June 27, 2025 • 19 mins
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 part 2 of this interview, 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 Wigels 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.
📌 Subscribe for more in-depth discussions on customer loyalty, emotional engagement, loyalty partnerships, and next-gen program design.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Good afternoon and good morning everyone.
Welcome back to Leaders inCustomer Loyalty, the CEO's Desk
, the Loyalty360 podcast series,where we unpack loyalty trends
with insights only our CEO canoffer.
I'm Ethan Perry from Loyalty360, and in this part two episode,
we're continuing ourconversation with Mark Johnson,
Loyalty360 CEO.
(00:27):
If you haven't listened to partone, make sure you go back and
check it out, because we aregoing to continue discussing the
11 trends shaping customerloyalty in 2025.
The Loyalty360 advisory boardreported on all of this to us,
and they touched on things fromshifting consumer values to the
structural challenges faced bybrands today.
In this installment, we'rediving deeper into partnership
(00:49):
strategy, AI, execution risks,program differentiation and
advanced loyalty metrics allareas where brand leaders are
either gaining serious ground orfalling dangerously behind Mark
.
Let's get into it, Absolutelyso.
We'll start with partnerships.
As loyalty ecosystems areexpanding, we continue to see
that strategic partnerships areincreasingly central to
(01:11):
delivering value to the endusers.
What are some criticalcomponents of a strong loyalty
partnership strategy in 2025?
Speaker 2 (01:18):
Yeah, I think partnerships are still very
impactful.
We saw it in the 2025 State ofCustomer Loyalty survey.
It was still a top five area ofinterest.
I think it shifted from maybethree to four or maybe three to
five, but it's still a verysignificant interest.
And I think when brands look atpartnerships, they're looking
at probably two differentoptions right when there may be
(01:39):
a currency exchange, a gift cardexchange, something simple to
start to co-promote the program.
But when you look at theintegration kind of more of a
strategic, long-term partnership, there are a number of
different things and we've seenit in the last couple years of
the conferences that brands aretalking about knowing your
customer a little better, maybesome different financial rubric
they have to go through.
(02:00):
But I think the key threethings are alignment internally,
so those in the organizationunderstand the partnership
strategy, but also with thecustomers of both programs.
And making sure that when youhave that alignment internally,
that you drive that executivelevel buy-in initially and you
can also do that going forwardby showing the value of the
(02:21):
program to those internally butalso to the program partners.
And I think one of the mostimportant things is a mutual
value exchange for the programs,understanding that if the
customers are alike, does thevalue, the incrementality of the
reward, the incentive, thepartnership between the two or
three or four brands drive thatvalue exchange for both brands
(02:46):
or four brands drive that valueexchange for both brands, but
also for those customers,definitely and so like.
Speaker 1 (02:53):
When it comes to the execution of doing that,
particularly around the datasharing, across brands and the
technology integrations, whatbarriers are still holding
brands back from executing thesesuccessful partnerships?
Speaker 2 (03:01):
You know that's a pretty significant challenge as
well.
As mentioned this year, we hada panel at the Loyalty Expo
around partnerships and theopportunities and challenges.
Some of the things that we'reseeing right now with the
tariffs no tariffs some of theeconomic uncertainty creates
some challenges for brands.
But when you have a successfulpartnership, you don't only have
(03:22):
to get the partnership approved.
You have to get that alignmentwe talked about.
You have to get that alignmentwe talked about.
You have to get that in thequeue.
Then, if there's technologythat needs to support it, you
have to get that in the queue.
So many brands are asking theircurrent vendors are there ways
to leverage what we have thatwill enable a starter
partnership or some manner ofpartnership?
While we get that technologythat we may need to do that of
(03:45):
partnership, while we get thattechnology that we may need to
do that, many of the vendors noware looking to create
functionality that will allowthat, whether it's REST APIs or
something in their SDK thatwould enable those partnership
opportunities.
But I think there are stillpretty significant tech
challenges that do that sorry,that are hindering kind of true
partnership, but fluidity thatmany brands are looking for.
Speaker 1 (04:06):
Yeah, and you know.
Speaking of technology and thechallenges around it, no
conversation in 2025 abouttrends would be complete without
talking about AI and otheremerging technologies.
You know, right now many brandsare struggling with IT
bottlenecks or general techalignment.
What advice do you have forloyalty teams who are trying to
integrate with broader MarTechstacks, or even those trying to
(04:30):
get prioritization and internalqueues?
