Krispy Kreme UK’s Smiles Rewards Program shows what happens when loyalty is built around data, context and commercial outcomes. In this webinar with The Wise Marketer, Krispy Kreme UK and ITA Group discuss how they used analytics to identify key audience segments, refine offers and create a more relevant member experience. The result was a stronger, more agile program designed to drive both engagement and revenue.
[Transcript]
Aaron Dauphinee (00:19):
Welcome everyone. For those of you who don't know me, I'm Aaron Dauphinee and I'm the Chief Marketing Officer of The Wise Marketer Group who operates The Wise Marketer and Loyalty Academy brands. I'm genuinely excited to be welcoming you today to the CRMC webinar series. For those of you attended before and then as a reminder, but those who maybe have not attended this series, we've designed it so that it's been operating for about a couple years now and I continue to be very, very proud of the caliber of loyalty marketing stories that we get to bring to you. And today I'd say is no exception. Like the title's namesake, we aim to be serving up some smiles today as we look inside Krispy Kreme UK's analytics driven loyalty strategy. And I think maybe let me open up with something that I think will land with everyone joining us today.
(01:03):
And this is regardless of where you may be at a point in time in your loyalty journey. I like to look from fact space and it's a bit dated. It's 2024, but a stat that really resonates for today's conversation is that only 60% of consumers say they're satisfied with the personalization their loyalty program currently delivers. And that was from a customer survey that Deloitte did in 2024 of about nearly 10,000 consumers globally. So a very large substantive study. And if we just think about that for a second, what it suggests is that as much as two in every five members really feel their program doesn't know them at all. So that's a big gap to be closing down. And I've certainly spent, I'd say my career in data-driven marketing environments, whether it's at Bond Brand Loyalty, where I helped build the loyalty report for a number of years, which for those of you who don't know, is an annual benchmark of how consumers and brands engage with loyalty.
(01:55):
But also year after year, the signal in my career and through these types of research studies that I've been a part of, it really is the same. Programs aren't shifting from ... Sorry, programs are shifting from more broad brush analytics or broad-brush engagement, I would say, to analytics led. Very behavioral targeted communications aren't improving member satisfaction. And so they fundamentally need to change the role that loyalty plays in the business for your brand and analytics plays that strong role. So as we think about today, we're going to see exactly what that shift looks like in practice. We have a brand here that has made loyalty not just a marketing initiative, but a genuine engine of business growth. And I've been hearing that term a lot lately that loyalty needs to step into being a growth engine. So let me get right to it and introduce our guests.
(02:44):
First off, our brand voice for today is from Krispy Kreme, which is one of the world's most recognizable and beloved donut brands, you might say. They have a presence across standalone stores, retail grocery partners, and of course, digital channels as well. Krispy Kreme UK operates the Smiles Rewards Program, which is a loyalty initiative that as you'll hear today, has delivered some genuinely remarkable results. Representing Krispy Kreme UK is Melissa Wood. Melissa is a customer engagement and loyalty specialist with 16 plus years, experience shaping retention. I think going into CRM, digital adoption across some of the UK's most recognized brands. And just to give you a short list of those brands because they're impressive, BMW, Sky, British Gas, Virgin Media two, really, really great resume that she's worked with. And I would say from my conversations with her that she has a rare ability to blend this creative instinct with data rigor and she currently leads the CRM for Smiles Rewards Program at Krispy Kreme UK.
(03:42):
So welcome to you, Melissa. Thanks for
Melissa Wood (03:44):
Having me. Looking forward to our chat.
Aaron Dauphinee (03:46):
Great. And our second subject matter expertise that we're tapping in today is Chris Jones, who is the senior vice president of customer engagement solutions at ITA Group. ITA Group, for those of you who don't know them, is a leader in designing and delivering very compelling customer experiences. And Chris brings about 30 plus years of cross-industry expertise to every client engagement that he gets into. And I'd say he's passionate about creating emotional connections between the brands and their customers and the results that he and his team have really helped Krispy Kreme UK achieve that is effectively a proof point of that type of commitment. So we're going to hear from him. So Chris, great to have you here today as well.
Chris Jones (04:25):
Thanks, Aaron. Looking forward to the conversation.
Aaron Dauphinee (04:27):
Perfect. And with that set up, a little housekeeping for those of you who are on the call, we do appreciate your time. We have a full agenda and a very fantastic story that we want to get through. So the plan for today is to have me chat with Melissa and Chris and have them share their experience for about 30, 35 minutes, and then we'll follow up with a Q&A session of about approximately 10 to 15 minutes targeting 50 minutes in total, or if we need to extend a little bit, we will go to the full hour, but we'll try to get you out of here before 2:00 PM Eastern our time. We like to be on time because we respect the time that you give us. Real quickly, I've muted everyone. Keep that background noise at bay, but use the Q&A icon at the bottom of your screen to send questions through the session.
(05:09):
I always say our team, which is really me quite candidly, we'll monitor those questions and we'll get as many as we can answered at the very end. But for any that we don't, our guests will provide written responses and we'll include them when we publish this recording probably early next week in terms of timing for an expectation that's realistic. Finally, if you have any final thoughts or follow-up thoughts after today, you can certainly reach us at support@thewisemarketer.com. Alrighty, let's get into it. Melissa, I'd love to start with you and take us inside Krispy Kreme UK a little bit, perhaps give us an overview of Krispy Kreme UK's business overall and your loyalty audience that you're trying to target.
