June 20, 2025 • 22 mins
2025 Customer Loyalty Trends Uncovered
Welcome to Leaders in Customer Loyalty: The CEO’s Desk, a Loyalty360
original podcast series featuring exclusive executive insights from Loyalty360 CEO Mark Johnson. In this episode, Mark unpacks the Top 11 Trends in Customer Loyalty for 2025, straight from Loyalty360’s Advisory Board sessions at the 2025 Loyalty Expo.
What You’ll Learn in This Episode:
• Why organizational alignment is mission-critical to program success
• How leading brands are substantiating and reinforcing loyalty program value
• The growing pressure to prove ROI to CFOs and align loyalty with business strategy
• Key strategies for simplifying loyalty program structures and overcoming tier fatigue
• The evolving role of AI, data, and personalization in loyalty program optimization
• How brands are adapting to economic uncertainty, supply chain disruption,
and regulatory changes
• Real-world examples of loyalty innovation from brands like Weigels and others
Whether you’re a loyalty program manager, brand executive, or tech partner,
this episode is packed with critical insights to help you evolve your loyalty
strategy in a time of rapid change.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Hello everyone out there and welcome to Leaders in
Customer Loyalty.
The CEO's Desk, a Loyalty360podcast series where we sit down
with our very own CEO, markJohnson, to hear directly from
the top about the direction ofcustomer loyalty, brand
engagement and what matters mostright now.
In every episode, mark will besharing rare executive vantage
(00:26):
points, connecting the insightsfrom our Loyalty360 advisory
board, our member conversationsand Loyalty Expo sessions into
one focused discussion on thetrends that are shaping our
industry.
Mark, it's always great to hearfrom you.
On the CEO's desk.
Welcome, thank you very much.
Looking forward to thisdiscussion, for sure.
On the CEO's desk Welcome,thank you very much.
(00:47):
Looking forward to thisdiscussion, for sure.
Awesome.
Well, coming out of the LoyaltyExpo, one of the things that
Loyalty360 does every year issit down with the advisory board
to talk about what's going onin loyalty from a big picture
perspective and what are thetrends we're seeing in the
industry.
So would you want to explain alittle bit about what you take
away from those discussions andhow we compile this list?
Yeah, absolutely.
Speaker 2 (01:07):
So every year for the past three years we have met
with our advisory board, whichwe spun up kind of a year or two
after COVID.
The goal of the advisory boardis really to elevate customer
loyalty within kind of allindustries right.
So it's a very diverse board.
We meet the first day of theconference and just have an open
discussion.
We go around the room I thinkthis time there are about 30
(01:27):
different advisors and peoplewho are on committees within the
Lothi 360 that we ask them whatwere the challenges or
opportunities they see for theirprogram.
And I think there's 11 thisyear, last year there were seven
, so a little bit different.
But the big trends we saw againvery qualitative, bit different
, but the big trends we saw,again very qualitative and we'll
(01:48):
get into this a little bit moreon each topic individually.
But organizational alignment isvery important right now for
brands.
There's a big push forsubstantiating and reinforcing
the program and the programvalue.
Obviously customer focus,especially in these kind of
challenging economic times, isfront and center.
Prioritization of the programis another one and it kind of
goes hand in hand withsubstantiating and reinforcing
(02:09):
the value Push to simplify theprogram and optimize the program
.
Obviously those not necessarilyaren't always mutually
exclusive.
Navigating this economicenvironment that I mentioned a
little bit earlier, it's verychallenging for brands right now
.
They may not have the rightproduct in store, they might not
have the right product online.
So navigating some of thetariffs no tariffs, travel, no
(02:32):
travel has been a prettysignificant challenge for brands
, especially in the hotel andour entertainment industries.
Partnerships are another areathat have kind of a growing
focus.
Brands have moved away, as aswe know, over the last couple
years, from affiliate basedpartnerships to more one-to-one
partnerships, but that comeswith a series of challenges as
(02:54):
well.
To making sure there's alignmentTechnology, understanding
technology, getting it rightwithin their technology stack,
ai challenges everyone's talkingabout AI, but within the
customer loyalty arena, exceptfor, maybe, measurement and
offer optimization or offersegmentation, it's not really
being used to its fullest.
There's some consternationsthere.
And then, lastly, as always,this big push for metrics and
(03:17):
data that you can use and numberthe other top 10 to reinforce,
substantiate or create alignmentaround.
So brands are still looking forindustry wide metrics and data.
So those are the top 11.
Awesome.
Speaker 1 (03:31):
Well, let's dive in and kind of talk about each of
these 11 things in a little moredetail, and I guess we'll start
at the top of the list withorganizational alignment.
I know from your seat you'reconstantly hearing how
challenging it is for brands toget internal teams aligned
around loyalty.
What do you think is the corebreakdown happening here, and
how can loyalty leaders reallyearn buy-in across all
(03:53):
departments more effectively?
Speaker 2 (03:55):
Yeah, there's a significant challenge with
regard to organization alignment, both initially and ongoing.
But I think brands that do itwell realize that it's a
constant right.
They have to keep a constantpulse of the organization,
understanding what those withinthe organization understand and
know about the program andaddress any misconceptions that
may exist.
You know we're fortunate enoughagain the advisory board.
(04:18):
We actually meet throughout theyear on weekly sessions and
talk about different facets ofcustomer loyalty.
But this whole idea ofunderstanding the organization's
perspective on customer loyaltyand how to elevate it is pretty
consistent.
