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March 4, 2025 • 15 mins

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As part of the Leaders in Customer Loyalty: Industry Voices series, we had the opportunity to speak with Alexa Pak, Customer Success Lead of EMEA at Talon.One. Pak brings extensive expertise in helping brands enhance their loyalty programs through strategic innovation and personalization.

In this discussion, she shares her insights on key trends that will shape customer loyalty in 2025 and beyond.

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Episode Transcript

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Speaker 1 (00:04):
Good afternoon, good morning.
This is Mark Johnson fromLoyalty360.
Hope everyone's happy, safe andwell Wanted to.
Welcome you back to our newLeaders in Customer Loyalty
series, industry Voices.
This is the second episode inour new series, which replaces
the original Loyalty Live series.
In this series, we spotlightinnovation and customer loyalty

(00:25):
through insights from leadingconsultants, agencies and
technology providers in customerand channel loyalty.
Our guests will share expertiseon emerging trends, solutions
and best practices helpingbrands navigate current market
challenges.
Today, we have the pleasure ofexploring key trends and
strategies shaping customerloyalty in 2025.

(00:47):
And we will be speaking withAlexa Pak.
She's a customer success leadin EMEA with TalentOne.
How are you today, alexa?

Speaker 2 (00:56):
Thanks so much for having me, Mark.
It's great to be here.

Speaker 1 (00:59):
In our State of Customer Loyalty report in 2024,
we saw that 72% of brandsbelieve there is a sea of
sameness regarding customerloyalty programs.
Can you share an example or twoof how a brand successfully
differentiated itself through aunique strategy, campaign or
reward offering to address thatsea of sameness?

Speaker 2 (01:19):
Yeah, of course.
So businesses come to Talon Onebecause they're looking to
break away from the basic earnand burn loyalty programs that
often get lost in that sea ofsameness that we see with so
many programs.
Today's customers expect more,so in my role, I help brands
transform their loyalty programsinto really engaging
experiences.

(01:40):
It's what makes my job sorewarding and interesting.
We help advise customers ontheir loyalty strategy and help
them bring their strategy andvision to life.
I'll give you two examples.
The first is H&M.
Their loyalty programtransforms casual shoppers into
brand advocates.
So signing up for H&M's loyaltyprogram, it's super quick.

(02:02):
It only asks for the basics andthen you're in Plus.
It's a really smart way forthem to gather zero party data
without making it a hassle forcustomers.
They've also tied in somereally cool sustainability perks
, so you can bring in your oldclothes to recycle and they'll
thank you with a $15 coupon,which is really a win-win,
because you get to clean outyour closet and then you also

(02:23):
get to score some rewards.
H&m also makes earning andredeeming points feel really
effortless, whether you'reshopping online or shopping in
the app.
You just use your digitalmember ID and it's all synced up
for a really smooth andpersonalized experience.
Another great example is Adidas.
Their loyalty program isdesigned to engage and reward

(02:45):
customers for their fitnessactivities, along with purchases
, so, for example, points forpurchases and workouts.
So members can earn points forevery dollar spent and for
tracking their workouts via theAdidas app, and this encourages
both shopping and fitnessengagement, letting members gain

(03:06):
points quickly for everyworkout they complete.
They also have exclusive accessto offers, so members can enjoy
early access to sales, limitededition releases and member only
products.
This exclusivity always createsa buzz and a sense of belonging
.
Then there's the other layer ofexperiential rewards, so Audit

(03:29):
Club stands out with uniquenon-monetary rewards like
raffles for signed merchandise,access to member-only products
and once-in-a-lifetimeexperiences like training with
your favorite athletes, andthings like that.

Speaker 1 (03:43):
Brand partnerships continue to be a significant
area of interest for the membersof Loyalty360 and brands that
we speak with, but they can bechallenging to incorporate for a
number of reasons.
You know what factors arecritical to ensure the success
of brand partnerships incustomer loyalty programs and
what should brands beconsidering before entering into

(04:04):
these partnerships.

Speaker 2 (04:05):
Brand partnerships can really boost a loyalty
program by giving customers moreways to earn and redeem rewards
, like we talked about a bitearlier.
It's great.
It's a great strategy to avoidthat sea of sameness by creating
more value for customers.
But making them work for itrequires really careful planning
, because you don't want to loseyour customer in that process.
So, for example, brands kind ofneed to think about three main

(04:29):
things shared values andaudience.
The best partnerships happenwhen brands have similar values
and when their customers overlapsmooth operations.
So everything from the techintegration to customer support,
it needs to run very smoothlylike clockwork.
And then the last is a clearmutual benefit.
So both partners need to gainsomething, whether that's

(04:52):
increased visibility, newcustomers or better engagement,
and customers also need to seewhat's in it for them too.
One really successful exampleis Built Rewards.
Built Rewards was founded withthe goal of rewarding the
billions of dollars that peoplespent on rent in the US.
Every year, members can earnpoints on rent without fees and

(05:14):
redeem their points with Builtpartners like Emirates, air
France, british Airways and thenhotels, as well as gyms like
SoulCycle and Y7 Studio.

