An interview by Adam Posner with Andre Korte - General Manager, eCommerce and Marketing Supercheap Auto

The Loyalty Leader interviews I do are a gift that keep on giving and this interview is another insightful gift.

To say I was excited about this interview (#26) is an understatement…I was super (sorry) excited!

Andre Korte - General Manager, eCommerce and Marketing Supercheap Auto, is also the leader of one of my favourite* loyalty programs – Supercheap Auto Club.

*Upfront I declare I am a raving fan of this program!

I often share this fact when I speak about loyalty programs because this program solves a problem, a customer pain point and I passionately believe loyalty programs need to focus more on solving customer problems.

(Details in the article on the problem this program solves in the section “Unique element of the program”).

Another reason I love this program is how they are adding some joy to the program through a recent positioning of ‘the most loyal loyalty club’ – watch some videos here.

I hope you enjoy reading the article as much as I enjoyed learning from Andre and the loyalty program he leads.

1. So, who is Andre (outside of work) + a little on your work biography

I'm originally from Germany and arrived in Australia about 15 years ago. We have now settled north of Brisbane, and I love the life up here with my family. The Queensland weather, the outdoors, four-wheel driving on the beach, camping, water sports and boating. We love the outdoor life.

Not so coincidentally, this life links right into my work because when you think about our company and what we sell, we sell a lot of the gear that I'm then using in my personal time. And yeah, that's part of the reason why I love working for this company.

When I walk through a Supercheap Auto store, I see it as my toy store.

I always find something that I didn't know I needed, and I'll end up buying it. And I really enjoy being in there.

(I love this quote “When I walk through a Supercheap Auto store, I see it as my toy store”)

I’ve been at Supercheap Auto for more than three years. Before I moved to Supercheap Auto, I was with Amazon Australia. I was part of the team that built Amazon here in Australia, a fantastic experience.

(Oh wow…another program I love … Amazon Prime)

Prior to Amazon, I spent 12 years in management consulting improving, transforming, and optimising companies across various industries.

2. Tell us about the Supercheap Auto’s Club loyalty program. Any stats you can share?

We have been through a process of simplifying the program in different areas. It used to be called ‘Club Plus’ and there was no difference the word ‘plus’ provided, in fact it did create unnecessary customer enquiries, so we removed it. Even though it is a small change of name, it symbolises a lot more improvement.

(Insight: Simplifying a loyalty program can be actioned in a range of areas and if removing a name removes customer enquiries, then downstream efficiencies are gained)

About two years ago, we had 2.3 million active club customers. Active is a key measure for us being they have shopped at least once in the last 12 months.

Over the last two years we've simplified the program, and it's not just the name.

For example, we removed the $5 entry fee: It used to cost you $5 to join the club. We realised it was holding us back and a lot of customers were put off by this fee.

We found a way to remove it and still the club works well. It reduced complexity.

We improved customer communication. As an example, if you want to find out how much credit you have, and sometimes customers didn't know how much credit they had, every email we send now out will include how much credit they have. The communication has improved vastly.

And through all those efforts and many more, we increased that active members from 2.3 million two years ago to now 3.7 million.

The simplification process has worked out well.

3. What is the most unique element of the program?

The benefit of best price credit is what makes the program so unique.

Simply speaking, this benefit is based on providing members a credit of the difference in price they paid for a product if the product goes on sale in a two-week period after the item was purchased.

So, here’s the problem being solved – they will automatically receive the difference between the sale price and what they paid into their member account, and they can then use the credit for future purchases.

We're really adding value to their experience and we're solving a pain point.

We are building trust by what we're doing.

As an example, you buy some seat car covers for $150, which a week later go on sale for $100. How annoying is that? You just wasted $50, and you feel you should have waited for a week, and you would have saved $50.

And that's what we recognise and solve for. As a club customer you will get the $50 difference as a credit.

We have a lot of promotions running throughout the year, a lot of discounts that we're offering to our customers, and that's great for those who then purchase whilst it's on discount, but it's not so great if you bought it on full price.

That's why we have best price credit in place. If an item goes on sale the two weeks after you bought it, we credit you the difference.