Melissa Wood (05:48):
So Krispy Kreme has been in the UK for nearly 23 years now and we started our loyalty program about five years ago, which is called Smiles Rewards Program. We span our standalone retail stores of which we have about 126 across the country and then we're in multiple supermarket chains in cabinets and then you'll also find us obviously on our digital channel. So what I would say about Krispy Kreme globally is a brand that most people kind of have an emotional relationship with before they even join the loyalty program. There's already a kind of smile attached to just saying the name for us that is a gift and a challenge. The gift is that we start with great brand affinity. The challenge is that donuts aren't a weekly habit. So we're working with quite a low frequency category and a very diverse member base. Our membership ranges from what we like to call the For Me customer and they're basically grabbing a single donut and a coffee for themselves.
(06:56):
Then we have people buying dozens for the office on a Friday, or we might have the parent picking up a treat for the family at the weekend. So same brand, but we've got to meet them at completely different occasions, completely different motivations. And as I said, we meet them then across multi-channels, our own stores, supermarkets, online, social. So our program basically has to work across all those touchpoints.
Aaron Dauphinee (07:24):
Wow, that's a lot of diversity. So when you were thinking about loyalty at the start of this journey, where did you feel the opportunity was being left on the table? Because that seems to be a large gamut, but was there room still that you could gain more?
Melissa Wood (07:37):
Yeah, definitely. When I came into the program just under two years ago, it was fairly mature. As I said, it was started up five years ago. And the kind of honest assessment was that we had great reach. We got over two million members, but we were kind of lacking a bit of depth. We didn't really have the analytical foundation to understand who they really were, what occasions they were buying for, or why some of them were just quietly lapsing and not coming back to us as a brand. So we were treating our member base as if it was one broad audience. So the brief we discussed with ITA was we need to stop accepting the lapses. We need to get those customers back in. They loved us once they can love us again. Start identifying the different audiences inside that membership and then build a strategy to meet them where they are to start driving frequency, to start getting them back in store.
(08:41):
But underneath all of that as well, we have to always bring the brand's identity of fun and generosity into the program itself. Everything must always feel Krispy Kreme and not just like any other generic point system.
Aaron Dauphinee (08:57):
And I know we're talking about Analytics today, so there has to be a data foundation in place. And before you had that, how well did you really know your members and maybe more, what surprised you the most once you started to look into the data?
Melissa Wood (09:13):
Honestly, I think we knew them less well than we thought we did. You kind of build a story internally about who you think the members are. And then the great thing about the data is that it quietly kind of tells you a different one or it might challenge you to think completely differently. So we'd assumed we had a relatively engaged base who just needed a little nudge to get them back in, but the data showed us that engagement was much more concentrated than that. We had a small group of very, very loyal customers doing a lot of the heavy lifting and then we had this larger, as I just mentioned, kind of lapsed group as we called it. So the counterintuitive bit was at the top. We assumed our best members needed rewarding the hardest, but they were already loyal. They're already coming back, they're already purchasing and what they really respond to is relevance and recognition.
(10:08):
So meeting them at the right occasion for them, not necessarily depth of discount. And then the biggest untapped opportunity was actually in this wider lapsed group. Then the other thing which has been a big brand piece of work for us is occasion. So we'd been treating the membership as one audience, but there were at least three running in parallel. As I said, the people who were just coming to us for a coffee and a donut, then the office people and then the family moment and family moment is kind of where we're really leaning into hard as a brand. So again, same member, just different reasons to buy. So the first layer that we worked with ITA Group on the data didn't just give us answers. It started to change the questions that we needed to ask. How much more can we get out of our members?
(11:13):
It was more which is member doing what, on what occasion, where can we meet them? And that's a completely different program.
Aaron Dauphinee (11:22):
Oh, that's fascinating. That's excellent. Chris, would love to shift to your perspective here as you stepped in together with Melissa to rethink the program or see what the data was pulling out, what were some of the core strategic pillars that you were able to align on?
Chris Jones (11:37):
Yeah, there's two that really come to mind, Aaron. And I think the first one is personalization. And before I get people to say, "Wow, that sounds really cliche." Yes, we all talk about personalization. I know that oftentimes people are like, "Yeah, is it addressed to the person? Does it have their name?" And that's kind of table stakes. And we know that and we were doing that, but I think what we meant by personalization was really more in the area of occasional relevance that Melissa was just talking about, but also making sure that behaviors and preferences were contextual. So when did they
Melissa Wood (12:10):
Buy,
Chris Jones (12:11):
What were they buying and what did that imply about their mindset or about what their needs and motivations were? And so making sure that our offers and the communication that Melissa's team was creating reflected not only a thing to buy, but more importantly, the context within which it was happening. And that's what we really meant by personalization. I think that was a powerful part of what Melissa and our team created from a communication standpoint. The second thing I would talk about is agility and to do this kind of discovery, reflection, test, respond, adjust in an iterative fashion took a great deal of agility. So those are kind of two pillars that I think we quickly said, "If we're going to do this, it's not just about names and personalization that way. It's about depth of context informing what we do for the consumers." And the second piece was agility.
(13:02):
Try it, discover, adapt, move forward again. And I think those are two things that really enabled a lot of accelerated discovery together with ITA Group and Krispy Kreme UK.
Aaron Dauphinee (13:14):
I love this idea of accelerated discovery that that's a great term to use. Sometimes we can go and find too much. Were there specific business goals that the analytics needed to support from the start that were more like very, very tangible or more concrete than say this discovery that you went on? I'm curious.
