Latest / Leaders in Customer Loyalty, Powered by Loyalty360 / #520: Leaders in Customer Loyalty: Brand Stories | How Deutsche Telekom AG Is Expanding Loyalty Beyond Telecom

Transcript

#520: Leaders in Customer Loyalty: Brand Stories | How Deutsche Telekom AG Is Expanding Loyalty Beyond Telecom · Leaders in Customer Loyalty, Powered by Loyalty360

• 0:05
  SPEAKER_01: Good afternoon, good morning.
• 0:06
  SPEAKER_01: This is Mark Johnson from Loyalty560.
• 0:09
  SPEAKER_01: Welcome back to our Leaders in Customer Loyalty series.
• 0:11
  SPEAKER_01: This is the Brand Stories Edition.
• 0:13
  SPEAKER_01: It's great having you with us every Thursday.
• 0:16
  SPEAKER_01: Mobile and telecommunication companies don't always come to mind when we think about high engagement or standout customer loyalty.
• 0:24
  SPEAKER_01: When price or network quality is the main decision driver, switching providers can feel fast and purely transactional.
• 0:33
  SPEAKER_01: But today's guest represents a brand doing something very different, breaking the mold and building genuine customer loyalty across Europe.
• 0:42
  SPEAKER_01: By leaning into relevance, personalization, and emotional connection, this team is driving deeper engagement in a category that's not traditionally known for.
• 0:52
  SPEAKER_01: And this just isn't a big program.
• 0:55
  SPEAKER_01: It's a truly borderless one that works with more than 5,000 partners, adding real value to the customers and the broader ecosystem.
• 1:05
  SPEAKER_01: This telecom leader is raising the bar and redefining what best in class customer loyalty looks like.
• 1:12
  SPEAKER_01: I'm excited to be joined by Arnab Gaswamy.
• 1:16
  SPEAKER_01: He's the Vice President of Customer Engagement and Partnerships at Deutsche Telecom.
• 1:20
  SPEAKER_01: Arnab, great to have you here on the Leaders in Customer Loyalty series.
• 1:24
  SPEAKER_01: How are you today?
• 1:26
  SPEAKER_01: I'm doing good, Mark.
• 1:28
  SPEAKER_01: Thank you.
• 1:29
  SPEAKER_01: Should be a great discussion.
• 1:31
  SPEAKER_01: Looking forward to the discussion for sure.
• 1:33
  SPEAKER_01: First off, for those who may not be familiar, can you give us an introduction to Deutsche Telekom?
• 1:38
  SPEAKER_01: You know, how's the company started, what you guys do, how you do it.
• 1:44
  SPEAKER_00: Sure.
• 1:45
  SPEAKER_00: Uh Deutsche Telekom is uh one of the largest uh integrated telecom operators in the world uh with annual revenues of around 119 billion euros.
• 1:57
  SPEAKER_00: Uh when we talk about telecom operations, we are present uh largely in two continents, uh the North America and uh Europe.
• 2:06
  SPEAKER_00: In North America, we are known by the brand uh T-Mobile.
• 2:09
  SPEAKER_00: In Germany, where Deutsche Telekom actually started many, many, many years back, is the home.
• 2:16
  SPEAKER_00: Uh and we are also across nine other countries in Europe.
• 2:20
  SPEAKER_00: Um we are the number one uh telecom most valuable brand in the world.
• 2:27
  SPEAKER_00: Uh comprises all of our operations together.
• 2:32
  SPEAKER_00: And in Europe, we are the we are the number one uh most valuable brand across all categories.
• 2:38
  SPEAKER_00: So uh it's it's it's a company that uh focuses uh uh a huge amount of uh their efforts uh in customer-centric uh uh offerings as well as uh finding uh figuring out what the customer wants.
• 2:57
  SPEAKER_00: Um I take care of magenta moments, and that's the customer engagement and loyalty uh part of uh B2C for the B2C audience uh across the European footprint.
• 3:11
  SPEAKER_00: Right?
• 3:12
  SPEAKER_00: So uh this is where I come into the play or our team comes into the play.
• 3:18
  SPEAKER_01: Okay.
• 3:18
  SPEAKER_01: You you talked about you're the most valuable uh company in all of Europe on the stock exchanges.
• 3:25
  SPEAKER_01: No, in terms of brand valuation.
• 3:27
  SPEAKER_01: Brand value brand value, yeah, yeah.
• 3:28
  SPEAKER_01: Makes most recognized.
• 3:29
  SPEAKER_01: Okay, perfect.
• 3:30
  SPEAKER_01: And that that takes into consideration brand recognition, uh kind of what uh customers feel about the brand, kind of that that uh the valuation there, correct?
• 3:39
  SPEAKER_01: Absolutely.
• 3:40
  SPEAKER_01: Well, when you look at Deutsche Telekom, uh we know what's led to the great success that it's had.
• 3:46
  SPEAKER_00: Well, I'll I'll I'll rather talk because Deutsche Telekom is much larger than uh uh uh the remit of uh the discussion, obviously.
