The Loyalty Podcast
Newscast 2 - Spotlight on GDPR, the UK market & Blind Loyalty
This week Rick Ferguson travels to the European Union for a look into the current state of General Data Protection Regulation compliance, Charlie Hills, of WPP, gives a summary of the UK loyalty market and Amanda Cromhout shares her inspiration for setting up the Blind Loyalty Trust.
- Duration:
- 34m
- Broadcast on:
- 24 Jun 2024
- Audio Format:
- mp3
(upbeat music) - This week's episode of the loyalty newscast is brought to you by Tricycle Marketing. Since 1996, Tricycle Marketing has provided advisory, studios, and technology platform services. Tricycles inside its outboard platform is a proprietary platform as a service loyalty solution. Built from the requirements of 100 plus loyalty implementation, serving retail, entertainment, dining, travel, financial services, and healthcare industries globally. More information, please visit tricyclemarketing.com. (upbeat music) - Hello there, I'm Katie Topping. Welcome to the loyalty newscast with Rick Ferguson, powered by Loyalty Wired. This week on the Loyalty Newscast, we take a look at British loyalty trends and consumer behavior in the UK. We delve deeper into the current state of general data protection regulation compliance in Europe, and we chat to a South African loyalty consultant in a new segment we are calling First Person, which explores the human stories behind the customer loyalty industry. Plus we'll examine as usual the data and join sponsor love. All this and more today on the Loyalty Newscast. And to start us off, here's Rick with this week's Loyalty Headlines. (upbeat music) Welcome to the Loyalty Newscast, I'm Rick Ferguson, and here are your Loyalty Headlines for the week of June 24th, 2024. The big news in tech last week were the headlines emerging from the Apple Worldwide Developers Conference. While there was no shortage of sexy headlines, such as the upcoming marriage of Siri to Apple Intelligence, that's AI for short in case you didn't notice, the loyalty marketers were most excited by the news that the company's latest iOS update will allow discover, synchrony, and Pfizer card holders to redeem rewards online and at the point of sale. And while this move unlocks opportunity for program members who would like to use their points and miles like cash, it also raises a host of questions about where the goodwill from that ability will land, to the card issuers and their co-branded partners, or to the retailers who accept the points as payments. The good news, the Loyalty Economy continues to expand, leaving plenty of goodwill to go around. 2024 Customer Loyalty Management Software Global Market Report, that is a mouthful by the business research company revealed that the market for Loyalty Tech is expected to reach nearly $26 billion by 2028. That's an adjusted growth rate of over 18%. Loyalty Tech Suppliers, get your IPOs ready. Meanwhile in Europe, fashion brand Hugo Boss announced the launch of Hugo Boss XP, a web three enabled reward scheme that will allow members to collect NFTs through their purchases and interactions to unlock exclusive benefits and services. Program will roll out in the UK this summer, and that launch will be followed by a global rollout over the coming years. These were your Loyalty headlines for this week, and if you need me, I'll be at the cleaners picking up my boss, slim fit suit, and a pattern wool blend. As the kids say, that fit is tough. Thanks, Rick, focus in there. Now we introduce Charlie Hills, Mando Connect Head of Strategy for a deep dive in to what British consumers expect from loyalty and reward programs. As Charlie reveals, Brits love Loyalty programs, and the impact of those programs on customer behavior is stronger than ever. - Hello everybody, I'm Charlie Hills from Mando Connect, WPP's Loyalty Specialist Partnerships and Rewards Agency, and Ian and the team have asked me to come and do a quick summary for you of our latest British research, what the British want from Loyalty programs 4.0, which we've released in March 2024. It's hard to tell you everything about the report in four minutes, but I've just picked out a couple of key highlights that I thought you might like to know. So highlight number one, Loyalty membership in Great Britain has skyrocketed in the last two years. We have now got 79%, so that's almost eight in 10 of the British adult population who were members of at least one Loyalty program, and that's significantly increased from when we've done the research in previous years. What we've also seen, however, is as well as that increase in penetration, we've seen a significant increase in the number of programs that Brits are members of. So the average British adult is a member of six Loyalty programs, that's up from four in 2022, and of those six, they are active participants in at least three of them. So a huge demonstration there that people are joining programs, but that those memberships mean something to them and they're using them. Highlight number two is that along with that increase in membership, we've also seen an explosion of love for Loyalty programs. This is a brilliant time to be working in the Loyalty industry. 