Speaker 2 (04:33):
Again this year when we did the State of Customer
Loyalty paper, which was justout or is just out over the last
couple of weeks, one of thethings that we saw that those
who are looking to enhance, redoor augment their customer
loyalty program dropped a littlebit this year, I think, from
79% to 63% or 64%.
Brands are trying tooperationalize what they have,
trying to understand whattechnology works and what
(04:55):
doesn't work.
So I think one of the biggestchallenges is, you know,
understand what the weakest linkof the technology Martech, the
landscape they have internallymay be and that can be a
challenge is truly understandingwhat the technology does, what
it was supposed to do.
But if you can step back andlook at the technology stack you
have right now and if you knowthe main loyalty platform, or if
(05:17):
your CDP or if your data lakeis challenged, you really have
to look at that.
And it gets back to theiroperationalizing.
If the marketing orchestrationpiece doesn't work, that really
should be addressed first beforeadding new functionality or new
benefits to the program.
So many brands the verysuccessful brands are truly
(05:38):
looking at their tech stack andunderstanding what that weak
link is within the organizationand when they do that I think it
helps them.
You know truly, not only assessit, but also you know how do
you increase the performance,because you know it's the
addition by subtraction mantrathat we're hearing a good deal
about.
Speaker 1 (05:58):
Interesting and I know during your advisory board
meetings you know, ai surfacedas both a game changer and a
potential disruptor.
What specific risks are brandsfacing with AI, particularly
around disintermediation of theloyalty experience or automation
that alienates the customer?
Speaker 2 (06:16):
Yeah, there's a couple of other things and I'm
sure people are familiar withwhat Google is doing now.
They're kind of aggregatingsome customer loyalty stats from
more of the bots or buyingservices that are out there.
You know AI has huge potential.
Many brands in the customerloyalty space are challenged on
a couple fronts.
They don't have theorganizational team in place to
(06:37):
truly drive a successful AIefforts.
They don't have theorganizational team in place to
truly drive a successful AIefforts.
They're concerned about whoowns the data and what happens
with that data.
But there also is a bigchallenge I think we talked
about this a little bit in thefirst part of this interview is
that it has a higher kind of barto entry and a bar kind of
measurement right.
So it's akin to the autonomousvehicles.
(06:59):
There's been four or five deathsover the last few years, a few
accidents, but in the US dailythere are 10,000, 13,000
accidents a day.
So we've had a few deaths andwe have probably more daily
deaths in the US from thetraditional driver than the
autonomous vehicles.
And the same thing for AI.
(07:19):
And they're building out teamsto kind of manage the AI because
there's a trust factor, right.
Oh, if I send you Ethan anemail or offer a personalized
offer for diapers.
That's wrong and obviously youwant to understand the root
cause, which is the AItechnology.
That may have kind of createdthat from the analytics, the
orchestration, but at the end ofthe may have kind of created
that from the analytics, theorchestration, but at the end of
(07:39):
the day, it's no different thanthe mistakes that currently
happen.
You know everyone gets thatemail, say dear x, but whoops, I
saw that you were looking atour uh, porsche, nope, you know.
But now, right now, with the ai, they've just there's a higher
threshold to get it trulytrusting and I think a lot of
that is just kind of thesanctity the data and and, and
(08:02):
new brands are trying to gettheir arms around that yeah, and
I know that's definitely true.
Speaker 1 (08:06):
I just recently started getting SMS messages
from random people and all ofthem are addressed to William.
I don't know where they gotthat from, but they sure have it
out there.
So those risks are real andthat's happening every day.
So, as our programs are, youknow, exploring these
technologies and things, they'reultimately looking to battle
(08:27):
for attention in a crowdedlandscape.
Right, you know what approachesare brands using to
meaningfully differentiate theirprogram benefits right now.
Speaker 2 (08:37):
As mentioned earlier, I think some of the economic
uncertainty we have for brands.
Are they going to have, youknow, from a product, but also
from a customer perspective?
Are the customers going to wantthe same products?
Are they tightening their belt?
Potentially Many brands aretrying to get to the value
equation right.
So if customers are tellingthem that they are having some
(08:57):
challenges financially, how canyou leverage a loyalty program
to kind of backfill that?
You hear that in grocery, youhear that in CSR, you hear that
in retail.
So you know, kind of leaninginto the customer loyalty
program, offering products orreward options that have higher
perceived value.