• 3:55
  SPEAKER_00: But I would rather uh talk a bit more about uh our customer engagement initiative, uh which in many ways manifests the brand ideology that we believe in, which is basically not being uh uh content with connecting people that all telecom operators do.
• 4:17
  SPEAKER_00: Uh rather uh taking uh the uh agenda a bit more uh uh further and uh being the leading digital enabler in our customers' lives.
• 4:28
  SPEAKER_00: So that's the motto.
• 4:29
  SPEAKER_00: Uh and that's why we don't restrict ourselves only to telecom, but we move beyond telecom and try to see what is our right of uh right to play to offer um uh in an incremental value to our customers.
• 4:43
  SPEAKER_00: And that's where uh Magenta Moments uh comes into the play and the way it was designed to uh uh shake off the traditional, you know, the do this, get that kind of loyalty initiatives uh that are there in the markets.
• 4:57
  SPEAKER_00: Uh, if you look at uh the different uh telecom programs, either they are points based, pretty much uh based on your transactions or uh uh you know uh discount or cashback led.
• 5:10
  SPEAKER_00: Again, very, very transactional.
• 5:12
  SPEAKER_00: However, the way we looked at it as uh telecom operators with at least 25% of uh population as our market share, uh, we have a bigger role to play.
• 5:24
  SPEAKER_00: And uh adding to that, it's not only the retail consumers, but it's also about all the B2B customers that are our clientele.
• 5:33
  SPEAKER_00: And we saw that uh we can be a very reliable bridge between our B2B partners or B2B uh clientele and our B2C audience, and thereby can create much bigger benefit pool for our B2C customers uh or the consumers that we talk about, and also bring in value to our B2B clients.
• 5:55
  SPEAKER_00: So that's where Magenta Moments uh uh vision was all about.
• 6:00
  SPEAKER_00: Uh so it was not only about uh retaining customers by giving some freebies, discounts, uh cashbacks, creating a points-based program which you can discount your bill with, but bringing in an ecosystem of partners into the program, which made sense uh for our customers and for those partners being part of the program, uh, it was a very viable means to reach out to our audience, uh to their audience, which was our consumers, uh, thereby uh you know giving a much more 360-degree effect or being more relevant in short uh for our consumers in their everyday lives, as well as uh uh the next objective of creating some viable revenue streams with the context of uh the loyalty and engagement program.
• 6:54
  SPEAKER_01: Well, it's interesting because you mentioned not uh a lot of telecom providers uh have loyalty programs.
• 7:01
  SPEAKER_01: The growing list do, right?
• 7:02
  SPEAKER_01: But they're more transactional, they're more based on discount, right?
• 7:06
  SPEAKER_01: There's not necessarily that that deep uh reciprocity between the brand and the customer.
• 7:11
  SPEAKER_01: So when you look at the Magenta Moments program, yeah, you talked about moving past transactional, uh obviously focused on more experiential to drive, uh, I would assume, more emotional loyalty.
• 7:22
  SPEAKER_01: So, you know, what does that deeper level of connection, that emotional loyalty mean to you and the brand?
• 7:30
  SPEAKER_00: Yeah, so I mean, when right from the beginning, when we were designing the program, there were two things that we didn't want to do.
• 7:40
  SPEAKER_00: One was creating a loyalty program which is transactional and very inward looking.
• 7:48
  SPEAKER_00: Okay.
• 7:48
  SPEAKER_00: Now, telecom as a category is not very aspirational.
• 7:52
  SPEAKER_00: So, I mean, uh uh it's not like a travel or hospitality or even retail, one might argue.
• 8:00
  SPEAKER_00: It's it's pretty much a service that we provide, which is right at the back end of the customers.
• 8:07
  SPEAKER_00: The customers might be using our service to browse Netflix or YouTube, but they don't uh realize uh the kind of value that we bring in, right?
• 8:18
  SPEAKER_00: So that was uh one thing that we didn't want to do and make it a transaction inward-looking uh program.
• 8:26
  SPEAKER_00: We wanted to be more productive and uh bring in value beyond telecom to them using the right-of-way that we have with the different uh B2B partners that we have within our ecosystem.
• 8:42
  SPEAKER_00: And thereby creating value right from uh uh the time they get up in the morning till the time they go back uh on their bed.
• 8:52
  SPEAKER_00: So you have uh you get up in the morning and uh uh you pick up a coffee and there is uh Starbucks or a Costa uh available for you uh giving a relevant offer.
• 9:05
  SPEAKER_00: Uh you want to book a ride to the office, you can book a ride through us because there is uh an Uber offer waiting for you.
• 9:14
  SPEAKER_00: You are in the office, you want that uh lunch to be delivered.
• 9:17
  SPEAKER_00: There is a Volt in US the parent company's dashboard, uh gives you uh uh a certain uh credits or a complimentary vault plus, which gives you a free delivery.