97% of British adults are fans of at least one Loyalty program and 74% think they're a great way to reward customers for their Loyalty. That's huge, that means that not only are your customers being members of Loyalty programs, they're loving the Loyalty programs that they're a member of and they want more. So really kind of great news for us in Loyalty. What we then looked at was kind of what's the big new news in Loyalty and there's big shifts in sectors. So my highlight number three for you all is to go and look at what's happening in the coffee and restaurant sector. So for as long as we've done the research, the big three sectors have been supermarkets, retail and pharmacy and coffee and restaurants has been quite small, but in the last two years, we've seen a huge increase in investment from that sector in existing programs being redeveloped, but also in new programs being launched, the likes of My McDonald's, the program from Pizza Express, Gail's Bakery. Everybody's out there, KFC rewards arcade, launching really exciting cool new programs. That's meant is that 28% of the British population are now members of at least one coffee or restaurant loyalty program. So that's highlight number three, go check it out. Number four is that brand partnerships is really on the rise in Loyalty programs. It's a particularly interesting time to work in partnerships. In the full white paper, we talk to you about and explain the eight ways that we're seeing Loyalty programs use and partnerships, but top for us is that 63% of British adults want partner rewards from their Loyalty program and partner rewards are a great way of adding variety, treats and also rewards that are much higher value to your members, but that cost you as a Loyalty program own a significantly less to deliver. So that's a big new trend and check out the paper for some great case studies and some great overviews. And then finally, it would be remiss of me not to talk about the impact that Loyalty is having. So we've tracked functional metrics and emotional metrics since we started doing the research in 2018 and we've seen some really strong results this year. So 58.6% of British adults say that as a direct consequence of being a member of the Loyalty program, they shot more often with a brand, 47.6% say they're more loyal to the brand and 43.2% will spend more. So some really strong functional metric impacts. And then it's also really important that we look at emotion. So 48.2% will say they find the brand more appealing when they're a member of its program. 38.9% will recommend that brand more than 31.6 say they are more emotionally connected. So some really strong emotional metrics there as well. So that's my summary of the highlights of the paper. To download the paper, please go to www.mando.co.uk. You'll find it as well as all our previous papers on our website for your reading pleasure. And if you've got any questions, please get in touch. Thank you. (upbeat music) (upbeat music) - In 2018, the European Union implemented the General Data Protection Regulation, GDPR. A set of regulations designed to protect consumer privacy from exploitation by big data tech firms. Six years later, has GDPR lived up to his promise of a privacy utopia. Recently, Rick Ferguson sat down with privacy expert Richard Dutton, managing director at LAAS Partnership to discuss the current state of GDPR compliance. According to Richard, the war for consumer privacy is still in its opening campaign. - Hello, Richard and welcome to the loyalty newscast. - Thanks, Rick. Delighted to be here. So Richard, you have described the battle between big tech companies who see GDPR finds as a parking ticket and the regulator is looking to hold organizations to the regulation as a battle between impunity and accountability, which is, I thought was a great way to describe this conflict. Can you elaborate on this battle? Is six years later, is one side or the other winning the battle? - Well, I think that the last 12 months has seen the FTC enter the battle in the US, demanding a lot more accountability from big tech. It's been one of the big developments, I think, in recent months, because particularly with the advance of AI, big tech is getting more powerful. And it's one of those things where at the moment, we are trying to regulate what everybody calls the attention economy. And yet, with AI, you have the advance of the intimate economy. And we haven't even worked out how to regulate nor enforce the regulation for the attention economy. So I do see that battle is raging and set to rage on certainly over the next couple of years. - So AI, you see, is something that's even gonna make this conflict a little bit more in the forefront. And now US regulators are getting involved, as well as EU regulators who have traditionally been enforcing GDPR. - Yes, 100%. I think that particularly in the EU, with the recent passing of the AI Act, together with a whole bunch of other Acts, Digital Markets Act, Digital Services Act, the Data Governance Act, that the European Union or the European Commission is effectively putting a massive stake in the ground and saying, right, the battle lines are being drawn up. And big tech is going to have to respond. And I think the response that we've seen already is, well, things like Google Analytics being