How to Keep Your Customers Loyal with Paula Thomas

Simon Dell: Welcome to the Cemoh marketing podcast, Paula Thomas, who is in Dubai, the United Arab Emirates. Our very first guest to have ever been from the Middle East, so you're a first in that. Congratulations. You are a loyalty marketing expert, and we're going to talk all things loyalty marketing as well. And you are also a very prodigious podcaster. So, give us the Paula Thomas quick history, the story.

Paula Thomas: Okay, cool. Well, thanks Simon, great to be here. The story is very varied, so I think I'm of a similar age profile to you. Originally from Ireland, and originally actually a beauty therapist. So, very random in terms of my background. But I did listen to your full show, talking about your full history, so it was interesting to hear. 

We've both done lots of things in our lives, but for me, Simon, I think what I learned early on is that I love business, and I realized that I loved to make people feel good in business. That's a really interesting dynamic, and that's something that loyalty marketers seem to share.

I got into loyalty marketing 13 years ago now, in the telecommunications industry back in Ireland for a huge global brand called Telefonica. I ran their loyalty program for about seven years, and then worked on lots of different loyalty programs on a freelance basis. And about three years ago I started my podcast which is called Let's Talk Loyalty, so I get to talk to people all over the world about this industry, which I love, and get to share all their stories.

Simon Dell: Let's dive straight into it, let's talk about this loyalty. When you mention loyalty schemes to people in marketing, sometimes they get a bad rap, because people think loyalty schemes, they think, "Oh, I'm getting another points scheme that I'm never going to redeem, or I'm getting a little shitty piece of card that I need to put a stamp on," all those kind of things. Tell me, from your perspective, what makes a good loyalty scheme?

Paula Thomas: It's a really interesting question Simon, because one thing I definitely decided with my podcast was I want to talk about loyalty as an emotion for business to drive loyal behaviour. A loyalty scheme is definitely one way to do that, but it's actually not the only way. For sure, I spend a lot of time talking to people who run big programs, and you're right, there's a certain amount of complacency or frustration when something feels maybe too transactional. That is where loyalty programs have sometimes gone off track, I think.

I think what has happened particularly in the past couple of years, and maybe with the pandemic is people really realize what's important. They want to be connected to brands that do have good business sense, and obviously great products, but they actually want to do business with brands that they like. 

To me, loyalty is something that can be done in lots of different ways, points is one, stamps is one, and you're right, there's those reasons to do those and not to do them. But also, there's some very interesting models, Simon, around things like partnerships which is how I started in loyalty, and interesting things like subscriptions for example. So, loyalty can come in lots of shapes and sizes at the moment.

Simon Dell: Talk to me about when you first started off, you were working at telecoms in Ireland. How does a telecoms company breed loyalty? Most people hate their telecoms company, or at best, are indifferent towards them. You probably started off in the hardest industry possible there, but how does a telecoms industry deal with loyalty?

Paula Thomas: Thank you, Simon, you're absolutely right. Things like utilities are much leisure into the loyalty gain than the sexy stuff like airlines and hotels. Telefonica is a Spanish company, super famous, very big in South America, huge in the U.K., and I think what Telefonica decided was... Well, O2 is obviously a great brand, but they didn't want to do anything with points, so I didn't have to build any points programs at all which was amazing.

The key thing was we built an entire proposition around partnerships, which was what can you get? So, let's say you're a customer of O2, what can you get exclusively as a customer of O2 that you can't get if you're a customer of some other telecoms company? My job was to go out to all of the really big Pizza Hut and Pizza Express, for example, or high street retail brands, and negotiate exclusive discounts. 

So, as a customer of O2, I got 50% off on Pizza Express or half-priced cinema tickets. There was a mutually beneficial partnership there, where the brand got access to our database, and we gave them extraordinary benefits to our customers, and we send them loads of customers as well. This is the thing I was talking about. I like loyalty because you get to make people happy if you can do it well. Not easy, but it can be done.

Simon Dell: Here in Australia, a major telecoms company, Telstra, fights it out with Optus, certainly the mobile phone space. And Telstra they do a rewards program, and a points program, which I've never paid attention to... and I really should, I've got thousands of points there. But probably the one thing that I see that cuts through with me is when they give you exclusive opportunities to buy tickets to an event before someone else can do that.

