#422: Understanding Loyalty in Europe - Getting to know VeryMe Rewards from Vodafone
Pete is the Head of Loyalty for Vodafone in the United Kingdom. He is an experienced senior commercial manager with a proven track record across the telecommunications industry
Pete is a key contributor to the “Understanding Loyalty in Europe” White Paper created by Mando-Connect in partnership with YouGov, which explores loyalty membership, appeal and impact across 24 European Markets.
Listen to learn what makes VeryMe Rewards from Vodafone an award-winning programme, what Pete’s favourite loyalty programmes are and what’s coming next!
Hosted by Charlie Hills.
Paula: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m Paula Thomas, the Founder and CEO of Let’s Talk Loyalty. Today’s episode is hosted by Charlie Hills, Managing Director of Mando-Connect, a UK-based agency that uses smart data to create brilliant partnerships and rewards that really work.
If you work in loyalty marketing, make sure to join Let’s Talk Loyalty every Tuesday, every Wednesday, and every Thursday to learn the latest ideas from loyalty experts around the world.
This episode is brought to you by Collinson, worldwide leaders in customer engagement and loyalty, creating an orchestrating customer engagement and loyalty initiatives and programs for some of the world’s biggest brands in travel, retail, and financial services doing it globally for over 30 years.
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Charlie: Hello and welcome to episode 422 of Let’s Talk Loyalty. I’m Charlie Hills, the Managing Director and Head of Strategy for Mando-Connect, WPP’s Loyalty Specialist Partnerships and Rewards agency. We have created a new white paper in partnership with YouGov that explores loyalty, membership appeal, and impact across 24 European markets.
And I’m delighted to be hosting a series of six podcasts with some of the experts featured in the paper to help listeners better understand loyalty across Europe.
Today, I am delighted to welcome Pete O’Donnell. Pete is the Head of Loyalty for Vodafone in the United Kingdom, leading the development and delivery of VeryMe Rewards from Vodafone. He’s an experienced Senior Commercial Manager with a proven track record across the telecommunications industry. He’s commercially driven with a keen focus on customer insights, campaign effectiveness based segmentation, and commercial efficiencies, ensuring that customers get the right offer in the right way at the right time.
He has provided the expert commentary on VeryMe Rewards from Vodafone in the white paper. Today we will be learning about Pete’s favorite loyalty programs, about VeryMe, rewards from Vodafone, and what the future holds. I hope you enjoy our conversation today.
So hi Pete, and welcome to Let’s Talk Loyalty. We’re absolutely thrilled to have you here with us today.
Peter: Oh, thank you for having me.
Charlie: You are very welcome. I’m gonna go straight into it without any further ado, really, Paula’s favorite, favorite question. Tell us about your favorite loyalty program. What inspires you? What’s out there that’s good?
Peter: So the loyalty program, I suppose, I love the most and likely use the most is the BA (British Airways) Avios program. So I use it in my day-to-day life. So I collect points, obviously, on my credit card and everything else. But what I love about it the most is that I can use those points to do various things.
So whether it’s book a flight, upgrade on a flight or even use, them towards the wine flyer, which is the new kind of innovation from BA, I really, really love it. What I also love is that I can make my money work harder for me, so I link my other cards to my HSBC my Revolut. So every time I spend on those, I also gather points, whether it’s on Uber or Deliveroo. It’s really, really useful.
And lastly, what I really love about it is, and what my most favorite thing is when I’m booking a holiday. For every pound I spend on booking.com, I get eight Avios. So that really, really helped because I pay the same price as normally would if I went to the hotel, but what I’m doing is I’m really doubling down on my on value. So I love it. I’m in the app every single day looking at my points balance, trying to get more upgrades. So, yeah, it’s my, definitely my favorite loyalty program.
Charlie: Oh, that’s awesome. You’re like a loyalty programs dream, right? That’s literally ticking off every single behavior and attitude that they wanna see. Linking all the partners, linking all the credit cards, and the new wine fire thing is really fantastic. I was particularly thrilled ’cause they’ve just launched a new partnership with Whispering Angel as part of that. I was like, oh, it’s gonna be good for the summer. So I think, yeah. All our listeners are gonna completely agree that that is one of the best loyalty programs out there.
