Loyalty Stories 32: Why Price Should Stay Off the Table – Nicola Fox

Gabor

Hi and welcome to Loyalty Stories, that is Antavo’s podcast on customer loyalty and loyalty programs. I am Gabor Vigh, one of the Partnership Managers at Antavo, and Antavo is a technology vendor that empowers loyalty programs all over the world. We help various great businesses such as KFC, Benefit Cosmetics, very well known global automotive and fashion brands, airports and so on.

In this Loyalty Stories podcast, we dive into the trends around loyalty programs and customer loyalty. We talk with industry experts everywhere from the globe to pick their brains to learn what’s new and what’s next for loyalty programs. 

Today’s guest is Nicola Fox, an independent loyalty and CRM consultant and also a returning contributor to the report, who is specialized in retail and helped many businesses by rolling out loyalty programs, developing digital and customer relationship campaigns and store marketing. I have to say that I really like the name of her company, Fine Tooth Comb. It just makes people to remember it straight away. 

So hi Nicola, how are you doing today?

Nicola

Hi, I’m really well, thank you.

Gabor

Thank you so much for accepting our invitation for today’s podcast. I am really looking forward to learning your point of view about loyalty. But before we dive in, would you mind briefly introduce yourself to our audience?

Nicola

Yeah, no problem at all. Hi, I’m Nicola and as Gabor said, I’m a CRM and loyalty specialist. I work independently and specialise in retail. I’ve worked in retail for over 20 years in a number of different marketing roles and I’ve worked in CRM and loyalty for the last 15 years. It’s kind of the area of marketing that I started in and knew very little about, but actually it’s now kind of my absolute favorite place to be and I wouldn’t be really anywhere else. 

I’ve worked in healthcare, fast fashion, gifting, homeware and I just love being able to take what customers do and turn that into strategy and also support teams in adopting the changes that happen when you start to be data and customer focused.

Gabor

I am very glad to hear that you are loyal to loyalty. So it makes me just want me to ask, what is your favorite loyalty program on the market at the moment? And why are you naming it as your favorite?

Nicola

Yeah, I mean, it’s almost impossible, right, to pick one. And I think in years gone by, I’ve been very loyal to things like Boots Advantage Card. I used to love that Advantage Card and all the kind of perks that came along with it. But there are just so many more now out there. I still think that retail loyalty is probably my favourite space. 

I think I mean, gosh, it needs it right now. I mean, there are many reasons why retailers need to have that insight and that understanding, but also that special connection with customers that loyalty programs bring. And, and so, you know, I think ones that kind of stand out for me at the moment are programs like Sephora. 

Who are really recognising that, yes, they have a market of people who would probably enjoy that reward and that recognition, but they’re also allowing customers to have some personal control over how they earn those rewards and how they use those rewards. So particularly things like picking your favourite two brands and then getting a continual discount on those. 

And I think we’ll see a little bit more of that actually. I think we’ll see that kind of partnership between brands saying: We’re going to give you this, but we’re also going to allow you a little bit of control over how we reward you and how we recognise you. So yeah, I think that’s one that stands out to me at the moment that I’m particularly enjoying spending in.

Gabor

Great, great. And because you’ve been in the loyalty space for quite a while and you’ve worked with brilliant brands in the past, if you look back to your career, what would you say? What is that piece of work that you are the most proud of?

Nicola

Yeah, I mean, I do have to go back to my time at Holland and Barrett and establishing their loyalty programme, which is called Rewards for Life. That piece of work still stands out to me as a kind of real point in my career where I got the opportunity to do something which was fairly innovative for that business but also to kind of get that grounding and passion for what I do now. 

And there are many, many more people involved in what that program looks like today and how that program has evolved into what it is today. But I can hand on heart say I was there on day one and the delivering and developing that concept of how we take a fairly traditional retailer that knew an awful lot about how many pots of tablets and supplements and powder and creams that they sold, but they had virtually nothing about their customer. 

And we turned ourselves into an organization that actually was using that customer data on a day-to-day basis, both for marketing purposes, targeting, segmentation, but also for decisions around range and space, where to locate our stores, the types of products that would work well in there. 

