Adam Posner on inspiring Joyalty* within your customers

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Editor’s Note: We’d like to acknowledge that the For Love or Money customer loyalty and loyalty program research report is a trademark of Adam’s.?*Joyalty is term that Adam has adapted from the book Brand Currency by Steve Susi.

Adam Posner - Loyalty Specialist is the founder and CEO of The Point of Loyalty and Directivity. He has been a data-driven direct marketer for over two decades, and for the last 11 years, he has authored the annual For Love or Money customer loyalty and loyalty program research report. The latest edition was released in June and remains a highly anticipated resource for customer loyalty and marketing specialists across Australia and New Zealand.?

On a Tuesday afternoon in June, Adam sat down with Tortoise & Hare to discuss the latest edition of For Love or Money. Our chat explored a variety of areas including why joyalty is essential for brands looking to connect more emotionally with customers and what's next for loyalty programs beyond 2023. Over the course of our conversation, it became increasingly evident that the only thing deeper than his expertise in loyalty marketing - is his passion for it.?

Tortoise & Hare: Thank you for taking the time to speak with us, Adam. Let's start at the beginning - what led you to start For Love or Money?

Adam Posner: Back in 2013, I realised that there needed to be more information regarding Australian consumers' attitudes and preferences towards loyalty programs.?

As someone heavily involved in customer loyalty and loyalty programs, I couldn't find any data or insights on what Australian consumers liked or disliked, what worked and what didn't work across various aspects such as reward structures, the overall member experience and even their general attitude towards loyalty. This realisation led to the creation of the For Love or Money research, which has been an independent research study focused on Australian consumers' attitudes towards customer loyalty and loyalty programs for the last 11 years.

T&H: In 11 years, you've released 16 editions of the report. How has the process of constructing these reports changed?

AP: The strategy and reporting of For Love or Money has remained relatively consistent. We continue to use a robust methodology, surveying a sample of over 1000 Australian adults who are members of at least one loyalty program. The methodology and sample size have remained unchanged, ensuring the reliability of the data.

But to answer your question, what has evolved year after year is our focus on seeking new insights that offer fresh ideas and actionable strategies to inspire loyalty marketers. Each year our goal is to lift customer loyalty strategies and loyalty programs out of the sea of sameness.

While certain areas remain consistent with tracking ongoing benchmarks, we also adapt our research to reflect the rapidly changing world around us.

T&H: The world has changed a lot since you started your research, as has the Australian consumer. Over the last 11 years, what have you learnt about the Australian consumer who engages in loyalty programs??

AP: Well, firstly, loyalty programs have become widespread across various industries, not just limited to frequent flyer and retail programs. Entertainment, education, telco, insurance and many other verticals have recognised the value of implementing customer recognition and reward programs to influence customer behaviour, motivate advocacy and drive incremental income. Not to mention the benefits to business intelligence and customer insights!??

Another notable change is the shift in the number of programs consumers sign up for. While the overall number of programs has remained relatively stable, individuals are now joining fewer programs but becoming more actively engaged in the ones they choose.?

Generational engagement has also evolved. Different age groups, including Gen Z, Gen Y, Gen X, and Boomers, have displayed varying levels of involvement with loyalty programs. Factors such as environmental issues and economic conditions influence the importance of loyalty programs in people's lives.?

During challenging economic times, loyalty programs become especially significant in the lives of members, offering members substantial savings and benefits. Furthermore, younger generations seek a more emotional connection with brands through their loyalty programs, valuing non-financial rewards that provide moments of surprise and delight - or, as I like to call it - Joyalty!

T&H: Joyalty was a key concept in this years For Love of Money report. Could you unpack the idea a little more and explain why it's important for brands in 2023??

AP: Joyalty is a term that I came across while reading the book Brand Currency by Steve Susi . I've adapted the idea for loyalty programs, and now define joyalty as a customer’s feeling of maximum joy and delight from one or a series of Moments of Magic (MoMs) delivered by a brand.?

Initially, new members will focus on the transactional aspects of loyalty programs, such as discounts, savings, member pricing, cashback or a combination of these. However, as members engage more deeply, there is an opportunity for programs to add more joy to the lives of their members through random acts of kindness or benefits that members do not expect. This moves members from a transactional interaction to an emotional connection.?

T&H: Outside of inspiring Joyalty, where else should brands focus their loyalty program efforts?

AP: In our research we found six areas where programs need to improve in the future. Members’ are looking for programs to continue to improve the earn-rate of rewards (how quickly rewards can be earned), surprise and delight moments, non-financial rewards, personalisation through tailored and relevant offers, simplicity and technology engagement such as seamless tap-and-go payment integration.

T&H: Are these also the same areas causing customers to leave loyalty programs??

AP: Most members leave programs because of:?

• Complexity: Members expect loyalty programs to be simple to understand, easy to identify as a member and effortless to interact with.?
• Lack of personalisation: Members don’t have time for impersonal and irrelevant communications and rewards, they want a loyalty program that is tailored to their preference and needs.?
• Little or no value: The value offering (mostly finance-based) of the loyalty program should provide tangible benefits and be perceived as valuable by the members - rewards are achievable and desirable.??

Members may consider leaving when any or all of these fundamental aspects of a loyalty program break down. If the program becomes overly complex or challenging to redeem rewards, it can discourage participation. Additionally, excessive and irrelevant communications can lead to communication fatigue and opt-out. Customers may also leave loyalty programs due to lifestyle changes that render the program less relevant to their current needs and preferences. While these reasons may not directly relate to the program itself, they can still contribute to member attrition.

T&H: Rising interest rates, cost of living, talks of recessions - there's a lot of macroeconomic uncertainty in Australia at the moment. What changes are you expecting to see within loyalty programs over the next 12 months?

AP: Considering the rising cost of living and the general uncertainty, Australian consumers are looking for programs that can provide more financial benefits to their members. Brands, especially retailers across various categories like telcos and energy, will focus on rewarding and recognising their customers so they don't keep switching and moving around.?

There will likely be a stronger emphasis on the economic value of loyalty programs for both the brand and the member. But it's not just about financial benefits; it's also about adding layers of joy and creating a positive experience.?

When times are tough, a little bit of joy and value can go a long way without creating more hassle in people's already stressed lives. We're all feeling the impact of the uncertain economy, and brands need to find ways to support their customers, understand their needs, and put more value back into their lives.

T&H: Adam Posner, thank you for your time.?

AP: It's been a pleasure.?

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You can also access your complimentary copy of the Executive Summary of the 2023 edition of For Love or Money or purchase the comprehensive report here.