Speaker 1 (04:30):
Yeah, so in these large organizations that have
really long approval cycles,what have you seen work well for
people when it comes to gettingthat momentum and
operationalizing loyaltyprograms in their companies?
Speaker 2 (04:42):
We'll talk about this in a little bit.
There's kind of a bifurcationright now within the industry of
those brands who view customerloyalty as kind of a cost and
those who view it as aninvestment.
And also when those who look atinvestment in and around
customer loyalty, they have amore customer-centric
perspective.
So they're open to looking atnew technologies, they're open
(05:03):
to redoing their organizationalstaff.
Maybe they have a pod structurethat kind of reinforces the
value of the customer loyaltyprogram.
But you're right on, from atechnology perspective, getting
the technology in the queue andwe'll hear, with partnerships as
well can be kind of an arduousprocess.
Kind of an arduous process andthose who view it as a cost,
(05:26):
especially in this challengingeconomic environment, it can be
very, very difficult to sustainorganizational alignment going
forward because oftentimes thecustomer loyalty program, the
rewards, the incentives, thebaseline earning structures can
be cut or changed in a way thatcan create some confusion or
consternation for the customers.
Speaker 1 (05:43):
Yeah, well, and that really leads to the next trend
that you heard about from theadvisory board the
substantiating and reinforcingthat program value.
You know it was one of thestrongest messages we heard
coming out of this year'sLoyalty Expo advisory sessions
is the need to prove thatloyalty is a strategic asset.
You know everybody's got a CFOthat they answer to.
So how do successful programselevate loyalty to be part of
(06:05):
their broader business strategy?
Speaker 2 (06:08):
Yeah, again, getting to that bifurcation, those
brands who view customer loyaltyas an asset.
They are the ones that can takerisks, they can make
investments, they can try thingsa little different.
But you know what we're seeingright now, especially in this
challenging economic environmentbrands are going all in.
The successful brands are goingall in and we saw that in the
rewards programs as well, insome of the presentations that
(06:31):
they are viewing the customerloyalty program as kind of their
database, right With walledgardens and some challenges with
regard to measurement from moretraditional CPM type
acquisition models.
Brands are really focused onleveraging the customer loyalty
data.
So if you have one to five fivebeing your most loyal customers,
how do I move that four to afive?
(06:51):
How do I move that three to afour?
Because, in understandingwhat's going to drive that
behavior, is it a discount?
Do you need 50% off Dick's topurchase a used sweater?
Do I need 5%?
What actually will drive thatbehavior?
And listening to the customers,it's very.
Do I need 50% off to purchase aused sweater?
Do I need 5%?
What actually will drive thatbehavior?
And listening to the customers,it's very important.
So there is that kind ofbifurcation between, again, the
(07:13):
brands that view it as aninvestment and those who view it
as cost.
Speaker 1 (07:18):
Are there any data points that you are seeing that,
really, when people are tryingto have this conversation
internally, what data points arereally moving the needle in
terms of validating the impact,the business impact, of a
loyalty program?
Speaker 2 (07:32):
You know it can be very challenging and that's
again the last topic we talkedabout, or at a high level, was
metrics and data.
But from a qualitativeperspective it's how you look at
the data, right Realization.
You may not have that rich dataset and if you have that trust
you're getting first party data,transactional data.
You're getting zero party data,potentially from quizzes and
commerces and surveys that get adeeper understanding of how
(07:56):
that customer reacts or whattheir interests are.
It's being able to leveragethat data and leverage that
insight and, again,understanding that you may only
take a 5% discount or you maynot even need a discount right.
So again, these data points canbe challenging.
When you're looking at only afinite set of data points, ie
(08:16):
discount or margin given away,that can be a very big challenge
.
And again, some of the brandsthat presented at the Loyalty
Expo they showed that they seepretty significant investment,
kind of ROI and, althoughattribution is challenging, when
they're investing in theloyalty program, putting more
money into the program, havingthe right kind of discounts and
right offers.
But that takes kind of a largerteam potentially, it takes a
(08:40):
different data type and also theorchestration engines that
allow that personalization basedon the segmentation of all the
data they have.
Speaker 1 (08:49):
Yeah, I mean, I've heard that a lot over and over
at the Expo, people having thosesame challenges, and I think it
keeps coming back to what ournext trend was, which is
customer focus.
Right, the customer lens isalways front and center in these
most successful programs.
But, as you've pointed out, youknow, many programs are still
falling short in showingcustomers real differentiated
(09:10):
value, like how are the mostinnovative brands closing the
gap between, like the evolvingcustomer needs and desires and
what their loyalty programdesign offers?
Speaker 2 (09:20):
That can be a big challenge.
Many brands traditionally arechallenged with regard to
listening to and understandingtheir customers and being able
to put yourself in yourcustomers' shoes.
Understanding what they findvalue in the program is very
important.
So the innovative brands again,they have kind of a unique
structure.
They are looking at ways thecustomer engages with the brands
(09:43):
.
They're listening to them, theyhave kind of an active feedback
loop and when they develop orkind of enhance the program or
change the program they try todo it in concert with the
customer versus kind of againstthe customer.
Just because there's achallenging economic environment
doesn't mean you have to kindof scrape the whole program or
denigrate the reward structurein a way that could be
(10:04):
deleterious to the customer.
So when you look at the brandsthat do it well, they have a
unique organizational alignment.
They talk about it differently.
They talk about it in their10Qs and their quarterly reports
.