And you know that can take manyforms and factors as well that
could be branded products, thatcould be branded products, that
could be partnership productstoo, that, that that enable that
(09:20):
higher perceived value.
But also trying to push up theredemption options earlier into
the sweet states brands.
That that did really well inthe little 360 awards this year.
They were pushing those rewardopportunities up, whether
they're sweet stakes or swipe towin.
Where you get that engagementearlier in that customer
lifestyle life cycle, that willhave, you know, kind of very
(09:41):
advantageous behavioral patternsgoing forward.
So you know this all kind offalls under this larger rubric
of personalization.
But you know understanding whatthe customers have.
If they're telling you they'rehaving some economic challenges
or uncertainties, how can youlean into the customer loyalty
program to offer maybe discountsor offers or higher reward
(10:02):
options or more rich rewardoptions that can help navigate
this economic uncertainty,because longer term that will
have some pretty beneficialoutcomes for the customer from
an emotional engagement andconnectivity perspective, from
an emotional engagement andconnectivity perspective and, to
that point, we've seen somerising popularity of alternative
rewards.
(10:27):
What's your take on the brandsoffering things like exclusive
experiences and exploring brandpartnerships,
sustainability-driven incentives, things like that that are
outside the normal incentivestructures we've seen One of the
things that we've heard overthe last year from our growing
brand membership is that theymay have some tier fatigue, tier
malaise, depending on whoyou're speaking with at that.
You know the upper tiers gold,platinum, whatever it may be.
(10:49):
So, again, getting to this,listening to and understanding
the customers from apersonalization perspective,
some of these alternativeincentive reward options have
that higher perceived value.
They have that emotiveconnection, you know, ethan,
with you and some things yourwife focus on from a.
It could be something from a.
You know, a very unique houseoffering right.
(11:10):
That drives unique kind ofengagement with your audiences
and I think that that is a greatopportunity.
Personalization, as we mentioned, is very key to higher tiers.
If customers tell you thatthey're focused on
sustainability or CSR, it'ssomething brands should look to
because it's a great way toaddress that tier malaise or
(11:32):
that kind of tier fatigue thatthey're having at the higher
levels.
And sweepstakes they add agreat deal of value, especially
if you have a good partnershipoffering.
But it's a great way to burnsome points you know a thousand
points to enter a sweepstakethat the customer, so they start
to engage with the brands aswell and it really pushes up
that reward opportunity andengagement opportunity that
(11:53):
customers are looking for,especially today.
Speaker 1 (11:57):
Awesome.
Yeah, and I know thateveryone's kind of looking at
how those things are going toimpact programs.
And as we evolve into thisspace, you know metrics and
measurements of loyalty programsare also evolving Right.
You know we've seen attributioncan be especially challenging,
you know, across differentdepartments.
So how are loyalty teamsbuilding a stronger ROI case
(12:19):
within their cross-functionalorganizations to promote loyalty
?
Speaker 2 (12:23):
Well, there's a couple of things that you
mentioned there.
I think the cross-functionalorganization that's still pretty
rare within customer loyalty.
But those who do, I mean thoseare the ones that are seeing
great success, right.
So they have the finance guysin there all the time, they have
the operation guys and then themarketing guys, the product
guys.
So they're talking aboutcustomer loyalty a little bit
differently.
(12:44):
And one of the things that we'veseen over the last year is this
whole idea of understandingwhat those within the
organization know about theprogram.
Right, if you've come into anew program, does the CFO know
about the program?
What are the objectives for theprogram?
So those organizations who havehigh performing, you know pod
structures I'll talk about thislater and what you know
(13:04):
cross-functional teams, they'redoing it quite differently, uh
and and they're leading intocustomer loyalty, right.
So you've seen this kind ofmaybe pull back from, kind of
the growing the program at thebase level let's lean in to.
If we have 40, 50, 100 millionpeople in the loyalty program,
let's offer them something veryunique, very distinguished from
(13:27):
giving discounts to someone whojust signed up for the program.
And those brands who are kindof leaning in understanding that
, ethan, you may only need a 5%discount at Sephora, or you can
give me some lipstick for mykids at Ulta every other week
and it keeps me happy.
And I think that's what they'relooking for, because they're
(13:48):
looking at data differently.
They're sharing within theorganization.
These pod structures arestarting to come out more and
more, so it's kind of thatchicken or egg.
Do the metrics drive thecross-functional team or does
the cross-functional team drivethe metrics?