Speaker 1 (05:28):
Among new technologies such as AI,
gamification and zerofirst-party data, which do you
believe has the greatest impactto influence customer loyalty in
2025, and why?

Speaker 2 (05:42):
Honestly, I think all three will be defining trends
in the loyalty space in 2025.
But for me, gamification is theone that really stands out as
the top engagement strategy, andthat's because it taps into
basic human instincts ofachievement, recognition,
excitement.
It keeps customers coming backand it can show up in a few

(06:02):
different ways.
So a lot of times withgamification within the loyalty
program, we're seeing thingslike points and badges, so
rewarding milestones to helpcustomers celebrate their
progress.
Nike Run Clubs app gives badgesfor completed runs and creating
a motivating cycle of comingback and making sure that you

(06:25):
are logging all of those runs.
Then there's also the challengeand leaderboard aspect, so a
little friendly competition canalways go a long way in keeping
customers engaged.
Brands can introducetime-limited challenge to really
increase activity and thensurprise rewards.
So adding an element of mysterycan build excitement and
curiosity, keeping customerscoming back and wanting to see

(06:48):
what that next surprise is goingto be for them.
But the key is to makegamification feel like a natural
part of the overall experience,as competition for attention
heats up.
Brands that master this willreally stand out in the space.

Speaker 1 (07:01):
Gamification has been a popular strategy for driving
engagement in loyalty programs.
What are some successfulexamples of gamification in
loyalty, and how can brands useit to enhance their customer
experience?

Speaker 2 (07:14):
Thanks, Mark, it's a great question.
Gamification isn't just atrendy term.
It's a proven way to keepcustomers engaged In the loyalty
world.
Sephora offers a masterclass inusing gamification to drive
engagement with their customers.
I call it a masterclass ingamification because there are
challenges for all members.
The gamified challenges areavailable to every loyalty

(07:35):
member, not just those in thehigher tiers.
There's no purchase required,so members can earn points for
competing tasks that don'tinvolve making purchases,
whether that's buying online andpicking up in store or
subscribing to Sephora textalerts, as well as adding
samples in during the onlinecheckout.
And then the other thing ismembers are consistently

(07:57):
encouraged, so each completedtask earns members 100 points.
Encouraging consistentengagement with the program
earns members 100 points.
Encouraging consistentengagement with the program, In
particular, in 2025,gamification strategies that
will really capture customers'intention include interactive
sweepstakes and points guessingchallenges for rewards, as well
as those limited-timeparticipatory promotions.

(08:20):
So helping create a sense ofurgency with time-sensitive
gamified offers can be a greatway to grab new customers and
re-engage the customers thathave gone quiet.

Speaker 1 (08:30):
One of the big challenges that we continue to
see is being able to navigateboth the digital and physical
channels.
You know how should customerloyalty programs drive both
in-store and online experiencesfor a seamless and cohesive
customer journey?

Speaker 2 (08:45):
Customers don't usually think in terms of
channels.
They just really want a smoothexperience, whether they're
shopping online or in-store.
So loyalty programs really needto make sure that, with every
touchpoint, customers feelconnected.
Ways that brands can includethis in their strategy are
activating things like a loyaltyID, so whether the customer is

(09:08):
shopping in-store or online orthrough the app, they should
really only need one ID, like aphone number or an email a very
easy way to be identified sothat they can continue earning
those points.
Instant syncing purchases andpoint balances should be updated
in real time across channels sothat customers always see the

(09:28):
most accurate info and it keepsthem engaged.
Cross-channel incentives, whichare things like encouraging
customers to interact acrossmultiple channels by offering
rewards for actions likebrowsing online and maybe
shopping in store.
Target circle rewards is areally great example of
omni-channel done right.
Whether customers shop in-storeor online, their rewards work

(09:51):
seamlessly across Target'splatforms, making the whole
experience feel effortless forthe customer.

Speaker 1 (09:57):
As loyalty programs become more data-driven, how can
brands effectively integrateand analyze customer data from
multiple sources?