You know it's a focus wherethose brands who view it as a
cost, you know they don't talkabout it the same way.
They have maybe one or twopeople running the program,
(10:24):
traditionally a little morejunior, and it just doesn't have
that focus within theorganization and again, you can
see it, culture, I think, is abig piece of this as well.
But customer loyalty, that haskind of a seat at the table,
that C-suite table, that theycan talk about the program, they
can make investments and theycan also fail at some efforts
are the ones that are doingquite well.
Speaker 1 (10:46):
Yeah, and so, as these brands are evaluating
their health of their program,what signs should they be
looking for that indicate thattheir value proposition is
losing relevance with theircustomers?
Speaker 2 (10:57):
Well, I think we've seen it in a number of brands
and discussions had throughoutthe last year.
So there's kind of a tierfatigue that we've heard a great
deal about, right Tier fatigueand also being able to
differentiate your program, thisquote-unquote sea of sameness
which is kind of passe now, butwhen you look at the idea that
many brands view their programas very similar to others and if
(11:19):
they can't differentiate it itmakes it very difficult for
customers to buy in, but you'llsee kind of a tier malaise or a
tier fatigue at some of thehigher levels.
People at that top tier, thegold tier, that diamond tier,
may not be engaging with thebrand in the way they used to.
So the preferences have changedpotentially or how they were
(11:41):
brought into the program may bea challenge.
It's really looking at kind ofall those segments that you have
and understanding again whatthey value.
It's not necessarily difficultbut making sure you're providing
that value in a manner thecustomer wants and it resonates
with.
Speaker 1 (11:57):
Totally so.
With all this talk about howyou align internally, you know
there's always going to becompetition for priority within
an organization and we've seenthat this is something that
folks have come back and said isa trend this year.
You know how do you look atloyalty and elevate it when it's
one of many initiatives vyingfor attention within your
(12:19):
company.
So do you have any advice forloyalty leaders who are trying
to rise above the internal noiseand keep loyalty top of mind at
the executive level in theircompanies?
Speaker 2 (12:27):
Yeah, I think we touched on this a little bit.
But it's really understandingwhat the organization knows
about the program.
We've had, as I mentioned, overthe last year, many sessions on
this weekly and when asuccessful program, someone
comes into a new program, it'sreally about getting kind of a
temperature within theorganization, what the CMO, cfo,
(12:47):
the director, who may knowabout the program right and
truly addressing thosemisperceptions what metrics do
you have in place?
And being able to kind of fosterthat relationship with those in
the more senior position butalso downstream as well, making
sure they understand the valueof the program.
If you have customer servicereps at the front line, are they
asking you if you're a member?
(13:08):
Are they engaging you, Are theygetting you into the program?
So again, training can be kindof a big piece of that as well.
But I think the most importantthing we've consistently heard
is that understanding what thosein the organization know about
the program, feel about theprogram and if there's
misconceptions, how do youaddress them?
What metrics do you need toaddress that within whomever
(13:31):
within the organization may havea challenge or misunderstanding
, to proactively build and kindof engender focus for the
customer mobility program.
Speaker 1 (13:42):
Awesome.
Well, you know, we all know,within an internal discussion
you might not get everythingthat you want, when you could go
and ask for some improvementsto your program.
Have you seen some exampleswhere brands are still able to
make meaningful loyalty progresseven without having all the
internal green lights that theydesire?
Speaker 2 (14:00):
There are some for sure.
I mean, again, going back tothe conference, those who were
there, there were a number ofbrands, smaller brands,
surprisingly enough, that maynot have marquee brand, not
necessarily a marquee brand name, but they're doing things that
are very unique, understandingthe customers, understanding
where they resonate.
We had a brand called Weigel'sand they have a very unique
(14:22):
focus Tennessee, mostlyTennessee, a little bit Kentucky
, you know.
But they have NIL programs.
They are focused on thecustomers who primarily reside
in SEC country, right, so,understanding the passion that
resides within the SEC kind ofcustomers.
But the fan base right, they'rereally doing that to leverage
(14:43):
the audience.
But the fan base, right,they're really doing that to
leverage the audience.
And it doesn't necessarily takea lot of investment.
If you can structure programswith partners that can help you
allay maybe some financialconcerns or offer meaningful
rewards or kind of incentives toaugment your program.
That kind of fits in with whatthe interests they may have
being a part of the SEC fan base.
So I think brands, again, arelooking at it more holistically
(15:06):
and there may be challengesinternally with technology and,
you know, kind of looking at andbeing able to try things
quickly.
Again, going back to Weigel'sright, they are.
I think they're 85, 87locations.
They have their own medianetwork, which you would never
expect from an organization thatsmall, but they're doing things
that are very, very unique foran organization of that size.
(15:29):
But again, they have thatorganizational commitment and
alignment which is sometimesoften hard to achieve.
Speaker 1 (15:35):
Yeah, I think that's a great idea.
I mean, that was one of themost impactful stories I heard
at Loyalty Expo and it reallyjust came out of having a great
creative idea that they knew wasgoing to resonate with the
audience and it took very littleinvestment on their side to do
something really successful.
So I think that's a greatexample.
One of the other topics that wecontinued to hear about at
Loyalty Expo over and over againwas simplification and
(15:58):
streamlining.
I just heard it again inanother interview that I did
this week with someone whoattended.
They brought up that topicagain as something that they
were really looking at for thisyear.
What do you see as the mostimpactful ways.
Speaker 2 (16:20):
Brands are simplifying program design or
tier structures withoutcompromising on customer
motivations.