Speaker 1 (14:03):
Interesting.
So, from what you're seeing,are brands finally making
progress on integrating thatcustomer data across systems, or
is data fragmentation still thenorm?
Speaker 2 (14:13):
Yeah, there's still a great challenge, or a
significant amount of challenge,with regard to data attribution
, especially when you get intoPII, and how brands are even
looking at some of theirreporting.
So if you're using differenttools a Domo, a Snowflake you're
(14:34):
obviously going to kind ofanonymize that data.
You know, you're obviouslygoing to kind of anonymize that
data.
But they are definitely makingsignificant challenges because
there are very, very uniquereward opportunities.
But data lakes data technologieslike a snowflake that allow
kind of flexibility andscalability to these brands and
(14:57):
and and getting Kind ofunderstanding where the data
lies many brands now are workingon or have organizational data
maps, everything from kind ofthe call center to, you know,
when you engage with the websitefor the first time.
You know they're using kind ofthese, these tools that allow
them to see that customercross-channel, cross-device.
(15:18):
And you know the CDPs aregetting better and I think the
CDPs too are, you know,personalization engines.
You know, like a snowflake,they offer the scalability and
flexibility, but they're also alittle more holistic right now.
So you know they can take thisdifferent data and, you know,
help the customers PII that dataand tie it back to a customer,
(15:42):
which they can make kind of adeeper, you know, kind of
decision on, which is veryimportant.
Speaker 1 (15:48):
Definitely, and I know we heard about all of those
things from multiple differentvendors at the expo.
Those are all the things thatwe continue to hear that people
are looking for those solutions.
So well, I think that we'vemade it through all of the
trends, but before we close, Iwanted to end on a
forward-looking note.
We just came out of being inthe rooms with some of the
(16:12):
biggest leaders in customerloyalty.
Based on your conversationswith Loyalty's 360s advisory
board and other attendees fromthe expo, what's one emerging
loyalty trend or challenge thatbrands absolutely must act on
within the next six to 12 months?
You know?
Speaker 2 (16:30):
AI seems to be all the rage right now.
Last year hyper-personalizationwas all the rage, but it was
interesting when we do kind of arecap series with some of our
technology partners.
Don from Briarley, slashCapillary.
He talked about howhyper-personalization never came
to fruition last year and hewas waiting for it.
But you know, I think AI issomething everyone's talking
(16:52):
about.
But with this economicuncertainty we have again, and
we've talked about leaning intothe customer loyalty program,
making sure the program isworking well.
And one of the topics we heardabout is operationalizing the
program, making sure from apartnership or the program
itself, that it's performingwell or adding more.
And we saw that in the state ofcustomer loyalty paper there's
(17:14):
a little bit of retrenchmentwith regard to kind of redoing,
blowing up or enhancing theprogram.
You know, let's figure out whatwe have, let's figure out where
the dead bodies lie, and thenyou know can we have and can we
see or can we drive improvementin the current program, and
that's really what I think iskind of the secret sauce.
Technology yeah, there's a lotof great technology out there.
(17:35):
Ai everyone's looking to leaninto AI, but with some of the
challenges we mentioned aboutkind of that trust factor.
It's really about making sureyou have the organizational
alignment that the program isperforming, addressing some of
that tier malaise and thatquote-unquote sea of sameness.
Everyone has Build thoseeffective pod structures that
allow more focus and kind of adeeper dive and understanding
(17:57):
into the program.
Speaker 1 (18:03):
Definitely.
I think that's awesome, andthat's exactly why the CEO's
desk exists to spotlight theconversations that matter most
to loyalty leaders.
And Mark, thank you so much foryour insights and for helping
us navigate these rapidlyshifting priorities in the space
.
I don't think anybody has thebird's eye view to it and the
input from so many people likeyou do, so thank you for sharing
that with the audience.
Speaker 2 (18:22):
Absolutely.
Thank you, Ethan, for takingthe time to put this together.
Speaker 1 (18:26):
Yeah, and to our listeners.
Thank you for tuning in to parttwo and just remember whether
you're reevaluating your techroadmap, rethinking your metrics
, exploring new partnerships.
We hope that our content andtoday's discussion is giving you
practical strategic guidancefor what's ahead.
Be sure to subscribe to Leadersin Customer Loyalty, wherever
you get your podcast, follow uson YouTube and check out all of
(18:50):
the amazing strategic insightsthat Loyalty360 is bringing to
you week in and week out.
