It isn't often that we get a fresh round of insights from one of the founding fathers of loyalty marketing. That's why we were so excited to see the latest interview from Air Miles founder Sir Keith Mills in the latest edition of UK's Marketing Week. The wide-ranging interview finds Sir Keith still bullish on the power of loyalty marketing - and its ability to build personalized, relevant, value-added relationships with best customers.
By Rick Ferguson
When we say "founding father" of loyalty, we aren't kidding. Sir Keith Mills invented the coalition model of loyalty by leading the team that created Air Miles in the United Kingdom in 1988 - and built a database of three million Air Miles collectors in the first three months of operation. Mills later replicated his success by launching Air Miles Canada in 1992 and the Nectar Card in 2002, thereby proving the durability and power of the multi-merchant loyalty coalition. If that accomplishment wasn't enough, he was knighted by the Queen in 2006 for his efforts in bringing the Olympic Games to London in 2012.
So when Sir Keith Mills speaks, loyalty marketers should listen. You can read the full Marketing Week interview here; in the meantime, here are a few key quotes from Sir Keith.
On lessons retailers can learn from Amazon:
"Retailers need to move towards a more Amazon-like relationship with customers, and to do that they need data. Creating customer propositions on a one-to-one basis works very effectively online with companies like Amazon. Offline retailers need to be able to do what Amazon do online with the normal shopping experience."
On the importance of data and insight to marketing:
"If data and insight can help you tailor your proposition on a one-to-one basis with the consumer then 'see your best return. In the future, the one-size-fits-all model won't provide companies with the same sorts of returns. You might as well do mass marketing."
On the limits of discounting:
"There is clearly a subset of any consumer market driven primarily by price, but that's by no means the majority. In all the work we've done we've found 15-25 percent of any consumer group are promotionally sensitive to an offer, but the majority want good value and that can be determined in a number of different ways."
On the competitive advantage of customer insight:
"I find it interesting to see companies like Asda that don't believe it's necessary to collect information on customers so they can create better products and services for them. I suppose it's a Walmart culture. When I came into marketing we didn't know how profitable our customers were, but now you can look at any customer in a major loyalty program and determine what their profitability is, and whether you are getting more or less of their business. That's an incredibly unique position to be in. If advertisers spending money on television could get that information it would be worth a fortune."
On the importance of fundamental loyalty drivers:
"Fundamentally, if you have a poor product or a poor service you will fail because the consumer is very discerning and if they have a bad experience in a store or they buy a bad product then there are plenty of alternatives for them to choose from. So customer loyalty is as much about staff training and recruitment as it is about giving points away. Loyalty is a range of things that build a relationship of trust between the consumer and the brand."
That's the gospel according to Sir Keith, and you can count us as true believers. Sir Keith isn't resting on his laurels, either; Marketing Week reports that he is part of a group investing in a technology platform that collects real-time transactional data at the point-of-sale and translates that data into instant mobile offers. Loyalty marketers never stop innovating - and as one of the most successful innovators in loyalty, Sir Keith Mills continues to lead the industry forward.
Rick Ferguson is the CEO and Editor in Chief of the Wise Marketer Group.