How Live Events Will Be Critical to the Growth of Sony Rewards
Steven is responsible for all marketing activities for Sony Corporation of America, with key focus areas including Brand Strategy and Communications, Marketing Technology and Loyalty Program Management.
In conversation with podcast host Jim Andrews, Steven takes us inside the company’s loyalty program, Sony Rewards, and discusses the shift in consumer loyalty drivers that has led to an expansion of the program into live events. Below are edited highlights of the conversation.
Jim: With a company as large and diverse as Sony, it’s probably a good idea to start off with a reminder for the audience of all the different companies, businesses and product lines that you have responsibility for, so would you mind briefly walking us through that?
Steven: Sony is a company based in Tokyo that is a little more than 75 years old. We are known traditionally as an electronics company with strong capabilities in consumer electronics, but also B2B. But what many people don’t realize is that Sony is a much broader company than just an electronics company.
We are a full-fledged entertainment company, with Sony Pictures, Sony Music and PlayStation. In aggregate, those three businesses are north of 60 percent of our overall business. We operate just about everywhere throughout the world. When you think about the individual businesses, like PlayStation, everyone knows PlayStation and the PlayStation 5 and all the amazing games. Sony Music is the number one music publisher, with artists from Michael Jackson to Beyonce to Adele to Harry Styles. Sony Pictures has created more than 3,500 movies, 275 TV series, and has 12 Best Picture Academy Awards. Currently, we are responsible for the Spiderman movies and just released Uncharted, which is an amazing collaboration between PlayStation and Sony Pictures.
We really think of ourselves as much more than an old-school electronics company—as important as that business is and has technologically evolved as it is—we think of ourselves as a creative entertainment company with a solid foundation of technology. That is our brand identity and what we seek for people to understand.
Jim: As I mentioned in the introduction, I’d like to discuss your loyalty program and some new developments happening there. So let’s start by getting a little bit of the background and history of Sony Rewards if you would.
Steven: The background and history is that Sony Rewards is an entertainment-focused loyalty program. It started as a redemption program on a co-branded credit card. We have had a Sony-branded credit card in the U.S. market—which is where Sony Rewards is domiciled—but we re-imagined that about nine or ten years ago into something that was much bigger; something that connects the dots between the different businesses and rewards consumers who are already buying and receiving services from the respective companies for all of the things they do across Sony.
While we have very independent businesses that are driving their own activities, consumers move back and forth across those and we wanted to reward them for that behavior.
Jim: We are all familiar with loyalty programs, either as marketers or members, but given your extensive experience with them, can you share some of the specific value a program like Sony Rewards delivers and any changes or trends you are seeing in the loyalty area?
Steven: Let’s start with some quantitative answers to your question of what companies get from a loyalty program. At the end of the day, all companies are seeking out their most loyal and most valued customers. A loyalty program is a series of mechanics to achieve those goals. Well-run loyalty programs have 77 percent of consumers who are in the top two boxes in terms of performance in the loyalty program are going to do more business with that company. Sixty-three percent will actually change their buying behavior to maximize their points. Sixty-four percent will change brands if they are not happy with the program.
Qualitatively, in terms of what we are trying to achieve with consumers, as we bring our different operating companies together, we want Sony Rewards to serve as an extension of the brand and a connector across the technology side with Sony Electronics and the entertainment side.
So we try to create digital experiences that tap into a member’s passion for movies or games or music or technology and enable a two-way dialogue with that consumer about what’s relevant to them. Ultimately, our goal is to keep Sony top of mind with them. We want to be relevant and stay relevant. We think the way to do that is not to think about an individual business, but to think more broadly about Sony.
In terms of your question about changes that are underway, like everywhere on the planet there were tremendous changes during the pandemic. We saw a shift in loyalty where customers tried new brands and everyone did much more digitally out of necessity. In loyalty, we’ve seen a shift from the transactional. Before, many people thought about “what’s my earn and what’s my burn.” It’s become more about elements of community and empowerment, which really shone through during the pandemic, and which we think will continue and last.
It’s important to stay relevant to these consumers because they are the most loyal, but also because they expect the most from you. They are going to hold you to being the best version of you that you can be.
Jim: We want to talk about what’s next for Sony Rewards and part of that is the target audience you are trying to reach with the program. Tell us who that is.
Steven: I don’t want to try to bring in a different customer set that is not relevant to the respective operating companies. We want someone who loves Sony and engages with Sony. We spend a lot of time understanding through data who is buying, who is engaging, who is going to the movies, who is playing the games, who is buying the electronics, etc. By doing that, we get a sense of who our design target is. Is much more important than just the demographics. Demographics are incredibly important, but we are looking at behavioral characteristics as well.