That can be a challenge,especially when you look at kind
of malaise that we talked aboutand the sea of sameness.
But again it gets to being ableto listen to and understand the
customers, understanding whatmechanics are important to them.
Even Starbucks recently hadsome changes to the program that
were deadpan within thecommunity, and obviously Delta
(16:42):
and some of the airlines a yearback when they kind of debased
the value of the program.
So I think you have to be veryimportant to that.
Simplification is reallygetting back to that
understanding of the customerthey have of the program, but
also internally what those insenior positions and those who
are on the front linesunderstand about the program.
So some programs are verycomplex earning mechanism
(17:07):
mechanisms.
They have tons of partnerswhere the earn and burn ratio
can change pretty significantly.
So I think it's really justabout you know getting listening
to the customers and makingsure that you can you kind of
meet them uh with with theincentives, with the rewards, uh
with communication and contentthat they want.
Speaker 1 (17:26):
Yeah.
Do you have any good examplesof how brands can modernize some
of those reward mechanics tohelp keep pace with their
customer expectations and notbreak the bank and keep their
program health in check?
Speaker 2 (17:38):
Yeah, there's a number of different brands that
are doing things that are veryunique.
So gamification is kind of abig push right now.
So brands know that the moreoften you can get a consumer
involved with the program,especially if you can bring that
first, second, third rewardredemption up into kind of the
life cycle, the brands will besimply more.
The customer should I say, willbe significantly more engaged.
(18:01):
So I think that's where there'ssome pretty significant
opportunity there is going tobring that up into the life
cycle and things quizzes,commerce, game, vacation are
very important.
Sweepstakes where you can get100, 1,000, 500 points off the
book.
They create a very uniqueengagement paradigm as well
(18:21):
because it gives that customerthe opportunity to burn some of
those points even though theymay not win, but it kind of
creates that aspirationalopportunity for the program.
Speaker 1 (18:32):
Yeah.
So talking about keepingprograms you know economically
viable, you know our next trendis navigating the current
economic environment.
You know we've seen thatthroughout the first half of
this year that economicuncertainty continues to shape
how brands are thinking aboutvalue and about engagement.
What strategic shifts are youseeing in how brands adapt
loyalty strategies to changingconsumer behaviors and these
(18:55):
increasing economic pressures?
Speaker 2 (18:57):
Yeah, it's very interesting.
As mentioned, brands are notonly tasked to keep their
program highly, you know,performing in a high manner, but
they're also challenged withnavigating the tariffs, pricing.
Are they going to have product?
And it's interesting, a numberof the conversations to brands
talked about that at theconference and recently they may
(19:19):
.
Before they didn't know wheresome of this product came from.
And it may be a product that hasa very high emotive appeal.
It may be something that isused in kind of the redemption
catalog and and if it'ssomething that it is at risk or
could be at risk for the program, uh, you know, they have to be
cognizant of that.
So it really takes some focusaway from from brands, um,
(19:40):
knowing that the products, thetechnology, uh, you know, may
not be available in a rewardcatalog, you know, even in store
, right.
So I think that creates somechallenges and it kind of takes
away some of the focus from theorganization because again, so
many people were talking aboutwell, are tariffs going to hit
us?
Not going to hit us?
What are regulations looking at?
(20:01):
You know the Credit Card Actthat's in the House, I think.
Now maybe back to the Senateand some of the other
regulations, privacy, virginiasorry Maryland just came out
with a new law recently.
So did Tennessee and Kentucky,so that creates a lot of
dissonance as well and can bequite challenging.
Speaker 1 (20:20):
Yeah well, are there any particular verticals that
stand out as leading examples ofloyalty, resilience during all
of this?
Speaker 2 (20:28):
I'm not sure if they're necessarily industries,
but again I think restaurantsand QSRs, especially those who
serve chicken, seem to be doingquite well.
I know the restaurant industryas a whole was up about one and
a half percent in sales, butthose who have chicken fare seem
to be doing very, very well andalso a lot of grocery programs
(20:49):
are doing quite well too.
They are leveraging their CPGdata, but also the CPG
partnerships, to get a kind ofmore lasered focus on the
customer, their needs, theirwants and how to drive
incentives to actuate aroundthose.
So I know that the travelhospitality seem to be still
doing quite well.
That's what's very unique aboutbeing a member of Multi360 and
(21:12):
sitting on these advisory callswith the peer groups we have,
you kind of get a broad swath ofthe challenges that exist
across industries, frommanufacturing to retail, travel,
hospitality, and I think thereare brands that are doing quite
well and managing it.
Because even when you look atfood retail I think it was the
(21:35):
soup company, I'm forgetting totalk about it their release
yesterday that kind of the soupbusiness, the more substantial
kind of snack business, is kindof dying off.
But kind of the soup business,the more substantial, uh, kind
of the snack business is kind ofdying off, but uh kind of the
made at home, uh that that thatyou know high touch, uh kind of
food affair where customers havekind of a an involvement in
making the product and thenwhere they kind of feel good
(21:57):
about making the product, that'sdoing quite well.
So, um, yeah, I think in retailis is okay, but definitely
restaurants, grocery, seem to bedoing quite well with regard to
kind of keeping economics incheck.
Speaker 1 (22:12):
Well, mark, that brings us about halfway through
the trends for this year.
This has been really eyeopening and I'm really excited
to continue learning more aboutthese things and what we've
heard and all the great stuffthat came out of Loyalty Expo.