banned from several European countries. Microsoft are under pressure too. Ban 365 has been effectively declared unlawful in a number of countries. So yeah, this is a very, very fluid, but also quite volatile space at the moment. - Certainly sounds that way. And I wonder if by the very nature of some of these big tech companies and the business models, which are predicated on the use of consumer data to extract profit, do you see that they're capable of voluntary compliance or do you see this endless cycle where regulators are going to have to keep clamping down or is there a future where big tech and regulators might be able to work together to protect consumer privacy? - I don't think that's a realistic proposition for collaborating with regulators. I think the stakes are in the ground. The business models of big tech are, because big tech offered everything for free. Certainly when we're looking at the world of Google and Facebook, their whole business models are based around advertising and/or search. I do recall a famous quote by Johnny Ryan from the Irish Council's Civil Liberties that Google's cascading monopolies from search, which flowed down from search into all their other businesses. So I do think, particularly when you look at the likes of YouTube, there is talk about, certainly once the FTC get their teeth into them, them having to divest themselves of YouTube because of the concerns, the antitrust concerns. So no, I mean, this is where, for the future, the battle will rage, but I do think that the individual who is beginning to appreciate their data rights is certainly going to have a say in the outcome of the battle. - I certainly hope so. And that was one of the promises, right, when the EU first started talking about GDPR that at some point, because of these regulations and the compliance of big tech, that consumers would gain more control over their data. They can perhaps even monetize it themselves. You can ask for your data from a company and you can give that data to another company. That hasn't really happened. There doesn't seem on either side to be incentives to make that happen. Do you see a future in which consumers actually have that promise control, or is that a little bit of a pipe dream? - I do actually see there is a promise of that. And for a couple of reasons. I think the first thing is that, clearly one of the things that the GDPR does is it enshrines a number of data rights with the individual. The privacy purists will tell you correctly that you can't own your data. But what you can do is you do have rights over your data. And over the last 80 months, there has been legal precedent certainly in the UK, whereby it is possible and very probable that technology will be available to convert those data rights into an enforceable personal property asset. And in the same way that you can enforce legally somebody breaking into your home or stealing your car as your property assets, you'll be able to enforce your personal data rights as a property asset. So I think that's the first thing that's gonna change. It'll make the lawyers very happy, I think. But the second thing, and I think this is the most important thing when you look at the GDPR and you go back to its creation or its drafting, which actually started as far back I think as 2011. But even if you assume as the drafting got far more closer to the final version in 2014, that was still a decade ago. The key thing here is that the drafters never ever envisaged the individual being the data controller. It always envisaged the corporate entity being the controller. And I think what is really going to make the difference. And this will be, I think, generated by a combination of AI and what many commentators refer to these days as empowerment tech to allow the individual to become the controller and therefore do the negotiating with corporations licensing their data and being able to monetize it that way. And that sounds like a future that may eventually settle into some rules of the road where consumers are benefiting big tech is mostly under control, regulators are keeping an eye on things. That kind of seems to be the best case scenario here, right? - Certainly when you look at the advances technology is making the regulation just isn't keeping up, it can't. There are always technology companies will always stay ahead. But I do think we can't have this discussion without acknowledging the threats that are also out there. It's not just big tech, it's nation states who are the hackers who are looking to compromise personal information. That's where I think also you have that added dimension, that third dimension, where the key thing for every individual is going to be able to prove their identity and particularly online. If we consider, which I think everybody acknowledges, that audio and video content is effectively broken, that's what AI has done, deep fakes, make it really, really challenging to authenticate somebody. So there is going to be a shift there, seen some great technology at the moment while your face may be able to be impersonated. The one thing that can't be is the palm of your hand. And that will be a very interesting way to see if you can authenticate yourself, not just online, but obviously for