Chris Jones (13:30):
Yeah, there definitely were. I think there was a desire to increase engagement frequency. So think of that as, are we getting the members to engage with what we're sending them, what we're showing them? Then we really were focused on accelerating the time to the next transaction. As you would expect, we knew when we could expect to see a climb back based on their normal behavior, expect to see a consumer back in the stores at Krispy Kreme. We're trying to shorten that time period. So that was another key metric. Melissa mentioned it, but I'll reiterate it. Reactivating dormant members was a huge priority for us. And then as any good retail business, but particularly in the UK with Krispy Kreme, accelerating foot traffic was a top priority. Now, if we could do those things and at the same time, find ways to introduce different types of occasions to those consumers.
(14:19):
Melissa talked about, okay, I'm a consumer who buys typically on Saturday or Sunday for my family. Why haven't they ever brought it to the office, to their coworkers? So there was a desire kind of as a fifth topic, I would say, to cross pollinate those usage occasions where it made sense. Those are the things that the business said, "We want to get this out of our rewards program."
Aaron Dauphinee (14:39):
Oh, I like that. That's a great list of five core analytical goals that you wanted to support. I think analytics-led loyalty is kind of easy to champion in hindsight as they say sometimes, but maybe we can go a little bit deeper and I'll open it to the two of you. How did you make the case internally to prioritize and fund this shift before you had results to point to? Perhaps you can talk and even perhaps you can talk a little bit, Melissa, about the reframe from the original business case that you had because you joined a little bit later, as you mentioned earlier.
Melissa Wood (15:13):
Yeah, I'll be upfront. The original business case was signed off before I joined. So Chris could definitely expand on how those initial conversations were framed and how the early funding was secured. But from my perspective, I came into the next stage of that, taking a program that had been approved in principle and then turning it into something that could prove it's worth on an ongoing basis. And that's a kind of different internal case making. You're not selling the idea once and then walking away off you go, just go and make it happen. You're earning the right to keep going every time you report back to the senior leadership team. I think Chris alluded to it just previously, the thing that's mattered most to us on that shifting that case making is a small set of early signals. Nothing massively dramatic, but enough to show that when we segmented at a high level and targeted the cons accordingly, we got material different response rates and that directional evidence is what moved the conversation on from, well, is this something we want to keep investing in to, okay, great, how fast can we scale that?
(16:31):
And once you've got that kind of pattern established, the funding conversation stops being an annual battle that you have to have and it becomes more of a continuous conversation.
Aaron Dauphinee (16:42):
That makes sense. Chris, maybe you can offer a bit of the OG perspective since you were there before Melissa on this.
Chris Jones (16:47):
Yeah, for sure. I think one thing that the business was facing into was that leadership was saying, "Hey, look, we're acknowledging that we have, and Melissa said earlier, a relatively low frequency business. People don't buy a dozen donuts 300 times a year, generally speaking." So it's easy to say in a high frequency business, if you work at Starbucks and maybe you see your best customers five, six times a week, that wasn't the frequency of a Krispy Kreme customer. And so one of the things that we had to overcome was this perception that maybe loyalty isn't right for a low frequency business, say a naturally low frequency business. And I could say till I'm blue in the face, no it is right, it is right. But like Melissa said, we had to show early signals. So the very first test we ran we showed in the context of the question that was being asked, your expected frequency went from, I'm making up numbers 180 days to 52 days That shows you that with the right context and the right agility and the right emotional connection, you can dramatically change that.
(17:50):
That I think was a real eye-opener that created lots of possibilities for the team and for the business through the eyes of the leaders.
Aaron Dauphinee (17:58):
Oh, that's impressive. I know we talked about analytics supporting business goals overall. Maybe let's keep that train of thought. What were some of the goals for the actual Krispy Kreme Rewards program and how did they shift the business forward? Kind of looking at what success really looked like in practice. Melissa, maybe you can offer some
Melissa Wood (18:18):
Thought
Aaron Dauphinee (18:18):
There.
Melissa Wood (18:19):
So I think historically we'd always thought that acquisition was the one metric that you really had to double down on. And I would say that our first goal was to accelerate revenue growth through visit frequency. So frequency became the number one goal over acquisition. Obviously you still need to work on acquisition, but it was how can we get our members in one extra visit a year? That's probably all we need to kind of shift the dial quite significantly. I think the second one was to establish analytics driven decision making. So that sounds really obvious, but in some cultures that's quite hard to embed. So it's really emphasizing, this is what the data's telling us and this is what I'm going to make my decisions on. And then the third one was to sort of always be optimizing that return on investment, both at a program level overall, but also on every individual offer and campaign.
(19:26):
Every single pound spent on an incentive should earn its keep. And I have to say the ITA Group have, I've mentioned every single offer. They have absolutely served me up the data on every single one of those offers and that's been really invaluable. We haven't wasted time. We've been able to move at pace because of that.
Aaron Dauphinee (19:49):
Melissa kind of served it up of the role that ITA Groups played in this. But Chris, what else would you add? Maybe perhaps tell us a little bit about how ITA Group specifically helped Krispy Kreme on these goals from your point of view.