You know, one of the biggest and just such a brilliant partner network to bring value back to their customers. I mean, obviously it’s a nice link into the industry as well. It’s one of the biggest programs, one of the most famous here. How did you end up working in loyalty? What’s your background? What got you here?
Peter: So, I’ve had an interesting background. So I’ve worked in telco since I left university many, many moons ago, but in different, in different forms. So I’ve worked in heavily commercial roles throughout my, kind of past 10 years within the telco industry. But most recently before I took over as the loyalty position in Vodafone. I was working with Apple and Samsung. So looking after those really, really big partnerships that we have with those brands.
And with Vodafone, they’re really important to us. They’re key moments in our, in our customers lives. They’re key moments in Vodafones, annual kind of performance as well.
So kind of a very different pivot in my career when I moved into the loyalty space. But what I didn’t really appreciate at the time was that there was loads of hidden crossover. You know, when we talk to a customer about buying a new phone, or upgrading a plan or taking some Apple services, you still have the same kind of intention when you’re trying to offer them loyalty and offer them rewards as well. So there’s been loads of crossover, which has been really, really exciting.
And also, I think what is nice as well is that I bring a really commercial aspect to the loyalty program and a different lens, to maybe a traditional marketer that would’ve been a loyalty. So that has probably a lot of benefits, but also I can be a bit rigorous on the numbers as well, maybe too much. But yeah, that is where I’ve kind of my journey so far.
Charlie: That’s a great way in. I think that’s one of the nicest things about the industry actually. They’re so transferable into all those other disciplines and everybody we interview on the podcast has come into it from different ways.
Although it is interesting to see that commercial focus in your personal life and how you use the program with BA as well as applying that to VeryMe Rewards from Vodafone.
And I’m hoping that most of our listeners are really familiar with the program. It won best in Western Europe last year. It’s a constant feature on the circuit and kind of one of the most well regarded programs. For those few that probably don’t know much about it, do you want to tell our listeners about what VeryMe Rewards from Vodafone is?
Peter: Yes, sure. So VeryMe is the rewards program that we have at Vodafone that’s there to help the brand build genuine and meaningful, loyal relationships with our customers. In a really, really tough telco market, like the UK market is really, really competitive. So it’s really, really important that we build relationships with our customers throughout their tenure with us, and hopefully they recontract and stay with Vodafone for a long time.
As you’ve mentioned, the program is award winning, so I think we won some awards in 2018 and obviously won the best in Western Europe last year, and we are five years old in November. So quite a milestone. For us, in November, which is really, really exciting.
From kind of a rewards point of view, we structure our rewards in, in kind of a different, in a kind of hierarchy. We really focus on kind of the everyday essential rewards for customers, making sure that customers get value, whether it’s a free coffee or they get five pounds off of their local kind of Sainsbury’s or Mars. And then as we go through the hierarchy, we kind of have more always on rewards, which is, kind of 20% off your just eats or seven pounds cinema tickets. So we like that value as well as a core always on proposition.
And then we have the really exciting stuff, which is the free giveaways that we have within our brand. So we have loads of really exciting, sponsorship opportunities within, within Vodafone. And this year we’ve been giving away tickets to Glastonbury, British Summertime, Wimbledon, Kendal Calling, Mighty Hoopla. And we’re about to start giving away tickets as well to the Rugby Series.
So there should be something for everyone within our program, whether you just wanna save on your coffee when you’re walking down the street, or you want a really, really nice day out. There’s something there for everyone on our program.
Charlie: Yeah, I think that’s one of the things that it’s really admired for in the marketplace. And I’m sure all our listeners will be thinking actually, how can I apply that insight to my own program? It’s that hierarchy of rewards that you are thinking about, but also that breadth of, you know, a genuine ambition to connect people to what they love.