Speaker 2 (10:05):
Loyalty programs are more than just a way to reward
customers.
They act as a data flywheel,benefiting both the brand and
the customer.
The best loyalty programs don'tjust reward loyalty.
They gather valuable insightsto help brands understand their
customer preferences andbehaviors.
To make this data flywheel work, it's important to be

(10:27):
transparent with customers abouthow you collect and use their
data.
When you do, members feel likethey're more than just
participants.
They become informedcollaborators of the program
almost, and by being clear aboutwhat data you're gathering and

(10:47):
how it benefits them, you buildtrust, which keeps that data
flywheel turning.
From the analytics andintegration side, brands need to
bring together data fromdifferent sources, like
purchases, interactions and evenlocation info.
So here's what that could looklike Unified data using a CDP to

(11:08):
build a complete view of eachcustomer that you have.
Smart analytics, meaningadvanced models, can help spot
patterns and predict whatcustomers might do next, which
allows a lot betterpersonalization.
That can be done, as well asdata privacy.
Customers are more willing toshare data if they trust the
brand, so following the GDPR andCCPA regulations is really key

(11:32):
when done right.
Integrated data lets brandsoffer hyper-personalized
experiences, from spot-onproduct suggestions to
well-timed rewards thatcustomers will absolutely use.

Speaker 1 (11:43):
What are the most critical metrics brands should
be considering when they measuresuccess of their customer
loyalty programs in 2025?
, and what metrics do youbelieve may be underutilized or
overlooked when assessing thesuccess of customer loyalty
programs?

Speaker 2 (11:58):
Tracking the right metrics is crucial for knowing
how well the loyalty program isdoing.
While classics like customerretention rate and lifetime
value are still really important, brands should also look at
engagement rate.
How often do members interactwith their program?
A high engagement rate usuallymeans a lot stronger customer

(12:18):
loyalty.
Redemption rate, which showswhether customers see value in
the rewards.
How often are they actuallyusing them?
A low rate might mean that thereward actually isn't attractive
enough for the customer, whilea super high rate could hurt the
brand's profitability.
And then cross-channel activity.
So keeping track of how manymembers use multiple channels

(12:40):
can reveal how well youromni-channel strategy is working
.
Metrics that get overlooked.
I love this question becausethere's two main ones churn rate
for loyalty members knowingwhen and why members stop
participating can help fixissues before people drop out as
well as the reward breakagerate.

(13:01):
So, of course, you're nevergoing to use all of the rewards.
Well, some do, but some don't.
So some breakage is totallynormal, but too much can
definitely signal problems withhow the rewards are being
offered or communicated, ormaybe how easy they are to
redeem.

Speaker 1 (13:19):
Alexa, thank you very much for giving some great
feedback on some of the trendsand best practices that you see
are going to be integral forbrands to consider in 2025.
Now we have our quickfirequestion round.
We'd like to limit these to aone word or short phrase
response.
The first question is what isyour favorite word?

Speaker 2 (13:40):
Incentivize.

Speaker 1 (13:41):
What is your least favorite word?

Speaker 2 (13:43):
Irregardless, because it's not a word.

Speaker 1 (13:45):
What excites you?

Speaker 2 (13:47):
The mountains.

Speaker 1 (13:48):
What do you find tiresome?

Speaker 2 (13:49):
Finding a new show to watch.

Speaker 1 (13:51):
Is there a book that you have read that you'd like to
recommend to colleagues?

Speaker 2 (13:54):
Decoded by Phil Barden.

Speaker 1 (13:57):
What profession, other than the one you're
currently in, would you like toattempt?

Speaker 2 (14:01):
Easy astronaut other than the one you're currently in
?
Would you like to attempt Easy?

Speaker 1 (14:03):
astronaut.
What do you enjoy doing thatyou often don't get the time to
do?

Speaker 2 (14:06):
Karaoke.

Speaker 1 (14:07):
Who inspired you to become the person that you are
today?

Speaker 2 (14:10):
Not just one person, but a village.

Speaker 1 (14:13):
And what do you typically think about at the end
of the day?

Speaker 2 (14:15):
It's always dinner.

Speaker 1 (14:16):
And last question how would you like to be remembered
by your friends and family?
Probably the best baker ofcinnamon rolls.
Alexa, thank you very much fortaking the time to speak with us
today.
It was great getting to knowand hearing more about some of
the trends that you think willbe impactful in 2025.
Look forward to hearing morefrom you and your team, as you
guys are in a very uniqueposition in the industry as you

(14:38):
are helping a number of brandselevate their customer loyalty
approach, so it's great to hear.

Speaker 2 (14:43):
Thanks so much for having me.

Speaker 1 (14:44):
Also, I want to thank everyone else for taking the
time to listen.
Make sure you join us back, asMadden Vladek, the General
Manager of Loyalty Services atFIS, will join the Industry
Voices podcast to exploreemerging trends in customer
loyalty in 2025 as well.
So, looking forward to thatdiscussion, please make sure you
subscribe to the podcast.
Until then, have a wonderfulday.
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