• 9:29
  SPEAKER_00: Uh you are out of your office and you want to catch up on a movie, you can enjoy a buy one, get one.
• 9:36
  SPEAKER_00: And uh you come back home, you can uh uh get uh uh a preferential Netflix uh uh offering uh for you to uh to enjoy.
• 9:48
  SPEAKER_00: So that's the basic promise to the customer, and that is without any conditions, just because you are our customers, we bring in this ecosystem to you.
• 9:59
  SPEAKER_00: However, on top of that, there are uh uh the the entire program is delivered digitally in a very gamified way.
• 10:09
  SPEAKER_00: So uh we uh firstly uh the program is embedded in the digital app uh of uh uh Deutsche Telekom.
• 10:18
  SPEAKER_00: And by the way, we have one app code across all the countries.
• 10:22
  SPEAKER_00: So there are different instances of the app, but one app code.
• 10:26
  SPEAKER_00: Hence uh the product can be super uniform, and whatever we bring in for Greece can be brought in for Austria or Poland or North Macedonia, whichever the footprint be.
• 10:40
  SPEAKER_00: So they uh uh uh they they they uh get the the app is super accessible.
• 10:48
  SPEAKER_00: We have a penetration of around 78%.
• 10:51
  SPEAKER_00: So 78% of eligible customers uh uh are on the uh uh the Deutsche Telekom One app.
• 11:00
  SPEAKER_00: Um uh and then we build gamification on top of that, so which means uh our uh customers can earn gamified tokens, which we call magenta hearts.
• 11:13
  SPEAKER_00: Uh and these uh hearts are not earned for transactions, but for behavior and influence.
• 11:20
  SPEAKER_00: So for things like uh using the app as the mode of interactions with telecom, uh referring a friend uh into magenta moments, and when the friend joins in, uh they get hearts.
• 11:34
  SPEAKER_00: Uh, using uh the various uh offers and deals that we bring in from partners and us uh in the form of app streaks uh also can give them hearts.
• 11:47
  SPEAKER_00: And all these hearts can then uh be redeemed to either uh win big benefits like uh, let's say uh uh a fully paid trip to uh Disneyland Paris or a concert ticket at the sphere or a Formula One ticket and so on and so forth to amplify the benefits, uh the perceived benefits by the customer.
• 12:10
  SPEAKER_00: So the idea is how much can we be relevant beyond telecom?
• 12:14
  SPEAKER_00: We are relevant in telecom by our service, but how much can we be relevant beyond telecom in our customers' lives, and what kind of uh uh surprise, delight, and joy that we can bring into uh in their lives?
• 12:30
  SPEAKER_01: Excellent.
• 12:30
  SPEAKER_01: And you talked a little bit about value, uh, making sure that the the the you know the customers find value in the customer.
• 12:36
  SPEAKER_01: That's a big discussion right now in the customer loyalty industry, right?
• 12:39
  SPEAKER_01: With some of the economic uncertainty that exists uh in uh holistically, but also in different verticals.
• 12:45
  SPEAKER_01: When you look at bringing more value to the customer, you talked about that, bringing value to them throughout the day.
• 12:50
  SPEAKER_01: You know, how do you do that?
• 12:52
  SPEAKER_01: Do the customers realize that you have uh kind of personalized offers or are very focused on them?
• 12:59
  SPEAKER_01: And you know, how are the customers responding to the value that you're bringing to them?
• 13:04
  SPEAKER_00: Right.
• 13:05
  SPEAKER_00: So uh telecom as an industry or uh the kind of customers that we uh serve, we serve a very heterogeneous audience, right?
• 13:14
  SPEAKER_00: So unlike let's say a Frequent Flyer program or even a hospitality program or even uh a bank HI program, which are very, very homogeneous, you know.
• 13:25
  SPEAKER_00: Uh we have uh uh the challenge of being relevant to uh someone who is uh spending, let's say, around 200 euros a month uh for their telecom services, uh, but also be relevant to the other part of the other end of the spectrum to customers who are maybe let's say spending only 10 euros uh per month on their telecom services.
• 13:51
  SPEAKER_00: Now uh saying that uh the way we uh uh work out the value equation are by doing two things.
• 14:01
  SPEAKER_00: One, uh we have been able to create a very robust, exclusive marketplace of privileges.
• 14:09
  SPEAKER_00: So today we have more than 5,000 brands in the program.
• 14:14
  SPEAKER_00: Okay.
• 14:15
  SPEAKER_00: However, uh these 5,000 brands can be very intimidating, you know.
• 14:19
  SPEAKER_00: So it's it's like uh it's uh uh finding relevance is uh when when I say 5,000 brands, is like searching uh for a needle in the haystack, right?
• 14:29
  SPEAKER_00: So uh what we do, uh and another advantage as telecom operators are also that we have we are sitting on a lot of data, a lot of customer data.
• 14:37
  SPEAKER_00: Uh, there is a huge amount of data to slice and dice, considering that uh the program is opt-in, which means we take consent for all customers who have decided to be part of the program, we have the opportunity of personalizing the offers, the aims uh and the rewards to the best of uh uh uh uh what AI can do today.