Chris Jones (20:01):
I think there's obviously the blocking and tackling, getting the data, doing the work, collaborating with Melissa and her team day in, day out, week in and week out. What I would say though is that the mindset we took is that oftentimes I think loyalty programs tend to say, "I sent a communication, I made an offer, I got the behavior I wanted. Now let's move on to the next communication, the next behavior." The mindset we had is, well, that's fine. You can just about always get some portion of your member base to do a thing with stimulus, with incentive, with communication. But what happens for the next 90 days, the next 180 days, the following 12 months? And so what we did is we approached it from, "Okay, great. We got the stimulus to work, but what was the follow on effect? What was the knock on effect?" And the more we measured and show that within the Krispy Kreme business, and as Melissa and her team bring that to the leadership and the organization, there are, I think it's fair to say, Melissa, less and less questions that get asked and more like, "Hey, you know how you showed me that that special offer to reactivate had purchases in the ensuing year?" Was that true for the other program too?
(21:10):
So our dialogue is now happening in the language of the results we're showing. And I think that was a real breakthrough for us mutually across the program.
Aaron Dauphinee (21:22):
I like that a lot. I mean, Melissa, is there maybe a specific proof point that you can offer up to kind of reinforce what Chris has described from your point of
Melissa Wood (21:30):
View? Yeah, I think from the test and learn perspective that we had to activate fairly quickly. It wasn't just a kind of single result that I got across the line. We had to get the whole business comfortable with moving at four times the pace that it was used to. So that means very much a cultural move for Krispy Kreme UK and three things made that possible. Senior support essentially said to me, "Just go and do it, get the work around the testing, prioritize alongside everything else the business needs at this time." And that was creative, especially I was making a lot of demands on them because we had so many tests running. And in the early days, sharing the results of all those tests constantly so people could see for themselves that it was working.
Aaron Dauphinee (22:32):
That's very good. I mean, Chris, maybe you can add a little bit on this. A test and learn environment, not everything works. Was there a test or maybe an assumption that you got wrong? What did this process teach you perhaps?
Chris Jones (22:46):
Well, actually Aaron, everything was perfect every time. No, I'm kidding. No, certainly far from it. I think just the mindset that we went into this with between ITA Group, Krispy Kreme's rewards team that Melissa leads, but also the broader team at Krispy Kreme. I felt like there was never any pushback about failing from anyone in the organization. Now we're not talking about massive failure, we're talking about managed failure. And what I mean by that is we're going to try something that we're not 100% certain about, but we're going to manage the risk of that by, we're not going to try something we're uncertain about with two million customers. We're going to try something we're uncertain about with 2,000 customers. So as Melissa alluded to this A/B testing, which I know is probably everyone's toolkit, that's not new news. There's no revelation there, but it was the mindset that said, "We're not sure about this, but customers can tell us.
(23:42):
Let's expose them to it in a managed, sensible way." We did learn a lot of things. There were times when we thought this discount is going to be better than that discount and we're actually wrong and it was actually the less deep discount worked better because of the way it was positioned to the consumer. So those are like loyalty programs and marketers' dreams, right? Like you're like, "Wait, I could invest les and get more." Let me write that down. And so sometimes we said, "Well, I think price elasticity is going to drive the day on this, but we found that positioning and more behavioral economics and what are we anchoring to and what are they seeing was more important in how we position it than maybe what the discount was. " So that was an aha for us. And the other thing I would say related to that is even if you take everybody who buys dozens, so Melissa talked earlier, instead of sending it to everybody, we're only going to send this to people who have historically bought dozens, but then to her point, we knew there were deciles that were very different from one another.
(24:44):
We saw that the same offer had a different response in the bottom five deciles than it did in the top five deciles. And so that was all really informative for us. And what it did is it helped us to fine tune and to target with increasingly precise capability. I think those are some things where we're like, "Oh, we were wrong about that. " And I don't remember anytime, Melissa, I don't know if you do, when somebody said, "I can't believe you tried something that didn't work." I don't remember hearing that ever. They're like, "I sure am glad we understand that it doesn't work before we did it in a broader scale." So I think just freeing your team up with that mindset is really powerful.
Melissa Wood (25:21):
Yeah. I felt a very safe environment at Krispy Kreme UK to surface tests that didn't work. Everybody understood the journey that we were on and some things were going to be amazing and other things that we thought were going to be amazing were not amazing. But if you always only celebrate things that go really well and then you bury the things that don't, you kind of lose the most valuable learning that the program will generate for you. And to Chris's point, there were some where we thought, "Well, this is definitely going to be amazing." And then it kind of really challenged a lot of things that I had known about loyalty and marketing, to be honest, over my whole career. So yeah, that's been invaluable.
Aaron Dauphinee (26:11):
And Chris, I think from a perspective here, Melissa talked about learning about loyalty and also about marketing as a whole, does that also extend into your kind of thinking at ITA Group as well?
Chris Jones (26:26):
Oh yeah, absolutely. I think when we work with clients who talk about, "I just need enrollment or I just need engagement," we say, "Yeah, yeah, those are good leading indicators to the success you can ultimately drive, but we never stop short of that. We're always focused on the business outcome." And notice I didn't say the program's outcome because the program's outcome is a step on the path to the business outcome. So the business wants accelerating same store sales. The business wants broadened margins or broadened contribution from the program and the business. And so I think we always said, "Great, these are interim outcomes. They're not ultimate outcomes." And we started showing every test in the context of those ultimate outcomes, foot traffic, margin growth, cross pollination of occasions, customer satisfaction. And that's where I think the business now, if they had questions or saying, "Yeah, we need this.
(27:22):
Let's just, how do we do more of this? " It's kind of more the question we got versus years ago, should we do this? And that's a nice shift to see.