What do you think sets VeryMe apart? Because as you say, it’s, you know, it’s one of the most competitive telco markets in the world from the telco side, but also on the loyalty side. Like, why do you think it’s been so successful?
Peter: I think what’s made it really, really successful is probably goes back to the sponsorship point, is that we’ve really began to leverage that because what we’re trying to do is give our customers really unique experiences and days out.
So we have Kids Pass, which is an always on offer, which allows up to 50% off and days out for families, and that’s really, really important to us. A big part of our business is the family, the household, and we’re really focused on that, but also laddering on top of that, does money can’t buy experiences.
When you go to Glastonbury, go to see Men’s Final at Wimbledon Center Court, you know, or you want to go to see Pink or Bruce Springs Senior on this summer in, in Hyde Park. It’s that really money can’t buy experience, which we love. But also it’s really bringing that family together, feeling that connection as one of our brand values and in keeping everyone, I suppose, connected.
Charlie: Yeah. And I think that warmth and kind of genuine desire to give stuff people that they really love doing really comes through in the program. I think, you know, when we compare it to the norm and where loyalty programs were 10 years ago, you know, just points, programs, giving away points, giving away transactional maths and kind of hard cash and cashback offers to their customers.
I think VeryMe just kind of seems a world apart from that. How do you figure out what it is exactly that your customers want? Because that’s such a broad range, right? From tickets at Glastonbury to a free coffee. How on earth do you do that as a program?
Peter: Good question. This is where the commercial brain comes in. The part I love, and I know you’re a big fan of insight and data as well. We have a big insight and data team at Vodafone. So we analyze all our campaigns, that everything that goes on, but we look for third party input as well. We carry out focus groups, and we just recently done one across the Vodafone group, and that was really interesting to see kind of different aspects from different countries and different perceptions of loyalty programs.
We also have in-app reward rating as well, which is really, really good indicator. It’s kind of a good litmus test for us to know, right? Is this offer really performing or is this offer really not performing. Do people love it? Do people not like it? So we have that at the bottom of all our rewards, and that is a really, really good indicator that we’re on the money. People like it, people want it.
So that’s kind of what we do. We look at every, every campaign and we split that into as well, how do we target our non-users? How do we target our active users? And how do you target our laps customers? Customers who were on our platform and haven’t really engaged in a while?
And we treat them all really differently. We use different language, we use different methodologies and communication to really kind of engage with those customers and hopefully use that data and insight to re-engage them or actually onboard new customers onto our platform as well.
Charlie: Yeah, I love that complexity that sits behind it. Because the consumers and the members don’t see any of that, do they? They just see the rewards that are relevant to them presented in the way that’s relevant to them. And I think that’s probably the holy grail for loyalty programs everywhere. How do we all get it right but then actually present that really simple user experience to the customers.
Charlie: It’s interesting that you talk as well about that input from Vodafone Group and all the other different markets that you are in and all the other kind of programs that the Vodafone operate around the world. I know that was one of the things that inspired us when we were first talking about that European Loyalty White Paper that we published this year, understanding Loyalty in Europe.
And I know it’s certainly how I convinced you to be one of our three deep dive case studies in it along with Marriott and Samsung. What did you like about that paper? What did you learn from that paper? Obviously, as well as the fact that VeryMe’s a great program and everyone across Europe should be learning about it. But what did you see? What were the things that really stood out for you?
Peter: I think the one bit that really stood out to me was the piece around the loyalty appeal and how that varied across different markets. I think the UK had the highest loyalty appeal, which is up around 70%. So that was customers who think, yes, everyone should offer a loyalty program, I thought brilliant. Everyone’s kind of we’re a long way there. People think loyalty probs are good.
But what really surprised me and has really kind of got me thinking as to how we take it away and action, kind of use that insight and create a plan, is that when you look down at the number of customers who actually convert and actually sign up to a loyalty program when they’re given the opportunity is only 35%. So that’s half of the people. So yes, they think loyalty programs are great, but when you actually give ’em the opportunity, only half of them converting.