a payment as well. - So technology will always outpace things, but eventually the regulations will catch up. Thank you for your time, Richard. Really appreciate you taking the time to discuss this important topic with us. And I'm sure we will be talking with you again. - Look forward to it. Thanks, Rick. (upbeat music) - Hi, this is Rick Ferguson and this is Sponsor Love, our regular segment highlighting the loyalty leaders who make this newscast possible. I'm speaking to you from a quaint seaside motel in Santa Monica, California. Technically, I'm on vacation. But I had such a great conversation with Michael Hemsey of Tricycle Marketing this morning that I wanted to share it with you right away. In part one of our conversation, Michael describes a shift underway in the utilization of loyalty platforms to solve enterprise business issues. Joining me today is Michael Hemsey, CEO and co-founder of Tricycle Marketing. Welcome to the program, Michael. - Thank you, Rick. Morning, it's a pleasure to be here with you. - Michael, you've talked about a shift both in the requirements and utilization of loyalty platforms to solve problems not typically associated with a traditional loyalty platform implementation or ongoing management. You describe the shift from traditional business to consumer loyalty program enablement or B2C, to clients more focused on their business to business or B2B needs. Can you elaborate on what you mean by this shift? - Absolutely, Rick. But if you think about where the focus has been, let's say over the last 10 years, most brands were interested in standing up their business to consume or value proposition. The solutions in market were very similar over time and that served very well. And the SaaS model for loyalty platform was born. What I've seen over the last two years in particular is a shift in the focus from standing up the value propositions for consumers. And instead the brands that are looking at loyalty platform tech and wanting to understand what's new out there are almost far more concerned now about the B2B side of the house. What about their partners? What about their extended relationships? What about their different business units? What about their investment in AI? What about their new channels? What about their infrastructure? What about their growing solution architecture? And what about moving it on-prem? So the requirements that we've seen have been really focused on what has been the more complex side of the house, if you will, implementations either succeed or fall apart at that quote integration layer. And so I find that very interesting. And then number two, the utility of the platform has expanded beyond a traditional B2C value prop. And instead we're being asked to understand how can the value prop and the platform help their employees or sales enablement? Or media buying? And so they're taking that same loyalty tech and expanding it across the funnel and leveraging those capabilities in new and interesting ways. I understand. And I wonder what this shift means in practical terms. You've discussed leveraging the tools of a loyalty platform for sales enablement, media buying, partner client integration, channel management, and so forth. Let's talk about the example of the client focused on sales enablement, creating and facilitating the sales journey for their organization. How can the tools of a loyalty platform help this journey? Yeah, it's a great question. So when you think of what loyalty platforms do independent of CRM or similar systems, one of the core differentiators is that they have the ability to mint currency. And that currency could have value, could have different values. There could be multiple currencies. And the currency could have no value. The loyalty platforms are installed and integrated to be able to respond in real time or near real time and to enable a journey that someone is set forth right away. So when you think about a consumer journey from becoming a prospect to a lead, to a customer, to a loyal customer, so too have brands looked at their sales team as an example and said what journey are they going on with respect to the process, the content, the tools, the conversations, the follow up, and ultimately the outcome of sales. So one example is a large medical manufacturer, J&J, who took a look at their Salesforce and they have a variety of divisions and a variety of tools. And they wanted to reimagine what it would be like to leverage a platform to help them with their sales enablement journey. It took two flavors. One was to redesign the front end tools that the sales team used. And on the back end, they wanted to plug that tool into a loyalty platform so that first, they could understand what the journey looked like. Where was the sales team spending time? Where were they not spending time? Where were they following the process? Where did they go off the process? Where did it maybe stall? And where did it lead to a sale? So all of this without ever minting a single piece of currency, they are looking to the loyalty platform to help them first understand what that journey is producing. And then number two, to leverage the fact that you can mend currency to perhaps inspire people to continue along that journey. That was part