Telefonica O2− which serves more than 101.6 million customers in the United Kingdom, Ireland, Germany, Czech Republic and Slovakia; and more than 221 million customers in Brazil, Argentina, Chile, Peru, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Mexico, Nicaragua, Panama, Puerto Rico, Uruguay and Venezuela−garnered the International Markets, Silver Winner award at the inaugural Loyalty360 Awards which were handed out at the 7th Annual Loyalty Expo, presented by Loyalty360 – The Loyalty Marketer’s Association.
Mark Stevenson, Marketing Director of Priority and Sponsorship at O2, participated in an eye-opening Q&A with Loyalty360 to discuss the company’s loyalty program.
Q: What is the company doing now in terms of the loyalty program, commitment to its customers, and commitment to a strategy?
You have to give customers more of what they want and less of what they don’t. And more than that, you have to inspire and motivate them with something new that they can’t get anywhere else, all with an understanding of how to do this in a way that most positively impacts your business. At O2, our customers are our priority in every sense. We ask them what they want, when they want it and how they want it. We then track what happens and learn and improve what we do based on their behaviour and the feedback they give us across all of our channels. We have done this from the inception of Priority, and we will continue to do so, using new technologies to give them what they want and what they need at a time when is perfect for them.
Q: How has the measurement of your program changed today versus three to five years ago and how does the challenge of new technologies and ROIs play into this?
With all programmes and initiatives, we set detailed KPIs at the outset and then track, measure, and learn based on performance against those measures. Where I think a lot of brands fail is that they set KPIs, measure against them, but then don’t shift behaviour or do anything different based on what they learn. At O2, we focus on innovation–from the brands we partner with in the delivery of Priority, the types of rewards we offer, when, how and to whom we offer them, and how we communicate them. We strive to improve continuously. As time has progressed, we have got smarter at how we measure, what we track and how we apply those learnings. New technologies are an enabler of this. We use profitability as our key measure and then develop the correct ROI model according the channel and the customer.
Q: The challenge with many loyalty programs today is the complexity and multichannel integration can be significantly more expensive and more difficult to implement than traditional programs. How challenging was that to sell internally or has the investment in your program increased in line with return?
You have to understand the customer opportunity, get the big idea right and then communicate it at the right time in the right place in the right way, using all the tools and technologies you now have available to you. You have to stay on top of the new and emerging technologies and then determine if they are appropriate. The challenge of marketing is the same; it’s just exciting that we have so many new ways to connect with customers, and new ones emerge every day. We stay on top of it, work with experts in the relative areas and then implement what is right for our customers. We also track, measure and learn each time to continuously improve.
Q: How much of the evolution, design or redesign of the program driven is by competitive pressure, voice of the customer, or internal interests? Which of the three has had the most “impact” on your program (based on your internal metrics)?
Our customers are our priority in every sense–we are completely focused on meeting and exceeding their expectations. In the development of Priority we are, of course, sensitive to shifts in the marketplace and competitive pressures, as well as internal interests, but we are always ruled by the voice of the customer.
A great example of this is O2’s film programme. Using customer feedback alongside our business intelligence, we looked at our customer segmentation and their passion areas; this research told us that film was one of the biggest motivators. We therefore built on this popularity and elevated film to more than just popcorn and tickets, by giving customers ultimate VIP experiences that they could only get through O2 Priority.
Q: If you had to narrow it down to one thing, what do you think has led to your program’s success?
Single-minded focus on the customer, always.
Q: What role does personalization play in your strategy? How important do you think it is to nail personalization for a successful loyalty program?
Naturally personalization has to be a key part of any marketing strategy and we personalize based on what we know about our customers from what they tell us and also their behaviour. For example, our ‘Thank-you’ rewards have a personalized approach, and we’ve also introduced a new HTK system to reach our customers via all their communication channels–based on age, location, sex and behaviour.