Customers love it.

We even find customers educating other customers on social media about this benefit, which is amazing.

They feel good and commercially for us it works well. It drives incremental purchases and incremental spend. If we hand out, let's say, $50 worth of credit, customers tend to not just spend $50. They spend far more, but still feel good about it because they save $50, and this is an absolute win-win.

Besides the best price credit offer, it is still a very important having club exclusive specials and club exclusive prices. We have regular sales events, and those sales events offer club member special prices as well.

We also have digital receipts, making members’ lives a little simpler so they can forget about paper and keeping a record of the purchase as it is all on their member profile.

4. If you had to choose the most important measure of success for your program, what would that be?

While members need to be happy with the program, we need to make sure that it works commercially.

I think performance tracking is so important to manage the loyalty program and we're doing that on a weekly, monthly, quarterly, and annual basis to make sure it's performing the way we want.

One important number is annual member spend, monitoring how much our members are spending compared to non-club customers.

Incremental spend is another important one. The number of visits and are they spending more with us and if yes, by how much?

Net Promoter Score is important as well monitoring our customer verbatims.

If there's something that stands out, we dive right into it to understand what is going on and how can we improve the customer experience.

We look at the quantitative data from the scores across various aspects such as pricing and service and other tools that help us identify themes.

I always like to dive in and read the customer comments myself. I believe it’s important to be close to the customer. Being a customer, listening to customers, talking to customers, hearing it firsthand and asking questions - why did it happen, why did it bother you.

All of this gives me a real insight to what drives our customers. It’s super important!

5. What are some of the challenges you face on an ongoing basis to keep the program relevant/fresh/thriving (internally and externally) and how do you overcome these?

It's not easy keeping the program fresh and relevant. There are both challenges with customers and internally, which keeps it interesting.

So even though our unique value is best price credit, it can be a bit of a mouthful to explain to a customer at the checkout if there is a long queue.

And that's where our team in store are doing a fantastic job. Sometimes it's a challenge, especially on busy days.

So that's one big challenge, how to communicate the program effectively.

You might have noticed we're doing a lot more marketing about our program and we're trying to get that across in a fun way. It's a bit of a bit of a fun tone, a bit cheeky, but also getting across what our loyalty program stands for and the main benefits. Watch some videos here.

Probably the most important part to all of this and it can be a challenge or an opportunity, is the in-store team - motivating the in-store team, getting them to understand the benefits of the club for our customers and for the company, and being fully on board and talking to customers.

Besides having our in-store team fully on board, it’s also very important for our head office and all the various support teams to be on board.

If you could add more joy into the lives of your members, how would you do that?

I think this links back to my comment around the toy store.

The products that we sell, a lot of them are used for fun activities. So simply by selling these products to our customers that drives a lot of joy for them.

The fact that our loyalty program helps them with that and gives them ‘best price credit’, makes it easier to justify buying yet more four-wheel drive gear to your wife! Well, I got credit, right, so that makes it easier to justify buying even more items and deliver a lot more joy!

6. What advice would you give to brands thinking about a loyalty program?

1. It all starts with the customer.
It's so simple to say but it's often forgotten or not done to the detail that it needs to be. It’s not thinking about what benefit can we add or what point system and so on, but looking at who are your customers, their behaviours, how they purchase items from you and for what reason, what are their preferences? Then talking to your customers about what would work well for them.

2. Keep it simple.
Professionals who are in the loyalty space very quickly get lots and lots of great ideas and when you put them all into the mix it all looks like soup. You're creating a lot of complexity. The reality is, it's not your customer’s full-time business to understand your loyalty program. If they must study what's going on, you fail.

3. Communicate clearly and consistently.
The ability to effectively communicate the program to customers I think is super important.

7. What do you think is creeping up on programs that could disrupt them for better or worse?

The biggest risk facing programs is complacency.

Just keep doing what we're doing and we're going to be fine is not an option.

Keep on the pulse of customer trends that may impact the performance of the program is key. I'd say complacency and lack of innovation are the biggest risks for established programs.

8. What’s the most underestimated force behind a program’s performance?

I would highlight one: Convenience.