And so when I look back on that, yes, it was a very tried and tested model. Yes, we, you know, it’s quite a few years ago now and I’ve done many more things and I’ve had a really kind of privileged position in many different organisations to work in loyalty. But actually, it’s what really stands out for me because it gave me that really good understanding, and I wouldn’t really be stood here talking to you today if it wasn’t for rewards for life.

Gabor

I quite enjoy Holland & Barrett’s loyalty program, by the way. So yes, especially the discounts in this sense. So sometimes we receive coupons if we spend more than certain amount and then we will have discounts on different kinds of products that are in our interest. So yeah, thank you for being there from day one.

Nicola

That’s okay. And I think, you know, particularly for that market as well, it was a model that just really worked. You know, we knew that actually, in order for natural and herbal supplements to be effective, you do have to take them for a period of time. It’s not kind of traditional medicine. 

And so actually we wanted to give people beyond price and promotion, a reason to choose us each time and I’m glad to hear that it’s kind of working for you as well because that was what it was all about. As an organisation we got the benefit of the data and the insight that we could use but actually it was also about recognising people for choosing a health and natural food retailer on the high street.

Gabor

And if you also look back a couple of years in the loyalty space, what would you say, what were the biggest changes over there? Was anything like outstanding, I know that digital transformation sped up a bit, but is there anything special that really just you would like to share with us?

Nicola

Yeah, so I think what I can certainly see is that, and maybe this is because of some of the changes that were kind of enforced or you know just required during the pandemic period, but there’s a much bigger focus now on how brands differentiate themselves through loyalty. 

So when we really kind of boil loyalty down into what is it, it’s for me, it’s about carving out a place in customers’ lives that makes them feel really valued, but also the brand be really valued by the customers. And I think I can see examples of people still doing that now, and not just kind of going for reward and recognition, but actually really thinking about what do we do with our loyalty program? 

What do we do for our customers that would make a difference for them? And you know some of the very kind of acclaimed programs like North Face give you some examples of that where it’s not necessarily about price and promotion for those customers, but it is about recognising who they are, what they like, how they enjoy spending their time and then really kind of tapping into that and giving them that through their rewards and the membership of that alongside that and kind of link to it as well, really understanding what’s important to your customers, what do they care about outside of your shop or outside of your website? 

And I think that’s where we start to see things like sustainability and planet impact coming in as well. And because you know, the customer now is no fool around this type of topic. And so it can’t, we can’t simply sort of do things that are tokenistic or you know, just sort of do a small part of it. It has to sort of be baked into how we run our businesses, how we conduct ourselves as brands and really tap into what matters to our customers around those subjects. So I think those couple of things stand out for me. 

But then, I mean, we can’t talk about changes in the last couple of years without talking about that shift that almost like 180 degree turn towards a more overt exchange of data and price. I mean, we’re seeing this in Nectar, in Boots, in Clubcard, the big players making that change to something that was never ever going to be considered. And so I think, you know, we’ve really got to as loyalty specialists, as people who work in this industry, we’ve got to kind of take note of the fact that is happening, and loyalty and loyalty programs are the vehicle for which they’re delivering that.

Gabor

Did anything surprise you in the past couple of years, like past two, three years back in the loyalty space? Did like some program come out that was kind of outstanding and ground-shaking?

Nicola

Well, I think, I mean for me, it’s not a new one, but I think that shift by Boots, by Nectar, to by Club Card, to differentiating themselves on price is the one that stands out for me as jaw dropping. I don’t, I mean, it might be an unpopular opinion, but I don’t feel like that was what we all set out to achieve through loyalty. 

I mean, my personal view is that price should stay off the table when it comes to loyalty. Price is just what you do and it’s just good shopkeeping really. But actually we are seeing that big change and that kind of very clear signposting particularly in store around the difference between a price when you’re part of the loyalty programme and a price when you’re not. 

In a way that 10, 15 years ago was really only seen in the US markets, where they had much more of a couponing and promotion culture. Personally, as a loyalty professional, I’m disappointed to see that start to happen, but I think it’s certainly something that we all have to take note of and understand more about what that’s making people feel and think about those brands.

Gabor

Yes, I agree. So I think I put my Tesco card deep in my wallet and I didn’t use it for a couple of years, but when these kinds of signs come in, then I just dig it out and start to use because, yeah, there can be like really nice price or prices on those products that I’m purchasing for the barbecues I had. I think I was able to buy it. Corona beer for 10 pounds instead of 14. So it’s yeah in this sense it’s working.