So I think there’s a really big piece of work that we need to do as an industry to understand how do you convert customers better? They are warm. So they do like loyalty programs, but how do you increase that conversion? So a hundred percent of that, of those customers are all signing up at the same time.
And within Vodafone, we’ve taken some of the insight away and actually we’ve started to look at how we onboard customers and the journeys those customers actually go through, because I think it’s really, really important that when someone is onboarding onto your platform, you need to be telling or kind of outlining the benefits of that, of your platform, and why customers should join, but in a really nice storytelling way.
So you need to make it really relevant, make the language like really colloquial that they understand that it’s really, really simplistic. You know, why should I sign up? Well, when you’re on the move, we could give you a reward if you’re near a local shop. Really simple, rather than kind of a complex message.
So I think we’ve done that and we’ve actually seen really, really good results around simplifying the journey. Making sure we’re telling a story as to how it benefits the customers throughout the whole journey. And we’ve seen great results from it. And I think it’s really important that you do showcase that value in that journey when someone is signing up.
So I think that was probably the most interesting piece and I think it’s really kind of put a fire under me to go, right, we need to, to do a lot more in that space of maximizing that opportunity when customers are presented with loyalty program.
Charlie: That’s really interesting. A lot of the programs we’ve been talking to have actually have really pulled that out. And the ones that are kind of on a pan-European level are like, oh, I can sit back in Poland. This is great. They’ll just join. But actually a lot of brands have then sat back on actually, how can I improve that journey? And it’s that balance, isn’t it? The big tension in loyalty at the moment. It’s how can I learn about my customers a lot very quickly and give them what they want, but also not overwhelm them as part of the signup process.
We’ve seen a big move away from preferencing, for example, as part of the signup process. And actually just get them in there, get them seeing the benefits of the program, and then tailor as you go. So yeah, I think that’s a really good insight across the whole industry actually. What can you do, in onboarding and engaging them? You know, every sector has its different time period, but you know, 12 weeks is really key, isn’t it, in that first three months to really get them on board and active.
Peter: Yeah, 100%. And also, another point we’ve looked at is now we’re looking at channels. So what channels actually on board? Obviously, we have a retail presence, we have an online presence, we have a telesales presence and we’ve loads of indirect partners that sell our products as well. And it’s really interesting kind of the mix of those and kind of the ones where there’s lease human interaction, there’s actually good conversion and there’s less when there’s some human interaction.
So it’s really interesting when you actually go down a level and understand like which channels are really driving the people into you and which which aren’t. It presents a great opportunity for us to understand, figure out the why.
Why, why is this happening? And then how do you kind of bring everyone in line and create new baseline? So I think really, really interesting. That’s me getting writing under the data and under the carbon there.
Charlie: But it’s awesome. Right? I think that was one of my big observations from The Loyalty Summit that I attended in March, looking at the power of The twin program. So actually the program that’s for your members, but actually what are you doing behind the scenes, across those channels and across your different internal stakeholders to actually get them to become champions for the program and then drive that sign up and get people using it.
It’s quite different in the telco market actually thinking about it versus sort of retail. It’s not like you’ve got people walking into a supermarket once or twice a week, or the hotel industry where somebody is, you know, checking in either now, you know, just through the app or through a front desk. So I think one of the other big trends that we’re seeing in the industry at the moment is about tailoring the contents of the program for different audiences.
I know you’ve already talked about the different stages in the journey as you go through the program and tailoring and the hierarchy of rewards. But how do you tailor the approach for the different sort of segments that you have within the program?
Peter: Yeah, really, really good question. So, obviously we’ve got a wide range of customers across our portfolio within Vodafone.
I suppose those customers that kind of are on a mid-range tariff within Vodafone. They really love our giveaways. They love our five pound vouchers, they love their free Costas. And they like, those everyday essentials. But when we look at kind of customers that are on the high end tariffs, it’s very, very different.
Those customers love experiences. They love days out like the Lion King. They like days out with Kids Pass, they love, going to the Rugby or Wimbledon and everything else. Kind of exciting that brings the whole family together. So it’s really interesting that we’ve kind of used that insight to now tailor where we’re going as a brand and how we talk to the different cohorts of customers.