one of my interview with Michael Hemsey, a tricycle marketing about the loyalty platform shift. We'll bring you part two in an upcoming episode. If you'd like to learn more, DM me, Rick Ferguson on LinkedIn, and I'll connect you with Michael directly. Or you can learn more at tricyclemarketing.com. Thanks for listening to sponsor love. (upbeat music) (upbeat music) And now it's time to look at the data, the numbers and metrics that matter most to the global loyalty industry. This week, we're turning our attention to the current state of the European Union's General Data Protection Regulation, or GDPR. Roughly six years since GDPR went to effect, just how serious are the regulators? Let's dive into the numbers. On its face, GDPR appears to have lived up to its promise of holding tech firms accountable. Since the law's introduction, European regulators have levied over four billion euros and fines and over 2.3 billion euros in 2023 alone. More than the three previous years combined. Here are the top 10 GDPR fines imposed thus far as recorded by data privacymanager.net. Meta, or the company formerly known as Facebook, has been the biggest scoff law with the groundbreaking fine of 1.2 billion euros levied in 2023. The company takes up five of the top 10 slots but fines of 405 million, 390 million, 265 million, and 60 million euros. At number two, stands Amazon with a fine of 746 million euros levied in September of 2022. In the number five slot, TikTok was levied at 345 million euro fine. WhatsApp holds the number seven slot with a 225 million euro penalty. Alphabet's European subsidiaries Google LLC in France and Google Ireland hold the eighth and ninth slots with 90 million and 60 million euro fines respectively. You'll have noticed that the violators are all with the exception of TikTok, the usual Silicon Valley suspects. The largest fine levied against a European company, Paris based digital marketing firm Critio, which received a 40 million euro fine in June of 2023. The number and recency of these fines tells us that A, EU regulators are serious about GDPR and B, Mark Zuckerberg has been a very naughty boy. And that is our look at the data for this week. We'll see you here next time. (upbeat music) (dramatic music) (dramatic music) And now we'd like to introduce you to a new regular feature here on the Loyalty Newscast. First person, which is a look at the human stories behind the customer loyalty industry. This month, Rick Ferguson shares the story of Amanda Cromhout, a South African loyalty consultant whose personal medical journey has led her on a path to change the lives of disadvantaged South Africans. Here's Rick. (gentle music) - The story of blind loyalty begins with a sudden and terrifying health scare. The kind of scare that comes out of nowhere and utterly capsizes your life. Here's Amanda Cromhout. When did you first notice that you were having a problem and what happened after that? - So Rick, it's quite an alarming story in terms of how it started because on the 8th of March 2022, I was perfectly fine. No indication whatsoever of anything. And then overnight, I literally in the middle of the night remember thinking something's scratchy in my eye and I rubbed it violently, probably. And then on the 9th of March, I woke up and from that point on, I had three months of utterly terrifying pain. I couldn't open my eye and it just then went, I went through a series of diagnostics to check what it was. No one could identify it. - It took nearly a month of tests before Amanda bound a doctor who diagnosed her with eusarium curatitis, a rare fungal eye infection, resistant to treatment. Without an emergency corneal transplant, Amanda might have lost her right eye. Two transplants later, she faced a long road to recovery. - But the most terrifying thing was is I literally could not see, and I couldn't even have a light on us. I lay in complete darkness with a throbbing pain like someone drilling through my brain for pretty much three months. So I was off work and just in complete darkness trying to further them out if I was ever gonna see again. Amanda was lucky, she's a working professional with good health insurance. Because of her financial means, her surgeon was able to save her right eye. But in a country in which 85% of the population has no health insurance and is forced to rely on an overtaxed public healthcare system, Amanda realized that other South Africans suffering from debilitating eye conditions might not be so lucky. - And I could afford all of the medical treatment he needed me to have at the drop of a hat because I was highly insured through medical insurance. And then if anything fell outside of that insurance, I could find the funds to cover it. And there was quite a bit that still fell outside of the insurance. But literally at the drop of a hat, he would say tomorrow, not quite tomorrow, but when as soon as the transplant to the donor, cornea can get here, I need to do a transplant, otherwise you're gonna lose your eye. And he could do that because I was insured. And I said to him, how on earth does the average human being who may not be insured quite so heavily? Or may not have disposable income to find the funds survivors? Because I could barely lift my head off