme and date sort of becomes less corporate in a way and much more consumer orientated. Yeah, I think that's what, you know, part of what creative brings to the table?
Speaker: [Host]
Yes, yes, absolutely. Well, I doubt it was a data analyst who came up with Wilbur, so I think it proves your point that we probably need to be looking to the marketing agency community to bring those into our loyalty programme to see what we can do to dehumanizes, to emotionalize it if that's a word, and yeah, really drive the feeling of loyalty, not just the overall loyalty programme.
Speaker: [Guest]
Yeah, I think the other thing is again, now coming back into a purposes agency, they don't have a loyalty agency, let’s say. I mean, a lot of big agencies don't, you know, they've been sort of the sort of domains of specialist loyalty companies in a way. So again, it's another interesting sort of dynamic or whether that becomes now more mainstream and an agency environment.
Speaker: [Host]
Absolutely, yes. And I knew I was looking at publicists, I know which is still one of the largest and longest established and marketing and PR agencies in the world. And obviously headquartered in Paris. So publicist does extraordinary work. So I think the partnership between publicist and epsilon is just extraordinary. So Paul Davies, Senior Vice President for APAC media for epsilon, thank you so much from Let's Talk Loyalty.
Speaker: [Guest]
Thanks, Paula.
Speaker: [Unknown]
This show is sponsored by the wise marketer, the world's most popular source of loyalty, marketing news, insights and research. The wise marketer also offers loyalty marketing training through its loyalty Academy, which has already certified over 170 executives in 20 countries as certified loyalty marketing professionals. For more information, check out the wise marketeer.com and loyaltyacademy.org.
Speaker: [Unknown]
Thanks so much for listening to this episode of Let's Talk Loyalty. If you'd like me to send you the latest show each week, simply sign up for the show newsletter on letstalkloyalty.com and I'll send you The latest episode to your inbox every Thursday. Or just head to your favorite podcast platform. Find Let's Talk Loyalty and subscribe. Of course, I'd love your feedback and reviews and thanks again for supporting the show.