So we're going to end thisepisode for today, but make sure
you come back in two weeks forthe next episode of CEO's Desk,
(22:33):
where we're going to drop thesecond half of this year's top
11 trends.
We'll continue diving deep intowhat we heard from the advisory
board and Mark will continuegiving you all of the insights
you can't get anywhere else buton leaders and customer loyalty.
Speaker 2 (22:47):
Thanks, Mark, Thanks Ethan, Thanks everyone.
Have a great day.
Hello everyone out there and welcome to Leaders in
Customer Loyalty.
The CEO's Desk, a Loyalty360podcast series where we sit down
with our very own CEO, markJohnson, to hear directly from
the top about the direction ofcustomer loyalty, brand
engagement and what matters mostright now.
In every episode, mark will besharing rare executive vantage
(00:26):
points, connecting the insightsfrom our Loyalty360 advisory
board, our member conversationsand Loyalty Expo sessions into
one focused discussion on thetrends that are shaping our
industry.
Mark, it's always great to hearfrom you.
On the CEO's desk.
Welcome, thank you very much.
Looking forward to thisdiscussion, for sure.
On the CEO's desk Welcome,thank you very much.
(00:47):
Looking forward to thisdiscussion, for sure.
Awesome.
Well, coming out of the LoyaltyExpo, one of the things that
Loyalty360 does every year issit down with the advisory board
to talk about what's going onin loyalty from a big picture
perspective and what are thetrends we're seeing in the
industry.
So would you want to explain alittle bit about what you take
away from those discussions andhow we compile this list?
Yeah, absolutely.
Speaker 2 (01:07):
So every year for the past three years we have met
with our advisory board, whichwe spun up kind of a year or two
after COVID.
The goal of the advisory boardis really to elevate customer
loyalty within kind of allindustries right.
So it's a very diverse board.
We meet the first day of theconference and just have an open
discussion.
We go around the room I thinkthis time there are about 30
(01:27):
different advisors and peoplewho are on committees within the
Lothi 360 that we ask them whatwere the challenges or
opportunities they see for theirprogram.
And I think there's 11 thisyear, last year there were seven
, so a little bit different.
But the big trends we saw againvery qualitative, bit different
, but the big trends we saw,again very qualitative and we'll
(01:48):
get into this a little bit moreon each topic individually.
But organizational alignment isvery important right now for
brands.
There's a big push forsubstantiating and reinforcing
the program and the programvalue.
Obviously customer focus,especially in these kind of
challenging economic times, isfront and center.
Prioritization of the programis another one and it kind of
goes hand in hand withsubstantiating and reinforcing
(02:09):
the value Push to simplify theprogram and optimize the program
.
Obviously those not necessarilyaren't always mutually
exclusive.
Navigating this economicenvironment that I mentioned a
little bit earlier, it's verychallenging for brands right now
.
They may not have the rightproduct in store, they might not
have the right product online.
So navigating some of thetariffs no tariffs, travel, no
(02:32):
travel has been a prettysignificant challenge for brands
, especially in the hotel andour entertainment industries.
Partnerships are another areathat have kind of a growing
focus.
Brands have moved away, as aswe know, over the last couple
years, from affiliate basedpartnerships to more one-to-one
partnerships, but that comeswith a series of challenges as
(02:54):
well.
To making sure there's alignmentTechnology, understanding
technology, getting it rightwithin their technology stack,
ai challenges everyone's talkingabout AI, but within the
customer loyalty arena, exceptfor, maybe, measurement and
offer optimization or offersegmentation, it's not really
being used to its fullest.
There's some consternationsthere.
And then, lastly, as always,this big push for metrics and
(03:17):
data that you can use and numberthe other top 10 to reinforce,
substantiate or create alignmentaround.
So brands are still looking forindustry wide metrics and data.
So those are the top 11.
Awesome.
Speaker 1 (03:31):
Well, let's dive in and kind of talk about each of
these 11 things in a little moredetail, and I guess we'll start
at the top of the list withorganizational alignment.
I know from your seat you'reconstantly hearing how
challenging it is for brands toget internal teams aligned
around loyalty.
What do you think is the corebreakdown happening here, and
how can loyalty leaders reallyearn buy-in across all
(03:53):
departments more effectively?
Speaker 2 (03:55):
Yeah, there's a significant challenge with
regard to organization alignment, both initially and ongoing.
But I think brands that do itwell realize that it's a
constant right.
They have to keep a constantpulse of the organization,
understanding what those withinthe organization understand and
know about the program andaddress any misconceptions that
may exist.
You know we're fortunate enoughagain the advisory board.
(04:18):
We actually meet throughout theyear on weekly sessions and
talk about different facets ofcustomer loyalty.
But this whole idea ofunderstanding the organization's
perspective on customer loyaltyand how to elevate it is pretty
consistent.
Speaker 1 (04:30):
Yeah, so in these large organizations that have
really long approval cycles,what have you seen work well for
people when it comes to gettingthat momentum and
operationalizing loyaltyprograms in their companies?
Speaker 2 (04:42):
We'll talk about this in a little bit.
There's kind of a bifurcationright now within the industry of
those brands who view customerloyalty as kind of a cost and
those who view it as aninvestment.
And also when those who look atinvestment in and around
customer loyalty, they have amore customer-centric
perspective.
So they're open to looking atnew technologies, they're open
(05:03):
to redoing their organizationalstaff.
Maybe they have a pod structurethat kind of reinforces the
value of the customer loyaltyprogram.