• 15:06
  SPEAKER_00: So uh firstly, all the offers are tagged using LLM.
• 15:11
  SPEAKER_00: Uh so a McDonald's, uh, for example, could be tagged uh as uh uh fast food, a burger, uh a cafe, and so on and so forth, uh, as well as with uh geolocation.
• 15:23
  SPEAKER_00: So if somebody is searching for McDonald's and we do not have McDonald's, we can say that sorry, we do not have McDonald's now, but we have 10 other uh offers uh uh uh uh related to your search uh around you.
• 15:39
  SPEAKER_00: Uh moreover, the entire feed of Magenta Moments is uh customized in a way that uh we show uh offers that fit in the interest based on either the profile that they had uh given their information about or their past transactions and uh searches and navigations.
• 16:00
  SPEAKER_00: Uh for a cold start, we also use lookalike modeling uh to bring in some kind of relevance uh when the customer is absolutely new into the program.
• 16:11
  SPEAKER_00: So uh by this uh we uh we bring in that relevance, so a mix of a big uh number of partners and offers, however uh offering these in a very personalized uh manner to customers.
• 16:30
  SPEAKER_00: So just to give you some understanding, uh we didn't start with personalization when we started the program.
• 16:37
  SPEAKER_00: We used to segment, so uh we didn't have the right tools, uh, nor did we have enough data uh to start personalizing in a meaningful way.
• 16:48
  SPEAKER_00: However, uh from the time when we moved into personalization and we moved gradually.
• 16:53
  SPEAKER_00: So we didn't uh ditch segmentation completely.
• 16:58
  SPEAKER_00: Uh uh we uh started with a certain uh uh set of audience uh getting personalized feeds, and then we started scaling up to understand what's the uh b results.
• 17:12
  SPEAKER_00: Uh however, uh on an ongoing basis, we have seen that uh uh a personalized recommendation gives us a 10x uh uh higher uh conversion in terms of transactions vis-a-vis a segmented approach.
• 17:30
  SPEAKER_00: So we see that it's not a very fancy experimentation, but it's something that is leading to big results.
• 17:41
  SPEAKER_00: And that's the reason uh we are scaling our personalization.
• 17:44
  SPEAKER_00: That's one of the top priorities, uh, to scale up personalization across uh uh not only magenta moments, but across the organization using uh more centralized data, uh uh be it uh retail outlets, be it the contact center, uh, as well as our digital channels.
• 18:06
  SPEAKER_00: Excellent.
• 18:07
  SPEAKER_01: When you look at uh the success of the program, what are the challenges or opportunities in running a customer loyalty program across several regions?
• 18:14
  SPEAKER_01: You talked about having one app code that can be customized uh based on the regions, potentially based on privacy concerns that Greece may have differently than Poland or Slovakia.
• 18:26
  SPEAKER_01: You know, what are some of the opportunities or challenges you see in running a program across such a large uh number of regions?
• 18:34
  SPEAKER_00: Yeah, yeah.
• 18:36
  SPEAKER_00: So um I think uh there are a couple of challenges and as well as they they they they are also our opportunities.
• 18:46
  SPEAKER_00: So first thing is um you know driving uh relevance at scale.
• 18:52
  SPEAKER_00: So considering that uh uh let's say uh uh an Austria is very different from Poland uh or let's say uh Greece uh in terms of not only customer expectations but also in terms of regulatory environment.
• 19:08
  SPEAKER_00: Just to give you an example, yeah, gamification works perfectly well across all our countries except uh Poland, where uh you cannot do any kind of uh game of chance.
• 19:21
  SPEAKER_00: Right?
• 19:21
  SPEAKER_00: So uh which means you need to find new ways not minimizing the value, delivering the same value, but changing the mechanics.
• 19:31
  SPEAKER_00: So you have to customize and uh uh to the to uh to the nuance of each and every country to deliver the same value.
• 19:40
  SPEAKER_00: So so that's definitely a challenge.
• 19:43
  SPEAKER_00: Uh however, that's uh uh that's an opportunity to uh test out new things in different countries and then scale it up across other countries.
• 19:54
  SPEAKER_00: Um that's that's that's that's one of the challenges.
• 19:58
  SPEAKER_00: The second challenge or opportunity is that we have been able to create a critical mass now uh with the program that we have launched since 2023.
• 20:08
  SPEAKER_00: And we are now looking at uh uh shifting the gears and moving up the ante uh to not only uh uh position moments as uh as an engagement initiative, which drives uh indirect monetization by increasing customer lifetime value, by let's say, doubling the uh the app usage and so on and so forth.
• 20:33
  SPEAKER_00: But our mandate is to drive or set a use this context of engagement beyond the core to drive uh new businesses uh uh which are non-telecom.
• 20:46
  SPEAKER_00: So we are uh already rolling out uh uh Discovery to check out mini marketplaces on moments for gifting, uh travel, and dining.