Nicola

Absolutely. And I think that’s the case, isn’t it? I think on the shelf edge, there’s a really clear signpost for customers of how much we value their loyalty. And when you can see those big price differences, I just wonder what that really does to the integrity of that, that loyalty programme proposition. 

That’s the only thing that goes through my mind when I see those big differences because I suppose I look at it and I think but we’re really making, we’re really sort of buying people in on the basis of price and actually if you can sustain that price anyway then shouldn’t that be for everybody and I think it’s a really hard message to give to customers around why are we giving some people this price differential with the sort of backdrop of the current economic situation. So that’s why it makes me feel a little bit uncomfortable as a professional in this space. 

I think for me it should be about recognition and reward and thank yous and delights rather than that price differential. The price should be good price and that’s what it should be for everybody and then we reward people who stay loyal to us and who really kind of get on board with the brand but yeah it’s a hard one isn’t it as a customer when you’re in there and there’s that much of a difference particularly on things like beer and barbecues that not to sort of be tempted by it. So it will just be interesting to see it unfold, won’t it? And to see what actually happens as a result of those changes.

Gabor

Yeah, yeah, it’s a customer psychology, like a very interesting topic. And if we look into the future of loyalty programs, Nicola, what do you think, what will be the two main trends or even more trends that will really determine loyalty programs?

Nicola

So I think I would say that we will probably start to see a decline in subscription based models. I think particularly over the last sort of five years we’ve seen those become quite popular. That kind of, you know, regular outgoing where it kind of happens in the background and you get that kind of feel good factor.

I think given the economic circumstances, given the kind of need for everybody to focus a bit more on their outgoings and really kind of be a lot more intentional about how they’re spending that spare money if they do have it, I think that will start to mean that those subscription type models are less attractive. 

And particularly because now that we are through that pandemic era, we are able to now just sort of source that feel good factor that they supplied and they kind of filled during that time with many other ways. And so actually, I think that change in customer behaviour from maybe sort of feeling like, well, I’m not spending it on other things, I might as well spend it on that, has changed quite significantly. 

People are being very purposeful, very thoughtful, very intentional around how they spend their money. And so I think we will see a decline in that. But on the other side of that, I think we will see an increase in brands starting to really focus in on what part do they play in people’s lives and what service or value added service can they bring for customers through their loyalty program. 

And sometimes these are very kind of content led and very kind of inspirational, and sometimes they are a little bit more service and advice and sometimes they are, you know, sort of promotions and exclusivity and deals and price. It kind of really depends in which area you’re working, but I think there’ll be this real kind of focus on not just, you know, we’ve got a loyalty program. 

If you shop with us, we will reward you from time to time, but a real focus on these are the reasons why we want you to be part of it. And a lot of that is to do with the fact that has to be at the core of driving loyalty and retention. It has to be at the core of driving frequency so that people choose you each time because actually they’re getting something from you that they’re not necessarily getting from other retailers. But also it has to be there because of the data gaps as well. 

And as changes on permissions, and access to people’s data starts to become tighter and tighter and tighter. We need people to be volunteering to be part of these of these programs. And in order to do that, there has to be a kind of a very compelling reason why I would choose to be part of a program with a particular brand. So I think we will see that. Like I said earlier, my own personal view is we should focus on that and we should leave pricing out of it.

Gabor

Great, great. Yes, this cookie apocalypse is definitely coming. So I think loyalty programs are definitely a great way to try to substitute the data that is going to be missing from these cookie-centric worlds going forward. So yeah, I agree on that, Nicola. Thank you.

Nicola

And I think that’s where, you know, in the survey, there are questions around personalisation and targeting. And I mean, I wouldn’t be sitting here doing the work that I do and not advocating for personalisation and targeting. But I think for me, it’s about making sure that there’s purpose behind that personalisation.

We’re not just kind of showing things to people because that’s what they’ve looked at, but we’re showing things to people because actually our skill as a retailer and our knowledge of what that user has done, as well as what that user has told us, combined together, curates a really nice experience for them that is helpful and adds value and makes them want to shop more with you. 

So I think, you know, I’m not kind of saying that personalisation and targeting doesn’t have a place, but I think we need to really be thinking about how do we use it and how does that become really beneficial to customers in their experience of your brand.