When you think about a loyalty program and all its elements, rewards, and benefits, what's so important is the overall customer experience and the convenience across the customer life cycle.

To give you an example, if you have a new program with great benefits, and it's an absolute nightmare signing up, then it fails.

We want to, as part of our program, make it so convenient to shop at Supercheap Auto that it's inconvenient shopping elsewhere.

And that's not just because of the benefits. There's the whole customer experience around it.

(I love this quote “We want to, as part of our program, make it so convenient to shop at Supercheap Auto that it's inconvenient shopping elsewhere.”)

It reminds me of a Jeff Bezos quote re Amazon Prime “Our goal with Amazon Prime, make no mistake, is to make sure that if you are not a Prime member, you are being irresponsible,")

9.What are the important skills a loyalty program marketer needs?

1. A real strong passion for the customer.
Someone who is always looking to understand our customers, what drives our customers, their behaviours, and then continuously tries to improve the customer experience solving customers problems. If you don’t have a passion for the customer, I think you would be struggling in the loyalty marketing space.

2. The ability to deal with data, analyse data.
Analyse the performance of a loyalty program, and understand what's going on, derive insights to then work out what do we need to do differently.

3. Commercial acumen.
A loyalty program will not be successful just by making customers happy. It needs to work commercially. So as a loyalty professional, it’s important to be commercial.

4.That mindset of challenging the status quo.
Have the motivation to always try to make the program better for the customers.

10.If we are chatting again in (say) 2 years’ time, what do you predict would be the hot topic related to loyalty programs?

There will be topics that are sort of on the radar today that will become a lot more important in two years’ time.

Personalisation.
The ability to communicate with customers in a personalised way. While that's not a new topic, we have a responsibility to use the customer's details that they've given to us in a meaningful way. I think in two years’ time this will be even more important and more sophisticated.

Data security and privacy.
Again, not a new topic right now and already front of mind for many is customer data security and privacy. As more membership programs are launched and growing, the importance of managing that data and keeping it secure will become more and more important.

Channel integration.
We know that our customers are becoming more and more omnichannel in their behaviour. There's not just the customer who walks into the store or only shops online. They are using a website, using web chat with us, giving us a call, doing research on the website, walking into the store, and using their mobile to research a product.

The integration of channels from a customer perspective will become more important.

Obviously, we can send you as a loyalty club member an email or an SMS with an offer, but also having the ability to then identify you on social or in other channels and send you the same offer there and having that fully integrated across multiple touchpoints with consistent messages. That is the goal.

Sustainability and ESG.
I think we're becoming more and more environmentally conscious and there's more emphasis on sustainability. We've piloted a free service, that when you return your old engine oil to Supercheap Auto and if are a club member, we will give you credit for doing the right thing for the environment.

We do the same for members who recycle car batteries. You can bring it back to Supercheap Auto and you receive club credit.

The link between sustainability and loyalty programs is an emerging topic that we will be talking about in two years’ time.

11. Leave us with a lasting loyalty thought

I love our loyalty program, where we have come to and there’s a lot more to come. It is however important to recognise that there is so much more to customer loyalty than a loyalty program. If you get some of the key moments of truth wrong, really stuff up a critical customer experience – you will lose the customer and their loyalty, no matter how great the loyalty program.

To achieve true loyalty, you need to look at the end-to-end customer experience and get it right, identify pain points and fix them.

In simple terms: If you want loyal customers, don't p?ss them off!

Summary
This interview with Andre Korte has so many insights with three standouts for me (along with a quote from Andre).

1. Simplify your program from every angle.

“Professionals who are in the loyalty space very quickly get lots and lots of great ideas and when you put them all into the mix it all looks like soup. You're creating a lot of complexity. The reality is, it's not your customer’s full-time business to understand your loyalty program. If they must study what's going on, you fail.”

2. Avoid complacency.

“Just keep doing what we're doing and we're going to be fine is not an option.”

3. A single-minded obsession on convenience
   
   “We want to, as part of our program, make it so convenient to shop at Supercheap Auto that it's inconvenient shopping elsewhere.”

Have a happy loyalty day!