• 21:00
  SPEAKER_00: Uh as we speak, we have uh rolled out gifting across uh four countries, and uh there is a very clear roadmap to use Magenta Moments uh as the lever to start creating new businesses in these lifestyle verticals.
• 21:19
  SPEAKER_00: Also, again, because uh these are the lifestyle verticals where we saw the most amount of transactions uh from our customers.
• 21:28
  SPEAKER_00: And we believe, based on different market researches that we have done, we have the right to play in these markets.
• 21:35
  SPEAKER_00: And for our very closed user group, we can be uh we can bring in a disruptive model.
• 21:41
  SPEAKER_00: Okay.
• 21:42
  SPEAKER_01: Excellent.
• 21:43
  SPEAKER_01: You you talked a little bit about kind of kind of the the regional differences in Poland, you can't have games of chance.
• 21:49
  SPEAKER_01: Uh, are there other factors that influence why one may choose a wireless or telecom provider uh in Poland versus Macedonia?
• 21:56
  SPEAKER_01: Are are there are are they more homologistic?
• 21:59
  SPEAKER_01: Uh Kind of heterogeneous or more homogeneous with regard to how they uh may look at uh the value of a wireless telecom provider?
• 22:10
  SPEAKER_00: Yeah, so uh primarily there are three factors for uh choosing a telecom provider.
• 22:17
  SPEAKER_00: Um and and this works for both fixed line as well as wireless, uh considering that we are we are an integrated operator in fixed line, wireless, uh uh uh broadband and TV.
• 22:32
  SPEAKER_00: Um I think the first one which still dominates uh the decision making process is network quality, which is which is which is uh uh the hygiene.
• 22:44
  SPEAKER_00: Uh and that tops any other factors, right?
• 22:50
  SPEAKER_00: Yeah, the second uh parameter uh and this uh parameter varies from country to country is the price.
• 23:00
  SPEAKER_00: Okay.
• 23:01
  SPEAKER_00: Now, while there are certain countries uh where we find that customers are much more price sensitive than some of the others, okay.
• 23:12
  SPEAKER_00: Um but there is some amount of uh uh or uh uh um decision making that tilts in uh favor of what uh or which operator gives us a better price.
• 23:28
  SPEAKER_00: Now the third part which we are seeing or the third parameter that's coming up uh uh more and more, much more clearly, is the brand value or what they get out of it.
• 23:42
  SPEAKER_00: And sometimes in some of the markets we see, this uh kind of nullifies the price equation.
• 23:50
  SPEAKER_00: So if they perceive that the uh value provided by a particular brand is much more than another brand brand, which might be discounted in price, but doesn't give the kind of value that uh uh uh brand A gives, then people go for the one which gives a better brand.
• 24:11
  SPEAKER_00: And this brand value comes through multiple things.
• 24:14
  SPEAKER_00: One, uh what is the kind of uh fixed mobile convergence benefits that uh the telecom operator can give?
• 24:25
  SPEAKER_00: So one of the uh the uh the ways to uh increase the brand value equation is to give uh an excellent fixed mobile convergence uh offering.
• 24:38
  SPEAKER_00: Uh we see uh most of our customers have both fixed and mobile uh subscrip subscriptions through us.
• 24:46
  SPEAKER_00: And this is where we give a much better value rather than giving individually on wireless or wireline, right?
• 24:54
  SPEAKER_00: Yeah.
• 24:55
  SPEAKER_00: The second uh uh uh way to uh enhance brand value is through loyalty and engagement initiatives like Magenta Moments, where we provide immense perceived value uh through our engagement offerings.
• 25:09
  SPEAKER_00: Just to give you an example, um you know, we give away 12 months volt plus subscription complementary.
• 25:18
  SPEAKER_00: Uh and uh a volt plus subscription is around 8 euros per month.
• 25:23
  SPEAKER_00: So it's around, let's say, 99 to 95 euros worth of savings uh to customers without any conditions.
• 25:31
  SPEAKER_00: Similarly, uh we had uh an offer with Perplexity where we gave away Perplexity Pro uh 12 months complimentary to all our subscribers just for being telecom subscribers.
• 25:44
  SPEAKER_00: So these kind of and these are just a couple amongst various other benefits that we bring in on our day-to-day lives.
• 25:51
  SPEAKER_00: And these kinds of uh value, when we talk about in the market, uh increases the brand value perception.
• 26:00
  SPEAKER_00: And we see that uh uh month uh in and month out in the various NPS surveys uh that that we uh uh conduct uh across the markets.
• 26:14
  SPEAKER_01: Okay, that's excellent.
• 26:16
  SPEAKER_01: It's great to hear the focus uh and and you know understanding kind of the the value equations, what what the drivers are for uh you know, the mobile, the telecom, uh the fixed services.
• 26:28
  SPEAKER_01: So that uh that that that's it's very significant, as you mentioned.
• 26:31
  SPEAKER_01: And the value that you provide seems to be uh consistent with the markets as well, correct?