But you're right on, from atechnology perspective, getting
the technology in the queue andwe'll hear, with partnerships as
well can be kind of an arduousprocess.
Kind of an arduous process andthose who view it as a cost,
(05:26):
especially in this challengingeconomic environment, it can be
very, very difficult to sustainorganizational alignment going
forward because oftentimes thecustomer loyalty program, the
rewards, the incentives, thebaseline earning structures can
be cut or changed in a way thatcan create some confusion or
consternation for the customers.
Speaker 1 (05:43):
Yeah, well, and that really leads to the next trend
that you heard about from theadvisory board the
substantiating and reinforcingthat program value.
You know it was one of thestrongest messages we heard
coming out of this year'sLoyalty Expo advisory sessions
is the need to prove thatloyalty is a strategic asset.
You know everybody's got a CFOthat they answer to.
So how do successful programselevate loyalty to be part of
(06:05):
their broader business strategy?
Speaker 2 (06:08):
Yeah, again, getting to that bifurcation, those
brands who view customer loyaltyas an asset.
They are the ones that can takerisks, they can make
investments, they can try thingsa little different.
But you know what we're seeingright now, especially in this
challenging economic environmentbrands are going all in.
The successful brands are goingall in and we saw that in the
rewards programs as well, insome of the presentations that
(06:31):
they are viewing the customerloyalty program as kind of their
database, right With walledgardens and some challenges with
regard to measurement from moretraditional CPM type
acquisition models.
Brands are really focused onleveraging the customer loyalty
data.
So if you have one to five fivebeing your most loyal customers,
how do I move that four to afive?
(06:51):
How do I move that three to afour?
Because, in understandingwhat's going to drive that
behavior, is it a discount?
Do you need 50% off Dick's topurchase a used sweater?
Do I need 5%?
What actually will drive thatbehavior?
And listening to the customers,it's very.
Do I need 50% off to purchase aused sweater?
Do I need 5%?
What actually will drive thatbehavior?
And listening to the customers,it's very important.
So there is that kind ofbifurcation between, again, the
(07:13):
brands that view it as aninvestment and those who view it
as cost.
Speaker 1 (07:18):
Are there any data points that you are seeing that,
really, when people are tryingto have this conversation
internally, what data points arereally moving the needle in
terms of validating the impact,the business impact, of a
loyalty program?
Speaker 2 (07:32):
You know it can be very challenging and that's
again the last topic we talkedabout, or at a high level, was
metrics and data.
But from a qualitativeperspective it's how you look at
the data, right Realization.
You may not have that rich dataset and if you have that trust
you're getting first party data,transactional data.
You're getting zero party data,potentially from quizzes and
commerces and surveys that get adeeper understanding of how
(07:56):
that customer reacts or whattheir interests are.
It's being able to leveragethat data and leverage that
insight and, again,understanding that you may only
take a 5% discount or you maynot even need a discount right.
So again, these data points canbe challenging.
When you're looking at only afinite set of data points, ie
(08:16):
discount or margin given away,that can be a very big challenge
.
And again, some of the brandsthat presented at the Loyalty
Expo they showed that they seepretty significant investment,
kind of ROI and, althoughattribution is challenging, when
they're investing in theloyalty program, putting more
money into the program, havingthe right kind of discounts and
right offers.
But that takes kind of a largerteam potentially, it takes a
(08:40):
different data type and also theorchestration engines that
allow that personalization basedon the segmentation of all the
data they have.
Speaker 1 (08:49):
Yeah, I mean, I've heard that a lot over and over
at the Expo, people having thosesame challenges, and I think it
keeps coming back to what ournext trend was, which is
customer focus.
Right, the customer lens isalways front and center in these
most successful programs.
But, as you've pointed out, youknow, many programs are still
falling short in showingcustomers real differentiated
(09:10):
value, like how are the mostinnovative brands closing the
gap between, like the evolvingcustomer needs and desires and
what their loyalty programdesign offers?
Speaker 2 (09:20):
That can be a big challenge.
Many brands traditionally arechallenged with regard to
listening to and understandingtheir customers and being able
to put yourself in yourcustomers' shoes.
Understanding what they findvalue in the program is very
important.
So the innovative brands again,they have kind of a unique
structure.
They are looking at ways thecustomer engages with the brands
(09:43):
.
They're listening to them, theyhave kind of an active feedback
loop and when they develop orkind of enhance the program or
change the program they try todo it in concert with the
customer versus kind of againstthe customer.
Just because there's achallenging economic environment
doesn't mean you have to kindof scrape the whole program or
denigrate the reward structurein a way that could be
(10:04):
deleterious to the customer.
So when you look at the brandsthat do it well, they have a
unique organizational alignment.
They talk about it differently.
They talk about it in their10Qs and their quarterly reports
.
You know it's a focus wherethose brands who view it as a
cost, you know they don't talkabout it the same way.
They have maybe one or twopeople running the program,
(10:24):
traditionally a little morejunior, and it just doesn't have
that focus within theorganization and again, you can
see it, culture, I think, is abig piece of this as well.
But customer loyalty, that haskind of a seat at the table,
that C-suite table, that theycan talk about the program, they
can make investments and theycan also fail at some efforts
are the ones that are doingquite well.
Speaker 1 (10:46):
Yeah, and so, as these brands are evaluating
their health of their program,what signs should they be
looking for that indicate thattheir value proposition is
losing relevance with theircustomers?