Until next time, stay focused,stay strategic and, as always,
stay loyal.
Thank you.
Good afternoon and good morning everyone.
Welcome back to Leaders inCustomer Loyalty, the CEO's Desk
, the Loyalty360 podcast series,where we unpack loyalty trends
with insights only our CEO canoffer.
I'm Ethan Perry from Loyalty360, and in this part two episode,
we're continuing ourconversation with Mark Johnson,
Loyalty360 CEO.
(00:27):
If you haven't listened to partone, make sure you go back and
check it out, because we aregoing to continue discussing the
11 trends shaping customerloyalty in 2025.
The Loyalty360 advisory boardreported on all of this to us,
and they touched on things fromshifting consumer values to the
structural challenges faced bybrands today.
In this installment, we'rediving deeper into partnership
(00:49):
strategy, AI, execution risks,program differentiation and
advanced loyalty metrics allareas where brand leaders are
either gaining serious ground orfalling dangerously behind Mark
.
Let's get into it, Absolutelyso.
We'll start with partnerships.
As loyalty ecosystems areexpanding, we continue to see
that strategic partnerships areincreasingly central to
(01:11):
delivering value to the endusers.
What are some criticalcomponents of a strong loyalty
partnership strategy in 2025?
Speaker 2 (01:18):
Yeah, I think partnerships are still very
impactful.
We saw it in the 2025 State ofCustomer Loyalty survey.
It was still a top five area ofinterest.
I think it shifted from maybethree to four or maybe three to
five, but it's still a verysignificant interest.
And I think when brands look atpartnerships, they're looking
at probably two differentoptions right when there may be
(01:39):
a currency exchange, a gift cardexchange, something simple to
start to co-promote the program.
But when you look at theintegration kind of more of a
strategic, long-term partnership, there are a number of
different things and we've seenit in the last couple years of
the conferences that brands aretalking about knowing your
customer a little better, maybesome different financial rubric
they have to go through.
(02:00):
But I think the key threethings are alignment internally,
so those in the organizationunderstand the partnership
strategy, but also with thecustomers of both programs.
And making sure that when youhave that alignment internally,
that you drive that executivelevel buy-in initially and you
can also do that going forwardby showing the value of the
(02:21):
program to those internally butalso to the program partners.
And I think one of the mostimportant things is a mutual
value exchange for the programs,understanding that if the
customers are alike, does thevalue, the incrementality of the
reward, the incentive, thepartnership between the two or
three or four brands drive thatvalue exchange for both brands
(02:46):
or four brands drive that valueexchange for both brands, but
also for those customers,definitely and so like.
Speaker 1 (02:53):
When it comes to the execution of doing that,
particularly around the datasharing, across brands and the
technology integrations, whatbarriers are still holding
brands back from executing thesesuccessful partnerships?
Speaker 2 (03:01):
You know that's a pretty significant challenge as
well.
As mentioned this year, we hada panel at the Loyalty Expo
around partnerships and theopportunities and challenges.
Some of the things that we'reseeing right now with the
tariffs no tariffs some of theeconomic uncertainty creates
some challenges for brands.
But when you have a successfulpartnership, you don't only have
(03:22):
to get the partnership approved.
You have to get that alignmentwe talked about.
You have to get that alignmentwe talked about.
You have to get that in thequeue.
Then, if there's technologythat needs to support it, you
have to get that in the queue.
So many brands are asking theircurrent vendors are there ways
to leverage what we have thatwill enable a starter
partnership or some manner ofpartnership?
While we get that technologythat we may need to do that of
(03:45):
partnership, while we get thattechnology that we may need to
do that, many of the vendors noware looking to create
functionality that will allowthat, whether it's REST APIs or
something in their SDK thatwould enable those partnership
opportunities.
But I think there are stillpretty significant tech
challenges that do that sorry,that are hindering kind of true
partnership, but fluidity thatmany brands are looking for.
Speaker 1 (04:06):
Yeah, and you know.
Speaking of technology and thechallenges around it, no
conversation in 2025 abouttrends would be complete without
talking about AI and otheremerging technologies.
You know, right now many brandsare struggling with IT
bottlenecks or general techalignment.
What advice do you have forloyalty teams who are trying to
integrate with broader MarTechstacks, or even those trying to
(04:30):
get prioritization and internalqueues?