• 26:37
  SPEAKER_01: That's right.
• 26:39
  SPEAKER_01: When you look at partnerships, partnerships are another thing.
• 26:41
  SPEAKER_01: You talked about having 5,000 different options with regard to kind of the benefits for the customers.
• 26:47
  SPEAKER_01: How do you go about uh making sure the partnerships work from a B2B perspective?
• 26:51
  SPEAKER_01: Uh like say you talked about McDonald's or you know, different burger chains or uh uh fast uh food options or quick service options.
• 26:59
  SPEAKER_01: How do you make sure the partnerships work so well?
• 27:01
  SPEAKER_01: Because they are an integral part of your program, correct?
• 27:05
  SPEAKER_00: Yeah, yeah, that's a great question, actually.
• 27:08
  SPEAKER_00: Um so the way we look at partnerships is uh is like a pyramid.
• 27:13
  SPEAKER_00: Okay.
• 27:14
  SPEAKER_00: Um and again, um, you know, the the way we look at uh uh the categories and uh partners is uh worn out of uh customer feedback, uh uh market research and uh data insights.
• 27:31
  SPEAKER_00: Uh and there was a very clear message from our customers even before we uh launched Magenta Moments in the markets when we're designing Magenta Moments, uh, wherein the our customers said that while they see that we can bring in international brands into our portfolio, they want to see us support the local homegrown national brands in their countries to be part of the programs as well.
• 28:02
  SPEAKER_00: And hence it was a very clear, strong message to help the local brands uh and by bringing them into the program and giving them that this reach.
• 28:12
  SPEAKER_00: Uh so at the very base layer, which is the largest number of partners, are the uh are are filled up by uh city-specific local brands.
• 28:24
  SPEAKER_00: And however, these brands uh are from four lifestyle categories, which are uh food and beverage, entertainment, shopping, and a bit of travel, which are relevant.
• 28:40
  SPEAKER_00: Yeah, these uh partners are chosen based on their stand, based on customer reviews, based on uh uh you know uh what kind of uh transaction potential they bring in, and so on and so forth.
• 28:58
  SPEAKER_00: But that's that's basically these are the partners who give you everyday uh uh offerings largely.
• 29:04
  SPEAKER_00: Okay.
• 29:05
  SPEAKER_00: Uh so that uh uh uh neighborhood restaurant where you would like to go every uh uh weekend at least once, uh, or that cafe where you uh get your coffee from uh while you're going to the office and so on and so forth, right?
• 29:21
  SPEAKER_00: The second layer are national brands.
• 29:25
  SPEAKER_00: So these are uh brands that are across the entire country.
• 29:30
  SPEAKER_00: So these could be typical examples, could be the cinema chains in the countries, uh, could also be the chain of restaurants in the country.
• 29:40
  SPEAKER_00: So every country has one or two large chains of restaurants.
• 29:44
  SPEAKER_00: Uh this would be uh one of the large uh uh digital travel players uh in the countries, uh, or a shopping chain and a grocery mart in the countries.
• 29:54
  SPEAKER_00: So that is the second layer.
• 29:57
  SPEAKER_00: So we it's it's not a large set of uh partners, but uh relevant set of partners from these uh uh national brands, which gives uh uh a very strong value and relevance to our customers, if not on an on a day-to-day basis, but at least on a weekly basis.
• 30:18
  SPEAKER_00: Then the third layer, uh, which are much smaller, are international partners.
• 30:23
  SPEAKER_00: These are the ones like uh, let's say a Samsung or uh Perplexity or uh Vault uh kind of partners.
• 30:31
  SPEAKER_00: Uh, I am not deliberately taking dictionational brands like McDonald's, Burger Kings because they come into the national chains, since the decision making is done nationally by the franchises.
• 30:43
  SPEAKER_00: However, the uh international partners are the ones where decision making happens internationally, and this is where we sign the deals globally, centrally, and bring these partnerships uh rolled out across the countries from the center.
• 31:00
  SPEAKER_00: And the last but not the least are the experiences.
• 31:04
  SPEAKER_00: So these are the concerts, the theme parks, uh uh, you know, the uh the sports experiences and so on and so forth.
• 31:13
  SPEAKER_00: And uh this uh is a mix of our sponsorships that we do as an organization, uh uh uh with the likes of let's say Bayern Meonic, uh with the likes of uh various concerts that we sponsored, plus at certain times we also fund these uh uh money can't buy experiences and bring it to our customers in a gamified way.
• 31:39
  SPEAKER_00: So that's how we look at the partnerships.
• 31:42
  SPEAKER_00: So at the basic layer, these are large number of uh players uh who give you the everyday relevance.
• 31:50
  SPEAKER_00: Then you have the national players, which might not be relevant uh uh on an everyday basis, but gives you immense value.
• 31:58
  SPEAKER_00: Then you have the international brands, much smaller in numbers, but uh covers the entire geography and brings in a huge lot of uh value.