Gabor

Great, thank you Nicola. And what do you think how a loyalty program technology company should support these trends that are coming in the loyalty space? What are those features that are not even nice to have but must have?

Nicola

Yeah, I think first and foremost, companies are looking for partners in this space who help them to realise the things that they want to achieve. And often that starts with, we’ve got an idea, we would like to be able to offer our customers this or reward them in this way or track this behaviour so that we can reward this or understand more about what our customers care about so that we can build that into our programme. 

So I think first and foremost it’s about finding a partner, a technology partner who also has the creativity and also has the innovation, not just in terms of what the technology can do but in terms of where the market is going. Because sometimes, particularly in this space, you only know what you’ve experienced, you’re not necessarily thinking about the things that are not even there yet, or you don’t think are possible. 

So that creativity, that innovation is really key. But then naturally, you want, as soon as you’ve had these ideas, like all good marketers, you want it yesterday. So I think that ability to create light integrations that work alongside what already happens within your organization, alongside the tech stacks that you’ve already selected, along the other platforms that you’ve got that ability to get things working quickly and with some but not heavy engineering and development is really important as well. 

And that again it kind of comes back to that relationship with the platform provider that they understand their role and they understand the role that other platform providers play as well and the other tech systems that you know the role that they play. And everybody kind of respects that and does their thing with excellence rather than trying to do everything that everybody else does. So I think those two things are really important and that comes down to a lot of the time about really good relationship and understanding of each other’s businesses. 

But the only other thing that I would add in there as well is that more people to do it. And so the control of those programs, the control of those platforms, in my opinion, always needs to be developed with thinking about who the end user is. And oftentimes now that is marketing or an area of marketing. So really thinking about how do we get kind of a really excellent platform that does things, but a user interface which marketing can access. And there isn’t kind of a huge roadmap for getting this stuff done and getting this stuff out in front of customers. And I think those are the key things for me.

Gabor

Great. And with this easy to use technologies, what you said, and also you mentioned, Nikola, that the loyalty piece should be handled by marketing teams. Is it something that you see as well when you are talking about programs, loyalty programs strategies?

Do you see marketing as the key stakeholder in this project, or is there anyone else?

Nicola

There’s definitely other people. And I think it’s a really good question because that is starting to change and I think as historically it would have been marketing. Marketing come up with this idea of a loyalty program and it’s executed in a kind of a very customer-facing way. But what we know now all these years later is that this is all about how you structure your data, how accessible and democratized that data is. 

And so naturally, people involved in these types of decisions are those data users as well, because they also need to make sure that they would be able to make sense of this data that is coming in, that it is integrated and aligned and identifiable against the other data sets that we’ve got within businesses. So I think certainly marketing are still in there, but there is a growing focus on having kind of areas of the data teams or data science teams or INA teams who are focusing on customer data more exclusively.

Gabor

Great, thank you so much, Nicola. Is there anything else in mind that you wanted to share with the audience today?

Nicola

I don’t think so. I’ve covered everything I think.

Gabor

Okay, great. Yes. So I think as well we covered a significant amount of topics today. Thank you very much, Nicola, for being here with us today and sharing your thoughts with us. I really, really enjoyed our conversations and I was really having a good time on this podcast with you today. My favorite topic was when you were talking about the declining importance of the subscription-based models in the loyalty space due to the current economic climate, which I can 100% relate to. 

But also when you mentioned that companies really trying to change their approach to their customers, how they are going to play like a significant part in their loyalty customers’ lives how they can drive retention and frequency by engaging them even when they are not in their shops or spending the money there. So I thank you so much for these valuable insights today, Nicola.

Nicola

That’s okay. Thank you. It was really nice to be able to chat through them.

Gabor

Thank you. And for the viewers, wherever you listen to us, be it on a podcast platform, YouTube or LinkedIn, please like this podcast, please subscribe to our channel so then you can see when the next episodes are out on this series, and also tell us what you think about loyalty in the comment section below. Visit antavo.com, your next loyalty software.

So, visit antavo.com to discover your next loyalty software. Antavo is a next-generation loyalty program technology company used by global companies like KFC, Benefit Cosmetics, global automotive, fashion companies, and airports all over the world. 

Also don’t forget to visit Nicola’s LinkedIn page to find out more exciting details of her work.

Thank you, and see you on the next one. Bye for now.