Aaron Dauphinee (27:31):
Yeah. Melissa, Chris was talking about this as a strategic partner of yours, he's viewing this into the organization. Did you also see that in terms of Loyalty being taken more seriously across the business?
Melissa Wood (27:40):
Yes, definitely. It sort of moved the program out of a marketing silo where it had sat and we were able to show the business that it could be a lever that you can pull for specific business outcomes. We can reactivate a dormant segment to get them back into store. We can accelerate frequency in a particular decile. We can test a new occasion for some of these members. And I think the clearest evidence of that is what happened with the lapsed members. Once we could properly identify who was disengaging and target them with the right offer at the right moment, and it did take a couple of goes to get that right offer. We drove a 110% return rate in our lapsed membership and that's not just a marketing metric, that's a revenue we'd otherwise have completely written off if we had not decided to target those customers and they've been brought back into the business and that's purely through that analytics-led segmentation.
Aaron Dauphinee (28:45):
You talked earlier about personalization, Chris, maybe you can expand on that a little bit in terms of the value to the business as well.
Chris Jones (28:52):
Yeah. I mean, I think we were activating audiences, segments using the behavioral data that we had about them and sometimes we were going to try and infer something about what might happen, but most of the time we were able to just look back at it. A lot of brands and businesses over the last couple of decades have gone through this evolution of, I need to establish personas because that's what I do for media and the personas helped me because I don't know everybody. And what we're saying in the early business case we said, "There's nothing wrong with personas, but you don't need personas. You know what every individual in your business who's in this program is doing." So there was an evolution that personalization no longer to be persona dependent, it could be person dependent. So I think that was an important shift in the early mindset, but we would personalize offers.
(29:42):
We were personalizing messaging. The team at Krispy Kreme was doing that and by dramatically increasing the number of things we tested and tried, we had a broader toolkit to choose from. And so personalization, like I said, might not must be you all get a dozen, but it was You get a different dozen offer because you're in the top decile as Melissa was talking about earlier. So the personalization ultimately helped us not only with knowing what their occasions were, knowing what their frequency was likely to be, knowing the context within which they were likely to spend anyways and making our effort reflect all those things, not just we know your name, as I said, kind of from the top.
Aaron Dauphinee (30:25):
And Melissa, we know the point of analytics is to basically have a behavior change. Moving from broad brush communications into behavior-driven messaging, what's that look like for you when you get down to the pragmatic day to day?
Melissa Wood (30:40):
Yeah. I'd flag how much we change up the offer comms themselves to stay fresh. To Chris's point, every one of those segments that we talk to, we make sure the creative absolutely matches who we're talking to. Every new flavor or product campaign that we have, we bring a different look to the comms, a different tone potentially, different reasons for members to lean in. The offer might be sitting underneath that, but the wrapper around it shifts every time. So members aren't seeing the same email each time and that has what's kept the comms working. If we'd kept the same template every week with just a different number on it, people stop noticing. Every send for us needs to feel like a brand moment and our customers keep showing up. Our CRM incremental revenue is up 52% year on year, which we are really, really proud of.
(31:43):
And the program as a whole, the incremental program revenue is up over 122,000 year on year. So it really shows that when we've put the work in, it's really paid off.
Aaron Dauphinee (31:55):
That's great. I mean, running 10 tasks a week versus one is not really just a technology shift. It's also people and process that have to shift as well too. How did the team have to operate differently to support that pace?
Melissa Wood (32:09):
I think the biggest unlock for me at Krispy was I was just empowered to go and do it. We're a very lean team and the brief from the leadership was essentially, let us know if you can make it happen and flag any blockers to us. So no committees, no business case for every single test, no sign off ladder. And that sounds like a small thing, but it isn't. I think a lot of organizations, maybe ones I've worked in the past would've wrapped this in a process, a steering group, stage gates, and really it would've killed the velocity of what we needed to achieve in a small short period of time. We didn't put a governance layer over the top of test and learn. We kind of replaced it with clear accountability. I had to report back if a test didn't perform, that was on me to read it correctly and to act on it.
(33:05):
Otherwise, we were able to move at speed. I won't lie, technology has been a constraint at times. That's probably been the bit that might've slowed us down a bit, but everything else was basically put in my gift by the senior leadership, which was great. And that's what a lot of people don't have the permission, but that was a great unlock for us.
Aaron Dauphinee (33:35):
Oh, I love the candor. Thank you for being so transparent with us about that. That's a good share and I'm sure there's others that can resonate with that as well in their own organizations. Maybe let's shift a little bit to actual results and a bit of a longer term impact. So everyone loves obviously to understand performance metrics. Are there any results that you can share even if it's at a top line level that will help us kind of validate the sustainability of your analytics model?
Melissa Wood (34:02):
Yeah. Do you want me to go, Chris?
Aaron Dauphinee (34:04):
Yeah.
Chris Jones (34:04):
Yeah, go
Aaron Dauphinee (34:04):
Ahead. Sure. Yeah, perfect.
Melissa Wood (34:06):
Well, the program has delivered us measurable commercial impact of that. There's no doubt. We've got members spending meaningfully more. As I've just said, the comms program is driving direct incremental revenue and we're winning back members that we had lost really. So member spend is up 20% year on year. Member spend versus non-members, this has been really interesting and something that the business comes back to a lot. Basically, members spend 90% more than non-members with us, which is quite stark. As I just mentioned, the incremental program revenue itself is up 122% year on year CRM revenue up to 52% and our return lapse rate is 110%. So you can't really argue with that.