• 32:06
  SPEAKER_00: And last but not the least, the experiences, which creates that the uh the aspirational value of the program and uh are also strong magnets for uh uh our members to keep coming back to moments and uh sharing, playing uh games to win these.
• 32:25
  SPEAKER_00: By the way, one more thing uh uh uh I missed out uh telling you, considering that we are a pan-European uh program, which means a customer traveling from Greece with the Greek app uh to let's say Prague, uh, would be able to enjoy offers that are there in Prague.
• 32:45
  SPEAKER_00: Uh and that also helps us differentiate from the other operators and also other industry programs that are running in their countries.
• 32:56
  SPEAKER_00: So they they they consider this more of an of a European program rather than a localized country-specific program.
• 33:04
  SPEAKER_01: Well, let's talk about that a little bit because that's a big challenge, right?
• 33:06
  SPEAKER_01: We have members of Ulti 360 that run international programs, the McDonald's you mentioned, some others, hotel programs, Hilton, a core that are members.
• 33:14
  SPEAKER_01: They have challenges in running that program international, right?
• 33:17
  SPEAKER_01: So they become like their own little fightums, right?
• 33:20
  SPEAKER_01: They don't integrate, which creates complexity.
• 33:22
  SPEAKER_01: Uh you know, the Polish program is only for the people in Poland, they you only have English uh UK application.
• 33:29
  SPEAKER_01: How do you get the program to work across these different boundaries?
• 33:33
  SPEAKER_01: Uh you talk about having one app that works consistently, but how do you get it to work in a way that you can address hosting regulations potentially or privacy regulations or even value proposition communication?
• 33:44
  SPEAKER_01: How do you get the program to work so successfully?
• 33:48
  SPEAKER_00: So uh uh there are a few elements uh uh that works towards this.
• 33:53
  SPEAKER_00: One, obviously, uh from a product point of view, uh we we create uh all the functionalities features uh at scale for all countries.
• 34:04
  SPEAKER_00: And uh we ensure that whatever functionalities and features that we create are rolled out across all countries, uh with the exceptions of being regulatory uh uh uh differences.
• 34:17
  SPEAKER_00: So that's on the product part, which is uh from a technical point of view, you can say that it's it's it's doable.
• 34:25
  SPEAKER_00: Uh with with the technology at our disposal, it's now become easy as well.
• 34:31
  SPEAKER_00: Uh however, the second part is the difficult part, uh which is about having a common proposition across all countries.
• 34:42
  SPEAKER_00: Now, uh the the uh the way I define magenta moments is having a global brain with a local soul.
• 34:51
  SPEAKER_00: So uh how it works uh at a proposition level, the the program structure is very, very well defined with a very detailed blueprint for uh the countries to follow.
• 35:07
  SPEAKER_00: Okay, the categories of uh uh the uh of lifestyle verticals are also very clearly defined.
• 35:14
  SPEAKER_00: We are very clear that we would be interested only in the four verticals of food and beverage, travel, entertainment, shopping, besides telco, of course, right?
• 35:25
  SPEAKER_00: But uh as well as the tone of voice and in certain cases the large above-the-line communications are also centrally defined.
• 35:33
  SPEAKER_00: Okay.
• 35:34
  SPEAKER_00: However, we give the flexibility to each of the countries to then localize the proposition by defining the what kind of partners would go in uh based on the pyramid structure that I talked about.
• 35:51
  SPEAKER_00: Uh the number of partners, the number of offers, uh, and the kind of offers, right, within the blueprint, obviously, as well as creating those cultural moments.
• 36:04
  SPEAKER_00: So every country has their own uh uh uh set of uh sensitivities, uh uh special locations, and so on and so forth.
• 36:15
  SPEAKER_00: And this is what countries define and countries manage.
• 36:19
  SPEAKER_00: So they have one product, one proposition blueprint, uh very clearly defined, and within that uh they bring in uh the creativity of uh bringing in the relevant partners, creating the right uh impulse for the partner offers uh and decorating the house the way they would like to decorate the house.
• 36:44
  SPEAKER_00: With regards to cross-border offers, there are certain rules that we follow.
• 36:48
  SPEAKER_00: So, for example, uh cross-border offers need to be uh uh we need to uh the countries need to ensure that the cross-border offers do not have any limitation in terms of inventory, okay, so that uh none of the countries run out of the offers when people or visitors from other countries are utilizing them when they are uh using it.
• 37:16
  SPEAKER_00: Uh these offers are always configured without any condition of hearts, so you don't have any conditions to unlock.
• 37:26
  SPEAKER_00: So these are available just because you are part of the DT family.
• 37:31
  SPEAKER_00: Uh and uh we also uh ensure that none of these offers comes from uh e-commerce players where there is a fulfillment to be done.
• 37:42
  SPEAKER_00: Uh so for example, uh uh we do not want any uh any scenario where somebody is uh traveling in Prague and they have ordered something from uh let's say the local e-commerce player called Alza, and uh uh Alza delivers to uh the person's hotel after two days by when the person is back uh in Austria or Greece.