Speaker 2 (10:57):
Well, I think we've seen it in a number of brands
and discussions had throughoutthe last year.
So there's kind of a tierfatigue that we've heard a great
deal about, right Tier fatigueand also being able to
differentiate your program, thisquote-unquote sea of sameness
which is kind of passe now, butwhen you look at the idea that
many brands view their programas very similar to others and if
(11:19):
they can't differentiate it itmakes it very difficult for
customers to buy in, but you'llsee kind of a tier malaise or a
tier fatigue at some of thehigher levels.
People at that top tier, thegold tier, that diamond tier,
may not be engaging with thebrand in the way they used to.
So the preferences have changedpotentially or how they were
(11:41):
brought into the program may bea challenge.
It's really looking at kind ofall those segments that you have
and understanding again whatthey value.
It's not necessarily difficultbut making sure you're providing
that value in a manner thecustomer wants and it resonates
with.
Speaker 1 (11:57):
Totally so.
With all this talk about howyou align internally, you know
there's always going to becompetition for priority within
an organization and we've seenthat this is something that
folks have come back and said isa trend this year.
You know how do you look atloyalty and elevate it when it's
one of many initiatives vyingfor attention within your
(12:19):
company.
So do you have any advice forloyalty leaders who are trying
to rise above the internal noiseand keep loyalty top of mind at
the executive level in theircompanies?
Speaker 2 (12:27):
Yeah, I think we touched on this a little bit.
But it's really understandingwhat the organization knows
about the program.
We've had, as I mentioned, overthe last year, many sessions on
this weekly and when asuccessful program, someone
comes into a new program, it'sreally about getting kind of a
temperature within theorganization, what the CMO, cfo,
(12:47):
the director, who may knowabout the program right and
truly addressing thosemisperceptions what metrics do
you have in place?
And being able to kind of fosterthat relationship with those in
the more senior position butalso downstream as well, making
sure they understand the valueof the program.
If you have customer servicereps at the front line, are they
asking you if you're a member?
(13:08):
Are they engaging you, Are theygetting you into the program?
So again, training can be kindof a big piece of that as well.
But I think the most importantthing we've consistently heard
is that understanding what thosein the organization know about
the program, feel about theprogram and if there's
misconceptions, how do youaddress them?
What metrics do you need toaddress that within whomever
(13:31):
within the organization may havea challenge or misunderstanding
, to proactively build and kindof engender focus for the
customer mobility program.
Speaker 1 (13:42):
Awesome.
Well, you know, we all know,within an internal discussion
you might not get everythingthat you want, when you could go
and ask for some improvementsto your program.
Have you seen some exampleswhere brands are still able to
make meaningful loyalty progresseven without having all the
internal green lights that theydesire?
Speaker 2 (14:00):
There are some for sure.
I mean, again, going back tothe conference, those who were
there, there were a number ofbrands, smaller brands,
surprisingly enough, that maynot have marquee brand, not
necessarily a marquee brand name, but they're doing things that
are very unique, understandingthe customers, understanding
where they resonate.
We had a brand called Weigel'sand they have a very unique
(14:22):
focus Tennessee, mostlyTennessee, a little bit Kentucky
, you know.
But they have NIL programs.
They are focused on thecustomers who primarily reside
in SEC country, right, so,understanding the passion that
resides within the SEC kind ofcustomers.
But the fan base right, they'rereally doing that to leverage
(14:43):
the audience.
But the fan base, right,they're really doing that to
leverage the audience.
And it doesn't necessarily takea lot of investment.
If you can structure programswith partners that can help you
allay maybe some financialconcerns or offer meaningful
rewards or kind of incentives toaugment your program.
That kind of fits in with whatthe interests they may have
being a part of the SEC fan base.
So I think brands, again, arelooking at it more holistically
(15:06):
and there may be challengesinternally with technology and,
you know, kind of looking at andbeing able to try things
quickly.
Again, going back to Weigel'sright, they are.
I think they're 85, 87locations.
They have their own medianetwork, which you would never
expect from an organization thatsmall, but they're doing things
that are very, very unique foran organization of that size.
(15:29):
But again, they have thatorganizational commitment and
alignment which is sometimesoften hard to achieve.
Speaker 1 (15:35):
Yeah, I think that's a great idea.
I mean, that was one of themost impactful stories I heard
at Loyalty Expo and it reallyjust came out of having a great
creative idea that they knew wasgoing to resonate with the
audience and it took very littleinvestment on their side to do
something really successful.
So I think that's a greatexample.
One of the other topics that wecontinued to hear about at
Loyalty Expo over and over againwas simplification and
(15:58):
streamlining.
I just heard it again inanother interview that I did
this week with someone whoattended.
They brought up that topicagain as something that they
were really looking at for thisyear.
What do you see as the mostimpactful ways.
Speaker 2 (16:20):
Brands are simplifying program design or
tier structures withoutcompromising on customer
motivations.
That can be a challenge,especially when you look at kind
of malaise that we talked aboutand the sea of sameness.
But again it gets to being ableto listen to and understand the
customers, understanding whatmechanics are important to them.
Even Starbucks recently hadsome changes to the program that
were deadpan within thecommunity, and obviously Delta
(16:42):
and some of the airlines a yearback when they kind of debased
the value of the program.
So I think you have to be veryimportant to that.
Simplification is reallygetting back to that
understanding of the customerthey have of the program, but
also internally what those insenior positions and those who
are on the front linesunderstand about the program.
So some programs are verycomplex earning mechanism
(17:07):
mechanisms.