Aaron Dauphinee (34:56):
No, no, for sure. I mean, getting it to 122% member lift is one thing, but translating that into a language that resonates with CFOs and CEOs like you've done to have business impact. How'd you frame your ROI story internally?
Melissa Wood (35:13):
Well, I guess it'd be fair to say it kind of wasn't figured out in a single meeting. Chris and I had a lot of conversations about analytics and what were going to be the right things to measure and the right things that the SLT would want to see because the temptation is to flood senior leadership with every metric you got and hoping that something sticks with them, but often it's just an overwhelm. Chris and I spent real time on working out which numbers would actually land with them and we kind of landed on three things that have done the heavy lifting since and that's how much more profitable members are than non-members, how we can influence their behavior through the program and the specific leaders we're pulling to do it. So which offer, which segment, which moment. And I think it's the third one that's kind of changed the conversation.
(36:09):
The difference between members are more valuable. The leadership might nod and say, "Oh, okay. Yes, great." But when I say we moved this segment by this much using this lever, here's what it costs, that's a real commercial conversation. And I think as the program has matured, I'm sure Chris would agree with me, that kind of narrative has really tightened. Early on, we were still trying to prove the principle. Now it's much more granular which channel, which margin profile. And I think the engagement with the senior leadership has really gone up because our rigor has gone up.
Aaron Dauphinee (36:48):
Chris, maybe you can offer ITA Group's perspective here. What made the results sustainable rather than just short-term wins?
Chris Jones (36:57):
Well, I think having the right cadence, having the right context, that's a communication expertise that the Krispy Kreme team executed very well. What we did though is, as I said earlier, we didn't really just rely on we sent a thing and a thing happened. We said, "What is the sustained performance? How do people continue to respond and how does that value build over time?" And I think the other thing we did is there's sometimes when we said, Melissa and I and our teams, kind of people who do this for a living, we're like, "Well, of course everybody will understand X, Y, Z." So we kind of skip over that. Then we realize, "Oh, we need to actually show that. Here's a good example. When Melissa talks about members spending almost twice as much as non-members, the question that came from some of the leadership was, well, that's probably just because our most valuable non-members are the people who are joining the program."
Melissa Wood (37:48):
And
Chris Jones (37:48):
We said, "Oh, actually, no. We've looked back at mass card data, done analytics to household that mass card data and follow similar people who go from non-member to member, and we saw that they grew 140% after they became a member." So it's just knowing to anticipate what might the skepticism be? What might the pushback be? What might, well, yeah, but be. And if you can anticipate those things, you're going to accelerate the alignment and the progress you can deliver.
Aaron Dauphinee (38:19):
Oh, that's excellent. That's excellent. Before we transition to a bit of a Q&A portion here, I think it's always great to get or offer up some advice to the audience when we have two strong, pardon me, subject matter experts such as yourselves. If there were three key learnings, so to speak, that you'd like to provide for our audience to take back to their organizations to get executive buy-in in the same way that you've done it, what would they be? Melissa, maybe you can offer one, Chris, let's go back and
Melissa Wood (38:47):
Forth. Yeah. I think loyalty, if it sits as just a marketing initiative, we'll get you a loyalty program, but loyalty as a business initiative will get you a program that's going to survive. You got to tie your loyalty KPIs to the commercial metrics that your CFO, finance director already cares about and that's incremental revenue, margin per visit, retention, not just engagement metrics that kind of live on a marketing dashboard. And those programs are the ones that survive budget reviews. They're the ones finance defends, not the ones just the marketing team defends.
Aaron Dauphinee (39:30):
Very good. Chris, maybe we'll go back and forth.
Chris Jones (39:33):
Yeah. I mean, I wish I could say that one because I would just underscore it. The broader the perspective is about the program, the more alignment you're going to have. So I would say that this idea of having an insatiable curiosity is really essential because if you don't have much data, it's hard to be curious, but loyalty programs have mountains of data. So curiosity is there for the taking. And so Melissa has that kind of insatiable curiosity. Our team has that insatiable curiosity and I think as many questions as we get asked about the program, we've probably collectively asked 10 times that many questions. And so we keep talking about analytics as the proverbial onion and you're peeling back the layers. Everybody's like, "All right, we discovered X." And it's like, "Well, it's not like your boat landed on the shores of America." No, there's a lot more too.
(40:24):
It's like, okay, yeah, but why did they do it and how did it differ among the people who did respond and what happened differently in the ensuing six months? So there's always another question asked. So I think this insatiable curiosity is another key insight to kind of equip your team with.
Aaron Dauphinee (40:39):
Oh, I like that one. And the analogy works is very resonant in my mind as you described that. Melissa, maybe a third to, we always like pockets of threes in terms of learning.
Melissa Wood (40:48):
Yeah, sure. I would say something I brought with me from my time working at Sky was when something works, industrialize it as quick as you can and when something doesn't bin it off quickly. We used to say fail fast, find out what isn't going to work really quickly and move on and then scale up really quickly the thing that is working. So for us, as we've discussed, that meant moving from a successful test to scaling that rollout in around four months and just being really decisive about switching off the things that just didn't earn their place and keeping the test pipeline running the whole time. As Chris has just said, the point isn't just to land one big thing and then just think, "Okay, well, that's over." It's just to keep finding the next thing while you're industrializing the last one. And I think it's something you could adopt inside whatever kind of environment you're working in.