the pillow. The pain is so bad. And he said they would have to ultimately remove the eye. - And so, out of our own harrowing experience, Amanda Crum helped founded the Blind Loyalty Trust, which raises funds to be used for ophthalmology procedures for South Africans lacking the means that Amanda enjoys. Her corneal surgeon is now one of the trustees. He performs procedures pro bono for at-need patients with hard surgical costs covered by the trust. - Yeah, we have already, which is fantastic. So the trust has been set up for about a year now. And we spent the first year raising funds, and I can take you through how we raise funds. And that really is the tie back to the loyalty industry. And now we've just started literally in the last few months spending the funds on individuals who have been identified where we can really make a difference. So we've helped a young boy in Johannesburg. He's 15 years old, the same age as my own children. He literally can't study. He can't see. So his mother is a domestic worker. There's no way she can afford the care he needs. So he's having his second operation, actually, as this next week, he had his first operation in January. And then we've been into rural South Africa last month and saved the eyesight of 23 individuals. - That's amazing. And I'm sure it's very gratifying. And then the other outcome of the medical scare you had was it led to the writing of your book, Blind Loyalty, which is a book about loyalty marketing. And I'm curious about the process by which you decided, okay, I have this book, I'd like to write it. I'd like to donate the proceeds of charity. And I'd like this to kind of tie everything together, to write what you went through, how you're helping people and your profession, which is loyalty marketing consultant. Can you kind of explain that process and how the book was the output of that? - Yes, so I've been intending to write a book about loyalty for years. And it's the start of the book, Blind Loyalty. I explained, I never got round to it. And the reason I never got round to it, I was like, who wants to read a book on loyalty? We're all loyalty professionals, but we're all so busy. So what came out of my three months lying in complete darkness, when I couldn't read, I couldn't watch any Netflix or anything, couldn't distract myself, was a lot of thinking. And I thought at the time, I need to write sound bites, like a quick three minute read per subject on loyalty. And came up easily, came up with 101 loyalty concepts. Amanda donates all proceeds from the sales of her book to the trust, and she has quantified the impact every 10 books sold can save the sight of a disadvantaged South African. And if you're a loyalty program operator with a charitable redemption option, then you can make an even bigger impact by integrating the Blind Loyalty Trust as a reduction partner. - But I really have, what's come out of this personally for me is when you feel in your stomach that gut reaction of you can combine your professional life with doing something else for good. It makes everything else so much more rewarding and enriching. So the Truth Team support this. It's a zero cost charity. We just do this because it's the right thing to do. And it makes our work and our job so much more fulfilling. So if you've got that burning feeling in your stomach, no matter what career you're in, run towards it and make a difference for yourself and for others. We couldn't think of a better definition of the virtuous circle. So it's a great example that you've set. And I'm sure that the trust will continue to make a difference in the lives of the people that it touches. So thank you so much. And we look forward to hearing more of your story at some point in the near future. - Thanks so much. Thanks, Rick. - Join us for podcast 65 out on the 1st of July where we compare customers changing needs from two different sides of the planet by comparing the findings of customer research from Australia and the UK. Here's a quick extract of some of the key findings. - Male audiences and also slightly younger kind of gen Z, gender graphics. Those two audiences have had a big increase as well. And they've been typically quite hard to reach for us in the UK. - So it's really interesting to see that we as marketers might be jumping on the personalization bandwagon. But consumers, if you ask them to rank, they want value, simplicity and then personal. That loyalty has really kind of skyrocketed. It's everywhere. Membership and activity have just massively increased. And I think, and two of the big code learnings again, we saw in this paper is that actually brands are looking to kind of utilize those brand partnerships and also multi promotions to help them achieve more for less. - So join me, Ian Pringle and loyalty experts, Adam Posner and James Davis for podcast 65 out on Monday, wherever you listen. (upbeat music) (upbeat music) - And that wraps things up for this edition of the loyalty newscast. On behalf of Rick Ferguson and Ian Pringle, we'd like to thank you for listening. Do good work and stay in touch. I'm Katie Topping and I'll see you next time on the loyalty newscast, powered by loyalty mind. (upbeat music) (upbeat music) (upbeat music) (upbeat music) [MUSIC PLAYING]