They have tons of partnerswhere the earn and burn ratio
can change pretty significantly.
So I think it's really justabout you know getting listening
to the customers and makingsure that you can you kind of
meet them uh with with theincentives, with the rewards, uh
with communication and contentthat they want.
Speaker 1 (17:26):
Yeah.
Do you have any good examplesof how brands can modernize some
of those reward mechanics tohelp keep pace with their
customer expectations and notbreak the bank and keep their
program health in check?
Speaker 2 (17:38):
Yeah, there's a number of different brands that
are doing things that are veryunique.
So gamification is kind of abig push right now.
So brands know that the moreoften you can get a consumer
involved with the program,especially if you can bring that
first, second, third rewardredemption up into kind of the
life cycle, the brands will besimply more.
The customer should I say, willbe significantly more engaged.
(18:01):
So I think that's where there'ssome pretty significant
opportunity there is going tobring that up into the life
cycle and things quizzes,commerce, game, vacation are
very important.
Sweepstakes where you can get100, 1,000, 500 points off the
book.
They create a very uniqueengagement paradigm as well
(18:21):
because it gives that customerthe opportunity to burn some of
those points even though theymay not win, but it kind of
creates that aspirationalopportunity for the program.
Speaker 1 (18:32):
Yeah.
So talking about keepingprograms you know economically
viable, you know our next trendis navigating the current
economic environment.
You know we've seen thatthroughout the first half of
this year that economicuncertainty continues to shape
how brands are thinking aboutvalue and about engagement.
What strategic shifts are youseeing in how brands adapt
loyalty strategies to changingconsumer behaviors and these
(18:55):
increasing economic pressures?
Speaker 2 (18:57):
Yeah, it's very interesting.
As mentioned, brands are notonly tasked to keep their
program highly, you know,performing in a high manner, but
they're also challenged withnavigating the tariffs, pricing.
Are they going to have product?
And it's interesting, a numberof the conversations to brands
talked about that at theconference and recently they may
(19:19):
.
Before they didn't know wheresome of this product came from.
And it may be a product that hasa very high emotive appeal.
It may be something that isused in kind of the redemption
catalog and and if it'ssomething that it is at risk or
could be at risk for the program, uh, you know, they have to be
cognizant of that.
So it really takes some focusaway from from brands, um,
(19:40):
knowing that the products, thetechnology, uh, you know, may
not be available in a rewardcatalog, you know, even in store
, right.
So I think that creates somechallenges and it kind of takes
away some of the focus from theorganization because again, so
many people were talking aboutwell, are tariffs going to hit
us?
Not going to hit us?
What are regulations looking at?
(20:01):
You know the Credit Card Actthat's in the House, I think.
Now maybe back to the Senateand some of the other
regulations, privacy, virginiasorry Maryland just came out
with a new law recently.
So did Tennessee and Kentucky,so that creates a lot of
dissonance as well and can bequite challenging.
Speaker 1 (20:20):
Yeah well, are there any particular verticals that
stand out as leading examples ofloyalty, resilience during all
of this?
Speaker 2 (20:28):
I'm not sure if they're necessarily industries,
but again I think restaurantsand QSRs, especially those who
serve chicken, seem to be doingquite well.
I know the restaurant industryas a whole was up about one and
a half percent in sales, butthose who have chicken fare seem
to be doing very, very well andalso a lot of grocery programs
(20:49):
are doing quite well too.
They are leveraging their CPGdata, but also the CPG
partnerships, to get a kind ofmore lasered focus on the
customer, their needs, theirwants and how to drive
incentives to actuate aroundthose.
So I know that the travelhospitality seem to be still
doing quite well.
That's what's very unique aboutbeing a member of Multi360 and
(21:12):
sitting on these advisory callswith the peer groups we have,
you kind of get a broad swath ofthe challenges that exist
across industries, frommanufacturing to retail, travel,
hospitality, and I think thereare brands that are doing quite
well and managing it.
Because even when you look atfood retail I think it was the
(21:35):
soup company, I'm forgetting totalk about it their release
yesterday that kind of the soupbusiness, the more substantial
kind of snack business, is kindof dying off.
But kind of the soup business,the more substantial, uh, kind
of the snack business is kind ofdying off, but uh kind of the
made at home, uh that that thatyou know high touch, uh kind of
food affair where customers havekind of a an involvement in
making the product and thenwhere they kind of feel good
(21:57):
about making the product, that'sdoing quite well.
So, um, yeah, I think in retailis is okay, but definitely
restaurants, grocery, seem to bedoing quite well with regard to
kind of keeping economics incheck.
Speaker 1 (22:12):
Well, mark, that brings us about halfway through
the trends for this year.
This has been really eyeopening and I'm really excited
to continue learning more aboutthese things and what we've
heard and all the great stuffthat came out of Loyalty Expo.
So we're going to end thisepisode for today, but make sure
you come back in two weeks forthe next episode of CEO's Desk,
(22:33):
where we're going to drop thesecond half of this year's top
11 trends.
We'll continue diving deep intowhat we heard from the advisory
board and Mark will continuegiving you all of the insights
you can't get anywhere else buton leaders and customer loyalty.
Speaker 2 (22:47):
Thanks, Mark, Thanks Ethan, Thanks everyone.
Have a great day.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Special Summer Offer: Exclusively on Apple Podcasts, try our Dateline Premium subscription completely free for one month! With Dateline Premium, you get every episode ad-free plus exclusive bonus content.