Paula Thomas: Exactly, so isn't that an extraordinary benefit? So, you value that. You might only use that once every couple of years, Simon, but when you do it really matters. That's I think when... And I think particularly it is utilities. So, as you said, most people don't care about their phone company. The prices are the same, the product is almost the same so what is it that's going to make a difference in my life that's actually going to keep me loyal to that brand? Yeah, it takes a lot of thinking, and it's great fun to work on.

Simon Dell: The other thing, I think, when you look at the flipside of here in the Australian market, you have someone like Optus, who's Telstra's main competitor. Optus, I think, three years ago bought the rights to show the Premiership, the English Premiership in Australia, which historically had been held by satellite companies or cable companies, then all of a sudden, a phone company then has this. Sure, they charge a subscription to Optus.

Maybe in Optus people get it free of charge, I don't know because I'm at Telstra, but that's taking the loyalty thing to the nth degree, but I guess it's also that presuming they know their customers well or they know a segment of their customers well. They felt that segment was big enough, Football-watching Australians, that it was going to be big enough for them to spend that money in order to breed that loyalty.

Paula Thomas: And there might be a correlation, for example, it's English football and people might be phoning England, I don't know. I think one thing that really does prove itself time and time again in business is, this whole thing, the Pareto principle, the 80-20 Rule, if you know who your most valuable customers are, and just even take care of them, then everything else almost takes care of itself. I do think loyalty professionals like us just go, "Okay, how could we really make something that really matters to the people that matter to our business?"

Simon Dell: And that's interesting, because often when I talk to clients about strategy, we talk about six categories of customers, and number one is the adorers, the people who love you. There's obviously brands around the world, some of them do that very well. You've got things like Lego, things like Apple, and things like Tesla, and those create these adorers, and I guess that's what it's all about. It's taking people who are just regular buyers and converting them, and that's the model I use, it's adorers, buyers, and considerers. We're taking buyers and converting them into adorers.

Paula Thomas: Totally. I'm sure you agree, Simon, that at the end of the day that marketing is a complex, expensive, and time-consuming business. It's also essential, but if you can get your customers to be advocates, or adorers, as you said, if you can get them to recommend your business, then I think our job is half done. We have to take care of them so they take that action and do that behaviour, but it's really the most powerful... I love word of mouth marketing. So, how can we cultivate that within the businesses, or the programs, or the companies that we run?

Simon Dell: I always say with the more adorers, almost the less marketing you have to do because they're out there as the salespeople.

Paula Thomas: Exactly, it's a whole sales force working on your behalf, totally.

Simon Dell: If you think about how Elon Musk sells this new shiny truck, his entire marketing expense is to do an announcement on stage in front of a thousand people and broadcast it. The actual marketing expenditure is absolutely tiny, but all of a sudden, a hundred thousand people sign up and want to buy the truck because there's so many adorers out there.

Paula Thomas: And I find it amazing as well, things like Twitter, for example, never paid a cent in marketing for its ever. It just was created as something that was so useful that people went, "Oh, you got to get on Twitter," so all of a sudden it markets itself. That's a power that I think is extraordinary, and as business owners we have to be able to harness it.

Simon Dell: Do you think that as you generate more adorers, or advocates, or whatever you want to call them, the reverse is that we tend to create haters as well? Do we kind of have that dual effect there?

Paula Thomas: I don't think they're related in any way. I think the internet can be a toxic place, so I think it depends what business you're in. But it's one of the reasons I came off Twitter, for example, I'm one of the few marketeers, would you believe, this is totally outrageous, but I'm not on Instagram and I'm not on Twitter.

Simon Dell: Honestly, I would not be on Instagram if it wasn't for work, and I've actually posted less and less recently. Just because I find, and this is going to be sad for a 47-year-old man, but I find TikTok more interesting and more engaging these days, and I feel it's not sucking information out of me in order to use it.

Paula Thomas: And I really think that's important. The reason, I guess, I'm not on Instagram is because I want to focus. We're both podcasters and lovers of content... I haven't even gone down the way of TikTok, I've dabbled with Clubhouse, but what I have found is that I love podcasting, so to me it's a case of, "Personally, I'm on Facebook, professionally I'm on LinkedIn, and then from a brand perspective, I'm on all of the podcast channels." So, I think you have... I think we all have a limited amount of time and attention, so I prefer to focus it into the couple of channels that I do well and leave the Instagrammers to themselves, you know?

