An interview by Adam Posner with David Palfreeman , CRM and Loyalty Manager - Autobarn
For the first interview in 2023 for my series on Loyalty Leaders, I found gold hidden under rock (a quiet achiever) with the opportunity to chat with David Palfreeman currently CRM and Loyalty Manager at Autobarn.
With the recent launch (1 Dec 2022) of Autobarn’s loyalty program – Accelerate Rewards, getting under the hood (sorry!) about the program with David was so insightful.
Plus, David has a fascinating biography (personal and career), the least of which is he is an engineer, lawyer and raced Porsches!
Enjoy the read…(and check out his CHAT GPT loyalty program poem at the end!)
1. So, who is David? (outside of work) + a little on your work biography
Personally, I was born in England and arrived in Australia in 1999. I am married with two teenage children, and we have an ex-racing greyhound who spends his whole time on the couch asleep.
I was a keen yachtsman and competed in the Sydney to Hobart and Melbourne to Hobart Yacht races.
I also raced Porsches - that's no longer financially viable (if you want to get poor very quickly go Porsche car racing!). For the past 8 years I have been training in Brazilian Jujitsu, which is much safer and cheaper than racing Porsches.
I also mentor in the Masters in IT at Monash uni. My other big passion, is I'm a judge for a program called F1 (Formula One) in schools, judging state, national and international events.
From a professional and career point of view, I completed an engineering degree and worked in oilfield exploration on gas and oil rigs in Europe. I then moved into IT and did an MBA while working full time. In the UK, I worked for a firm in the 90s that sold one of the first event driven CRM campaign management tools when CRM was in its infancy.
When I came to Australia in 1999, I was working in CRM at Telstra and while I was there, I continued studying and qualified as a lawyer and then did my master’s in law.
(Wow – an engineer and a lawyer!!!)
I worked for Accenture for a while in their CRM strategy practice working with some great clients like Virgin Australia. Then I set up my own CRM and loyalty consultancy working with some clients like ANZ, NAB, Coles and flybuys, Qantas and T2 Tea.
Since October 2021, I have been working with Autobarn where my mandate was to put in a new CRM platform and launch a loyalty program.
2. Tell us about the new Autobarn loyalty program
Accelerate Rewards was launched on 1 Dec 2022.
Interestingly, this is the third loyalty program Autobarn has had in its near 40-year history.
The first one was way too generous to customers and wasn't financially viable. The second one worked very well for one of the partners, but not very well for the business and even worse for the customers. So, both of those were phased out.
(Insight: You can remove a program and start again)
Now, we have Accelerate Rewards, which has been carefully designed to reward regular customers. It's a points-based model, with member only deals and specials, early access to promotions, invites to special events and bonus vouchers.
We launched on the first of December and within the first month, we gained over 60,000 new member signups, which was close to our projections and which we are happy with.
It was mixture of in store (130 stores) and online signups. We have good engagement with teams in store and that's following through to the customers. We're converting about one in 10 people signing up in store.
We are tracking how many people are earning and redeeming and although it’s early days it’s going surprisingly well.
(Insight: Team belief and buy-in is critical to successful customer to member conversion)
Stores were keen to have a loyalty program. Our main competitors have a program and customers were asking what loyalty program we had. So, when we launched, our team were really excited as there was pent up demand for one
We launched with a Minimum Viable Product as we wanted to get something out sooner rather than perfect. There are lots of plans for the program in the coming year.
(Love this quote: “we wanted to get something out sooner rather than perfect”)
3. What is the most unique element of the program?
We looked carefully at what our customers value from other rewards programs across similar and totally different industries.
One of the features that came back again and again, was customers wanted their receipts to be stored online, which can be valuable for tax and warranty purposes. Some of our products have got warranties that cover multiple years and so digital receipts was something that customers find useful.
What’s probably our most unique element is we do money can't buy experiences for our members.
We sponsor the Tickford Supercars racing squad and one of the drivers, Cam Waters. Members can come to the store and meet Cam Waters and they get so excited.
They don't just bring t-shirts in to sign, they also bring in whole bits of their car, their dashboards, wings, their bonnets. To sign!
We have queues going outside the stores and we don't promote it that much. Because the crowds are so huge, its members only. We also have requests for branded t-shirts and merchandise which we didn't think members wanted it, but they do and it's been great.
(Insight: Use your owned assets for adding uniqueness to a program)
We want people to love the brand. And we've completed quite a bit of market research and they are passionate about their car. They love spending money on it.
Also, we have a very a high percentage of women car owners as they tell us they feel comfortable in an Autobarn store. Typically, they're buying for the family, things like car seats, seat covers, pet covers for the dog, they're buying all those sorts of things.