(41:43):
You can't always control the conditions around the program, but you can control how decisively you act on what the data's telling you.
Aaron Dauphinee (41:51):
No, I love that. That's great. This has been good conversation. I want to get to some questions that audience members are asking. So we'll switch to the Q&A format reminder to just post your questions and we'll try to get to all of them. But first off, and open it to either of you to answer these as we go through, when you look at Krispy Kreme's journey, which elements of the strategy are most transferable to other brands regardless of industry or size? That's the question.
Melissa Wood (42:18):
Chris, do you want to take that one?
Chris Jones (42:20):
Yeah, I think one thing we would say is that this idea of context and occasion relevance, not just plain personalization is true everywhere, whether you're in a super high frequency business, a relatively low frequency business, once every X year's business, there's still a role for loyalty, but it's sort of if someone's not trying to purchase today, are you trying to build consideration? Are you trying to build recommendation? Those are all things, and so I think context matters. That’s when Melissa talked about the occasion and the mindset of the customers at Krispy Kreme around that occasion, that's a super transferable, true north for any business, any brand, any loyalty program in our experience.
Aaron Dauphinee (43:05):
Very good. I like that. That's great response. Here's another question. You've both emphasized loyalty as a business initiative, not just a marketing one. So, what metrics or outcomes tend to resonate most with executive leadership? So, getting a little more specific here.
Melissa Wood (43:19):
Yeah. I think for us it was incremental revenue, margin per visit, retention rate, cost per pound return. But for people listening to this, it's really dialing into the metrics that move your executives, which are going to be the ones that they already track. So, it's aligning to that to really get yourself heard. And the numbers that I've already shared around the program have really done the heavy lifting internally. They've changed the conversation between marketing and senior leadership because they're commercial outcomes, not just marketing. And that's kind of what gets the cut through. Of course, engagement metrics are always really useful for diagnostics, but they might not survive a budget review, whereas incremental revenue does.
Aaron Dauphinee (44:10):
Oh, I love that. That's amazing. There's another question that's similar to this a little bit. For marketers who feel overwhelmed by analytics, where should they realistically start to ensure analytics actually drive decisions? So, I think you touched on that a little bit, Melissa, but also just not just their dashboards. Maybe Chris, you can offer a perspective on this.
Chris Jones (44:28):
Yeah, I think it's probably pulling again on the thread we talked about a little earlier that don't worry that your analytics are like this monolithic everything at once kind of approach. The beauty of analytics, especially in a loyalty program, is your ability, like I said earlier, to manage risk and exposure and learning at a very manageable level. We can talk to a thousand customers, not 10 million customers. When we get it right, then we'll talk to 10 million customers, no problem. But I think if people are worried about, like we said, there's one, mitigate the risk with how you test and learn and two, make sure you're having open dialogue about, well, we will do things that don't go as we expected. And if everybody expects that from the outset, from the onset, then you should be fine. And I think the more you think this is like a big thing that's going to take years to figure out and prove it all at once, I would say take the opposite approach.
(45:21):
Think about it in small steps, in measurable steps. And Melissa just said a moment ago, you were asking, "Well, what metrics should people think about? " I'd say, "Don't even worry about that. Worry about the metrics that your business is worried about and connect those back to your program." And when you do that, there's a lot more freedom to operate, I think, as Melissa rightly pointed out.
Aaron Dauphinee (45:39):
Oh, I think that's great advice as well too. We've got one question that's actually specifically for Melissa that says. So, for Melissa, have you explored any store employee initiatives to help support the loyalty program either to reinforce any kind of emotional connections or amplify the in- store experience?
Melissa Wood (45:55):
With our retail stores, yes. So, we did a lot of work engaging our retail staff at the beginning of the year. For example, I attended their town hall. I have been on team calls with most of the areas in the country, basically just showing them what we're trying to do, showing them the metrics behind it. They had a lot of questions, and it was absolutely the right thing to do because you really need to get them on side. They are facing the customers every day and also it works the other way. They get to tell me the difficulties that customers might come across, or they'll tell me the things that customers absolutely love and that's all invaluable because obviously I can't be in store every day and it's just about building that relationship with them to drive the program harder. I rely on them for acquisition and engagement with our customers.
(46:59):
So, they're really a key part of what we do
Aaron Dauphinee (47:03):
And then talking about what you do, there's a question here. What's next for Krispy Kreme UK's Smiles Rewards Program?
Melissa Wood (47:10):
I think the principle we kind of hold ourselves to is that the program should keep evolving as we learn more about our members. We're kind of never done with the design of it. What I can say is that our direction of travel will be deeper personalization, sharper measurement, and continuing to make sure every pound we spend is really earning its keep. We're always evaluating what's working and what isn't and we'll just keep making changes where the evidence points us.
Aaron Dauphinee (47:42):
Very, very good. There's a question here that maybe it will trend towards Chris, the asker has led into. So, if the brand wants to get started on this, what should the first steps be?
Chris Jones (47:54):
Wow, that's like a big broad question. I think it really depends on where you are in your journey. I think if you have the program and the technology, then you need help with analytics. I think there's a lot of resources you can go to. One of the things that's maybe different about ITA Group is that we aren't only a technology provider. We're the provider of technology for Krispy Kreme, but we're an end-to-end loyalty partner. So, I think it's about finding the right partner, and it might be a partner who can provide end to end or it might be a partner who does end-to-end and you can pick that piece out of what you need for your program. So, I do think having a resource and a partner who can ... Melissa and I use one another's teams as a sounding board. "What about this? No, I wouldn't try that.