Simon Dell: It's funny actually, we started doing some TikTok, taking TikTok seriously. About a month ago we got a series running, Great Australian Brands, where we give a 60-seconds overview of what we think is a really good Australian brand. It's amazing, the ones we get the most engagement with are the ones where there are plenty of people that dislike the brand. Plenty of people who like to... Well, we have a Mexican food chain here in Australia called Guzman y Gomez, and Mexican in the loosest sense of the term, it's not traditional Mexican food, Americanised Mexican food, Chipotle, kind of.

It's almost at unicorn status, the business has grown so drastically in seven or eight years, I think it's valued at something about, I'm sure I'm wrong on this, but it's about 860 million US dollars. It just launched in Japan, Korea, North America, and all these kinds of things, anyway. You know, these are huge fans, you go to any Guzman y Gomez. It's rarely not busy because it's good, it's cheap, it's fast, it's that sort of thing, and it's not full of fat and those kinds of things that... Their whole loyalty thing is consistency, and I guess that's a form of loyalty to talk about in a second.

But yeah, I find when we posted that TikTok, we just got these rabid people who were telling us how bad the food was, and how bad the product was, and I'm going, "It's an $800 million brand, it can't be that bad." Going back to that point, consistency and loyalty go hand in hand if you're trying to build a brand.

Paula Thomas: For sure, and there's a good example that I'm a big fan of the moment, Simon, because there's this new form of loyalty, which is paid loyalty. It's really interesting, I haven't seen any Australian examples just yet, but I've seen it in the U.S. done well, and obviously not done well, so the model's not the answer, it has to be executed well. But in the U.K., Pret a Manger has launched it as well, across Europe, Espresso House has launched paid loyalties, so it does deliver to your point about consistency.

Panera Bread is a massive coffee shop, café, lunch brand in the states. I think they've got two and a half thousand stores. Just before the pandemic they decided, in fact based on a really cool marketing insight, that most Americans, I think there's like 160 million Americans buy coffee every single day. It's an extraordinary business, but they said at least half of those people feel very guilty about spending, I think it's over a thousand dollars on those coffees. So, what Panera bread decided to do is say, "Okay, let's do a fixed price unlimited coffee deal." So, it's $8.99, so you can go and get your coffee at Panera bread every single day.

What's extraordinary though is can $9 easily justify that kind of money, but the amount of loyalties... For example, there's 800,000 people that signed up for the deal last time I checked. They haven't announced any new numbers but that's 800,000 people guaranteed to pay them nine dollars a month. Then the upsell, the cross-sell, they have a 90 percent retention rate so in terms of actual loyalty, it's unbelievable that people are going, "This is phenomenal. I can get my coffee. I can get a sandwich or a cake, or whatever if I want to." And they've published some extraordinary numbers. So, there's some really cool ideas around building loyalty in new ways.

Simon Dell: So, that's how your definition of paid loyalty, is that subscription model, because that word subscription has been hackneyed and been done a thousand times, and now us marketers are calling it paid loyalty. And that makes it sound all fresh and new.

Paula Thomas: Totally. Amazon Prime is a paid loyalty program so that's a thing. So yes, you can use the word subscription to talk about Netflix, but to use it in the context of a retail business, for the first time for a physical product in unlimited quantity I think is a gamechanger. I think for your listeners that are looking to build their businesses, I think there's a lot of ideas there that are quite new.

Simon Dell: Do you think that would translate well? Because a lot of the clients we service are relatively small to medium-sized businesses, I guess the concept of paid loyalty in any business is the fear that you'll be taken advantage of. Should it be a paid loyalty beer subscription, then people would just be getting blind drunk every night, that would be a disaster.

Paula Thomas: That would be disaster, total disaster. I'm Irish, Simon, you're British, so totally, yeah.

Simon Dell: I was going to say, the Irish love to drink and then fight, they'd be straight onto it... But yeah, do you think that scares people off, the idea that people might take advantage of paid loyalty schemes?