4. What were some of the challenges you faced to get the program to market and how did you overcome these?
The loyalty business case took a long time to get approved. There were internal changes which slowed the process. Once approved, we had three months to implement. We had four different systems from three technology providers to integrate - a technology challenge.
Getting the stores on board was relatively easy however launching so close to Christmas created another challenge with all the noise Christmas provides – a timing challenge.
I think we solved these challenges by working closely with our technology partners. We had a great team. I can't praise them enough. Doing a big bang launch is not something I'd recommend. I would have preferred to do a phased rollout. But we did a big bang launch and with that we accepted a lot of risk.
It all worked out!
(Insight: Strong technology partnership can never be underestimated)
5. What are your top strategies to ensure the program delivers to its expectations over the next 12-24 months?
- We launched with members earning rewards in-store and online, with redemption only online. The next key action is to allow redemption in store.
- We want to keep adding value and we will be asking our customers and our people in-store as often as possible to find out what they want.
- Customer expectations are increasing all the time. Amazon, for example, you can place an order on Saturday night, and it'll arrive on Sunday. So, customers are happy with that level of service now, so we really need to be on top what customers want.
- AI and machine learning is a focus for us. But we need to make sure our basics are working properly.
6. What advice would you give to brands thinking about a loyalty program?
- Think about what's valuable to your customers not to you. What you think is valuable may not be what your customers think is valuable. A great example is things like the digital receipts. Customers value the utility and peace of mind to have their receipt stored online, probably more than points.
- Make it as easy as possible for customers to sign up and get the benefits. Design a smooth, easy process. Don't ask for too much information.
- Work with your trusted partners, and don't be afraid to get expert help.
- Talk to companies that aren't in your industry about their loyalty programs. Learn about what works for them and what doesn’t and is there any relevance to your industry and program.
- Make sure that your whole team is on board with the program. We were lucky to have executive support from the CEO and across the business, store managers, marketers, digital team and so on.
7. What do you think is creeping up on programs that could disrupt them for better or worse?
- I think there are risks for loyalty programs with more regulation in areas such as points expiry and value changes and data collection and use, privacy and security.
- The proliferation of APPs and the potential for those with no utility having limited downloads and access.
- Customers are becoming more and more concerned about sharing data and information, especially with all the recent data breaches. They will be thinking “Why should I give you, my birthday?”. You've got to give them a compelling reason and the confidence that you're going to manage that data correctly and safely.
8. What are some underestimated forces behind a program’s performance?
- Personal recommendations of the program by the team in store. A team that genuinely believes it's a great program, will have no trouble getting customers to sign up. On the other hand, if they don’t believe in the program, they will not be enthusiastic about signing customers up to the program.
- Making sure your personalised journeys, offers and experiences are implemented at scale. No more batch and blast. What triggers can you use that are going to engage with a message that's appropriate and relevant for them?
9. What are three important skills a loyalty program marketer needs?
- Customer empathy: I think the ability to think from a customer's point of view.
- Technical skills. Strong ability to understand what is technically possible. Understand how the system will work, how the data will flow through the various programs and know how to work with technology partners to get the best out of them.
- Attitude to act: Loyalty program marketers who have the get up and go to get things done - make the loyalty program better and customers’ lives better
10. If we are chatting again in (say) 2 years’ time, what do you predict would be the hot topic related to loyalty programs?
I think we will be talking about changes in legislation impacting programs, data use and the increasing expectations about what loyalty programs deliver to members.
11. Leave us with a lasting loyalty thought
Reward your customers for being loyal to you and ensure they actually feel they're being rewarded.
P.S David also used Chat GPT to create a loyalty program poem (Love it!!)
Loyalty programs, oh how sweet, a reward for every purchase you complete. Points that add up and never expire, bringing discounts and perks to admire. From free shipping to exclusive deals, there’s always something that loyalty reveals. A sense of belonging and being appreciated, makes shopping more enjoyable, it’s not overrated. But it’s not just about the benefits you receive, it’s also about supporting the brands you believe. The loyalty program builds a strong connection, encouraging you to shop and show affection. So, join the loyalty program, don’t hesitate, It’s a win-win for both you and the retailer’s fate. It’s a relationship built on trust and devotion, A true reflection of loyalty in motion.
Summary
This interview with David provided so many insights to learn from especially what it takes to implement a new program in such a short time.
For me, some of the stand-out insights from David, are:
- Team belief and buy-in is critical, from executives all the way through to stores.
- Customer empathy – what is valuable to them vs what internally the brand thinks customers want
- Strong technology partnerships are key to success
- Skills of loyalty marketers – customer empathy, technology capability understanding and an attitude to act
- Use your owned assets for adding uniqueness to a program
- Plus the important reminders of what’s around the corner impacting the value and viability of programs – legislation and data use (say no more!)
Have a happy loyalty day!