Really the test is when we think one size fits all. And so we’re trying to really segment the base to make sure that every message we give to someone is really, really relevant. And how does that kind of play out for the different cohorts of customers And, and kind of on top of that as well.
One piece that I’ve started unpick and kind of in our reward strategy is that, the kind of covid situation’s really changed kind of the landscape of the UK geographically. So less people are in the offices, more people left kind of those heavy populous areas like London, Manchester, Birmingham, and they’ve kind of moved out to quieter areas. So it’s really important that when we now look for rewards, and the trend I’m seeing is that we need rewards that are kind of really location agnostic so customers can still get a delivery.
So they might get 20% off a really big brand, but someone who’s living in Cornwall or someone who’s living in the Scott Highlands can still exactly can benefit from that reward. And that is a really, really big focus of mine is to make sure that we can. We don’t discriminate against anyone based in the location that their rewards are applicable to as many people as possible within our base.
Charlie: And I think that’s another really great example for the listeners in VeryMe, sort of pivoting to what its audience needs and the truth about their lives and their lifestyles, rather than a sort of one sit side fits. One size fits all. We’ve done it this way for sort of five years as you come up to your fifth birthday.
You know, certainly the program was lauded during the lockdown periods because actually the full reward portfolio then pivoted to digital at home rewards. And then, you know, as we eventually sort of move back into this new normal, you’ve now got this real hybrid. So I think that’s definitely something to look out for, for all our listeners and kind of admire in the program.
That other piece that you talked about there, about learning more about your customers and then transferring that back to the business. I know that’s something that Vodafone really values through VeryMe. Actually as well, understanding your customers more through the program.
But, but how important is Vodafone VeryMe, within the enormous Vodafone brand, I imagine, you know, it’s a very small part of a very big beast. You know, where do you sit? What works?
Peter: It’s a small team within a very big beast, but we bring a lot of value. So if you think the differentiation between like customer who’s on Nectar or Clubcard, they’re making regular transactions on a weekly basis. And the difference I suppose, between a Telco loyalty program is that we contract people for maybe 12, 24 months, 36 months on a contract, and a loyalty program is a brilliant way to be able to keep in contact with those customers as they’re progressing through their contract.
We’re not trying to sell you more things. We’re just actually trying to unlock more value for you, and that has become a really, really important part of our business. You know, it’s, it’s important that we talk to the customers, we give them value and we kind of communicate and be like, we know you’re there. We haven’t forgotten about you, and here’s some great offers.
It is really, really competitive as well within the market, as we’ve kind of alluded to already. And at Vodafone we’re really, really focused on the why Vodafone? So from an acquisition perspective, from new customers joining Vodafone, we have a really big mantra around why Vodafone, so why should you come to Vodafone?
And VeryMe forms a very big part of that. So we’d also have our 5G award-winning network in the Why Vodafone section, which gives co customers great coverage. But also you have the VeryMe part, which tells them about the great value they unlock whilst they’re Vodafone customer. So if you go on a website and you go through a journey, you’ll see VeryMe front and center because it does tell that story of great value, great rewards. This is why you should come to us. So it’s really, really important.
And I think as well to the wider business, it also really, really helps with NPS. It makes sure it reduces churn also. So it’s really, really important that people who are on our loyalty program and are redeeming their happier customers and they’re more likely to stay with Vodafone as well. So it’s a core part of our business. Even though there’s only a team of 13 of us, we’re a very big part of the Vodafone Business.
Charlie: I know. I think that’s one of the things I’ve loved, observing since the program was started. You know, as you approach year five, you know, you started very much as a project, and then actually, the profile of the program and the impact of the program internally as well as externally has just grown exponentially in the last well just over four years.
So it’s a really interesting journey to watch in programs and how they actually kind of move up the hierarchy. It’s been a common theme actually in some of the other podcasts that we’ve done actually about that internal impact and recognition almost being as important as the external.