Paula Thomas: It's absolutely... So, what you have to do is you've got to do the modelling, you've got to run your business case, you've got to set your expectations, you've got to get a sense of what will the upsell be. So, if I do get an extra increase in traffic, for example, the figures that Panera Bread said, instead of somebody coming in four times a month, they now come in ten times a month. So, the frequency is extraordinary, it's more than double.

So, if somebody's coming into your store more than twice, okay, are they going to buy more stuff? What I do like is, I've seen it in South Africa with a juice brand, and what they've done is they've just launched a one month so it's not an automatic renewing, recurring subscription. They've just said, "Here's a one-month deal," obviously it's prepaid, and I think that eliminates some of the risk. 

Because you're totally right if somebody's concerned about diluting their revenue, then that is something you need to be careful of. You don't want to be giving away the whole house, so I wouldn't be recommending doing subscriptions for an expensive, high-end meal, or your Mexican friends, for example, you know.

Simon Dell: They would probably get a paid subscription out of me. They would most likely.

Paula Thomas: So, if you were getting your meal, and then you were buying beer, well then all of a sudden, you're probably going to buy more beer, so everybody wins.

Simon Dell: Absolutely. Let's talk a little bit, two more personal questions. How did you get from Ireland to Dubai? What was the reason for that? Was it just fortuitous or...?

Paula Thomas: Not even, Simon. I had family who came here in the late 70's so that was very unusual, so I grew up hearing about this, hearing about this extraordinary land of opportunity. And you've been here, it's certainly true, this is a very ambitious, and very positive place to live. 

I literally upped sticks in 1995 the first time, and moved over. Did some great work with British Airways and then Emirates, so I started my digital marketing career launching Emirates.com in the year 2000. That was super fun, so I've been in digital and anything to do with e-commerce for quite a long time, so I went back to Ireland and then moved back here again because I just loved it so much.

Simon Dell: Probably a bit warmer as well here, isn't it? Compared to Ireland.

Paula Thomas: Totally, and thankfully, at the moment, with COVID, I can tell you, we are living the dream compared to Europe, so very grateful.

Simon Dell: And the podcast, what brought you to doing a podcast?

Paula Thomas: That's actually a really good question, Simon. Because for me, I'm a consultant. I'm in a very niche industry, so I'm well known in Ireland, I'm well known in Dubai, but if you want to build a global brand, there are a few things that, I think two years on, that are as powerful as showing up and creating content consistently, and you raised that point earlier.

My favourite marketeer, I'm sure you know Seth Godin. I read Seth Godin's blog most days, and for him as one of the top marketeers in the world to say that the best marketing that he does is create content, that focused my attention that I should be doing something. And I find writing very time consuming and to be honest, kind of tiring, so I found that I really like talking, and I have more questions than I have answers, Simon, so I'm like, "Oh my god, I can get to talk to all these cool people, ask them how to do this really cool work, and they'll tell me!"

At the time as well, Simon, nobody was podcasting professionally about the loyalty marketing industry. I was first, I really value innovation, so I wanted to be the first to do something, so I'm super proud. Literally launched in September 2019, and I have released an episode every single week, in fact I'm now twice weekly, and yeah, some cool stories, and some amazing brands I got to talk to. It's the proudest thing, I would say, I've ever done.

Simon Dell: Do you think about doing more videos or do you just prefer the podcast medium?

Paula Thomas: It's interesting, actually, I did dabble with that. A few months ago, I said, "okay let me do a dual format. Let me record it in video and put the audio on the channel as well." But I found it distracted me, I just wasn't putting the attention into marketing it so back to the thing about, "Let's just do something well." I just stopped with YouTube, and I said no, I'll just keep on with the audio.

Simon Dell: And how do you market the podcast? For anyone that's out there that's started a podcast, or wants to start a podcast, marketing is 80% of the battle, 20% of it is actually recording the thing, because recording a podcast is relatively easy in comparison to a lot of other things that you can do. It's a relatively low entry point, and that's just one of the attractions for me because I'm so hopelessly unorganized. But how do you find the best way of promoting it?

Paula Thomas: Well, I did one really big thing and that was I found a partner, which I'm clearly good at doing. But there's a really great website, some guys in the U.S. that have a website called The Wise Marketer, so I've been reading their blog for years. They do extraordinary work, but they didn't have a podcast. 