Speaker 2 (04:33):
Again this year when we did the State of Customer
Loyalty paper, which was justout or is just out over the last
couple of weeks, one of thethings that we saw that those
who are looking to enhance, redoor augment their customer
loyalty program dropped a littlebit this year, I think, from
79% to 63% or 64%.
Brands are trying tooperationalize what they have,
trying to understand whattechnology works and what
(04:55):
doesn't work.
So I think one of the biggestchallenges is, you know,
understand what the weakest linkof the technology Martech, the
landscape they have internallymay be and that can be a
challenge is truly understandingwhat the technology does, what
it was supposed to do.
But if you can step back andlook at the technology stack you
have right now and if you knowthe main loyalty platform, or if
(05:17):
your CDP or if your data lakeis challenged, you really have
to look at that.
And it gets back to theiroperationalizing.
If the marketing orchestrationpiece doesn't work, that really
should be addressed first beforeadding new functionality or new
benefits to the program.
So many brands the verysuccessful brands are truly
(05:38):
looking at their tech stack andunderstanding what that weak
link is within the organizationand when they do that I think it
helps them.
You know truly, not only assessit, but also you know how do
you increase the performance,because you know it's the
addition by subtraction mantrathat we're hearing a good deal
about.
Speaker 1 (05:58):
Interesting and I know during your advisory board
meetings you know, ai surfacedas both a game changer and a
potential disruptor.
What specific risks are brandsfacing with AI, particularly
around disintermediation of theloyalty experience or automation
that alienates the customer?
Speaker 2 (06:16):
Yeah, there's a couple of other things and I'm
sure people are familiar withwhat Google is doing now.
They're kind of aggregatingsome customer loyalty stats from
more of the bots or buyingservices that are out there.
You know AI has huge potential.
Many brands in the customerloyalty space are challenged on
a couple fronts.
They don't have theorganizational team in place to
(06:37):
truly drive a successful AIefforts.
They don't have theorganizational team in place to
truly drive a successful AIefforts.
They're concerned about whoowns the data and what happens
with that data.
But there also is a bigchallenge I think we talked
about this a little bit in thefirst part of this interview is
that it has a higher kind of barto entry and a bar kind of
measurement right.
So it's akin to the autonomousvehicles.
(06:59):
There's been four or five deathsover the last few years, a few
accidents, but in the US dailythere are 10,000, 13,000
accidents a day.
So we've had a few deaths andwe have probably more daily
deaths in the US from thetraditional driver than the
autonomous vehicles.
And the same thing for AI.
(07:19):
And they're building out teamsto kind of manage the AI because
there's a trust factor, right.
Oh, if I send you Ethan anemail or offer a personalized
offer for diapers.
That's wrong and obviously youwant to understand the root
cause, which is the AItechnology.
That may have kind of createdthat from the analytics, the
orchestration, but at the end ofthe may have kind of created
that from the analytics, theorchestration, but at the end of
(07:39):
the day, it's no different thanthe mistakes that currently
happen.
You know everyone gets thatemail, say dear x, but whoops, I
saw that you were looking atour uh, porsche, nope, you know.
But now, right now, with the ai, they've just there's a higher
threshold to get it trulytrusting and I think a lot of
that is just kind of thesanctity the data and and, and
(08:02):
new brands are trying to gettheir arms around that yeah, and
I know that's definitely true.
Speaker 1 (08:06):
I just recently started getting SMS messages
from random people and all ofthem are addressed to William.
I don't know where they gotthat from, but they sure have it
out there.
So those risks are real andthat's happening every day.
So, as our programs are, youknow, exploring these
technologies and things, they'reultimately looking to battle
(08:27):
for attention in a crowdedlandscape.
Right, you know what approachesare brands using to
meaningfully differentiate theirprogram benefits right now.
Speaker 2 (08:37):
As mentioned earlier, I think some of the economic
uncertainty we have for brands.
Are they going to have, youknow, from a product, but also
from a customer perspective?
Are the customers going to wantthe same products?
Are they tightening their belt?
Potentially Many brands aretrying to get to the value
equation right.
So if customers are tellingthem that they are having some
(08:57):
challenges financially, how canyou leverage a loyalty program
to kind of backfill that?
You hear that in grocery, youhear that in CSR, you hear that
in retail.
So you know, kind of leaninginto the customer loyalty
program, offering products orreward options that have higher
perceived value.
And you know that can take manyforms and factors as well that
could be branded products, thatcould be branded products, that
could be partnership productstoo, that, that that enable that
(09:20):
higher perceived value.
