26 years of living (and loving) the loyalty program landscape

An interview with Phil Hawkins Head of Loyalty Operations at flybuys

I had the pleasure of meeting up with Phil to chat about his experience over the past 26 years in the world of loyalty programs.

It was a privilege for me to listen to his wisdom and views on the past, present and future of flybuys as well as the challenges and opportunities for loyalty programs in general.

1. How did your loyalty program life begin?

My first exposure to loyalty programs was in 1993 when I was in retail marketing at Shell and was approached to join a project team (with three others) to look at a ‘loyalty program’ opportunity with the then Coles Myer group.

Australian households’ main reference point for loyalty programs at that time were the Qantas (1987) and Ansett frequent flyer programs which were the domain of genuine frequent flyers; there was no credit card connection then.

As we embarked on this new loyalty program strategy, we held some focus groups with consumers and while they knew a little of ‘coupon collecting for rewards’, you could see their frequent flyer envy as well as the belief that ‘these where only for business travellers’.

When we put the proposition of earning points or rewards for their daily shopping to redeem them for flights, ’their eyes lit up’.

Eighteen months later in 1994 we launched flybuys.

2. In your 26 years of involvement with flybuys – what have been your big moments to remember?

I remember three massive moments

The first was launching the program in 1994, which despite the research we just didn’t know what would happen.

The Sunday night of launch we took over the ad block on the news and had all four ads top to tail – 1. Shell and flybuys, 2. National Australia Bank and flybuys, 3. Myer and flybuys and 4. flybuys…and Australians went crazy!

We signed up over 1,000,000 households in 6 weeks. The card manufacturer ran out of plastic (those were the days) and we had to send out cardboard cards!

The second moment (more than just a moment), I remember a period in 1997 when we had educated our members so well on earning points and had not focused on enough on redeeming them for rewards.

What seemed like a moment of madness (might have been a bit longer) many 1000’s of members suddenly wanted to redeem their rewards at once, sending the call centre into meltdown (online was not an option then).

Finally, for me, the relaunch of flybuys in 2012 was huge (you remember that Adam as you also had the pleasure to participate in that as well).

We revamped the program with more points, more partners, more rewards and mailed nearly every Australian household new cards, the Australia Post trucks were lined up on that weekend for kilometres!

3. Why do you believe flybuys is still thriving in 2019?

Because it is genuinely rewarding.

We have rewarded our members with more points than ever before, more rewards than ever before and continue to add new partners to give more earn and redeem options to our members.

flybuys members collected 24% more points in 2018 than 2017 and redeemed 26% more points over the same period.

flybuys has more than 8.4 million active members, covering about two thirds of Australian households, and has more than 20 major participating partners.

4. Culturally, what keeps your program thriving?

We simply focus on rewarding our members and finding new ways to reward them.

On a weekly basis we celebrate successes and share member feedback (the good, the bad, the not so nice). We recognise our team members who have gone above and beyond to turn unhappy members into delighted customers.

5. What three areas do you think flybuys can continue to improve on?

1. Continue to be relevant and find more ways to engage with our members.

2. Keep refining the experience and reduce the points of friction where it counts. As an example, one of our most popular rewards are flybuys dollars and via the flybuys app we have made it simpler by reducing the steps of redemption from 5 steps to 2.

3. Continue to keep pace with the rapid change in tech and digital interactions.

6. Why do flybuys continue to invest in coupon direct mail?

Simply because they continue to be popular with many of our members. We would not keep sending them if no-one used them!

7. In general, what do you think are the opportunities for loyalty/rewards programs to remain meaningful to members and at the same time be a profitable asset?

Better personalised member experience. With so much data collected by programs these days, they are just not using the data to improve the member’s life!

Why? I think they don’t realise how valuable the insights are and hence not resourcing or investing in what they’ve got.

Having said that, I believe that program managers (organisations) need to remain respectful custodians of customer data. The key words here are ‘respectful’ and ‘custodian’.

Programs also need to remove complexity at every opportunity.

8. What advice would you give to any brand or business that has an existing program?

Be rewarding – loyalty is a two-way street. Don’t focus on what’s in it for you. Loyalty programs should never be described as “schemes” – schemes are for scheming.

9. What advice would you give to any brand or business that is planning a new program?

These seem obvious however, they are worth remembering.

Don’t just do it because your competitors do. Consider them carefully…plan, think investment not cost and implement with loyalty professionals by your side.

A poorly constructed program will waste your money and reflect poorly on your brand’s reputation.

A program won’t paint over the cracks of inadequacy of any aspect of your core product or service offering.

10. What do you think is creeping up on Australian programs, that all of a sudden will be a reality?

GDPR type legislation in Australia will be a, when…not if.

Loyalty and payments integration which is already happening however has still not quite hit the majority of programs and hence members.

I wonder if there will be a successful ‘flybuys’ for small business?

Summary

Trying to capture 26 years of Phil's experience into a 50-minute interview was a challenge as there were so many tangents we could have taken and inspiring ideas and views we could have uncovered.

I am grateful to Phil for his 26 years!

Have a happy loyalty day!

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