The positioning of the Sony Rewards program is to be the best entertainment rewards program out there. If you marry the demographic of the frequent consumer of Sony products, services and content with the people who are the most digitally savvy, the entertainment enthusiasts, that becomes our design target.
When we further think about what they want, there are obviously many activities and experiences within Sony, but they also want experiences outside. One of the things we have thought about is how we can extend beyond the family of Sony companies and find relevant places outside where we can provide amazing and engaging experiences for our members.
So we put together a third-party roadmap and hired a team to help us develop and execute on this. We have now begun to partner with relevant companies that share the same passion for the consumer but also extend our ability to utilize the rewards program outside of Sony with that targeted consumer set.
Jim: And that’s the exciting news for most of our listeners and viewers because much of what you are doing with that extension has to do with the live events space, where they operate. Can you give us an overview of what’s happening there?
Steven: Sure. It’s a totally natural extension that fits the lives of our design target. We know that because we have eight million members within Sony Rewards. We study what they do inside and outside of Sony. The live events space was one of the natural first steps outside the world of Sony for us. We knew we needed a partner to enable that to happen. We did a lot of work to see who would have the best ability to leverage into that space and get us capabilities we just didn’t have on our own, and really didn’t want to spend the time and resources to try to copycat the best practices out there.
After our thorough and longstanding analysis, we selected TicketManager because of their experience, their aggregator capabilities and the fact that they work with multiple first-tier loyalty programs like American Express, Verizon and Anheuser-Busch.
We didn’t go forward just because they were working with these great companies so they must be good. We vetted them very closely and feel they have the capabilities to deliver for us and for our members.
Jim: In an earlier conversation, you mentioned that loyalty looks easy but is actually very difficult, with a majority of brands failing at it. Why is that and what are the keys to making loyalty programs work?
Steven: About 70 percent of brands who launch loyalty programs fail within either three or five years. You have to put the consumer at the center. You have to understand what the experience they have with your brand is and what you need to do to extend it. A lot of brands approach it as, “We want people to do X,” instead of thinking about understanding the customer and saying, “The people want to do Y. How can we facilitate that?” And obviously, it’s not that people want to do one thing. There has to be a lot of personalization and different pathways. It’s certainly not a one-size-fits-all scenario.
What we have done is really try to understand consumer expectations and make sure that we build experiences and have a platform, marketing functions and data to deliver those experiences. We also have to measure the effectiveness of what we are doing with a lot of refinement so that we can learn quickly when things aren’t working and course correct. We make mistakes all the time. If we’re not making mistakes, we’re either not trying hard enough or we’re not looking at what we’re actually doing!
Loyalty is essentially a marketing discipline that needs to be performed with a very clear sense of the consumer and where they want to go, and then to figure out the most effective and efficient way to get them there.
Delivering personalized digital experiences is just the ticket to the dance now. A couple of years ago that was best in class, but not anymore. You have to keep on moving and keep on innovating.
Jim: What advice would you have for sports and entertainment properties regarding how to best support corporate partners and sponsors who want to include their loyalty programs in their sponsorship activations?
Steven: I’m going a little outside my area of expertise, but with that caveat, I’m happy to answer the question! First, let me say one thing about the last question: We were talking about changes and what things work and don’t work. I neglected to mention one element of our third-party roadmap, and it’s regarding the selection of partners that have expertise in that space that we don’t have. This is not a plug for TicketManager, but as we are just launching the program now, they have brought best practices for the integration and how we should be set up for success.
Getting back to your question: It’s the fundamentals. It’s what I talked about with respect to how do you make sure you’re running an effective loyalty program: Know your customers and what their expectations are. Make sure there is a basic alignment of audiences and business objectives. Sit down, get in front of the whiteboard and make sure you are super clear about who you are talking about from an audience perspective and exactly what you are trying to achieve.
It’s also important to think about this: As great as a promotional experience can be, we have to think about our eight million members not just in terms of the big event that’s coming up that we’re going to have people go to, but the long term. Promotions have to fit in with a longer-term experience; they shouldn’t be just a one-and-done thing
Promotional partners should think about where are the gaps and shortcomings that we have in our program and the ways they can fill those gaps. Every rewards program wants to share more ways for people to earn, more ways for them to redeem, more ways for them to get status and recognition. If we can do that with a partner where it makes sense for them and makes sense for us, we would do that all day long.