But also trying to push up theredemption options earlier into
the sweet states brands.
That that did really well inthe little 360 awards this year.
They were pushing those rewardopportunities up, whether
they're sweet stakes or swipe towin.
Where you get that engagementearlier in that customer
lifestyle life cycle, that willhave, you know, kind of very
(09:41):
advantageous behavioral patternsgoing forward.
So you know this all kind offalls under this larger rubric
of personalization.
But you know understanding whatthe customers have.
If they're telling you they'rehaving some economic challenges
or uncertainties, how can youlean into the customer loyalty
program to offer maybe discountsor offers or higher reward
(10:02):
options or more rich rewardoptions that can help navigate
this economic uncertainty,because longer term that will
have some pretty beneficialoutcomes for the customer from
an emotional engagement andconnectivity perspective, from
an emotional engagement andconnectivity perspective and, to
that point, we've seen somerising popularity of alternative
rewards.
(10:27):
What's your take on the brandsoffering things like exclusive
experiences and exploring brandpartnerships,
sustainability-driven incentives, things like that that are
outside the normal incentivestructures we've seen One of the
things that we've heard overthe last year from our growing
brand membership is that theymay have some tier fatigue, tier
malaise, depending on whoyou're speaking with at that.
You know the upper tiers gold,platinum, whatever it may be.
(10:49):
So, again, getting to this,listening to and understanding
the customers from apersonalization perspective,
some of these alternativeincentive reward options have
that higher perceived value.
They have that emotiveconnection, you know, ethan,
with you and some things yourwife focus on from a.
It could be something from a.
You know, a very unique houseoffering right.
(11:10):
That drives unique kind ofengagement with your audiences
and I think that that is a greatopportunity.
Personalization, as we mentioned, is very key to higher tiers.
If customers tell you thatthey're focused on
sustainability or CSR, it'ssomething brands should look to
because it's a great way toaddress that tier malaise or
(11:32):
that kind of tier fatigue thatthey're having at the higher
levels.
And sweepstakes they add agreat deal of value, especially
if you have a good partnershipoffering.
But it's a great way to burnsome points you know a thousand
points to enter a sweepstakethat the customer, so they start
to engage with the brands aswell and it really pushes up
that reward opportunity andengagement opportunity that
(11:53):
customers are looking for,especially today.
Speaker 1 (11:57):
Awesome.
Yeah, and I know thateveryone's kind of looking at
how those things are going toimpact programs.
And as we evolve into thisspace, you know metrics and
measurements of loyalty programsare also evolving Right.
You know we've seen attributioncan be especially challenging,
you know, across differentdepartments.
So how are loyalty teamsbuilding a stronger ROI case
(12:19):
within their cross-functionalorganizations to promote loyalty
?
Speaker 2 (12:23):
Well, there's a couple of things that you
mentioned there.
I think the cross-functionalorganization that's still pretty
rare within customer loyalty.
But those who do, I mean thoseare the ones that are seeing
great success, right.
So they have the finance guysin there all the time, they have
the operation guys and then themarketing guys, the product
guys.
So they're talking aboutcustomer loyalty a little bit
differently.
(12:44):
And one of the things that we'veseen over the last year is this
whole idea of understandingwhat those within the
organization know about theprogram.
Right, if you've come into anew program, does the CFO know
about the program?
What are the objectives for theprogram?
So those organizations who havehigh performing, you know pod
structures I'll talk about thislater and what you know
(13:04):
cross-functional teams, they'redoing it quite differently, uh
and and they're leading intocustomer loyalty, right.
So you've seen this kind ofmaybe pull back from, kind of
the growing the program at thebase level let's lean in to.
If we have 40, 50, 100 millionpeople in the loyalty program,
let's offer them something veryunique, very distinguished from
(13:27):
giving discounts to someone whojust signed up for the program.
And those brands who are kindof leaning in understanding that
, ethan, you may only need a 5%discount at Sephora, or you can
give me some lipstick for mykids at Ulta every other week
and it keeps me happy.
And I think that's what they'relooking for, because they're
(13:48):
looking at data differently.
They're sharing within theorganization.
These pod structures arestarting to come out more and
more, so it's kind of thatchicken or egg.
Do the metrics drive thecross-functional team or does
the cross-functional team drivethe metrics?
Speaker 1 (14:03):
Interesting.