(48:39):
What about this? "Yeah, that sounds good. So, I think having the dialogue and making sure that you're going beyond just technology, I think Melissa talked about it, it's not technology alone that makes this work. It's curiosity, collaboration, analytics and the technology to make it happen. So, I'd say look for support and partners who kind of bring a broader perspective.
Aaron Dauphinee (49:02):
Very, very good. Another question here, we were talking about the performance of members versus the performance part of me of non-members quite a bit. How did you quantify the performance of non-members?
Chris Jones (49:15):
Yeah, maybe I'll take that one. Rooted is something I referenced earlier. We were actually looking at masked card data. The benefit of the Krispy Kreme is they're taking all of their UK transactions via electronic payment. So 100% of purchases were being done by electronic payment. So, we can in a secure and honoring private data look to see patterns and analytically we were looking for patterns and we do what we call householding. We say," Oh, here's a similar mass card that shows up in the same place, similar days of the week. "That's probably the same person. And so, what we do is we use analytical techniques to look at that data and then when somebody became a member, won't surprise anybody, you don't generally go out and get a new credit card the day that you become a Krispy Kreme rewards member. And so we can track that pre-post, we can track who never joins, who's early joiner, and that was analytical techniques that our team develops and employs for our clients.
Aaron Dauphinee (50:22):
Oh, that's very interesting because one of the best practices we talk about is always giving the consumer the option to pay and the currency they want, but this by stringing it into being totally online payments or non-cash payments, you get this great to and from kind of motion. That's wonderful. Here's a question. It's from me actually Knowing what you know now, is there anything that you'd go back and do differently or either how you started or how you scaled depending where you're at? I'll open that to both of you to kind of wrap up the Q&A.
Melissa Wood (50:55):
Yeah. I think for me it would be getting people genuinely interested in your program early on and treat it as everybody's. That sounds really obvious, but it is surprisingly hard in practice. Even now my own team, some people will say," Oh, I've done that for you, Mel. "And I have to remind them," No, you've done it for the program. It's not mine. It belongs to all of us. "And if it's hard inside the team running it, you can imagine how much harder it is across the rest of the business, but that's really where the shift can happen. I alluded to talking to the retail teams, talking more to the finance teams. Once people start to see the program as theirs too, everything kind of starts to shift. They get curious about the data. They ask you why you're running those offers and they ask, to Chris's point about the onion, they start asking questions and that's when the loyalty program really stops being something that marketing just does and starts being something the whole business does.
Aaron Dauphinee (51:57):
No, I like that answer. That's really strong. For me, as we kind of wind down, you're getting close to the top of the hour, one clear takeaway that I had from this conversation and it fits into our ethos here at The Wise Marketer is that loyalty must go beyond marketing. You said that, both of you said that at various points. So for us in particular, when it evolves beyond being seen as just a marketing initiative and starts to begin with being that framework for business decisions in the organization, that's the holy grail. That's why we're in this, I think, to some degree and certainly decisions that are being made on proven margins, business KPIs about growth, not changing to KPIs that are marketing oriented, but changing to the business ones, that certainly is a strong path forward. And also then I think a call from senior leadership to get those metrics and insights to then drive their business decisions.
(52:49):
They're calling you, if I understand this correctly, before they start to make decisions, that's a really powerful action set to embolden a business forward. So let me direct this to both of you. If there's one mindset shift that you'd want loyalty and marketing leaders to leave with today, what would that be? And perhaps let's start with you, Chris, first, and then we can leave Melissa to have the final word today.
Chris Jones (53:13):
Yeah. It's a theme we've already talked about. It's have that curiosity and couple that curiosity with a sense of, I'll call it measured fearlessness. Fearlessness, meaning don't be afraid to try things, but manage the risk in a sensible way. That's what test and learn is. So have that curiosity and a sensible fearlessness, you're going to uncover great things for your business.
Melissa Wood (53:35):
Yeah. And at the risk of repeating myself, stop thinking of loyalty programs that just are something that sit in marketing alone. They belong to the whole business, to trading, to finance, to operations, to retail. And sometimes it's not the programs that get real traction, not necessarily the cleverest ones. They're the ones that the rest of the business has come to feel completely invested in. And if you're able to build that, then it does make everything else easier.
Aaron Dauphinee (54:05):
Oh, I think those are two great thoughts for us to part with. So what a very powerful story you've shared with us today. I want to thank you both Melissa and Chris. This was just an incredible conversation. I really enjoyed it and I hope that our listeners did as well too. The Krispy Kreme UK story is one that I think is going to resonate with so many of our practitioners and the program operators out there. So whether you're at the beginning of your analytics journey or well along the path, this is something to pay attention to. Sorry, we'll be sending out our recording and a link to the published version on The Wise Marketer. Again, likely available next week for those who want to watch it over again and pick up on this conversation once more. But if you have any follow-up questions for Melissa, Chris, or even our team here at The Wise Marketer, then you can certainly reach out to us again at support@thewisemarketer.com.
(54:52):
But otherwise, we thank you for your time. We know it's valuable. Thank you, Chris and Melissa for your time. It's also valuable to spend with us and we want to wish everyone to enjoy the rest of their day or evening. So as always, stay loyal. Bye everyone.
Melissa Wood (55:06):
Bye. Bye-bye.