What about, I’m sure it’s not all been easy, I’m sure it’s not all been a success, you know, what are some of the biggest challenges that you faced? And then how did you go about addressing those?
Peter: Yeah, really, really good question. I think the challenges are always there, but there’s probably one that sticks out the most is that consumers want more value as costs are going up.
But equally, I think what consumers sometimes don’t appreciate is that vodafone’s costs are also going up as a business. It affects businesses and consumers at the same time. So it’s been a big challenge to try and balance that and ensure we’re still offering customers great value, but we’re also managing our costs as the business.
And I suppose what we’ve done is really, really, I think I’m really proud of it. It’s using my old job and my new job, and kind of leveraging those really big relationships we have within Vodafone to actually try to unlock more value for our customers.
So with Samsung, we had a really good discussion with them and we actually unlocked a really good discount on TVs, fridges and washing machines for our customers. That was an existing relationship, and I approached ’em. I said, oh, whichever chance to support in our loyalty program. And it was a really easy yes, because they knew the brand, they knew the customers. They knew their customers have Samsung phones, and also it was a good opportunity for them to get their products into it, in households across the UK.
So we’re really leveraging those existing relationships in our business to try and see how can we get more value of those to give our customers everyday rewards. Equally, we have great partnerships with Wimbledon, with Glastonbury and everything else. And what we’ve done is we’ve actually partnered with their partners.
So you can imagine we’re one sponsorship or partner of their event, but we’ve actually been speaking with Lavazza who are co-sponsor at Wimbledon, and we’ve actually created this synergy where we’re both kind of unlocking value for each other as well.
So it’s really, really, I’m really proud of how my team have kind of done that and kind of, kind of overcome that big challenge by just thinking really laterally instead of kind of stop looking at rewards and kind of sit up and look around the business and see where else could we kind of maximize our relationships. Because we have to imagine we have hundreds of partners and relationships across the whole business. So it was really clever to be like, kind of low hanging of fruit and utilizing that and maximizing it for the most.
Charlie: Yeah, and I think, you know, partnerships have long been employed in loyalty for that exact reason to unlock more value. You know, when two brands are contributing, of course you can do more for less.
But actually I think what really stands out for the program is you’re creating sort of rich and meaningful rewards and offers as well. And also on a personal note, I actually own a Samsung fridge, a Samsung frame, and a Samsung washing machine. And they are excellent, especially the eco mode on the washing machine, which, given the, the amount, amount of stuff that my kids can create is just absolutely lifesaving. So a really lovely partnership there. And, you know, a case study of a mom of two who just loves that, you know, the value you can get from Vodafone and from Samsung all in one.
What are the most important lessons you’ve learned since you’ve been in this role?
Peter: I think one of the most important lessons I’ve learned is lead with the data. Let the data lead you and use the data to let you lead you. Everyone has an opinion about a reward. Everyone has their own preferences and their own personal preference around brands and goods and everything else. And I think one of the biggest learnings I had when kind of I came into this role for the first kind of three months was it was a big learning curve to be like, yes, there’s 10 people sitting in the office in London, but we’re not representative of our base, we have, you know, millions of customers on the Vodafone base. And 10 people doesn’t equate to millions.
So it’s really, really important to, yes, voice your opinion, have an idea around brands we should be actually targeting and what our customers like. But you really need to get the data to back all that up because if you don’t, then I think you can kind of, you could probably go a bit wrong on where you’re going as a loyalty program, if you kind of, you allow 10 people to influence the, the future of, of where it’s going from a reward perspective.
And I think the biggest learn to have is you have to put your customer first, understand what they want, what excites them, and then build their plan around their expectations.
Charlie: I think that’s really nice. And I hope that all our listeners are nodding as they hear that. Where do you get that insight from? You know, what resources do you rely on, you know, internally and externally, to bring that kind of insight engine to life for VeryMe?
Peter: So we have, obviously we’re part to Vodafone, so we have Vodafone groups, so we have the luxury of having a loyalty presence acro