So, from what you're seeing,are brands finally making
progress on integrating thatcustomer data across systems, or
is data fragmentation still thenorm?
Speaker 2 (14:13):
Yeah, there's still a great challenge, or a
significant amount of challenge,with regard to data attribution
, especially when you get intoPII, and how brands are even
looking at some of theirreporting.
So if you're using differenttools a Domo, a Snowflake you're
(14:34):
obviously going to kind ofanonymize that data.
You know, you're obviouslygoing to kind of anonymize that
data.
But they are definitely makingsignificant challenges because
there are very, very uniquereward opportunities.
But data lakes data technologieslike a snowflake that allow
kind of flexibility andscalability to these brands and
(14:57):
and and getting Kind ofunderstanding where the data
lies many brands now are workingon or have organizational data
maps, everything from kind ofthe call center to, you know,
when you engage with the websitefor the first time.
You know they're using kind ofthese, these tools that allow
them to see that customercross-channel, cross-device.
(15:18):
And you know the CDPs aregetting better and I think the
CDPs too are, you know,personalization engines.
You know, like a snowflake,they offer the scalability and
flexibility, but they're also alittle more holistic right now.
So you know they can take thisdifferent data and, you know,
help the customers PII that dataand tie it back to a customer,
(15:42):
which they can make kind of adeeper, you know, kind of
decision on, which is veryimportant.
Speaker 1 (15:48):
Definitely, and I know we heard about all of those
things from multiple differentvendors at the expo.
Those are all the things thatwe continue to hear that people
are looking for those solutions.
So well, I think that we'vemade it through all of the
trends, but before we close, Iwanted to end on a
forward-looking note.
We just came out of being inthe rooms with some of the
(16:12):
biggest leaders in customerloyalty.
Based on your conversationswith Loyalty's 360s advisory
board and other attendees fromthe expo, what's one emerging
loyalty trend or challenge thatbrands absolutely must act on
within the next six to 12 months?
You know?
Speaker 2 (16:30):
AI seems to be all the rage right now.
Last year hyper-personalizationwas all the rage, but it was
interesting when we do kind of arecap series with some of our
technology partners.
Don from Briarley, slashCapillary.
He talked about howhyper-personalization never came
to fruition last year and hewas waiting for it.
But you know, I think AI issomething everyone's talking
(16:52):
about.
But with this economicuncertainty we have again, and
we've talked about leaning intothe customer loyalty program,
making sure the program isworking well.
And one of the topics we heardabout is operationalizing the
program, making sure from apartnership or the program
itself, that it's performingwell or adding more.
And we saw that in the state ofcustomer loyalty paper there's
(17:14):
a little bit of retrenchmentwith regard to kind of redoing,
blowing up or enhancing theprogram.
You know, let's figure out whatwe have, let's figure out where
the dead bodies lie, and thenyou know can we have and can we
see or can we drive improvementin the current program, and
that's really what I think iskind of the secret sauce.
Technology yeah, there's a lotof great technology out there.
(17:35):
Ai everyone's looking to leaninto AI, but with some of the
challenges we mentioned aboutkind of that trust factor.
It's really about making sureyou have the organizational
alignment that the program isperforming, addressing some of
that tier malaise and thatquote-unquote sea of sameness.
Everyone has Build thoseeffective pod structures that
allow more focus and kind of adeeper dive and understanding
(17:57):
into the program.
Speaker 1 (18:03):
Definitely.
I think that's awesome, andthat's exactly why the CEO's
desk exists to spotlight theconversations that matter most
to loyalty leaders.
And Mark, thank you so much foryour insights and for helping
us navigate these rapidlyshifting priorities in the space
.
I don't think anybody has thebird's eye view to it and the
input from so many people likeyou do, so thank you for sharing
that with the audience.
Speaker 2 (18:22):
Absolutely.
Thank you, Ethan, for takingthe time to put this together.
Speaker 1 (18:26):
Yeah, and to our listeners.
Thank you for tuning in to parttwo and just remember whether
you're reevaluating your techroadmap, rethinking your metrics
, exploring new partnerships.
We hope that our content andtoday's discussion is giving you
practical strategic guidancefor what's ahead.
Be sure to subscribe to Leadersin Customer Loyalty, wherever
you get your podcast, follow uson YouTube and check out all of
(18:50):
the amazing strategic insightsthat Loyalty360 is bringing to
you week in and week out.
Until next time, stay focused,stay strategic and, as always,
stay loyal.
Thank you.
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