• 38:06
  SPEAKER_00: Right?
• 38:06
  SPEAKER_00: So these are some of the, I'm just giving some a few examples.
• 38:10
  SPEAKER_00: So there are these things built up uh and uh um uh also uh we use uh a platform which is very robust uh to have a common marketplace across countries, uh, which gives a very easy workflow to our NATCO colleagues.
• 38:29
  SPEAKER_00: Uh when I say Natco, it's uh our country colleagues uh to accept offers from various countries uh very easily.
• 38:38
  SPEAKER_00: So uh that uh also aids the process.
• 38:42
  SPEAKER_00: So it's a combination of uh uh a very robust product uh tech and product architecture with very well-defined uh uh proposition, uh giving the flexibility to the countries to uh have their creativity exercised within the limits of the proposition framework.
• 39:02
  SPEAKER_00: And also, last but not the least, uh uh very strong governance.
• 39:06
  SPEAKER_00: Uh we have uh sync-ups uh every week uh with all the countries in a group.
• 39:14
  SPEAKER_00: Uh and that also weeds out a lot of friction uh that might uh come in from time to time.
• 39:20
  SPEAKER_00: Saying that, it's not a very perfect uh journey, but that's what it takes uh to enjoy the scale uh of uh having uh uh uh you know a cross-border global uh loyalty initiative across different countries.
• 39:37
  SPEAKER_01: When when you look at your program, you know, what are two or three things you're most proud of?
• 39:42
  SPEAKER_00: Well, the first thing uh that uh uh I think if I'm uh not proven wrong, we are the first telecom operator around the world who has a cross-border customer engagement program.
• 39:56
  SPEAKER_00: Yeah.
• 39:57
  SPEAKER_00: So there are uh different uh telecom operators that I know of, uh very big in their own right, uh, with programs with the same name but completely different structure and completely different uh proposition uh across the countries.
• 40:14
  SPEAKER_00: But we are one program which is uh not only uh uh has the same program structure, same name, but also is cross-border.
• 40:24
  SPEAKER_00: So that's that's one big uh differentiating factor vis-a-vis any other telco loyalty program.
• 40:30
  SPEAKER_00: I think the ones who have been able to do it are the hospitality and the airline guys, uh, but then again, they have a very, very homogeneous uh audience talking to.
• 40:41
  SPEAKER_00: And most of the times it's a very standardized program with uh uh with the same value that's been given out, whether you are in uh uh uh US or you are in let's say uh Greece.
• 40:57
  SPEAKER_00: But in our case, we have been able to uh take care of the country nuances as well and manage uh the heterogeneous audience very well.
• 41:07
  SPEAKER_00: So that's uh that's something that I'm extremely proud of.
• 41:11
  SPEAKER_00: Second thing is uh uh the way we have our we have approached magenta moments not as merely an engagement initiative, but uh keeping a vision of uh being uh an enabler between our B2B uh partners or B2B clientele and our consumers and bringing value for across the spectrum.
• 41:38
  SPEAKER_00: Uh and this is something not uh a statement of vision alone.
• 41:42
  SPEAKER_00: We have done it with the first phase uh of the program.
• 41:45
  SPEAKER_00: And if you see, I have something called Magenta Moments 2.0, which is the second phase of our program, where we have started rolling out the discovery to checkout uh uh mini marketplaces of gifting, travel, and dining, where uh we are not uh only giving value offerings to our customer, but we are also uh enriching the experience by managing the entire uh customer journey right from discovery of, let's say, in the case of dining, discovering a restaurant uh in a very rich manner, all the way up to checking out and paying the restaurant with an offer at the restaurant after dining.
• 42:26
  SPEAKER_00: So uh this is something that uh uh is not only very uh different the way uh, let's say some of the uh other counterparts, not only in telco but other industries, approach uh loyalty and engagement program.
• 42:43
  SPEAKER_00: Um, but also we feel is something that we can uh uh which would help us deliver more value to our customers across the spectrum as well as to uh to our organization.
• 42:57
  SPEAKER_00: So those are the two things uh that I would say that we are very proud of.
• 43:03
  SPEAKER_01: Arnold, thank you again for taking the time to speak with us today.
• 43:06
  SPEAKER_01: It was a pleasure getting to know a little bit about you, but also just the program, what you're doing for Deutsche Telecom, how you're making the program very relevant, uh, you know, evolving the technology, understanding the customers, and just truly putting your customers at the heart of everything you do.
• 43:22
  SPEAKER_01: So thank you very much.
• 43:23
  SPEAKER_01: Thanks, Mark.
• 43:24
  SPEAKER_01: It was a pleasure.
• 43:25
  SPEAKER_01: Also, want to thank everyone for taking time to join today, to stop by and listen.
• 43:31
  SPEAKER_01: Make sure you check in every Thursday for our Leaders and Customer World of the Series podcast and follow us on all social media channels that you can see below.
• 43:38
  SPEAKER_01: Until then, have a wonderful day.