So, they kept asking me to write for them and stuff, and I was like, "You know what, I don't want to write, but let's do a deal where I show up every week with amazing content in audio form, and you can put it on your top navigation, and you can tell all your readers about it." So, they get fresh new content, and I get an amazing audience, so yeah, works really well.

Simon Dell: What sort of plans for you from here? Obviously, the podcast seems to be getting bigger, and bigger, and bigger. Your consultancy work, are you doing a lot of that or is that getting pushed to the side a bit?

Paula Thomas: To be honest, I don't want to do any more consulting, and you know this as a marketing agency guy, so I've never wanted to have employees. I'm a bit of a perfectionist, Simon, so I prefer to do everything myself, so definitely not scalable, so it'll be interesting to see where it goes. 

For me, the podcast is now a business bigger than my consulting, so I have sponsors, I have brands, I have some of the top loyalty technology companies that I partner with, and they obviously sponsor it. So, if I can create this business and a bigger audience for the show, then that's the plan for the next two years.

Simon Dell: Awesome. My last question for today, then, small businesses, medium sized businesses listening to this, thinking about loyalty, thinking about trying to be better at customer retention, all those kinds of things, what are some actionable points? Maybe just two or three things that they can sit there and go, "Right, I'm going to start looking at implementing those tomorrow." And again, we deal with not the big corporates, but the smaller to medium-sized, local businesses.

Paula Thomas: For me, the first thing is about mindset, Simon. I think there's a lot of confusion around what is loyalty and if it is just this silly points thing. For me the very first thing is just to sit down and go, "Okay, what does it look like if I was to be loyal to my customers?" Rather than expecting them to be loyal to me, I need to step forward first. So, I think there has to be that flip, and sit down and write out how to be loyal. 

I often talk on my show about, on my birthday, for example, what happens with all these brands. I've given my date of birth to them, I've told them what I like, so who is showing loyalty to me? I think if you can literally go, "Okay, identify who my top customers are, and find some way to make them feel special," and whether that's a free cup of coffee on their birthday, or sending them a thank you email saying, "Thanks for that," I think there's extraordinary power in just being loyal to them.

And then I think, you know, sometimes maybe you can just simply talk to the point-of-sale guys that you work with, the technology companies, ask them what functionality they might have, and start to build up some simple capabilities. I'm sure you know very well, Simon, from next year digital's going to be a lot harder because Google's not going to be doing cookies anymore, so first party data, and having your own customer database will be absolutely critical. I think now, start thinking ahead to capture that data and then see what you can do with it over time. But build it slowly, be patient, and people will appreciate it for sure.

Simon Dell: I think I've said, probably a dozen times in the last three months about the focus all businesses should have on collecting email addresses, and I think I've said, "I've never seen a business with a big email list who used that email list on a regular basis fail." I'd go as far as to say it's almost impossible to fail if you've got a big database of customers and you're talking to them on a regular basis through email. 

You'd have to be spectacularly stupid to screw that up, right? Because even if there's another COVID or another something like this, if you're sitting there with 50,000 people on a database and when you pump an email out... Honestly, I had this conversation three hours ago with a girl who imports and makes nightlights, nightlights for kids, and she said, just in passing, "Every time I send an email out, we make sales."

Paula Thomas: Amazing, point proven, and one of my recent guests, Simon, is an Australian brand. I'm sure you've heard of Adore Beauty, it's the biggest pure play online retailer in Australia. They've just launched a loyalty program, and exactly to your point, first of all they have a podcast, which blew my mind, for skincare. But their strategy is podcasts and loyalty, so extraordinary, you're absolutely right, you know. Build that relationship, it's a two-way thing and people love it!

Simon Dell: If anyone wants to get a hold of you, want to ask you a question, what's the best way of reaching out to you, Paula?

Paula Thomas: It's Paula@letstalkloyalty.com.

Simon Dell: There we go, that was simple. But you're also on LinkedIn as well, which is where I found you, and you seem to be quite active on there as well. So, thank you for your insights and thank you for your time today. It's been an absolute pleasure as my first Middle Eastern guest, my first Irish guest as well, so maybe two birds in one stone there.

Paula Thomas: Brilliant. Thanks, Simon. Take care. Bye.